Health Committee on Oct. 30th, 2012

[Dr. Donald Weaver]

I would fully agree with that. We didn't say we wanted more money. We said that it would be nice if we could better focus it such that the work being done is converted to products. Strategies would be a good start. I'm not asking to pour more money into the existing system, just to use the existing money differently.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Would the other two speakers like to add something?

[Dr. Ravi Menon]

I would agree with all those comments.

In total dollars, we spend quite well per capita, but of course, we only have 30-some million people, and so our total investment in any problem is always small. However, I think we can spend the money that we do spend much more smartly. I would see a number of R and D programs across the country, especially with the National Research Council, being shut down. I would ask the government where this money is going. Is it going to encourage either basic research or commercial capacity to use the results of basic research?

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

It was also mentioned that one of the solutions would be to bring all those competent people together to work in cooperation. What is the role of the federal government in achieving this? The way I view things, those are things happening on the ground, in institutes or universities. How can the federal government help bring these people together so we can have better synergy?

[Dr. Donald Weaver]

I'll let you take that one.

[Dr. Ravi Menon]

I'm not sure I actually know the answer to that. It's a very difficult question.

When Stanford started their research institute 50 years ago, they had a lot of space next to a very famous university. With the University of Toronto or the University of British Columbia or my own university, we don't have a lot of space.

We also need critical mass. Again, we're a small country, so we have to concentrate our critical mass.

[The Chair, Conservative, Joy Smith]

Thank you.

We're just about out of time. Did you want to wrap that up?

[Dr. Ravi Menon]

No. Go ahead.

[The Chair, Conservative, Joy Smith]

Okay, thank you so much.

We'll now go to Mr. Lobb.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you, Madam Chair.

The first question is for Dr. Menon.

In your comments you talked about using patent lawyers in the U.S. to do your patent work in the past. Was that for filing patents in the United States or filing patents in Canada?

[Dr. Ravi Menon]

That's a very good question. That was for filing patents in the United States. Filing patents in Canada is not particularly useful, so we never do it.

We file patents, and we do international filing, and eventually it will get filed in Canada, but there's no reason to protect the technology in Canada because nobody's going to steal it from you.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I worked in the software industry before coming here, so that's why I asked the question. I thought it was peculiar. The way it came out, I thought you were insinuating you were using U.S. patent lawyers to file a patent in Canada. I thought we should clarify that for the analysts.

You've been through the ups and downs and the ins and outs, and if you were going to say the right mix of funding for research, basic versus applied, in a percentage format, what would you see as the right mix? Is it fifty-fifty? Where is it?

[Dr. Ravi Menon]

Well, if you look at any drug pipeline or medical discovery pipeline, I think you have to fund a hundred seed projects to get one to actually pay off. I think the balance has to be very strongly on the research side, because it's very hard to pick the winner. You basically need the marketplace to ultimately tell you who wins and who loses.

I would say it's 80% basic research and 20% transitional funding to get it into industry, and then industry has to take some risk.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I think there was a criticism—and correct me, if I'm wrong—about the way some of the funding takes place in your own school. Some of the pharmaceutical companies will come in with 50% of the funding for the research, and then they own the results and they take it wherever they see fit.

Do you have an issue with that, or is that just a frustrating reality as a research chair?

[Dr. Ravi Menon]

That model has saved my research life in Canada, I can tell you, because without it we would have had very little....

I'm very pragmatic. I'm an American living in Canada because I love this country. I've been here for a long, long time. I don't have a problem with my technologies going to the United States or to Germany, but I feel very bad for this country that it happens.

[Ben Lobb, Conservative, Huron—Bruce, ON]

The Richard Ivey School of Business at Western is known around the world for the quality of the entrepreneurial and business people it has produced through the years.

Can you tell me what relationship you and your department have had in working with entrepreneurs to develop relationships to create some of the commercialization products?

[Dr. Ravi Menon]

Yes. We do work with Carol Stephenson, the dean of the Ivey school, as well as a number of people there. We even have a chair that is funded by the federal government, in fact, looking at health care innovation, which Kellie Leitch was instrumental in helping to secure.

They are interested in big companies, not small companies and, unfortunately, all the business schools in Canada are interested in producing graduates who want to work for large companies. The concept of sweat equity is really unusual in this country compared to the United States, where people will work for no money for many years for a share of a company that might eventually go big.

[The Chair, Conservative, Joy Smith]

Your time is pretty well up, Mr. Lobb. Thank you so much.

We'll go to Mr. Kellway, please.

[Matthew Kellway, NDP, Beaches—East York, ON]

Thank you, Madam Chair, and thank you to all the witnesses for your testimony today.

When we started off the testimony, many of the comments were largely about the failure of the business end and the willingness of venture capital to take on risks. As the conversations evolved, it seems we've come back to the earlier stages in the process. You've actually identified issues even at the basic research part of this process.

Dr. Menon, with respect to this partnership funding for basic research, what are you suggesting might be the solution for that? Obviously, these developments don't get into the hands of venture capitalists. If you have these big companies, they're right at the beginning of the process, claiming ownership.

[Dr. Ravi Menon]

Wouldn't it be a lovely model if we had partnership funding but that partnership funding came from Canadian industry, Canadian venture capital, and Canadian investor groups rather than large scale multinationals? That would still secure the basic research for the people in academia. At the same time, it would be of massive benefit to Canadian industry.

The problem is if both federally and provincially I enter into a funding agreement because Ontario or the federal government says that for every dollar Siemens puts into my lab, they will give me a dollar, Siemens is not going to want to relinquish control of that technology. If we're lucky, and this happened to us with Varian, they allowed us to start manufacturing a product in Canada and we sold it to them. But of course, that increases their cost compared to them making it themselves somewhere in a low rate country.

For the most part, this model is not a really good model. It does help bring money into Canada for basic research. I think many researchers are happy, but it does not help stimulate Canadian innovation in the private sector.

[Matthew Kellway, NDP, Beaches—East York, ON]

Thank you.

Dr. Weaver, you identified the issue with medicinal chemists. What's the solution for encouraging more folks with that kind of expertise?

[Dr. Donald Weaver]

As I mentioned, I would like one of the granting councils to claim them as their own and to put in place a number of studentships, or scholarships, or post-doctoral fellowships to do this. I also think that it would be very nice if we set up post-doctoral fellowships in industry, so that people who come out of our university system could work in a pharmaceutical company for a while, and get exposed to that sort of approach and then bring it back.

[Matthew Kellway, NDP, Beaches—East York, ON]

Great. Thank you.

Mention has been made of the U.S. system. Is it the SBIR? Is that the acronym you're using? What is it about that program that's made it successful and how could it perhaps be adopted here in Canada?

The question is for either Dr. Weaver or Dr. Menon.

[Dr. Ravi Menon]

The SBIR program is run by the National Institutes of Health, which is the equivalent of the CIHR. The SBIR program is a peer-reviewed program. That means our scientific peers help in the evaluation of the technology, the business plan, and all the rest of it. The evaluation officers who administer the program are also skilled in the particular areas.

In Canada, IRAP is not run through a peer-reviewed research program. The people who run the program are not skilled in the art of evaluating the technology. I think we have a very major difference between those two programs.

[Matthew Kellway, NDP, Beaches—East York, ON]

Is the solution perhaps to put evaluators into the CIHR model? Maybe the solution in part is to expand the mandate of that organization.