Health Committee on Oct. 30th, 2012

[Libby Davies, NDP, Vancouver East, BC]

First of all, I'd like to thank the witnesses for appearing today and making your presentations.

You've opened up a whole subset of information for us. We're doing a study on technological innovation, but what you've really brought forward, all of you, is how good we are at doing early stage research but not following the path. I think all of your illustrations today, Dr. Menon, Dr. Weaver, all of you, are very illuminating. I feel that at some point we will need to call in other people to get some answers here. It is very concerning.

In the notes that we have for the committee, one thing I found interesting that relates to what you're saying is that there have been studies done showing that 80% of government funding for health-related R and D, and I'm sure it's not enough in and of itself, supports health research at early stages.

This is very pertinent to what you're all telling us today, that we have apparently a poor ability to follow through on how the research is applied and commercialized.

I want to leave it open to all of you to comment now, if you can, or in writing later. Because we're doing this study, what do you want to see the Government of Canada do to correct this situation? Do we need to have further later stages of research? Do we need to be working more with universities to ensure that they're supporting our researchers in the application of commercialization?

This is your chance to tell us what we should be saying to the federal government to correct what sounds like a pretty bad situation, an area in which we're now lagging far behind, even though we have fantastic researchers in this country.

I leave it at that open question, Madam Chair, so that the witnesses can follow up.

[The Chair, Conservative, Joy Smith]

Who would like to answer that question?

[Libby Davies, NDP, Vancouver East, BC]

Please be very specific, if you can, about what you want the federal government to do.

[The Chair, Conservative, Joy Smith]

Dr. Menon.

[Dr. Ravi Menon]

I have some comments from London, Madam Chair.

First you have to define who is good at research and who is failing at research. There are scientists in many different disciplines, of course, and across a great scale, all the way from academia to industry. When you have critical masses in any given area, you start to accumulate more and more talent. We have critical mass in academic research. I think that's why Canadian universities tend to do quite well across a large range of disciplines, particularly in health care.

However, we do not have in this country a critical mass of innovative companies that are involved in medical devices or in drugs. We have a few, many of them branch plants of large multinationals, so that their heart is not in Canada. Because we don't have this environment, we don't develop the people we need for assessing technologies for the companies. There is no need for them.

I have been doing a lot of consulting for venture capital companies, for 20 years, in fact. I have never once in 20 years gone to a place in Canada to assess a technology. Canadian companies hire me to go to the United States and Europe to assess technology. When I file patents, I use lawyers in either Milwaukee or Chicago, because there are no Canadian patent lawyers who know the technology I'm developing.

We need a major sea change here, and I don't think forcing academic scientists to do the commercialization is the right idea. We need, and the government needs to make, an environment in which innovative companies or academics who want to leave academia and go into commercialization, of whom there are many, would be facilitated in doing so. It's partly a question of tax structure, partly of incentives, partly of being able to provide real estate in proximity to major centres of academic innovation.

If we don't have those, we can't build that culture. We can keep digging and drilling and cutting and fishing for the next 100 years. It won't change many of our lives. But when all that is gone—and it will be, as it has gone in Japan, Germany, the United States, and the United Kingdom—we will be 200 years behind all these other countries in boarding the innovation band wagon.

[Libby Davies, NDP, Vancouver East, BC]

Is there more time?

[The Chair, Conservative, Joy Smith]

You just have about 50 seconds.

[Libby Davies, NDP, Vancouver East, BC]

I invite any of the others to really be specific. What do you want to see the federal government do? What can we recommend that will help you in applying your work?

[The Chair, Conservative, Joy Smith]

Dr. Hormes.

[Dr. Josef Hormes]

I discussed this last Saturday. My feeling on the NRC's IRAP is that it is not a very effective program for small companies.

[Libby Davies, NDP, Vancouver East, BC]

Which program?

[Dr. Josef Hormes]

IRAP is not very effective.

There is a similar program in the United States. Normally I don't refer to the other side of the border, but it seems that the SBIR program in the U.S. is a little bit more effective when it comes to support in the scientific start for small and medium companies.

Also, accompanying them to that first step of commercialization is not very effective. I would change the program.

[The Chair, Conservative, Joy Smith]

Thank you, Dr. Hormes.

Ms. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Madam Chair.

I would like to thank our witnesses for being here today.

As my colleague said, you've taken the lid off some very interesting subjects. I have some questions for a couple of you, so I'm hoping to get to all of the questions I have.

I do want to talk to Dr. Hormes, because I'm from Saskatoon and I'm very proud of Canadian Light Source, CLS, which is located at the University of Saskatchewan in our city. I know that it is a world-class state-of-the-art facility that is advancing Canadian science, enhancing the competitiveness of Canadian industry, and definitely contributing to the quality of life of people around the world.

Here's what I wanted to pick up on. What we heard from you today is that synchrotrons can be used to analyze a host of processes and information obtained by researchers, and can be used to design new drugs and develop new materials for products, such as safer medical implants. You gave us some examples, but I want to give you an opportunity to share more about the new drugs and medical implants that were designed as a result of CLS.

[Dr. Josef Hormes]

I will try to answer that. We have several pharmaceutical companies, of course, as you would expect, from the U.S. They are coming over to use the synchrotron. They are doing protein crystallography for drug development, and that's the end of our knowledge. They are not telling us any details. They are paying for the utilization—that means the commercial utilization is paid for—and they are stopping at one point. They are using it and they are not telling us which drugs they are developing.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay. That's good to know. You did say that it was a user facility, that people came in and—

[Dr. Josef Hormes]

There are two ways. We have access to a normal peer review process when you're publishing things, and we have an access that Dr. Cutler is responsible for, which is the industrial access, based on a fee for service or on paying for using the beam time. Then you are not forced to publish and to tell about your results. That's how all pharmaceutical companies are doing the work. There's too much competition.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

I now want to ask a question of you, Dr. Weaver. I appreciate what you had to say about your definition of innovation. Our government, the federal government, is cutting red tape and streamlining the regulatory process in terms of approving new drugs. Are there any areas where we can further support innovation, as you would describe it, by cutting red tape without compromising the safety of new drugs or medical devices?

[Dr. Donald Weaver]

Drug approval is a long process and, let's face it, the Canadian market is small. If you are developing a drug, you are developing it for the U.S. market, the European market, and the Canadian market, because this is an economic thing. No one is going to develop a drug just for a Canadian problem. You have to sell it in every country you can in order for a drug to be successful. In doing so, one is really at the mercy of the red tape of many other countries, and the FDA can certainly define red tape for you. I think that is a difficult thing.

To follow up on a previous question, though, I think the U.S. SBIR program is a very good program. I think it's something that we should actually look at and try to emulate, because that is certainly something that facilitates the conversion of research to innovation.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Getting back to something that you stated in your opening remarks, or that's in the brief that you passed out to us, you say, “In terms of innovation, the problem is not a failure of scientific innovation, rather it is a failure of business innovation.”

I'd like to give you an opportunity to explain that a little further.

[Dr. Donald Weaver]

I spend a lot of time with venture capitalists and with business people. I usually describe venture capitalists as people whose thorax is devoid of myocardial tissue. That means they're heartless.

One thing that always bothers me is that they always say, “Is this innovative? Is this really good research? You're not doing what everyone else is doing, are you?” You say, “No, no.” You get hammered away at this, and then when they're done, they say, “Okay, now it's done, here's how the business model works. We've used it 45 times. This is what's done, and this is what works.” You say, “Well, thank you. I'm really glad that we're busting our butts for scientific innovation, so that you can put this in a cookie-cutter business model.”

I would like to see the business people be as innovative and imaginative as us. If you have innovative products, sometimes it takes an innovative business model. They could do a little bit of leg work on that.

[The Chair, Conservative, Joy Smith]

You have another minute.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

What have your interactions been like with the federal government in the work that you do?

[Dr. Donald Weaver]

Most of my interaction is with CIHR because they fund and all of my interactions with CIHR have been positive. They fund research. They don't pretend to fund commercial. They don't do that, so I have to go out and find venture capital. CIHR, as far as what it does, has been fine. I've had no difficulties with that.

All of my other activities are mainly with the commercial sector because ultimately innovation is an industrial process. Therefore, you interact with industry a lot.

[The Chair, Conservative, Joy Smith]

Thank you so much, Ms. Block.

We'll now go to Mr. Hsu.