Health Committee on May 23rd, 2013

[The Chair, Conservative, Joy Smith]

We will get the committee started, ladies and gentlemen. Please take your seats.

We want to welcome our wonderful guests and to thank them very much for their patience. You never know when the bells are going to ring again. Not to worry, but I have to tell you that you have to talk fast, because each of you has a chance to speak for 10 minutes, as individuals. Dr. Hudson, from Biosential Inc., that's for you as well. Then we'll go to questions and answers.

We are very excited about your being here because this committee has done one of the most exciting studies we've ever done. A lot of the committee members feel that way. It is a study of technological innovation.

Without further ado, as individuals, we'll begin with Dr. Tyrrell, professor and director of the Li Ka Shing Institute of Virology, University of Alberta. How exciting.

[Dr. D. Lorne Tyrrell, Professor and Director, Li Ka Shing Institute of Virology, University of Alberta, As an Individual]

Thank you very much.

I'll start with a brief background. I did my MD at the University of Alberta, my Ph.D. at Queen's, and my post-doctoral fellowship, sponsored by CIHR or the MRC, at the Karolinska Institute. I've served as the dean of the faculty of medicine as well as the chair of medical microbiology. I've established three biotech companies and believe very much in the commercialization and translation of research.

Canada receives an A grade in excellent support of educational institutions and research universities. This net result is a really excellent grade for research. However, in innovation, Canada receives a D and is far down the line. Why do we fail to transform our excellent research into innovation and companies? We would expect more based on our research record. Innovation is critical to our international competitiveness and our social and economic well-being and, in the long term, is critically important.

Let me just say that the number one problem is maintaining our discovery research. I think there is a lot of concern out there among basic scientists in Canada that as we move towards commercialization it is taking away from one side and putting to the other. Basic research is really what generates the ideas that transform the health care system. Let me just say that we do 1% of the peptic ulcer disease because a scientist discovered that ulcers were caused by a bacterium and treated with antibiotics rather than surgery. That's an example of how basic discoveries can really transform health care systems.

When I first started practising in infectious diseases, those with AIDS had a life expectancy of about 18 months. Today, they have normal life expectancy. The critical discovery was the structure of the viral enzymes and the production of antiviral agents, which have transformed this disease. There are many such examples, so please do not cut back on our discovery research. We cannot simply trade them off. Not all research should be translated and commercialized. Many of our basic researchers are not trained in that area and should not be forced into that area, but they will continue to make critical discoveries that help build the knowledge base for translation.

We live next door to one of the most innovative countries in the world, and we need to learn some lessons from them. We recruited a Canada excellence research chair, Michael Houghton. When he came to the University of Alberta, he said that he couldn't understand why there wasn't more biotech in the city based on the research that was being done at the University of Alberta. After being here for three years, he said that he had come to understand why there is such a weak biotech industry in the province and in the country.

First, we need to change the culture. In the culture in academic centres and communities they really think about their discovery research. If they get into translation research or commercialization, they're still viewed in many Canadian institutions as second class if they do that.

In the United States, academics often think about discovery, translation, and commercialization all in the same frame, but in Canada, we often think in the academic centres of the commercialization as being a bit tainted. Even our educational systems and evaluation often recognize basic research or discovery research more than they recognize somebody who might have filed patents. A good publication is better than a patent in the academic centres, really.

With patenting costs, you want to see more commercialization. But let me tell you that the people who make the discoveries and the universities they are in have no money to patent. They can put out the initial patent for $8,000 to $10,000, but after that, 12 to 18 months later, they have to come up with between $50,000 and $80,000 to get an international patent. If you don't have the international coverage, you cannot partner with industry. You won't have venture capital or any other money coming in to support it. You have to get international patents.

We also deal with the valley of death between the discovery until you get a product to the level where somebody will come in and help support it. In the United States, they've had the SBIR grants, which have helped many people get across that. There has been a 47% success rate of the SBIR grants at phase 2, the ones that actually go out and produce products and have sales. In Canada, we simply don't have that type of assistance across that period of time. I think we need to see some kind of money equivalent to that, to help us go across.

The Canada excellence research commercialization program has helped recently. It is in a few centres and they have made excellent progress.

There is a lack of angel funding, and venture capital is really vulture capital in many ways. You've got to be very careful with it, and it's very hard to get in Canada compared to in the U.S. Many companies move to the U.S. from Canada because of the SBIR grants or because venture capital or the money to come in and support it is easier to get,

We need to continue to see the emphasis on the pillar 3 and 4 research. We shouldn't think only of commercialization of our research but also of how health outcomes have been changed by a lot of our research as we expanded the mandate of CIHR. There's been some excellent examples of that.

The results of a heart attack used to be a 25% mortality rate; someone with an acute MI would die. But today, it's down to about 5% to 6% during the acute phase. This is related to better ways of using treatment, including the ability to transmit an EKG through a cellphone, to interpret the EKG, and have the ambulance attendants, with the help of a cardiologist, make the decision and give therapy immediately at the site. It often changes the outcome quite dramatically, and you see people who have much better outcomes.

There are many examples where our Canadian health outcomes research has dramatically changed health care in Canada, and we need to see that continue to expand.

Let me say a few, very positive things about what Canada has done. Why we compete so well internationally is that the CFI grants have given us equipment and equipped our labs. Without the CFI grants, that wouldn't have happened.

The MRC and CIHR have broadened the mandate, which I think is very good. Then there are the CERCs, the Canada excellence research chairs. We had a day in Edmonton this last week where 18 of them came in and gave talks on their work, which is really transforming those centres that have CER chairs. Certainly, it has transformed ours, with Michael Houghton’s joining the Li Ka Shing Institute of Virology—that has been a major change. Centres for research excellence and Genome Canada have been tremendous.

But if you're thinking of commercialization, you have to help in the patenting, and in funding across that valley of death, to get them to a point where they can bring in the partners or venture capital, because most stop there.

In the last week, I've had three different people at different universities call me about their excellent work that can't be patented. They did the first patent. The universities can't afford to help them with the second patent. They asked if they could bring it to the Li Ka Shing Institute, if we would look after it, and they'll work out a partnership to do this. It's just an indication of how little money there is in universities to help these people get to the point of commercialization and translation.

Thank you.

[The Chair, Conservative, Joy Smith]

Thank you very much for your very insightful comments. With some of the terminology you used, I had to ask my analyst what it was. Don't be sorry—it's wonderful that you bring all sorts of new information to the committee.

We'll now go to Dr. Brindle, professor at Brock University. Please go ahead, doctor.

[Dr. Ian D. Brindle, Professor, Brock University, As an Individual]

Thank you, and thank you for inviting me to give this talk.

I put this slide together from the journal Nature Reviews . I've modified the data so that it's hopefully more understandable to a lay audience. It basically illustrates the cost of bringing a drug to market over the last 60 years. The costs are corrected for inflation, and what you see is a process that in many ways looks like it's going out of control. The cost of generating new drugs is going up and up as a consequence, in part, of regulation.

The scare started back in the time of the thalidomide scare when the drug called thalidomide was given to women in the first trimester of pregnancy and produced a large number of kids born without limbs as a consequence of the teratogenic effects of these drugs. There was a great deal of effort put into regulating the drug manufacturing industry as a result.

These are the costs; these are not the profits made by the drug companies. The natural tendency, looking at these data, would be to say that we have to stop making drugs because they are just costing us too much money, that we need to go back to the drugs that we've had in the past, and that's where we need to put our effort.

The next slide quotes a piece from the National Post, from last fall, which basically says this isn't really part of the picture. The drugs only amount to some 9% or so of the costs of bringing medical assistance to patients, so we can't just assume this is unnecessary. We'll see in the next slide why that is.

The other message was the notion that governments should think like investors, with long-term assessments of the relative return on investment, which I think is what the witnesses here today are going to be speaking to.

If we go to the next slide, you will see that an economist, Frank Lichtenberg, estimates that relying on existing drugs will get us nowhere, that the costs of health care will continue to increase and that the drugs are necessary. We still need to develop new drugs because, as it says in the second bullet point here, organisms are evolving constantly. We're playing a constant game of catch-up against drugs, and some organisms are very difficult to deal with, such as MRSA, the multiple-resistant Staphylococcus aureus, which is running rampant in a number of hospitals across Canada and, indeed, across the world at the moment. Diseases like that, like Clostridium difficile, are diseases that are modern diseases and need to be treated with modern medicines.

Perhaps I could just speak about the kinds of things going on at Brock University. I echo Dr. Tyrrell's comments about the value that we put on the Canada research program and the Canada Foundation for Innovation in bringing tier 1 researchers—literally as tier 1 Canada research chairs, in many cases—back from other countries to Canada, or by recruiting them from other countries themselves.

If we look at the work here, one of the things going on at Brock University at the moment relates to daffodils, as you see in the picture. Daffodils produce a chemical compound called galanthamine. Most of you are younger than I am and so you never have to worry about Alzheimer's disease—at least not yet. Galanthamine is used in the treatment of early-stage Alzheimer's disease.

Our tier 1 Canada research chair, Vincenzo De Luca, has been working on an efficient extraction of this particular compound—that's the structure of it up there on the screen—to make it more efficient and bring it quickly and cheaply to market. It's not an unknown compound but a known drug, and what we're looking to do is to decrease the cost of production. Despite the fact that southern Ontario looks like a very busy place growing grapes and everything like that, we have acres and acres and acres of land that can be used for growing interesting crops like the daffodil.

The next one is the Madagascar periwinkle, which is the source of two major anti-cancer drugs—you see those at the bottom of the screen—vincristine and vinblastine. This plant is sold as an ornamental and you can buy it in your local Home Depot and put it in as a border plant, but it produces two major anti-cancer drugs, which are useful against a whole range of cancers. Vincenzo De Luca, our tier 1 Canada research chair—who, by the way, we recruited from North Carolina despite the fact that he has his Ph.D. from the University of Montreal—has some 4,000 variants of the Madagascar periwinkle. He's trying to find the best, high-producing plant that will allow us to make vincristine and vinblastine, currently very expensive drugs, much more accessible to the market.

The next slide is actually an interesting one in a way. There's this chemical here called pancratistatin. It's an incredibly powerful anti-cancer drug but it only works in vitro. You can only kill off cancer cells in the test tube. Once you inject it into people it becomes ineffective because it's not very soluble. It doesn't actually work in the organism, so the question is what do you do with a compound like that? You have something that's a good candidate but it doesn't do the job.

Another of our tier 1 Canada research chairs, Tomas Hudlicky, who came to us from the University of Florida in Gainesville, is working on variations of this particular compound to make it more accessible. In fact, he has tested a number of variants of this compound that have greater solubility and are effective at the kind of dose that would be useful as an anti-cancer drug.

Although it's patented at this point, I echo Dr. Tyrrell's comment about how much money you can spend on this to get it through the next stages, through the initial studies to animal studies to human studies. It's a huge job, as you saw from the first slide that I showed you, so at the moment we're working with a small company called Lorus Therapeutics in Rexdale, Ontario, hopefully to move this forward and to produce what essentially, for the treatment of cancer, will be a new drug, although the compound, as I said, has been known for some time.

My final slide speaks to some of the issues that I know are not going to be a surprise to any of you but that you know full well: how to reduce the costs of treatment, the costs of aging, the treatment time, and the duplication of tests and so on. Getting information quickly flowing through the system is obviously one of the things we've heard about.

One of the things that really need a lot of attention is preventative medicine to stop people needing to go to a hospital for treatment. For example, using simple exercises to improve balance will reduce the percentage of falls by people over 65. Falls represent a major source of death for people over the age of 65. Being over the age of 65, I take that quite seriously, and I'm sure many of you do as well.

These things are very important. They don't cost a lot. They can be franchised. Get the right method. Get people improving their balance, and things will improve at very little cost to the system.

[The Chair, Conservative, Joy Smith]

Dr. Brindle, your time is just about up. I just want to let you know.

[Dr. Ian D. Brindle]

I have one more thing to say and then I'm done.

The last-but-one point on the right-hand side of the screen speaks to some work that was not actually done at Brock University. It was done at the University of Calgary, and the reason I know about it is that my daughter did some of this work. Simply replacing a regular vegetable oil with fish oil improved the life expectancy of premature infants with infected bowel disease. The life expectancy was significantly improved and the time to recovery was halved by the simple expedient of moving from simple vegetable oil to fish oil.

Thank you very much.

[The Chair, Conservative, Joy Smith]

Thank you, Dr. Brindle. You've given an extremely informative presentation, and we thank you for that.

Now we go to Dr. Albert Friesen. I understand you're from my hometown of Winnipeg, so a special welcome to you, Dr. Friesen.

[Dr. Albert Friesen, As an Individual]

Thank you, and thank you for the opportunity. It's much appreciated.

[The Chair, Conservative, Joy Smith]

Please do your presentation.

Thank you.

[Dr. Albert Friesen]

Again, thank you to the committee and to you for this opportunity to share.

Health innovation has been a lifelong interest of mine. Actually, I think it's a calling and a passion. This is actually the first time I've organized some of my thoughts from over the past 40 years.

The business that I'm in right now is helping to start-up biotech companies, life science companies. If a university professor or somebody contacts us and says they have a cure for cancer, if we like it we form the company to provide the financing and the infrastructure to manage IP and all the rest of it. I get probably a dozen or two dozen a month, so we have lots to choose from. I've done 17 companies. In the last five years we've only done two because of the economic situation.

I've presented and shared with you six ideas, and I want to illustrate the six ideas through two stories that I'll share with you. I played a lead role in one story, a very successful Canadian story. The other is also a successful research story that I observed from a bit of a distance.

I've given you the six areas to focus on and some of them, as you would understand, overlap with and are the same as Dr. Tyrrell's and others'.

The first one is, of course, strengthening and continuing to support basic research. This is really a key underpinning to any commercial venture or technology for the future. There are many different stories, so I was pleased. I'm on the CFI board. I see what CFI has done with billions of dollars to transform Canada. It has been in world-leading research but it was dipping a bit. CFI has regenerated it.

I was pleased to see Minister Goodyear's announcement this past week on the NSERC funding. I think that's a really strong message to the community, and I support that. Even though I'm in the business of commercialization, I think this is an absolutely necessary part of growing in the future.

Venture capital is an obvious area, and we talk about it a lot. My point is that venture capital needs to be managed locally. The second story will demonstrate that. Again, the government is encouraging venture capital, which is good and it's a start, but we really need to have local management across the country for this venture capital.

The other thing that is really critical and what I think is actually one of the most important issues is teaching and nurturing entrepreneurship. That's what commercialization is all about. A lot of our universities are now teaching entrepreneurship in their business schools, but I don't think that's the place to start. I think it should start at elementary school, really a whole dynamic. When you get into the business world, it's competitive. You know that in your situation you compete to win a seat. Our kids are taught in hockey not to keep score, that it's all fine, and not to worry about graduating, and that they'll get through. I think that's been a misunderstanding of the need for nurturing. We need to teach competition and we need to teach entrepreneurship starting at the elementary school and all the way up. I think that's key for our success and even for Canadian productivity.

Procurement policies have been talked about. I think it's important and I'll demonstrate that in the first story.

Dr. Tyrrell mentioned the cost of regulatory processes. When I started in the business in the seventies, regulatory was an entirely different environment. Today it's very costly. It's ironic that in our hospitals, where we provide health care, there are substantially fewer regulatory processes than the regulatory processes you have to go through for drugs. Every single drug that is introduced to the U.S. under the FDA is presented to Health Canada. We have one-tenth the population and one-fifteenth the budget, and that budget is used to review every single drug that's been applied for under the FDA. It doesn't make sense. We have to coordinate our regulatory pathway with other countries. They do that in Europe, and we need to do it in Canada.

My sixth area is a bit of paradigm shift. We have a single-payer system. Canada has led in the world in terms of a single-payer social health care system. But we have a multi-provider system. I think GE provides MRIs with which it makes money. We have a policy that says we want to have socialized medicine and we have to integrate it, yet we have multiple providers. We could reorganize to have competition in order to improve efficiencies through a multi-provider system.

The first story I want to tell you about demonstrates some of these things. It is one I got involved with in the prevention and treatment of Rh disease. Many young people today don't know what Rh disease is. It's the incompatibility between a husband or wife when they marry. If the mother is Rh-negative and the baby is Rh-positive, the mother builds up antibodies and destroys the baby's red blood cells. It was a very traumatic experience in the 1950s and 1960s. Today, young people don't know what it is.

Dr. Chown initiated some basic research in Winnipeg that was world-leading. As a pediatrician and professor at university, he was impacted by the loss of these babies and became involved in the research, initially discovering why, and then the treatment, using an Rh immune globulin, a product extracted from blood.

He helped Ortho, a Johnson & Johnson company, do the clinical trials on the first drug in the 1960s and then read about a new and better way of making this drug from a German, Hans Hoppe, in Vox Sanguinis.

He took this new technology, which would lead to lower cost and improved treatment, to Connaught Laboratories, which was the pharmaceutical company in Canada. They said they were not interested. Later on, when I became involved, I approached Johnson & Johnson. They said they were not interested. So Dr. Chown said, maybe we'll try it in Winnipeg. He approached me—I was a Ph.D. student—and said, “I've read this publication about a new technology. Would you be interested?” I was 23; I had never really thought about drug development. But as a chemist, I said “Why not?”

[The Chair, Conservative, Joy Smith]

Excuse me. Did you say you were a Ph.D at 23?

[Dr. Albert Friesen]

No, I was just finishing my Ph.D.; I hadn't quite finished.

So he had that idea. In the interview, I asked him what the future was—an idea, a publication...? He said, “What you make of it.” That's what his answer was. I was fortunate to be maybe naive and somewhat optimistic, and I took it on.

We started in 1971; this is now 40-some years ago. I built the building for the researcher/manufacturer in 1973. We started on the clinical trials in 1975 and got approval in 1980—so, in nine years. That's short in today's terms, but still, it was nine years. It led to what is now Cangene, which was at 800 employees, though there are 600 now—they have downsized a bit—in Winnipeg.

It led to many other spinoffs. I've been involved since then in 17 other companies, 12 of which exist today. I think six of them are biotech associate members, and so on.

So Dr. Chown, with his vision—knowing there was a problem with babies and that there was some research out there—led to this development.

The other story is about a professor at McMaster, Dr. Harley, one of the world's leading researchers. In Canada, he did research very early on to understand why cancer cells divide—about telomeres at the end of DNA.

He worked closely with two other researchers, one in New York, and I forget where the other one was, who won a Nobel prize for this. I'm not sure why Dr. Harley didn't win a Nobel prize, but he was involved in the initial publications that led to these Nobel prizes. This was in early 1991 or 1992.

In 1993, he and his entire research team were attracted to San Francisco to lead the research in a company called Geron, which was one of the first companies in the world to work on stem cell treatments. Again, they were the first in the world. The venture capital group from San Francisco attracted his entire team. I'm not aware of any commercial ventures out of that research in Canada. It's a huge commercial venture in San Francisco.

What are the messages? What is the difference?

[The Chair, Conservative, Joy Smith]

You have a minute.

[Dr. Albert Friesen]

I have one minute?

Amgen and Genentech are among the largest biotech companies. In both cases, the science was matched with a business entrepreneur. That didn't happen in the case of Dr. Harley. Dr. Chown was entrepreneurial; I was fortunate to be entrepreneurial.

So I'm back to my main message: entrepreneurship.

[The Chair, Conservative, Joy Smith]

Thank you, Dr. Friesen. It's been a very interesting presentation.

We'll now go to Dr. Craig Hudson.

[Dr. Craig Hudson, President and Chief Executive Officer, Biosential Inc.]

Thank you.

I'm a psychiatrist. I admit that I'm over-educated, and I thank the Canadian taxpayer for paying for all of that. I have an M.D., am a psychiatrist, and for a period of time worked as an MRC commission scientist.

I was working in Stratford many years ago and wanted to find a way of treating people with chronic insomnia, which is a very common complaint. I didn't really want to use medications; I wanted to try to do it in a natural way that would fit within the chemistry of the brain, the way we're supposed to do it.

I worked with the Guelph Food Technology Centre—a centre that is now being sold off—and discovered that the pumpkin seeds in southwestern Ontario are the highest source of tryptophan. One gram of pumpkin seed protein from southwestern Ontario pumpkin seeds is equivalent to a full glass of milk. If your mother told you to have a full glass of milk, just a few little grams of the pumpkin seed would have done it.

I had to cross over the valley of death that Dr. Tyrrell has talked about: how to go from an idea to a product. I had a clever idea: I knew I had to combine it with dextrose—and that made it a patentable idea—in order to get it across the blood-brain barrier. And I had a clever wife. Those are the two attributes I had.

With that, we have grown, not to the degree of the companies you've heard about so far, but we're doubling our revenues every year. We'll be hitting $1 million this year and hopefully $2 million the year after. Most of our sales are in Europe, not so much in Canada and the U.S.

There are a few things I can share with you about the struggle I had. There really is this valley of death. You have to go from an idea to getting a product out there immediately. The first patent costs $10,000, and it's almost like gambling. You put the first $10,000 down and think, okay, I'm in. But it's then an exponential crisis of cash flow that you have entered into. Once you have that in your mind, you have to log on to revenue as quickly as possible.

That's what I did with our little thing. We took our pumpkin seeds, we found a way very quickly to develop it into a product made into a functional food, and then I hopped on a plane and buses and got it into distribution in Europe. Without that, we would not have survived.

I'd like to make a few points, if I can.

There's something wrong with the fact that I buy my pumpkin seeds in Wisconsin, and yet the original seeds came from Ontario. It's not that people don't want to cooperate; I'm working with the local farmers now to find some organic spaces in order to procure them. We need to think more clearly about manufacturers who can manufacture at a pharmaceutical level and yet have an organic, functional food. That's what I have to find, and it's really tough to find in Canada.

Then, I want to echo what Dr. Friesen said: you have to learn to be an entrepreneur. I learned the hard way, probably too late. It would be good, if we could, to teach that in medical school a little bit.

I know that this is socialized medicine. I'm not opposed to socialized medicine; I want to be very clear about that. I'm happy to have gone through a socialized university. I assure you, my bank loans would have been huge. I favour people being able to receive health care based on need rather than on ability to pay.

At the same time, doctors have to become entrepreneurial, if we're to take the ideas we have into the marketplace. There Is really not a great fit right now, in many cases, between the way doctors are trained and the way venture capitalists are trained. They are two very different and competitive ideas. Venture capital, by and large, is not patient capital, and academics are perhaps too patient, and so you have a kind of collision of cultures.

I'll leave you with that: if you could, focus on “Canadian farm” brand as really a huge brand out there—people love it in Europe. Doctors should become a little more entrepreneurial. I'll leave it at that.

Thank you.

[The Chair, Conservative, Joy Smith]

Well, how interesting; this presents a very interesting aspect of the medical and health care field.

Thank you for doing that.

We're now going to go into our seven-minute question-and-answer period.

We'll begin with Ms. Davies.

[Libby Davies, NDP, Vancouver East, BC]

Thank you very much, Chairperson.

Thank you to our presenters for being here today.

Madam Chair, I'd just like to take a moment, as part of my time, to give notice of a motion that I want to put forward. The motion is as follows: That, the Committee immediately undertake a study to review Chapter 5 of 2013 Spring Report of the Auditor General of Canada: Promoting Diabetes Prevention and Control; that it hold at least two meetings on this study to hear from witnesses, including the Minister of Health; that it report its findings to the House of Commons.

This is a very major issue that's facing us. It was identified by the Auditor General. So I'd like to give notice that we will be moving that motion.

Thank you to the witnesses for giving us your knowledge and, I think more importantly, your experience, because that's what helps us understand what some of the barriers and the challenges are.

We are the health committee, but I feel like we've intersected with the economic world, as we're looking at this issue of innovation and we're looking at, as you say, translating ideas into commercial production and use. I don't feel terribly knowledgeable about it. I kind of struggle sometimes with what the continuum is and how it all works. Based on what you've told us today, though, I have a couple of questions.

Dr. Tyrrell, you mentioned—in fact Dr. Hudson mentioned this as well—the patent costs that can start at $8,000 to $10,000 and then quickly get you up to, as you say in your brief, $80,000. This is too early for the venture capital folks to become involved.

What would be a good federal response to that? Are you suggesting that we need to have some kind of agency that would actually provide grants or assistance loans, or whatever it might be, so that at least that hurdle could be gotten over? If you can't deal with that, you can't go much further, I guess.

[Dr. D. Lorne Tyrrell]

No, I think you're absolutely right. That is a major problem.

If you're a clinician, you may be able to finance this yourself, but a lot of the discoveries are made by basic scientists who do not have access to that kind of money.

I should have said a little more about what I did in this business. I developed the first antiviral for hepatitis B. There are 400 million people worldwide who carry hepatitis B, and hepatitis B is the commonest cause of fatal cancer in the world. We developed the first antiviral here in Canada. It is now marketed in over 200 countries, and cumulative sales are around $6 billion.

When the first patent was filed, the University of Alberta paid the patent cost for the first year. After that, we found money from family and friends to somehow patent it. That can't always go on like that.

When we partnered, I tried to set up some venture capital. There was Vencap in Alberta. They would have funded me to build a gravel pit or a restaurant, but biotech? No way.

[Libby Davies, NDP, Vancouver East, BC]

Can you focus, though, on what you would like to see happen in terms of...? We're going to be doing a report. What do you think the federal government should do? Should there be an agency that actually provides assistance, or is it something that you see more in the private sector?

[Dr. D. Lorne Tyrrell]

No, you have to get this money early, and it has to come from governments. It should be a partnership between the federal and provincial governments.

They're both saying there should be more commercialization out of universities. They cannot do it unless they come together in a partnership to say how we're going to fund the patent costs so that we can protect this and market it.

If that doesn't happen, we won't see much of this commercialization occurring that you want to see from universities.

[Libby Davies, NDP, Vancouver East, BC]

I do think that sometimes there's an interesting discussion between an idea of entrepreneurship and working in the private sector, but then there is a role for government. Sometimes I think we're led to believe that they have to be completely separate, and that if you're an entrepreneur you do it on your own. You use capital, etc.

But here you're clearly saying that there is a role for in effect the public sector, the state, to become involved.

[Dr. D. Lorne Tyrrell]

Again, Michael Houghton brought the contrast that when the University of San Francisco had an important discovery, the patent costs were covered by the university right away. Here, they cover the first year, but after that, when the real costs go up, the universities back off. It's very different.

It's surprising; I mean, the country with the biggest free enterprise in the world is the United States, but they put in government money to get people over the valley of death with the patent costs, and here, in a country where we believe in government support for many programs, we don't have that money for patenting and we don't have that money to get people across the valley of death.

So you hear how people struggle to try to get there, and most of them give up.

[Libby Davies, NDP, Vancouver East, BC]

I have one other quick question. I was interested in your point number 6, about improved access to databases and taking advantage of the publicly funded health care system. What is the barrier there? Whose databases are you talking about? Isn't that a more local issue? Again, what would the federal role be in that?

[Dr. D. Lorne Tyrrell]

It's a local issue, and the reason you can't get access to these databases is put up as privacy issues. Many countries have got over the privacy issues and found ways to get data unlinked with patients. Many of our organizations, our health care systems, are bureaucratic obstructionists if you try to get access to that data.