Health Committee on Oct. 30th, 2012

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thank you, Chair.

I'm getting the picture that we have a lot of basic research that's leading to discoveries that are being left on the shelf and not being properly commercialized as opposed to the other picture that industry has needs that researchers are not meeting as well as they should. What you were talking about today, in medical devices and so on, and drugs, is that there are a lot of discoveries on the shelf that need to be pushed out of the laboratory and into the market.

Is that a fair statement? Would Dr. Menon agree with that as well?

[Dr. Ravi Menon]

Yes, there are a lot of discoveries made that with the right environment could be successful in a Canadian or international context. The SBIR program, that the other two witnesses have mentioned, works well not because it's fundamentally different from Canada's IRAP but because there is capacity among the people who run the SBIR program to actually evaluate technology and make rational decisions about what might be successful and what might not be. We don't have that capacity in Canada. I think the reason IRAP fails is that we don't have that capacity. The concept is good, but the implementation is bad because of a lack of capacity.

How do we train people in this country to do that sort of thing? We have universities. They produce hundreds if not thousands of Ph.D.s every year. Some of them could do this, but if we don't have receptors for them in this country, they will go somewhere else, and they do. Capital flows across borders and so does intellect.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

I'm interested, Dr. Menon, in a bit of the history behind some of the devices that you've commercialized that have had some commercial success. I'm wondering, in the development of these devices, what the balance was between being driven by what you saw in the market and being driven by your work as a scientist, and your curiosity-based approach as a scientist. What was the balance between the two of those?

[Dr. Ravi Menon]

It started with curiosity, of course, because no company would want to market a product that they didn't know existed yet. This is the role of fundamental research, to create new products or new ideas that can be turned into products that companies don't even know exist yet.

In my case it was very much a push scenario. It was a push out of the lab. We did curiosity-based research. We showed that MRI at these very high magnetic fields was actually useful for something. Then all the companies started to become very interested in it. In the very early stages they were happy to buy components of their systems—these RF coils, radio-frequency coils, that I talked about—until they developed the capacity themselves or were able to invest in companies like USA Instruments that had also developed that capacity.

We were leaders. We were the first four ultra-high field MRI labs in the world, two of which were with the United States government at the NIH, National Institutes of Health, and the University of Minnesota. We could have captured some of that market here, but there was no receptor for the technology in Canada.

We tried our best. We made our own company. I was the shipping clerk for three years. I filled out all the export forms. We never sold a product in Canada. We sold in Japan, in Germany, in the United States, in England, and all over the world. Of course, I have a day job, so at the end of that we had to stop, and other companies took up the slack.

The problem is, why couldn't we have made a real company out of it? It takes capital. If you don't have capital, venture capital, banks—I don't believe it's the role of government to do this. It's the role of business.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Okay.

In terms of approval of medical devices by Health Canada, do you see any problems with that? Is that being done expeditiously from your point of view?

[Dr. Ravi Menon]

I think Health Canada is pretty good. They too have problems with evaluative capacity, just like business. For example, the MRI guidelines in Canada have not been updated since the mid-1980s. However, we have lots of these very high field magnets in Canada now because Health Canada essentially defers to the FDA on this. Even though on paper in Canada you should not have an MRI device that is higher than two tesla—and we have at least 63 Tesla machines in the country—Health Canada is prudent enough to say that since another agency has approved this, they agree with that and they will import them and use them. I don't see how Canada is the big barrier in all of this.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Professor Weaver, you mentioned that you thought universities needed a more multidisciplinary approach to improve the chances of commercializing discoveries. Could you give us more detail and maybe an example?

[Dr. Donald Weaver]

Sure.

Since I interact with the pharmaceutical industry a lot, I get to see it. The pharmaceutical industry will have biologists, chemists, and biochemists in the same building. When you, as a biologist, have a problem that needs a chemist's answer, you go down the hall and speak to them. That facilitates that. In Canada there may be a biology department and on the other side of campus there may be a chemistry department, but they barely know each other exists. I'm not sure how to do this because universities have been in their same structure since the 1800s, and they're not noted for radical change. It would be nice for some institutes to be formed, say, which may have a particular disease focus or particular mandate in which they would take people from different disciplines and put them in as a test case.

[The Chair, Conservative, Joy Smith]

Thank you so much. Our time is up.

We're now going to go to Dr. Carrie.

Before we do that, Dr. Hormes, I would love to have you stay here, but I know you have an important meeting to attend.

[Dr. Josef Hormes]

You can't get rid of me directly.

[The Chair, Conservative, Joy Smith]

I'm only trying to help you. I thought you'd lost track of time.

[Dr. Josef Hormes]

Deputy Minister Yeates shifted the meeting to 12:30. That means I can stay another 20 minutes. We just received an e-mail. I have a little more time. I'll be leaving on time.

Thank you.

[The Chair, Conservative, Joy Smith]

Excuse me, Dr. Holmes, I was trying to tell you that often we get so interested in our topic that we lose track of time. We love to have you here. I'd love you to stay the whole time. I just wanted to make sure you knew you were at 10 minutes. Great. You can stay here until 12:30 then.

[Dr. Josef Hormes]

I can stay until 12:15 or 12:20.

[The Chair, Conservative, Joy Smith]

Wonderful.

Now we will go to Dr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madam Chair.

I want to thank the witnesses for a very interesting panel so far.

I want to talk to Dr. Weaver.

You made some interesting statements. One was “innovation is an industrial process”. I know you also just stated that universities have had the same structure in Canada for some time now.

In the U.S. they do things a little differently. There are researchers with IP control, IP rights, things along those lines. There seems to be a different culture down there as far as taking risks are concerned. You mentioned venture capital.

Our government is going down the road to cutting red tape, streamlining things for researchers and industry, but I was wondering what else we could do. I know the government has been very supportive of a project. I think you know about MaRS in Toronto. Is that one of the models we could be focusing on more, like incubators, getting people from different disciplines and academia and industry together? Is that what you're talking about?

[Dr. Donald Weaver]

MaRS is an interesting idea and there are many aspects of MaRS that I like. Other times I think it's from Venus.

Within MaRS, we have the example of the university hospitals at the University of Toronto also working with the university. I always liked that. University hospitals, of course, can have their own research institutes and their own research efforts, which could be distinct and different from the universities with which they're associated. I put a lot of hope and stock in teaching hospitals and university hospitals as places in which this silo mentality to which I have referred is broken down a bit more successfully. Within a teaching hospital, a university hospital, you can have opportunities where you do have multidisciplinary people working, and so I think that could be useful.

[Colin Carrie, Conservative, Oshawa, ON]

On the way our system functions, you mentioned these silos—

[Dr. Donald Weaver]

Yes.

[Colin Carrie, Conservative, Oshawa, ON]

—and I think the key is getting people together in that regard.

I know CIHR works on fostering original research. Do you have any suggestions on how CIHR could change the way it invests in research to better involve all these stakeholders to produce more pertinent research?

[Dr. Donald Weaver]

That's a dangerous thing. I would hate to think that the research budget has x number of dollars in it, and so to solve the problem we're going to take all the money from the basic science people and whip it over to the applied people. The end result is that we'll just gut basic science, and we've already said that basic science is particularly strong. I don't really think that a massive reallocation of existing funds is going to solve a problem. It's going to create new ones.

We keep saying how we have very good research, and we do, and I think we should keep doing the research we're doing. We do that right. The problem is in its translation into products. Ultimately, it would be nice to somehow establish an environment in which the people at universities who want to do this could do it, but I don't want CIHR to turn into a drug company. That's not its role.

[Colin Carrie, Conservative, Oshawa, ON]

I do appreciate the different comments. You have said that innovation is an industrial thing and you don't want to see the government agencies turn into drug companies, or anything along those lines.

Maybe I'll turn for a minute to Dr. Menon.

You said you don't believe it's the role of government to be doing that. Our government has been taking action to cut the red tape, cooperate with the Americans and the European countries to streamline processes for approval, things along those lines, for drugs, medical devices. I was wondering whether you are in contact with the Europeans in terms of supporting regulatory cooperation and things along those lines that might be able to help us at this end.

[Dr. Ravi Menon]

I have done a little work. I have a colleague who sits three offices away from me, Dr. Blaine Chronik, who's also a Canada research chair. He does a lot of this work for Health Canada.

The reality is there is virtually no harmonization with the EU, or even within North America, on devices, drugs, or even electrical systems. We have the CSA. It's considered one of the stamps of approval internationally. In Europe they have CE. In the United States they have UL, which is Underwriters Laboratories. When we get a piece of medical equipment from the United States and it has UL on it, we have to spend thousands of dollars getting CSA approval before we can plug it into the wall at our university, because those are the provincial and federal standards.

I'm afraid that red tape has a long way to go before it's actually amenable to the exchange of all these things in any kind of seamless manner.

[Colin Carrie, Conservative, Oshawa, ON]

I know that we are working at that. Over the years there has been a buildup of all these regulatory barriers and things along those lines.

Are you familiar with MaRS and how that works in bringing industry and academia together as incubators and things along those lines?

[Dr. Ravi Menon]

Absolutely. I know MaRS very well and have a number of colleagues who have worked with it. It's a model, as I think Dr. Weaver said, but it's not the only model.

In the United States, as you mentioned, they tend to do things very differently. The Stanford Research Institute was several hundred acres of bare, barren land next to Stanford. It's an area we now call Silicon Valley, but it wasn't built as anything other than a place to house inventive people who wanted to start companies. Stanford didn't have a whole lot of say. They just had an IP policy that allowed people to run with the patents. The venture capitalists, who are all over Palo Alto now because of that, were the people who provided the seed money. It didn't take a lot of artificial constructs like MaRS or the NRC kind of development programs we have to do this.

I think you can build these, but if there's no actual company, no receptor there for the technology and no way to fund a receptor, it doesn't matter. You can have a beautiful atrium, and that's all it is.