Thank you very much, Mr. Chair and honourable members.
On behalf of Canada's Research-Based Pharmaceutical Companies—Rx&D—thank you for the opportunity to appear before you today. As you have heard, Declan and I are here representing Rx&D.
To start, Hoffmann-La Roche Limited is a member of Rx&D. We have Canadian operations in Mississauga and Laval. I am here before you today as the acting chair of Rx&D's intellectual property protection committee.
New medicines and vaccines represent some of the most advanced, safe and effective treatments available to help Canadians live longer, better and more productive lives. Our medicines also ease the burden on the health care system by avoiding more costly hospitalizations and invasive procedures.
The innovative pharmaceutical sector is a key player in Canada's knowledge-based economy. We account for some 46,000 well-paying direct and indirect jobs in Canada. Last year alone, we invested $1.3 billion in research and development and we contributed $3 billion to the economy. One of the drivers of business investment, commercialization, and prosperity is a country's intellectual property, or IP, regime. This holds true for sectors from aerospace to resource development, from information technology to the innovative pharmaceutical sector.
A globally competitive IP regime supports other policy efforts as well, such as tax policy, regulatory efficiency, and investing in research capacity such as universities, hospitals, and clinicians. A key aspect for success in Canada is a predictable and reliable business climate. IP protection is key to creating this stability.
Right now, Canada has a unique opportunity to conclude the Canada-EU comprehensive economic and trade agreement, CETA, and make necessary improvements to harmonize our life sciences IP regime with European levels.
Specifically, we believe the federal government should do the following: one, create an effective right of appeal for innovators in patent invalidity proceedings—it's a simple matter of fairness; two, improve our data protection regulations from eight to 10 years, an incremental but important change; and three, implement patent term restoration, which already exists in every other OECD nation except New Zealand, Mexico, and Canada.
These improvements would make Canada's IP regime more stable and predictable.
A few weeks ago, this committee heard that there was no link between strong intellectual property and pharmaceutical research and development. We fundamentally disagree. The facts state otherwise.
In 1987, pharmaceutical investment in Canada was just $93 million. A year later, Bill C-22 improved the Patent Act, and along with amendments in Bill C-91 a few years later, here is what happened: over the ensuing 25 years, innovative pharmaceutical company investment in Canada grew from $93 million to $1.3 billion, an increase of 1,500%.
Despite an increasingly challenging and uncompetitive environment, we honoured our commitment to Canada. In fact, Rx&D members are the largest private sector investors in health research in Canada, proudly investing more than $20 billion over the last two decades.
To be fair, we acknowledge that our member investments, while averaging $1 billion every year, have declined over the past few years.
This is due in part to other countries surpassing Canada's IP regime. As a consequence, the global pool of life science investments is migrating elsewhere. Other nations, both developed and developing, can also boast of their business climates and top-flight scientific talent. In a fiercely competitive environment, Canada must keep pace. Harmonizing our IP regime to European levels will be the catalyst that helps to halt and reverse this trend.
Mr. Chair, allow me to acknowledge the IP changes that the federal government made to Canada's data protection regime in 2006. These changes played an important role to enable Hoffmann-La Roche to attract and win a $190 million investment last year. This investment will yield a new global pharmaceutical development site in Mississauga, one of six such global clinical trial sites for the Roche group, and 200 high-skilled jobs.
These changes also resulted in Rx&D members submitting 25 new medicines in Canada over the last five years, which would not have occurred without effective data protection.
As for concerns that these IP changes could impact provincial drug budgets, I would note that the provinces have every tool at their disposal today to manage them. Furthermore, Europe has stronger IP protection than Canada, yet EU countries, on average, spend less on health care as a percent of GDP compared to Canada, while benefiting from better access to innovative medicines.
Mr. Chair, you've heard a lot about intellectual property in the context of policy tools and investment levels, but I'd like to conclude by telling you what we think IP means for Canadians.
Over 75% of our investments go to clinical trials that benefit patients. Today there are more than 3,000 clinical trials under way across Canada. These trials are helping Canadians drawn from every background, region, and riding. These are your constituents.
In our Living Proof campaign, copies of which have been circulated to you this morning, Canadians are telling stories about the positive impact of innovative medicines on their lives.
Tannis Charles, 46, from Winnipeg, was the first participant in a global clinical trial for a new rheumatoid arthritis medicine, and her symptoms are now In remission.
Bill MacPhee, 50, from Fort Erie, uses our medicines daily to manage his schizophrenia, a condition he has been living with for 26 years.
Ron Hansen, 69, in Toronto, uses innovative medicines for his COPD, which is a severe respiratory condition.
Today millions of Canadians are managing diseases such as diabetes, cancer, HIV/AIDS, or hypertension, just to name a few, and they are managing them with the appropriate use of innovative medicines and vaccines.
Strong pharmaceutical IP can increase our national wealth, but it is also critical to sustain and improve our national health. In our industry, intellectual property is the cornerstone of encouraging health research. The stronger it is, the stronger will be Canada's ability to innovate and bring new therapies to improve the lives of Canadian patients.
Thank you very much. We would now be pleased to answer your questions.