Industry Committee on April 18th, 2007

[The Chair, Conservative, James Rajotte]

Ladies and gentlemen, we will call the 54th meeting of the Standing Committee on Industry, Science and Technology to order.

Pursuant to Standing Order 108(2), we are continuing our study, our second meeting, on Canada's access to medicines regime.

Ladies and gentlemen, we have scheduled three hours of witnesses here for us today. Unfortunately there are votes at 5:45, so we will have to leave shortly after 5:30. I understand Mr. Lewis has graciously agreed to somewhat shorten his presentation so we could add more time for the non-governmental organizations, of which we have six today.

So the first hour was scheduled for Mr. Lewis.

Mr. Lewis, I want to thank you for taking the time to be with us from Toronto today by videoconference. We have you scheduled for an hour. Of course, you're well-known to all of us as the former UN Special Envoy for HIV/AIDS in Africa, as are your experiences there.

I think what we'll do is go right to your presentation. I understand you have about a five-minute opening presentation. and then we'll go to questions from members. If we can keep it to 45 minutes, then we will allow more time for witnesses, for the NGOs, to present.

Mr. Lewis, you can begin at any time. Thank you very much for being with us today.

[Stephen Lewis, Former United Nations Special Envoy for HIV/AIDS in Africa, Stephen Lewis Foundation]

Thank you, Mr. Chair.

I actually have an opening presentation that is a bit longer, but I won't violate the endurance of the committee. I very much appreciate the possibility to appear before you, albeit from a distance. I think I glimpsed a portrait of my father on the wall of the committee room; therefore, I'm feeling vastly more secure than would otherwise be the case.

I'd like to make some brief opening remarks, primarily by way of context. Please allow me to say at the outset that I claim no special grasp of the details of the legislation before you. I am appeased in that regard, however, by the presence of a number of NGOs, my friends in the HIV/AIDS Legal Network, and MSF in particular, who have submitted briefs of intelligence, clarity, and precision, and the more time you have with them, I think, the better it will serve the committee. My wish, rather, is to sketch for you a personal view of the lost opportunity of this legislation, as I've thought about it during my time as the UN envoy for Africa.

In September 2003, the regional AIDS conference for Africa was held in Nairobi. By fascinating coincidence, it followed immediately on the heels of the WTO decision to allow for the issuance of a compulsory licence that would permit the manufacture and export of generic drugs to developing countries, drugs that could treat many different illnesses. The AIDS conference was, of course, agog at the prospect, and when it seemed possible, right in the middle of the conference, that Canada would become the first country in the western world to act on the decision, there was, amongst many African activists and advocates, a tremendous surge of excitement and hope.

You must remember that it was only in 2003 that antiretroviral treatment for AIDS began to take hold. It was that very year when the World Health Organization launched its three-by-five plan to put three million people into treatment by the end of 2005. Canada seemed to be emerging as the strongest ally in this Herculean effort to subdue the pandemic and keep millions of people alive. We contributed $100 million—far more than any other country—to WHO to support the roll-out of treatment, primarily through Africa, and we set in train Bill C-9, the Jean Chrétien pledge to Africa. It took a tortuous route and a very long time to consummate the legislation, but I can say with confidence that the international sense was that Canada would play a leading western role in the fight against the pandemic. In 2003, 2004 and 2005, our position as a country seemed destined to be even more potent than that of the United States and the President's emergency plan. Why? Because his plan was based on brand-name drugs at high cost, whereas Canada was evidently proceeding with generics at a cost that African countries could afford.

In the post-2003 period, as our legislation was wending its unexpectedly slow way through the bureaucratic and parliamentary process, I was constantly being asked where things stood. The former high commissioner of Kenya to Canada called me to Ottawa to plead for his country to have access to our drugs. The same message was subsequently conveyed to me by Kenya's minister of health. The high commissioner of Tanzania to Canada made similar inquiries. The then head of the Rwanda AIDS commission raised it directly with me. I won't soon forget a meeting I had in Addis Ababa with the President of Ethiopia in mid-May of 2004; he ended a long conversation with the words, “So, Mr. Envoy, will we have the drugs from Canada? We're all waiting. When will we have the drugs from Canada?”

I hope the committee understands that expectations were pitched very high in Africa. There is complete bewilderment that the expectations and promises and legislation came to nought. I share that bewilderment. I believed we would make the legislation work; there was no reason why it shouldn't have been made to work. I believed that Canada realized it was on the threshold of a dramatic contribution in the battle against the pandemic, a contribution that had the potential of limiting the carnage for countless numbers of lives and reducing dramatically the tidal wave of orphans that has engulfed country after country. I was wrong: we failed. We failed lamentably.

I'm not interested in thrashing about assigning blame. It's clear to everyone that the legislation is deeply flawed. It's surely clear that we must find a way to make the issuance of a compulsory licence easier to achieve; that we must resist the curious inclination to impose conditions that go beyond the requirements of the TRIPS provisions of the WTO; that we must find a way of protecting the recipient country from any retaliatory measures; and that the brand-name pharmaceuticals and the generic industry must have a legislative regimen that results in a licence rather than an impasse. Public health is at stake, and the primacy of public health is specifically acknowledged under the TRIPS provisions.

I would argue that the achievement of all of this is possible. I would argue, having read other briefs to be submitted to you today, that it's possible within the identifiable flexibilities provided by the WTO agreement decision.

Mr. Chair, Canada has a huge role to play. No one should see this legislation, even with the passage of time, as redundant or beyond repair. The needs are monumental. There is a report this week from UNICEF, UNAIDS and WHO indicating that although 1.3 million people are now receiving treatment in Africa, at least five million more need it right now, today. The capacity to produce fixed-dose combination first-line drugs is what this legislation should provide.

Furthermore, over 300,000 children died last year from AIDS-related illnesses. With pediatric drug formulations, they could be alive. Moreover, 10% to 15% of all those who enter treatment develop resistance within four to five years. They require second-line drugs. Those drugs are not yet available in generic form, and the present prices are astronomical for poor countries.

Tragically, it's worth remembering that there are 40 million people in the world who will require treatment either now or in the future every single day for a large part of their lives, and the numbers are growing. We're talking about billions and billions of pills. But remember, the UN report also shows a 93% survival rate at the end of the first year for those receiving treatment. It's an amazing endorsement of what this legislation is designed to effect. There is a clear role for Canada. There is a clear role for this legislation.

In conclusion, let me say that no one is suggesting the impoverishment of the brand name pharmaceuticals. I, with others, am simply reaffirming the use of the WTO decision dating back to August 30, 2003, that makes it possible to manufacture and export generic drugs.

There are those who say there are other needs internationally. I say that's absolutely right, but this legislation is designed to address one of the imperative needs, incorporating several of the millennium development goals, and it should not be seen as subordinate to other priorities. For those who say that a large part of the problem is really health systems and health resources, I concede there's some truth in that, but if this legislation ensures the basis for long-term treatment, then Canada, and others, and the African countries themselves will have the confidence to restore the fractured infrastructures.

I beg you to put other considerations aside and make the changes to the legislation that will allow it to work. I don't want to sound maudlin, Mr. Chair. It's really just a measure of what churns in my mind when I think of what I've seen over the last five years. But , Mr. Chair, people are so courageous in Africa. They're dying in such appalling numbers, especially young women. They're fighting so hard for survival. It would mean the world if Canada would emerge as the pre-eminent ally in the struggle to confront the pandemic.

Thank you, sir.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Lewis, for your brief and eloquent statement. We appreciate that very much.

We will go right now to members with their questions. We will start with Mr. McTeague for six minutes.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Lewis, thank you for being here today and for your very appropriate and adroit comments. Also, certainly on behalf of my constituents, I want to thank you for all your work over the years.

You gave a speech at the Chateau Laurier in 2002 about what the needs were and about the consequences of inaction, which spurred many members, including me, to try to convince our government of the day of the need to provide a relaxation of the existing drug regime to address a human catastrophe, as I think you called it back then.

Since then, of course, we have watched this and have been, as have you, rather surprised at the fact that not one single pill has gone to help.

I also had the opportunity to speak to Mark Fried and others from Oxfam and Médecins Sans Frontières, and I wrote a letter some years ago explaining the situation in detail. It seemed to me at the time, as you quite rightly pointed out, that Canada was very much at the leading edge. We had NGOs on the spot. We couldn't be everywhere, but we certainly had the ability to distribute these drugs.

I'm here with my colleague Keith Martin, who will ask a question in just a moment, and who has a rather direct understanding of the situation in Africa as well.

But I want to ask you whether there are nations, in your mind, notwithstanding all of the good intentions that we have provided in Canada without result, that have actually made breakthroughs, that have in fact been bold enough to address this pandemic, this underlying catastrophe?

[Stephen Lewis]

When you say “nations”, Mr. McTeague, do you mean in the west or in Africa?

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Anywhere. Any nation that has been able to do what Canada has not been able to do despite these incredible odds.

[Stephen Lewis]

I believe there is legislation in place, as I guess is evident from the policy or discussion paper before you, from disparate groups like Norway, Holland, Switzerland, etc. That legislation, not all of which is as well developed as Canada's, has not yet been acted on. Nor have the African countries as yet sought a compulsory licence, largely because I think no African country wants to be the first to go forward if their names are not protected. There is a tendency to retaliation, both threats from, often, the United States and explicit threats from pharmaceutical companies.

Look at what's happening right now in Thailand. The Thailand government issued a compulsory licence for the production of a generic equivalent of a drug called Kaletra, which is produced by Abbott Laboratories. Abbott engaged in quite an astonishing act of retaliation by saying that it would withdraw all its current drugs or any further drug development from the Thai market. Abbott has received a great deal of criticism because of that, but you can imagine the sense of vulnerability amongst African countries unless there is a regime in place that secures initially their confidence and then the flow of drugs.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Lewis, the Minister of Finance, Jim Flaherty, made an announcement a week or so ago in Mississauga, a place known as Pill Hill in Toronto. I'm wondering if you would like to make some comments as to whether or not you think that will be effective in concert with this legislation, and whether you will see that as an opportunity to begin the ball rolling towards getting these necessary drugs to those who truly need our help in Africa.

[Stephen Lewis]

I feast on almost all the words of the minister, but I missed that particular Mississauga announcement. Maybe I didn't, but didn't know it was from Mississauga. What are we speaking of?

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I'll leave it to my Conservative colleagues on the other side to explain what had happened, but it was really to deal with a renewed effort by brand-name pharmaceuticals to provide access to affordable medicines to that part of the world. I'll leave it to them to ask questions, so that they can build on what they've announced. But I've heard this kind of thing before, obviously, and I've been very concerned that five years after this great vaunted declaration we are still nowhere near living up to our commitments.

So let me ask this question. Companies in India, a company like Rambaxy, for instance—would those companies that may be in violation of international norms be the way if we can't proceed successfully with getting Canadian drugs to Africa?

[Stephen Lewis]

There is no question that India is now the source of most of the drugs that are providing antiretroviral treatment around the world, and overwhelmingly the source for drugs in Africa. They're being used increasingly even by the American presidential initiative.They're being used by the Global Fund to Fight AIDS, Tuberculosis and Malaria. They're being used by the Clinton Foundation. They form the basis for most of the treatment, but it's not endless. They have production limitations, and there is some uncertainty as to the nature of the amendments to the Patent Act in India whether those drugs can continue to be produced in such large quantums.

There is also the question of the second-line drugs, which are desperately needed, and for whom the downward price negotiation has not yet occurred. And indeed the flow is not guaranteed.

So there is always room, there would absolutely be room for Canadian legislation, manufacture, and export. There is no question about it—and the demand, given the huge numbers that are required. And it looks as though, relatively speaking, we could compete. It might be a matter of a few cents either way.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

If we fail to get this right, Mr. Lewis, would you be in favour of the Canadian government simply providing and footing the bill to pay for these drugs? Frankly, if we can't get through the rhetoric, the battles, and the obfuscation that's going on to contain a disease that knows no boundaries in terms of its decimation of human beings and innocent individuals, do you believe the federal government should be duty-bound then to cut a bloody cheque?

[Stephen Lewis]

I've always believed that the federal government, if it increases its percentage of GNP for ODA—and we're going down, I noticed—could use a large chunk of that to support drug purchase and improvement of health systems, infrastructure, etc.

But frankly, it would be a much greater contribution to have a systematic flow of drugs to these countries over the years that are required, because the promise of cutting a cheque varies from administration to administration, and the amounts vary. As I said, our ODA contribution declined between 2005 and 2006 as a percentage of GNP. and it may decline further.

So the drug regimen is really, I think, the basis on which to proceed.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. McTeague.

We'll now go to Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon, Mr. Lewis. I'm very pleased to see you again. Since you were the United Nation's special envoy to Africa for HIV/AIDS, I suppose you have a very good grasp of what is going on there. The fact that not a single pill has been sent to Africa makes me believe that there are practical and political issues at play.

My colleague asked you earlier if the government should just write a check. However, we all know that, in some of those countries, drugs may be diverted and never reach the hospitals or clinics that really need them.

Do you have any recommendations about this?

[Stephen Lewis]

As the legislation is now constituted, the measures in to identify the drugs by way of colour or container in a specific fashion would prevent diversion, and that is true of many of the drugs that are coming from various sources.

The problem isn't so much, frankly, one of diversion. That hasn't been a vexing difficulty in most of the African countries with high prevalence rates. What they need is security--sustainability of supply and of resources. They obviously need some help with training and retraining to fill the gaps of human capacity, and they obviously need some help in the repair of the infrastructure, but if we could be sure that there were countries of significant capability, both within Africa and outside Africa, who could supply a flow of generic drugs at a very low price, then I think that if the G8 delivers on the promises it has made in terms of financing, we would be able ultimately to confront the pandemic.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

We know that there is a huge lack of infrastructures in some African countries. There is a lack of access to clean water and to good sanitation. It may be very well to talk about treating patients but do you not think that we should solve those problems of sanitation before sending drugs? Both could be done in parallel though.

[Stephen Lewis]

Madame Brunelle, that's a very good point, and it's a point with which I would not take issue. I think what you're essentially saying is that we have what we call the millennium development goals. Each and every one of them should be attended to; each and every one of them places a moral imperative on the western world to supply resources, reduce debt, and set up international fair trade rules.

One of those millennium development goals is to turn back the communicable diseases of AIDS, tuberculosis, and malaria, and one of those goals is to reduce poverty and hunger, and the others are maternal mortality reduction and infant mortality reduction. Yes, if CIDA were able to target funds to the other imperatives, along with the crucial imperative of dealing with the pandemic—The pandemic is destroying development in so many countries that you can't even make progress on the other goals, because there is such a level of disease and death; you have to secure the health first, before you can secure the development. That point has been made quite eloquently by the economist Jeffrey Sachs. He calls it the disease burden and says that unless you deal with the burden of disease, you can't deal with the other phenomena.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

It is very difficult to get rid of AIDS, a disease which leads to other diseases such as TB. Obviously, we have to do something. Pharmaceutical companies tell us that they already send generous quantities of drugs to Africa. Do you believe that it is enough, which might explain why this legislation is so little used, because it is not really required?

[Stephen Lewis]

I think it's worth noting that the brand name pharmaceutical industry cannot begin to compete with the prices that have been negotiated for generic drugs. The brand names, even at best, are between $500 and $800 per person per year.

The Clinton Foundation negotiated a price initially of $139 per person per year, and that price is coming down. Even if the brand names lower their prices further, they will still be higher than the generic costs. And when you're dealing with countries where people are living at less than $1 a day, obviously the generic equivalents become the dominant force.

Yes, the legislation, in its dormancy, is disappointing, but I don't think we should be deterred. We still have a very major contribution to make through this legislation to complement and supplement whatever the brand names are doing.

At the moment, the brand names are providing the second-line drugs and they're providing the pediatric drugs, but gradually the generic equivalents are emerging. And Canada could be a force on every front, not only for the fixed-dose combination first-line drugs, but for further developments if this legislation works.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mrs. Brunelle.

We'll go now to Mr. Carrie, please.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

And thank you very much, Mr. Lewis, for coming before us at this very important time, as we look at this legislation and see what we can do to improve what we do as a country. I think it is something that is extremely non-partisan. Everyone here on the committee wants to work together to see what we can do to make the best effort possible.

My Liberal colleague did mention one of the things that the government did recently under budget 2007. There was a measure where corporations donating medicines can claim a tax deduction equal to the cost of the donated medicine, or half the amount by which the fair market value of the donated medicine exceeds its cost—whichever is less.

I think what he wanted was your opinion. Do you think this would be a step in the right direction?

[Stephen Lewis]

Undoubtedly it's a step, but I hope people realize that it's only a step. And relative to the need, it will never be an adequate step.

The situation in some respects is so overwhelming. I don't consider that we can't deal with it, but it is vast. And everyone is trying to chip away at some responses, however incremental.

The difference between those steps and this piece of legislation is that this legislation could make a really significant dent on the problem. The steps merely chip away at the margins.

[Colin Carrie, Conservative, Oshawa, ON]

With your experience on the ground in Africa and other parts of the developing world, what actors or agencies are doing the best work in addressing public health crises like HIV/AIDS, malaria, and tuberculosis? Would you say it's the NGOs? Is it the United Nations? Is it the pharmaceutical companies, or is it the host country governments themselves? Who is really right on track with this, or is anybody?