Industry Committee on April 18th, 2007

[Stephen Lewis]

That's a terribly interesting question. Thank you for asking it.

I think that some of the host governments are doing a superlative job. The Government of Botswana, the Government of Rwanda, the Government of Uganda--these governments are working very hard and quite effectively. I'm very impressed by the recent efforts of the governments of Zambia and Malawi. So the governments themselves are now seized with the problem; they're moving heaven and earth to overcome it.

I'm also enormously impressed with the Clinton Foundation. It moves with a sense of urgency that is rarely seen in response to communicable diseases. It's a bit analogous to the Gates Foundation. It doesn't have that kind of money, but it has people on the ground and it has the power of the President's charismatic inclusiveness, and you have an organization that is really quite remarkable in the way it responds.

There are some international development agencies in the bilaterals. The U.K. agency DFID and the Irish are making particular efforts in various countries to break through. And I'm perfectly ready to acknowledge that the presidential initiative in the United States has managed to provide treatment for more than one million people worldwide now, which is in its own way significant. I may disagree with aspects of the program, but I have to acknowledge the truth of that.

CIDA, other than the tremendous contribution to WHO, seems less engaged than it might be, although my sense is that CIDA wants to be more engaged if it can find the resources.

I'm quite disappointed with a number of the UN agencies, although I think the World Food Programme distinguishes itself and the World Health Organization distinguishes itself. I think UNICEF has been less effective, and the United Nations Development Programme has been less effective over the last few years. There's a real problem around children, which shouldn't exist. Frankly, the NGOs can be terrific, some of them, really strong on the ground—Save the Children, CARE, World Vision. Doctors Without Borders does a magnificent job on the ground. I'd almost lay my life down for Doctors Without Borders. And there's an American outfit called Partners In Health, which is extremely effective on the ground.

So I think it's a mixed bag, but you can always find very good actors, indigenous and external, that are making a difference.

[Colin Carrie, Conservative, Oshawa, ON]

You mentioned a couple of governments—Botswana, Rwanda. Are you able to describe for us what they are doing that the other countries aren't? Are they putting things like appropriate distribution mechanisms in place to deliver the drugs to affected areas? Are they working with us a little bit better on the international level? What are they doing that the other governments aren't?

[Stephen Lewis]

I think, in one sense, it's the quality of the political leadership that has made of the pandemic a cause célèbre, and everybody is intensely involved. What many of them have done is remove all costs from drugs, so that drugs are free. They then understood that you shouldn't concentrate it only in the urban centres, you should move it out through the rural hinterland. And it wasn't always necessary to have a doctor do the work; it could be done by nurses and by community health workers.

They've also instituted very intensive training and retraining programs to attempt to fill the gap of the loss of workers in the health care system. And they have this encouragement to people getting counselled and tested. They have, beginning with Botswana, what they call routine testing, where everyone who presents themselves...even if you have a cold or you have cancer, if you present yourself to a doctor or nurse they will ask if you'd like to take an HIV test, so you get much higher levels of testing.

In a little country like Lesotho, they're now going door to door through the entire country and offering a test to everyone over the age of 12. They've trained 7,000 community health workers. It's worth noting, sir, that these countries are really working very hard at resisting the consequence of the pandemic.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Mr. Carrie, we're out of time. Thank you for that line of questioning.

We'll go now to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Lewis, for appearing here today.

I think it's ironic that as we discuss this, I'm looking at a poster from Tommy Douglas' Humanity First campaign, and the poster says, “People before profits”. Three years ago when we talked about this bill, it seemed there wasn't the political will to actually do the right thing to make the bill the best it could be.

What concerns me—and I mentioned this Monday in our hearings—is that it seems we're treating this as being the first and foremost country in setting a template to be the champions for this. I'm worried about whether or not our legislation actually poisoned the well in terms of setting a standard that other governments followed subsequently. We haven't seen any action anywhere.

I'm concerned; I would describe what's happening as a genocide. We have treatable measures that can help people, and we wilfully, for one reason or another, one excuse or another, do not act on it.

What is happening over there with regard to the loss of individuals who are professionals—the teachers, doctors, nurses? If we actually get treatment over there—to Rwanda, for example, and other places--will their lives be extended? Will they help stop children from being the heads of households? What is the capacity of human ingenuity and learning that's being lost by our not addressing this? Are we losing the capacity over there day by day to actually improve the conditions?

[Stephen Lewis]

The loss of human capacity is a nightmare. I think it's acknowledged everywhere that the damage to many sectors—health, education, agriculture—is severe, and deeply severe. One of the problems in rolling out treatment is that we've lost so many people, we often don't have enough professionals or quasi-professionals to be able to make it all possible.

There is a tremendous effort to train and to retrain. Now, the World Health Organization says that Africa is a million health care workers short, which obviously is a huge number to overcome. But that is now under way in many countries.

When we do put useful things in place.... For example, DFID of the United Kingdom provided a package of close to $300 million over five years to enhance the salaries, the benefits, and the living conditions of the civil service in Malawi, with a particular focus on the health sector. People stopped leaving the country and looking for other places to work. They had some security of income and jobs. The Irish are doing the same in Lesotho.

When in Swaziland there was a wellness centre established for nurses and other health care workers, not only did they feel treated in a special way—one must do that with many of the health care workers, because they feel self-conscious about standing in the same lineups for treatment as the people to whom they will then be dispensing treatment—but in truth it stopped the bleeding of nurses into other countries.

So we have learned that by various interventions, we can maintain what professionals we have. Then you work like the devil to make sure that additional people are added, and you rely on some expatriate help to fill the gap.

But the loss is terrible. Just look at what's happening to the life expectancy in many of these countries; it's dropping to between the ages of 36 and 45. I mean, that's almost less than half of the life expectancy in Canada.

[Brian Masse, NDP, Windsor West, ON]

You mentioned in your presentation the issue over intimidation, feeling that if your country goes first, you could have repercussions from pharmaceutical companies. You mentioned the situation in Indonesia.

We also had that situation during the last go-round here, when Bayer contacted me to lobby to get Avelox off the schedule list, because we'd decided to go the route of a schedule list of treatments available.

Can you describe greater the concern about setting a standard or precedent that could then be used against a country later? The repercussions probably go well beyond even just HIV and AIDS medications. There are probably other medications they're concerned about being shut out from their citizens.

[Stephen Lewis]

Yes, and I think my NGO colleagues would want to argue strongly that this was never intended purely and solely for HIV. That's my preoccupation, not theirs. They would argue, I think, equally that this listing of particular drugs is not compatible with the open opportunity that was given by the TRIPS and WTO arrangement. We've added our own particular stamp, which is a limiting stamp.

I think the sense of intimidation lies in the feeling that all of these countries are tremendously susceptible to pressure around international trade agreements. The pharmaceutical industries have very powerful friends, particularly in the United States.

You'll remember that when South Africa wanted to lower the prices of drugs, a consortium of over 40 pharmaceutical companies took the South African government to court. How much stronger could the sense of “Don't you dare confront us” be displayed? The pharmaceutical companies were forced to back off, with a degree of ignominy and humiliation, only because the world responded. It was just outrageous that the pharmaceutical companies could think they could bludgeon a whole government into submission by taking them to court, and threatening to pull out, and all of that.

It's a very delicate situation. I've never fully understood it, because I don't see that the brand name pharmaceuticals have a very large market in Africa. They're not losing a lot; they're protected for their prices in the western world, where they make their profits and do their research. I would think this piece of legislation could be repaired and made real.

[The Chair, Conservative, James Rajotte]

I'm sorry, Mr. Masse, your time is up.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll move now to Mr. Byrne, and then quickly to Mr. Martin.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Chair.

Mr. Lewis, I want to explore that concept of intimidation. We heard from witnesses just the other day, representing the Government of Canada and key government departments, that we're somewhat bankrupt to be able to explain why this legislative process, the compliance with the TRIPS waivers, is not leading to a better access to medicines regime on behalf of Canadian companies, generic producers. I'm just wondering whether there's some element of intimidation not just of the importing countries, the recipient countries, but as well of Canadian companies who might be involved in this.

You mentioned that India is punching above its weight currently. It has the regulatory environment to be able to produce this, but it also seems to me that it has the business case to offer. It has cheap labour, its production costs are much lower, and so it is now the warehouse of antiretrovirals.

I would like your opinion as to whether Canada, if we were to alter our business case—It seems to me that you are of the opinion that our legislation is pretty good; that notwithstanding the naming of specific countries of import, the legislation is pretty sound. What's happening here in Canada is that the business case is not all that strong for the generic producers to become involved in this.

I'm wondering whether there's a better or stronger role for CIDA to participate in this sort of activity, in much the same way as they provide official development assistance for other types of services, whether it be remote sensing of environments or provision of clean water supplies. CIDA goes out, contracts with existing Canadian companies to partner on official development assistance projects, and often contributes financially to that initiative.

If a generic company were to partner with an importing country and have CIDA partner financially in the project, could that be a better model for the Canadian rollout of the Canadian access to medicines regime?

[Stephen Lewis]

I think I would say two or three things: number one, that I believe the intent of the legislation is good but do not believe the legislation is good. I believe the legislation is deeply flawed and have said so, and I think it needs pretty significant amendment to make it work. But I think the intention was absolutely a decent and worthwhile one. It took advantage of the amendment to the WTO decision, the decision that came out in August of 2003 and then was consecrated permanently in 2005.

Secondly, I think that what we're really looking at here is a way in which to get a compulsory licence issued, as other countries have done, a way that is streamlined, can be handled comfortably, and need not throw up all of the tensions and all of the difficulties that seem to be inherent in this piece of legislation.

The third point is, sure, CIDA can help in this realm, as it helps in other development realms. But you still have to have, if the generic companies are going to be able to produce drugs that are sold at low prices in developing countries.... Whether they're purchased en route by CIDA or by anybody else, they're still going to have to have the compulsory licence issued.

In other words, the legislation still has to obtain before CIDA can be useful, unless we're prepared to use public money to buy very high-priced drugs, which doesn't make sense.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, sir.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Thank you very much, Mr. Lewis, for being here today. I have three quick points to ask your opinion on.

In the legislation, do you not think we have two options for rolling out meds immediately? First, through CIDA, Canada could fund medications through Health Partners International—not only ARVs but all the other meds required by the recipient country, as determined by them.

Second, the legislation could be written in such a way that both brand name and generic companies could compete within a fixed period of time. If the generics won they'd receive a compulsory licence. In that way, the meds could be rolled out with CIDA's financial help.

Finally, could you let us know how the Clinton Foundation rolled out an incredible plan within one month for Lesotho? That would be instructive for all of us.

[Stephen Lewis]

I don't know enough about the second item you mentioned, on the competition between the generics and the brand names, Keith—it's nice to be able to call you Keith, and I know Brian, so at least I know a couple of people on a first-name basis. I think it would raise enormous complications around international intellectual property rights law, and it would be very difficult to draft legislation that actually worked on the second suggestion you made.

On the first suggestion you made about CIDA effectively purchasing drugs and getting them into the countries that require them, again I think you have a real problem unless you have legislation that results in the issuing of a compulsory licence. Apparently we're not going to get a voluntary licence; that went by the boards in the negotiating period over the last two or three years. If you're going to have a voluntary licence you need to have a vehicle to get that licence in place pretty quickly, whether or not CIDA is involved.

It seems to me the focal point of this committee's deliberations—forgive my presumption—is how to get a compulsory licence. How do you manage to have a generic company produce the kinds of medications that will be absolutely treasured in Africa and result in the saving of huge numbers of lives? Whether at some point after the compulsory licence CIDA is able to intercede the way other purchasers have—UNICEF intercedes as a purchaser and a distributor, and the Global Fund intercedes, etc.—the compulsory licence has to be available. They intercede now with India where it isn't a problem, but I suspect they would intercede with Canada if we issued a compulsory licence for fixed-dose combinations, first-line therapies.

On Lesotho, the Clinton Foundation said to Lesotho within one month of the problem being raised, “We will sign a memorandum of undertaking with you that we will negotiate the price of drugs downwards.” It was with Lesotho that they gave the price of $139 per person per year. They offered it literally within a month of having the problem raised with them, simply because they had constructed an apparatus to negotiate with the generics in India. They would negotiate with generics in Canada and be a vehicle. We would be part of the realm that the Clinton Foundation or others used to provide the drugs for Africa.

So I think everything is essentially in place in Canada, except that we have—forgive me—lousy legislation that doesn't work. If we could make it work, Canada would have this pre-eminent role. I love that thought for my country. I think it's a wonderful thought.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Lewis.

We're in a bit of a tough spot here. We're at 4:15, and because we have votes at 5:45 we have to end the session at 5:30. That means the NGOs' time has been cut by an hour.

As the chair, I suggest we have Mr. Lewis speak until 4:15. I was on the list and we also had another member on this list, so I guess I'm looking for guidance from the committee. My recommendation is that we move on to the NGOs at this point. I know Mr. Lewis is a very good witness and we'd like to hear more from him, but we have six members of six NGOs, and I think we should give them at least an hour and 15 minutes.

Is that okay with the committee? That's acceptable.

Mr. Lewis, I apologize. There are many more questions we'd like to ask you. If there's anything further you'd like the committee to know, please feel free to submit it in writing to either me or the clerk. We'd be happy to pass that on. But thank you very much for taking the time to be with us here today.

[Stephen Lewis]

You're very kind, Mr. Chair, and you're about to deal with people who really know what they're talking about.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

I'll suspend for a few minutes while the NGOs come to the table.

Ladies and gentlemen, I call the meeting to order.

We have six witnesses with us here today. From the University of Toronto we have Sarah Perkins from the international human rights program, faculty of law. We have Mr. Richard Elliott from the Canadian HIV/AIDS Legal Network. From Oxfam Canada we have Mr. Robert Fox, the executive director. From the Interagency Coalition on AIDS and Development we have Mr. Michael O'Connor, the executive director. From Médecins Sans Frontières we have Carol Devine, access to essential medicines adviser. And from Health Partners International of Canada we have Mr. John Kelsall, the president.

We'll have five-minute opening statements, and we'll start right away with Ms. Perkins.

[Sarah Perkins, Acting Director, International Human Rights Program, Faculty of Law, University of Toronto]

Thank you, and thank you for providing me with the opportunity to speak to you today. I'm appearing on behalf of the International Human Rights Program's access to drugs initiative, based out of the University of Toronto's faculty of law.

In my submission today and my accompanying written brief, I will touch upon three major obstacles that are built into the access to medicine regime.

As much as possible, we have tried to approach our review of CAMR from the perspective of Ghana, one of the countries that were intended to use this legislation. Officials from Ghana have now travelled halfway across the world twice to visit Canada and to learn how Canada might provide Ghana with access to treatment for the tens of thousands of Ghanaians who are dying of HIV/AIDS, but despite their efforts, Canada's regime has proved to be impenetrable.

To remedy this, I would urge you to consider the concrete amendments proposed by the Canadian HIV/AIDS Legal Network, but we would also like to implore you to ensure that a revised system includes the three recommendations that follow.

First, you must ensure that CAMR is compatible with standard international procurement protocols. It is unacceptable for Canada to adopt a system that seems to encourage developing countries to break their own domestic procurement laws in order to have access to Canadian medicine. Standard procurement protocols require governments to issue calls for tender based on the supply of medicine, and to select the top tenderer based on objective criteria. CAMR does not facilitate the implementation of these procurement laws.

Under CAMR, a compulsory licence can only be obtained once the manufacturer and the importing country have already reached an agreement. This means that at the point that a manufacturer would come forward to bid on an international tender, this bid would have to be conditional upon receipt of a prospective licence. Such a tender would not be compatible with Ghanian tender laws, and even if it were compliant with these laws, it would be so uncertain as to nullify the bid. CAMR must be amended to permit a manufacturer to apply for a licence prior to entering into an agreement with an importing country. To facilitate this, the manufacturer should not be required to specify the person or entity to whom the product is to be sold.

Our second recommendation is that CAMR must explicitly permit licences to supply regional trade groups. Small countries have insufficient market potential to benefit from the economies of scale that bulk purchasing can achieve. CAMR's failure to explicitly include subsection 6(i) of the general council's decision of August 30, 2003, must be remedied to permit developing and least-developed countries to take advantage of all of the TRIPS flexibilities that were specifically made available to them, including the ability under subsection 6(i) to regionally redistribute medicine under the authority of one compulsory licence.

Our third recommendation is that CAMR must eliminate schedule 1 and specify that the regime includes active pharmaceutical ingredients.

With respect to schedule 1, the existence of this list serves as an immediate detractor to developing-country government officials. I have seen the faces of foreign ministers of health as they read this list. They are confused, they are disappointed, and they are angry. This list contains virtually none of the medicines they are most interested in and most desperate to provide to their populations.

The restricted list of medicines further exacerbates uncertainty and establishes a perception—and rightly so—that Canadian companies would be unable to respond promptly to tenders to fill drug needs.

With respect to active pharmaceutical ingredients, much of our analysis of CAMR has focused on the supply of finished pharmaceutical products to the developing world. In 2001 the WTO pledged to make positive efforts to ensure that developing countries would have a share in the growth of world trade through capacity-building programs. They also pledged to address the marginalization of these developed countries in international trade.

The August 30, 2003, decision also supported these commitments, specifying that this regime should be used in a way that would promote the facilitation of local production of medicine in developing and least-developed countries. Canada would be greatly remiss if we failed to look beyond the supply of medicine to other ways in which we can support a long-term and sustainable supply globally, including helping to promote local production.

The Economic Community Of West African States, which Ghana belongs to, is increasingly looking to bulk procurement and domestic production of essential medicine as viable alternatives to imports. Such efforts will not render CAMR moot. Rather, CAMR will be just as vital for the active pharmaceutical ingredients that it can provide. Canada and Canadian generic producers should be providing technology transfer and capacity building in local pharmaceutical sectors, as specifically contemplated by the general council decision.

In conclusion, corporate Canada and our elected representatives have made sweeping promises to address the continuing lack of access to medicine in the developing world. We need to start thinking creatively about ways in which we can make access a reality. It would mean the world to those who otherwise face certain death, and if we keep our word this time, we just might be the leaders that this crisis is demanding.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Perkins.

We'll go now to Mr. Elliott.

[Richard Elliott, Deputy Director, Canadian HIV/AIDS Legal Network]

Thank you, Mr. Chair.

My name is Richard Elliott. I am a lawyer and the deputy director of the Canadian HIV/AIDS Legal Network. We have sent you a summary of our brief containing several recommendations on how Canada's Access to Medicines Regime should be amended.

As we all know, Canada's Access to Medicines Regime has not met the promise made by Canada to help developing countries to get affordable medicines. We believe there are several reasons for that. Our recommendation today is to implement a different system which might allow Canada to fulfill its promise.

As we all know, Canada's access to medicines regime has failed to deliver in the three years since it was passed. With the recommendations that we put before you today, we hope to give you very concrete proposals for amendments that would simplify greatly and streamline the existing process, which is at the heart of the problem. We will be submitting to the committee a more detailed brief in the days to come. You have, attached to the material that has already been circulated to you, concrete proposals showing specific statutory provisions that should be removed from the legislation, and others that should be inserted, to put in place the recommendations that I hope to outline for you in the next few minutes.

But first of all, why has the Canadian regime not worked? We know it's not because there is no need for medicines. We heard earlier from Mr. Lewis, and we've seen the UN report that came out earlier this week that said that almost three-quarters of people living with HIV in the developing world are still, despite the progress that has been made in the last couple of years, not getting access to the antiretrovirals they need. There's no question, as we've also heard, that there is still a woeful lack of financing overall for scaling up the response to the global AIDS pandemic.

Funding is being mobilized. It has been mobilized in the last few years. More is needed, but treatment scale-up is happening. So the lack of resources is not, as some might suggest, a sufficient explanation for why Canada's regime has not worked, and indeed why other countries' regimes that are fundamentally similar have not delivered either. Rather, in our view, it is becoming abundantly clear that three and a half years after the WTO adopted a decision that was supposed to let developing countries make effective use of compulsory licensing to get lower-cost medicines, and since a number of countries, including Canada, have adopted that particular mechanism, the problem is with the mechanism itself.

Let me first of all, however, just note a couple of things that are Canadian-specific flaws in the implementation of that WTO decision.

There is a limited list of drugs which may be manufactured by generic companies for export. That limited the list should be abolished. All the medicines are required, whatever they may be. We should be able to manufacture affordable generic versions of drugs for export. We should also abolish the requirement for NGOs wanting to provide affordable generic medicines to get an authorization from the importing country.

We should eliminate the additional unnecessary and unjustified double standard that has been imposed for developing countries that do not belong to the WTO in order to import Canadian-made generics. We also need to eliminate the provisions in the Canadian access to medicines regime that create additional opportunities for brand-name companies to go to court and engage in vexatious litigation that will tie things up further.

We need to get rid of the arbitrary two-year limit on the term of a compulsory licence that is currently found in the Canadian regime. It is a completely arbitrary limit that was completely unrequired by the WTO decision that is the basis for this legislation.

More fundamentally, beyond those particular Canadian quirks of implementing this particular WTO decision, the fundamental problem is with the WTO decision itself. The mechanism has been the basis not just for our legislation, but for the legislation of half a dozen other jurisdictions, none of which have worked yet either.

The problem is that the WTO decision itself is unnecessarily complicated, time-consuming, and risky. It sets out a process for obtaining a compulsory licence that is unrealistic, is user-unfriendly, and does not speak to the needs and the realities of developing countries and the practical considerations that face generic pharmaceutical manufacturers, which are primarily commercially motivated actors, as we all know, just as the brand name companies are.

It is difficult to escape the conclusion that something is wrong with the system itself. On Monday, we heard from government representatives before this committee who were asked to explain what the current process is under the legislation. It took a full minute to explain just the first step of that process before the government representative was interrupted. Let me therefore tell you the full process so that you understand how complicated it is.

For every single drug order that a developing country might wish to place for a generic version of a patented drug, it must, as you've heard from Ms. Perkins, negotiate a contract with a generic producer here in Canada. The contract can only be tentative, because there is no licence issued at that point, and the producer must then go through an entire process of first seeking a voluntary licence and trying to negotiate a royalty. At the end of all that, the producer might then actually get a licence that will allow it to supply that particular product, in that quantity, to that particular country.

That process must be gone through every single time. In our view, it would be much simpler and more direct, much more streamlined, if you were to get the licence at the beginning of the process, as Ms. Perkins has suggested. That would permit the generic manufacturer to export that product to any of the eligible countries under this legislation, with the condition that they periodically remit the applicable royalties to the brand-name companies here in Canada.

One licence at the beginning of the process allows for competition from the generics, covers the eligible countries, and doesn't require the process every single time. As we've submitted to you, this is also consistent with our WTO obligations.

Thank you.

[The Chair, Conservative, James Rajotte]

I'm sorry to cut in on you, but we do have four other witnesses we have to get to.

Mr. Fox, we'll go to you, please.