Bill C-393 (Historical)

An Act to amend the Patent Act (drugs for international humanitarian purposes) and to make a consequential amendment to another Act

This enactment amends the Patent Act and the Food and Drugs Act to make it easier to manufacture and export pharmaceutical products to address public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.

[Mona Frendo]

Section 21.16 of the Patent Act presently describes the obligation on the authorization holder to provide the patentee or patentees, as the case may be—and it was that case in the Apotex example—as well as the Commissioner of Patents with a copy of the agreement. So once the agreement is signed with an importing country or user to supply a particular drug to a particular country, that's the obligation that appears. Currently in the Patent Act, under section 21.16, it's an obligation to provide a copy of the contract, basically.

Clause 13 of Bill C-393 would change the section. It would eliminate the requirement that the agreement to supply include the name and the particulars of the authorized product for export, the name of the country, and the name of the drug purchaser as applicable. It would remove a number of pieces of information that would have to be provided. It's of concern because, when read with other changes in Bill C-393, it would reduce the transparency in the system.

[Mona Frendo]

Yes, if you read clauses 9 and 10 of Bill C-393 together, they would allow a CAMR authorization holder to produce and export the drugs authorized in the application indefinitely. That is the consequence of clauses 9 and 10 read together, because there would be no limit to the duration of a CAMR authorization and no need for renewal because it would be indefinite.

[Mona Frendo]

Mr. Masse is correct. Currently, section 21.09 of the Patent Act states that a CAMR authorization is valid for two years from the date of the grant. That was reflective of several WTO requirements in the decision, including paragraph 2(c) of the waiver, which requires a country that authorizes the export--so a country like Canada--of a pharmaceutical product under its regime to notify the WTO of the quantities for which the authorization has been granted and the duration. Reflective of that and other WTO requirements, section 21.09 of the Patent Act presently describes the duration of an export, and it says that it would be valid for two years from the date of grant.

Clause 9 of Bill C-393 would delete this section altogether. It's a short section, but it is an important section in the regime.

[Mona Frendo]

I'm sorry. I meant section 21.05.

Clause 5 of Bill C-393 would change the current provisions in section 21.05 of the Patent Act by deleting all the references to quantity. It would also add a new proposed section, 21.051, that would put the onus on the authorization holder—the first or the manufacturer who is authorized under Canada's access to medicines regime to export. You would put the onus on that person to bear the responsibility of ensuring that the products that are sent are correctly labelled, as prescribed in the regulations.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

If I could, I'd like to go to the officials to have them explain what section 21.05 of the act does, first, and how it came about, and what the rationale is for 21.05 in the first place, and then what clause 5 of Bill C-393 would do--and what the effect would be.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

Thank you to my honourable colleague. There was some stuff in there that I agree with. We had a conversation the other day. He is very passionate about the issue of helping people in Africa who need help. He mentioned that we have one solution before us and I've said repeatedly that I would disagree with that. I don't think we have any solution before us in this bill. I don't think this bill offers the solution we're looking for.

He mentioned the government and what the government is or isn't doing. I would argue that what this government is doing is working on solutions that are making a difference and increasing funding, our investment, in the global fund. Where other countries are not doing that, our country is increasing the investment and taking advantage of our role in leading the G-8 this past summer to put forward an initiative on maternal and infant health. That is tremendously important and it is something that is looking forward, looking toward the solution.

Unfortunately, I don't see a solution in this bill. Maybe when this is all done, we'll have the chance to talk. Those of us in committee who want to continue to look at ideas that might help can have conversations. I have committed to continuing the conversation with some of the folks who have been before the committee as witnesses as it relates to trying to have an impact on the devastation that is happening in parts of the world, where things are a little different from what they are here.

To go back to the bill here, if I could, we're on clause 4 right now. If I can bring the discussion back to clause 4 and taking a look at what clause 4 does, I'll give some explanation as to why I would vote against the Liberal amendment.

Clause 4 takes section 21.04 of the Patent Act and basically and systematically, in three subclauses of Bill C-393, wipes out three subsections of the Patent Act. Again, large portions of the Patent Act will be wiped out by this one clause, clause 4, in Bill C-393, and are replaced with a few paragraphs. For subsection 21.04(1), I think it adds one word, for subsection 21.04(2) it adds one word, and for subsection 21.04(3) I think it adds 16 words in replacing paragraph after paragraph of references to the WTO and TRIPS and those things.

So again, we see wording in a bill amending something as important as the Patent Act in a way that wipes out massive portions of it, and again, I think with substantial potential for very negative unintended consequences in the long run. The Liberal amendment addressed only one of the subsections that was being wiped out and left completely unaddressed the most substantial parts that were wiped out. That would be why I voted against the amendment and will be voting against clause 4 of Bill C-393.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you very much, Mr. Chair.

When we discussed clause 3, our Conservative colleagues voiced their concern that Bill C-393 would divert Canada's Access to Medicines Regime from its primary objective. They were concerned that the resulting bill, act or regime would serve commercial interests more than humanitarian ones. I am certain that is not the intention; nor is it the intention of all those witnesses who testified throughout the proceedings that we needed to provide appropriate aid to children with AIDS, to their families—those mothers, fathers and grandmothers who are worried about the future of their children and grandchildren. So that is not what the people who introduced Bill C-393 wanted; nevertheless, the concerns are there, and they are legitimate.

Throughout the debate on Bill C-393, I often encouraged the committee members to come up with other solutions. There are actually other solutions; there is a way to help facilitate the current regime, in order to build more examples, more experience, for analysis purposes.

If the committee does not adopt Bill C-393, there will be nothing to take its place—no report, no other solutions. There is only one solution before us, and that is Bill C-393, which seeks to amend the current regime.

I wonder how we can view this amended regime and ensure that it does not exceed the limits we want to see imposed. We do not want the regime to stop serving humanitarian interests, and humanitarian interests only. I was discussing it with my colleague, Robert Bouchard, and our only solution may be to adopt Bill C-393 and turn it into a pilot project.

I would encourage my colleague from the New Democratic Party to sit down, after the committee stage, and see what amendments could be made, at the report stage, to turn this into a pilot project. A sunset clause comes to mind first and foremost, in order to put a time limit on the bill.

The way I see it, we should have come up with a proposal when we originally began studying this bill. Unfortunately, this is the only proposal we have. The government members have not shown a willingness to find a way to improve the current regime and make it more usable. A system that has been used just one time has not really been used at all. We cannot even say whether it works or not. Well, I suppose it does work, since it has a 100% success rate based on the one time it was used.

As I already mentioned, Mr. Chair, we are going to support clause 4, we are going to support all the other clauses, and we are also going to support our colleague from the New Democratic Party, who wants to remove certain clauses to bring the regime in line with the Food and Drugs Act and to strengthen Parliament's role. Clearly, we will propose some amendments at the report stage to ensure that the regime serves solely humanitarian interests, as originally intended.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

I am still trying to wrap my head around this. Why do you not simply vote against clause 4, instead of trying to amend it by removing, as I was saying earlier, the heart of the changes that all the witnesses who spoke in favour of Bill C-393 want, as does the New Democratic Party, which introduced the bill?

Why not just vote against clause 4? Why did you decide to move an amendment that would remove lines 15 to 18?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

When I began studying Bill C-393, I wanted to understand why Canada's Access to Medicines Regime, CAMR, did not seem to be working—meaning that it worked once. I took it upon myself to do an in-depth analysis of why that was. I was also aware that similar regimes in other countries had not worked. I would say I approached the matter objectively. Of course, CAMR was almost never used, except in the case of Rwanda, with Apotex.

I wanted to know why a system that had been put in place with such good intentions and that, I would repeat, was designed to provide very important medicines to developing nations—especially to treat AIDS, malaria and tuberculosis—had not worked.

Let's consider the case of Rwanda with Apotex. I always come back to one thing. When Apotex applied for a licence to three pharmaceutical companies, the process took 68 days the first time. One year later, the first shipment of medicines arrived in Rwanda. Then, when they applied a second time, it took the pharmaceutical companies a week to authorize the application, if memory serves.

In my view, that does not explain why CAMR seems to be hampered or ineffective. The Liberal Party, which wants to provide medicines to the third world, where the need is greatest, has a proposal to guarantee that much-needed medicines will get to where they need to go. That is the approach the Liberal Party wants to adopt, one that does not include the proposed changes in Bill C-393.

Keep in mind, as well, that what this private member's bill, Bill C-393, inherently does is alter our obligations regarding intellectual property, our international obligations. Of course, there are arguments both in favour of and against that position. Some say that it could lead to problems with the international community, while others claim that would not be the case.

I think that Canada has to send a message about intellectual property, because it is crucial to research and development. After all, it is the pharmaceutical companies doing the research and development to come up with products that can then be passed on to generic drug manufacturers.

In short, we cannot lose sight of the real source of the problem. Everything I discovered regarding Rwanda has led me to believe that the problem does not lie with CAMR right now. It may be necessary to make some minor adjustments, but we need to find another way to accomplish what we all want to accomplish.

That is why I cannot support the proposed change in clause 4; I do not think that it focuses in on the real problem.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

My understanding, from your comments, was that a number of the clauses that could be dropped had little or no effect on the rest of the bill. In other cases, removing those clauses from Bill C-393 could have an impact on other clauses in the bill. That was my understanding, especially with regard to the first two clauses that could be removed, clauses 6 and 7.

The last clause you mentioned, however, clause 14, might be worth keeping, because it directly addresses the question I put to Mr. Masse on the addition or removal of listed products. That could give Parliament somewhat of an advisory role in the process. Of all the clauses you mentioned, I think that would be the one most worth keeping. So we are talking about clauses 21.17 to 21.2.

It is not with this addition or removal of clauses, as far as Bill C-393 goes, that we can really consider the second Liberal amendment. That amendment deals with another aspect of the bill and seeks to delete lines 15 to 18 of clause 4. My understanding, from what most of the witnesses said, was that that part was the real bone of contention.

I first want to ask Mr. Masse about that, since he is the one responsible for the bill right now. In your opinion, lines 15 to 18 of clause 4 speak to the heart of the bill. Without them, there is no bill.

[Rob Sutherland-Brown]

As I recall the proceedings from last Thursday, the proposal was that the sponsors of the bill would be prepared to drop clauses 6, 7, 8, 11, 12, 14, 16, and 17.

Clause 6 proposes to repeal section 21.06 of the Patent Act, the website disclosure, and in its place it proposes a more limited disclosure: the name of the product; the name of the importer; and distinctive features and labels in accord with the regulation requirement, which is not yet in place.

If you drop that proposal, you would revive subsection 21.06(1) of the Patent Act, so there would be a duty to disclose the authorized quantity. That would conflict with the repeal of section 21.04 in clause 4. It revives Health Canada's review and regulation--product features, labels, and packaging. Depending on the outcome of these other things, that would also conflict with the clause 4 authorization provisions. It revives the duty to disclose the name of every known party that would be handling the product while in transit from Canada to the importing jurisdiction. It also uses WTO language, but I understand that some of the amendments probably fix that.

Clause 7 of Bill C-393 purports to repeal section 21.07 of the Patent Act. This is the provision that requires the exporter to give an export notice. It is required to give that notice to the patentee, to the importing jurisdiction, and to whoever it is within that jurisdiction, or on behalf of that jurisdiction, who has purchased the product. This would create some problems for the anti-abuse provisions. By virtue of the repeal of section 21.04, application requirements, there is no way you can verify the disclosure to the patentee, as they are not identified in the new authorization process. It also uses WTO language, which would be fixed.

Clause 8 in Bill C-393 would amend the existing royalty provisions and it would remove the Federal Court review, at the instance of the patentee, of a royalty rate, which would be determined in accordance with the regulatory scheme but nevertheless in the judgment of the patentee was inadequate in the circumstances. The revival will bring this back into compliance with that review process. The review process is not required by the waiver decision itself but there is a requirement in article 31 of the TRIPS agreement that any decision as to the remuneration given to the patentee must be reviewable by a distinct higher authority. In the Canadian case, for a federal decision, that would be the Federal Court. This provision also uses the WTO language, which may well be fixed.

Clause 11 in Bill C-393 deals with section 21.13 in the Patent Act. That is a clause that deals with termination on the happening of a statutory event. These events are things such as the expiry of the two-year term certain for an initial authorization and the expiry of a two-year term certain renewal authorization, on the happening of the Minister of Health notifying the commissioner and others that the product at issue is no longer compliant with Health Canada efficacy regulations or the labelling and appearance regulations.

It also allows for automatic termination where a country has been removed from one of the country lists. So if you revive section 21.13, as the proposal to drop would do, you revive the concept of a two-year set term for initial authorization. You also revive a reference to re-authorization for another up to two years. So there's a conflict there between what's in Bill C-393 and what would stay in the Patent Act. Well, as the trade dress issues as defined by Health Canada regulations would be revived, and it revives the concept of a named product in an authorized quantity, all of that creates some tensions within what would remain if the bill proceeds.

Clause 12 is a termination clause on the instant or the suit of the patentee for a number of reasons. The termination for failure to label accurately and failure to give export notice--that could be okay if clause 7 is dropped, because that would revive the export notice. It would also replace Bill C-393's definition of a regional trade agreement with the original version in the Patent Act that was drafted to comply with the definition used in the WTO waiver decision.

Clause 14 would repeal sections 21.17 to 21.2. Section 21.17 is on termination in circumstances where bad faith is alleged because the contract is being used for commercial purposes. Section 21.18 is on the advisory committee designed to assist the Governor in Council and ministers in determining whether a drug should be added to schedule 1.

In section 21.19, a website is to be established by Canada to disclose applications that are made to it by a non-WTO member that would not have had an obligation to give notice to the TRIPS council under the WTO scheme. Canada went beyond its strict obligations in this regard, because they thought everybody should have access to the system on equal footing. We had to design something where a focal point for the notice from the demanding jurisdiction could be made public and transparent to the world.

Section 21.2 was a requirement for a ministerial review and reporting to Parliament, and that's essentially spent, so it would be removed in a housekeeping bill and not with whatever you do here.

That's it. There are several places where Health Canada is referenced. I'm not sure in which particular clauses. Perhaps we can deal with those when we come to them.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm speaking against this amendment. This virtually guts the one licence solution. We heard testimony from witnesses who, first of all, explained that what we did created a regime that wasn't necessary. It wasn't required under the WTO to create some of the barriers that we have.

One of the problems that we faced in the access to this legislation is pure-out intimidation and threats. Some of them have been public, as in the Indonesian situation, for example. Others have been impossibly difficult to get over, requiring a series of attempts to move, to get CAMR to work, especially the one in the Rwanda situation. We heard that, yes, some elements from the technical aspect, once it got through, were okay, but because of the process involved in terms of identifying the country right away, identifying the drug right away, and identifying the quantity, it restricted the interests of those who wanted to use this legislation. Hence, the Canadian model, which is sometimes proposed as being very effective, really isn't being accessed.

It's also important to know that for some of the things that were contentious in this bill, we've decided to drop those clauses. Some of the things I don't think are necessary, but at the same time, there have been some good concerns raised on everything from the food and drug and safety act--that's the Health Canada provisions--to others as well, relating to diversions. But this particular element here would create the same system that exists today. We have our only customer--that being Apotex, which looked at this as a potential thing--saying they won't do it. They've also identified that they would actually, if we'd traded a different regime, look at getting pediatric drugs immediately overseas as well.

It's very important that this part of the bill be defeated in terms of this amendment. I believe we won't see the wanton abuse of patent elements in Bill C-393, which has the one licence solution in it. I don't think any evidence of that has been produced. I haven't seen any evidence from the generic companies or from the pharmaceutical companies that there would be problems.

It was interesting, though, because when we had GlaxoSmithKline testifying in front of us here about how they wanted to ensure safety and a series of products that weren't substandard, they were actually settling a $760-million lawsuit in the United States for having products that were deficient, including baby ointment.

We've set up a system here that clearly isn't working. It's one that we've designed. This is a critical part that I hope gets defeated. If not, we will see similar situations take place, in my opinion, where the licensing won't be granted.

Once again, I think the best evidence we have is from the one company that actually tried to use this bill. We had incredible testimony here from a number of different NGOs about the restrictions and the problems. We had some other good testimony from experts like Mr. Abbott who were there and who know we're not violating anything by going ahead.

I'm hoping this motion will be defeated. I would call for a recorded vote when it is appropriate.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Yes, certainly.

The proposal with respect to subclause 4(2) specifically was that under the current legislation, a pharmaceutical manufacturer applying for a compulsory licence under CAMR--under the current legislation, not under Bill C-393--is required to include information about the version of the product, the quantity of the product to be exported, the name of the patent holder, the name of the importing country, and the name of the importing entity. I would like to restore the legislation. I would like to make sure that Bill C-393 reflects that requirement.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Once again, it is to allow for the fact that in the new amended Bill C-393, there is a schedule 1 for medications and a schedule 2, which is the old unique schedule. Now we have to allow for the fact that this original unique schedule is now renumbered as schedule 2.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Does the amendment that we are talking about deal with the issues you've brought forward as problems with Bill C-393?