Industry Committee on April 23rd, 2007

[The Chair, Conservative, James Rajotte]

We will call the 55th meeting of the Standing Committee on Industry, Science and Technology to order. We have our third meeting today, pursuant to Standing Order 108(2), on our continuing study of Canada's access-to-medicines regime.

First of all, I want to apologize for the warm weather. I'm not exactly sure what happened, but I want to thank Mr. McTeague for bringing in the fresh air, as he usually does for this committee. He's one step closer to being competition commissioner of Canada.

We have our final meeting here. We have with us five representatives of either industry associations or companies.

First of all, from the Canadian Generic Pharmaceutical Association, we have Mr. Jim Keon, the president. Secondly, we have Mr. Jack Kay, the vice-chair, who is president and CEO of Apotex Incorporated. From Gilead Sciences Inc., we have Mr. Gregg Alton, senior vice-president and general counsel. From Canada's Research-Based Pharmaceutical Companies, first of all, we have the president, Mr. Russell Williams; secondly, we have Mr. Terry McCool, vice-president, corporate affairs, Eli Lilly Canada Inc.

Gentlemen, we have given ten minutes for each association. The Generic Pharmaceutical Association will have ten minutes, Gilead will have ten minutes, and Rx & D will have ten minutes.

We will start with Mr. Keon for a ten-minute opening statement.

[Jim Keon, President, Canadian Generic Pharmaceutical Association]

Thank you, Mr. Chairman, committee members, for having me here today.

My name is Jim Keon and I'm the President of the Canadian Generic Pharmaceutical Association, the representative body for generic pharmaceutical companies in Canada.

With me is Jack Kay, the President of Apotex, the largest generic pharmaceutical company in Canada.

On January 24, 2007, CGPA provided its written submission to the government as part of the review of the Canadian access-to-medicines regime, and we've provided copies to the committee. If you have questions to ask in greater detail about the failures and challenges of the regime, I will be happy to answer those, and I hope that we have an opportunity to do so.

I want to clear up one misconception that may have emerged since the adoption of this legislation two years ago. We have seen and heard many times that not a single pill has been shipped under this legislation. While the statement is sadly true, it hides the fact of the real story about the donations of medicines made each and every year by Canada's generic drug makers.

Last year alone, Canadian generic pharmaceutical manufacturers donated nearly 100 million doses of medicines, with an approximate value of $20 million. These have been donated to Afghanistan, to South Asia in the aftermath of the tsunami, and elsewhere in Africa. Our companies have been there to donate first-line treatments for all of those medicines.

In fact, the Canadian generic pharmaceutical manufacturers were pleased to join Prime Minister Harper on February 16, in Mississauga, to highlight their substantial donations of medicines to Afghanistan.

But those are medicines that generic companies are currently manufacturing. Under the Canadian access-to-medicines regime, the products are under patent protection and are therefore by definition not being produced by generic companies.

I recall the initial optimism that greeted the announcement, back in 2003, that Canada would be the first country to implement the landmark decision of the WTO on the implementation of the Doha declaration on the agreement of trade-related aspects of intellectual property. But from that point on, the process and the outcome have become a disappointment.

More than two years ago, I appeared before this committee and stated that Canada's draft legislation to allow generic pharmaceutical companies to export patented medicines to developing countries was unlikely to meet the goal of getting affordable medicines to people who desperately need them. It became clear early in the process that the government intended to make too many concessions to brand-name drug-makers and that it would be virtually impossible for generic pharmaceutical manufacturers to use this scheme.

We stated at the time that the overall approach to the legislation should be a straightforward and faithful implementation of the WTO decision. It is clear now that even that might not be enough, as no eligible importing countries have applied to access medicines under the decision, despite the implementation legislation in five countries.

Therefore, we're calling on the Government of Canada to not only address the fundamental flaws in its own legislation but to also go to the WTO and use its experience in trying to implement the decision as the basis to call on countries to remedy the constraints of the WTO rules.

Without further ado, I'd like to turn the mike over to Jack Kay, who will tell you first-hand about the experience of Apotex in trying to work with this legislation.

[Jack Kay, President and Chief Executive Officer, Apotex Inc.; Canadian Generic Pharmaceutical Association]

Thank you for allowing Apotex the opportunity to present our real-life experience of trying to manoeuvre through CAMR, Canada's access-to-medicines regime legislation.

The Apotex Group is a leader in the research and development of generic innovative and biotechnology medicines in this country. We plan to spend over $2 billion over the next ten years on research and development. As I speak, we have over 600 medicines under development. With close to 5,000 employees, we plan to add another 350 people to expand our production capacity from one billion tablets and capsules per month to over 1.4 billion. Over 300 of the medicines we presently manufacture are exported to over 115 countries, all of this to meet our core Apotex value: to provide access to lifesaving, affordable medicines.

In Africa, hundreds of thousands of people die needlessly from HIV/AIDS every year because they do not have access to such medicines. The reason is simple: the multinational pharmaceutical industry does not like to reduce its prices, and it's better to sell to industrialized countries, where it can charge higher prices.

After listening to a speech by Stephen Lewis, we made a corporate commitment to do something about the problem. In 2002 we made an offer to the federal government of the day that we would produce five antiretrovirals at our cost, as long as the government got them to where they could be used in Africa. The government never even offered to look at our proposal. Part of the problem was that there was no mechanism to facilitate the process, and there was a lack of infrastructure for effective distribution. In the meantime, millions continue to die from HIV and AIDS.

Then in 2003 Bill C-9 was tabled, and hope was high that something was going to get done.

Here is a recap of the Apotex experience. We worked in consultation with Médecins Sans Frontières, who outlined the HIV/AIDS medicines that were in critical need and advised us that a combination drug of Lamivudine, Zidovudine, plus Nevirapine was needed. We started working on Apo-TriAvir, and a special R and D team was assigned to this project. They doubled their efforts, working weekends and overtime to complete the submission dossier. Many worked on their own because they wanted to do something important for HIV/AIDS patients in Africa. This drug could potentially save millions of lives, and Apotex was committed to providing Apo-TriAvir at cost.

At the same time, Health and Industry Canada defined an expedited approval route. Work on the fixed-dosage combination began in April 2005, and the submission dossier was finalized in December of that year. The dossier was approved by Health Canada in June 2006, and pre-qualification at the World Health Organization was achieved following the Canadian approval. This assured recipient countries of its efficacy and safety, authenticity and availability.

Apotex has invested over $2 million to date on the research and development of this drug.

Yet, having done ail of this to get this important HIV/AIDS medicine ready, the real problem for Apotex is the legislation, as the CAMR requirements are impossible to navigate. First, it's a voluntary license versus a compulsory license, requiring the recipient country to be identified up front, and the recipient country needs to initiate the request. The entire burden is left on the shoulders of the poor countries, who do not have the expertise or the resources. The legislation is designed for pharmaceutical companies doing business in the industrialized world, not Africa.

The effectiveness of the legislation is compromised by its lack of clarity. Maybe the objective of CAMR has to be clearly defined: quality medicines for critical diseases in a timely manner.

The current complex legislation tries to balance the interests of big pharma first. Why? We need to get our priorities right as Canadians and focus on those who are dying every day from AIDS in Africa.

This legislation perpetuates the human crisis, without getting anything done. Also, there is nothing stopping the multinational pharmaceutical industry from unilaterally making these drugs available at affordable prices, but they have not. All of their efforts have been focused on impeding the legislation.

In conclusion, our recommendation, having experienced the process, is that we need to move to a defined compulsory licence upon regulatory approval. This will speed up the process and limit legal costs, which can be substantial.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Kay.

We'll now go to Mr. Alton.

[Gregg Alton, Senior Vice-President and General Counsel, Gilead Sciences Inc.]

Thank you, Mr. Chairman, for the opportunity to address you and the committee today.

Thank you, Mr. Chairman, committee members, for the opportunity to discuss this topic with you today.

I am the senior vice-president and general counsel of Gilead. I'm also responsible for our access program, the program at Gilead making our products available in the least developed countries of the world. It's actually a program that I designed and that I run personally myself.

Currently through my department at Gilead we're providing antiretroviral therapy to approximately 50,000 patients in the least-developed world. That represents about 100 countries of least-developed status and about 50 countries in the middle-income markets. In addition to that, I serve on the board of a non-profit that operates 38 clinics treating over 50,000 patients in 15 countries throughout the world. So I do have personal, hands-on experience on the issues we're talking about.

First of all, I want to congratulate Canada on its decision to be the first country to take steps to implement the 2003 WTO decision on public health. We at Gilead share a common goal in removing barriers that limit access to essential medicines for people living in the developing world.

I'm going to share with you some of the experiences we have had in delivering access to essential medicines and our view of both the challenges that we at Gilead face in delivering medicine and some of the challenges that have been faced by CAMR--Canada's access-to-medicines regime--in this process. I want to make it clear that the comments that I make are the comments of Gilead and do not necessarily represent those of other members of our industry, although I do believe that our industry shares a common goal in this effort.

We're committed to meeting the needs of patients living with HIV throughout the world. We do this through scientific research and development programs, where we invent new medicines that give patients important new treatment options. In addition, we have developed a comprehensive access program that addresses the impact of poverty on the ability of those living in the world to afford our medicine.

The cornerstone of our access program is the responsible use of intellectual property. In nearly 100 least-developed countries--this includes all of Africa--our access program makes our HIV products available at our cost. There is not one penny of profit in our program.

We have also worked closely with middle-income countries, countries that have financial capabilities well above sub-Saharan Africa, and have pricing tiers offering substantial discounts to countries like Thailand, Mexico, and Brazil. We've worked very closely with these countries. We have a very close relationship. And they are very comfortable with our pricing strategies.

Last year we established partnerships with eleven Indian generic manufacturers to produce generic versions of our HIV drugs for distribution in the developing world, including all of Africa. There are 95 countries included in this program. The rationale is that these companies are the world leaders in delivering medicine to the developing world; they have proven this.

All of our agreements include a full technology transfer to enable our partners to quickly ramp up production of active pharmaceutical ingredients and tablets. Our partners are free to establish pricing for their products--we impose no restrictions on the pricing--and they pay us a 5% royalty on the price that they set.

The other thing I'd like to point out is that these licences do allow these partners to make fixed-dose combinations with any other products that are available to them.

For the current review process, we believe that CAMR should be realistically evaluated in the context of the role it can play to accomplish the objectives of the 2003 decision. Some critics are calling CAMR a failure because of its red tape and because of its complexities, and they believe that those have prevented its use.

I will offer two primary reasons why we believe CAMR has not been used--and these are some challenges that we are facing--and also offer some suggestions for how we believe it can be improved.

First, least-developed countries that do not have manufacturing capacity, countries that really are intended to be addressed by the WTO decision, are accessing a majority of their medicines today from India, where patents on pharmaceuticals have historically not existed, and through the access programs of the R and D companies like Gilead, where we've substantially lowered our costs. There has been no need for these countries to purchase from Canadian generic companies.

Critics have also pointed to the lack of drug access for patients in least-developed countries as evidence that CAMR should be simplified. I believe that this ignores the facts. Lack of drug access is and has been an issue despite the fact that low-cost generic versions have been available.

The problem is weak health care infrastructure. The problem is too few health care professionals and a lack of political will to make HIV care a priority in these countries. According to the latest World Health Report, for every 50,000 people in Canada, there were 500 nurses; in Uganda there were 31 nurses and in Ethiopia there were 11 nurses for every 50,000 people. How are we going to provide access to people if they don't have people to take care of them?

Until these barriers are addressed, actions by Canada, NGOs, the generic industry, and companies like Gilead are going to meet limited success in their programs.

CAMR is an important, comprehensive, and well-designed regime that balances the rights of patients in the developing world with the rights of the R and D industry. While CAMR has not been used to date, it could be an important vehicle for access if patents prevent least-developed countries from accessing affordable medicine.

This will be particularly important if, as India begins to enforce patents, generic or low-cost branded products are not available in these countries.

I will offer several observations based on our experience that you might want to consider during the review process.

At Gilead we have had tremendous difficulty working with developing world governments, NGOs, and international purchasing agencies in forecasting demand for product. A forecasting or quantity requirement in CAMR could disrupt the supply of essential medicines. It could make it more difficult to use the regime. The government should remove the forecasting requirement in CAMR and remain focused on ensuring that generics exported under CAMR go to the patients for whom they were intended.

We also don't believe that CAMR should prescribe a specific duration of licence. The appropriate duration of a licence will depend on multiple factors, including the issue that is driving the need for the licence, the nature of the disease, the cost and time required to establish and scale up manufacturing capability, and the annual volume of production required to recoup that investment. One thing I want to make clear is that Gilead conducts all of its manufacturing through contract manufacturing, so we understand what it means and the process of lining up new contract manufacturing. These are all issues that go into those decisions.

Finally, I'd like to say that we should not have a double standard for quality. Patients in the developing world should receive the same quality of products as those patients in the developed world. This is even more critical in the area of infectious disease, where substandard product can lead to resistance and treatment failure.

Once again, I would like to thank the Government of Canada and this distinguished committee for the opportunity to be part of this policy discussion.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Alton.

We will start with you, Mr. Williams.

[Russell Williams, President, Canada's Research-Based Pharmaceutical Companies (Rx&D)]

Bonjour, monsieur le président, members of the committee.

Canada's Research-Based Pharmaceutical Companies (Rx&D) applaud Canada for being one of the first countries to provide legislation that responds to the Third World's need for access to pharmaceuticals. Canada's Access to Medicines Regime was passed into law unanimously by Parliament in a spirit of compassion that reflects Canadian values. The innovative pharmaceutical community supports the generosity inherent in this legislation, which serves as a tool to respond to the need for medicines in the developing world. A global humanitarian crisis is unfolding and it must be addressed on an urgent basis.

First, let me say that l am aware that Canada's access-to-medicines regime has attracted critics who say the legislation is not working. To those critics, l would respectfully point out that this is young legislation. The Doha decision occurred in 2003 and the bill came into force in May 2005. In some ways, it has not been fully implemented. For example, an expert advisory committee under the legislation has not yet been established. It is therefore hard to say that the legislation has been fully tested.

l think this point is proven by the fact that the awareness of this legislation is very low. l met with about 25 ambassadors from African countries before Christmas and found that the majority of them were not aware of Canada's access-to-medicines regime. Health Minister Tony Clement recently echoed this view when he indicated that he had met with representatives from two African countries, neither of whom was aware of the legislation.

Before altering the legislation, it is our view that the government should give it an opportunity to be tested. Rather than rewriting Canada's Access to Medicines Regime, I would recommend, as a first step, that the government undertake a full-scale education program to inform stakeholders—especially those in developing countries—of the legislation and its mechanisms.

It is also important to view this legislation in a broader context. The pharmaceutical community believes that delivering medicines to patients in developing countries addresses only one part of a much larger health care challenge. Without transportation, clinics, clean water, or access to health care professionals, as just discussed, this legislation alone will not be very effective. The legislation should be therefore viewed as one element of a comprehensive approach to increasing access to life-saving drugs.

People working at the forefront of the AIDS crisis have spoken about the need for a coordinated plan to address the proliferation of HIV in Africa. Some humanitarian organizations have recommended that steps beyond access to medicines be taken. Canada has been urged to commit money to help cover the costs of HIV prevention programs. Developed countries have also been asked to forgive debt in return for investments in health care and to invest in the training of health care workers.

Rx&D agreed with this need for a comprehensive approach. We must look at legislated access to medicines along with an array of non-legislated measures. Together, they should be seen as an integrated approach to supporting Canada's health-care objectives in the Third World.

There is much more to do, as we all share responsibilities to find a solution to this cause. The innovative pharmaceutical community has for years—and it's one of the reasons why I joined the community—provided increased access to medicines in developing nations outside the legislation that is now being reviewed.

Over the last five years, the global pharmaceutical community has donated $5 billion in humanitarian aid, including medicines. This equates to positive health interventions for some 540 million people worldwide. You can find details on these efforts in the binder that we propose. I recommend that everybody take a look at them.

This money has been used to build health care infrastructure, as well as provide medicines and vaccines. We know that progress is being made. The World Health Organization recently reported that there has been a very significant increase in the number of people receiving AIDS treatment in sub-Saharan Africa—from 2% three years ago to 28%, 1.3 million people. Still, much work has to be done, and we have to commit a great deal of energy, but I think progress is being made.

The pharmaceutical community has also taken innovative approaches, such as preferential pricing at cost, below cost, or free in some cases. Voluntary licence agreements with foreign drug manufacturers have allowed us to reduce production costs and the end price for certain drugs. We have also invested in clinics and education to ensure medicinal products are properly administered. This is quite crucial.

On the home front, Canada's pharmaceutical community since 1990 has contributed almost $150 million in medicines and financial assistance to Health Partners International of Canada, where the Prime Minister was a month ago. This money has gone to hundreds of humanitarian efforts. This is an ongoing partnership that speeds the delivery of “in-date” drugs to people in need and avoids diversion to unintended recipients.

We applaud the government's decision in the last budget to provide incentives aimed at maximizing donations to organizations such as Health Partners International of Canada, because we know they ensure high quality medicines are delivered to people in need.

Clearly, there are many ways to provide affordable medicines to countries in need. Generics are one option, although people, including Industry Canada, say the price of generics in Canada is a barrier. But equally compelling is the fact that the innovative pharmaceutical community has provided preferential pricing on brand names to struggling nations.

Terry.

[Terry McCool, Vice-President, Corporate Affairs, Eli Lilly Canada Inc.; Canada's Research-Based Pharmaceutical Companies (Rx&D)]

This committee heard last week that the government should eliminate some of the safeguards, including the schedule 1 of lists. In our view, this is not a solution, as the schedule is one list and is not an impediment to the availability of patented products, as some people have suggested. In fact, 95% of the medicines on the World Health Organization's list of essential medicines are not protected by patents, and of the remaining few products on that list, those patents are not being enforced in developing countries. This means that no special legislation is needed to deliver these medicines to countries in need.

I would argue that the schedule 1 list facilitates the movement of drugs, as it creates a process for distributing drugs to developing nations. For this reason, I view the schedule 1 list as advantageous. Removing the list won't make this legislation any better.

I would also like to stress the importance of ensuring that other safeguards, particularly those focused on diversion, will remain in the legislation and be fully implemented. Any diversionary safeguards will ensure that patients in developing countries receive medications and that they are not diverted and sold illegally.

Corruption of the pharmaceutical supply chain is a serious problem in developing nations. It serves no purpose for Canada to be involved in this process, and it cannot, at a minimum, secure the drug supply and ensure that medicines sent from this country reach the people who rely on them.

I would also remind this committee of perhaps a less-known provision of the legislation, which provides for a 30-day period in which a generic drug company can negotiate with a patent-holding pharmaceutical company to provide a specific drug for export. It is my understanding that no generic has gone past this process and applied for a compulsory licence.

Safeguarding intellectual property also plays a role in access of pharmaceutical products. People tend to argue that access and intellectual property are mutually exclusive, but I disagree. I would argue that intellectual property creates access because it leads to new medicines. The fact is that intellectual property fosters research and innovation, and that leads to life-saving drugs and vaccines. It is therefore important that we do not put research at risk in this country.

Intellectual property regimes exist in developed countries because they create a climate for innovation to treat disease. They do not exist in many parts of the developing world. As such, Canada has a responsibility to create a regime that protects intellectual property and leads to greater access of prescription drugs among poor nations.

Our community believes it would be premature and counterproductive to alter Canada's access-to-medicine regime at this stage. The legislation has not been fully tested. Its efficacy cannot be fully known until awareness of the legislation increases and it is fully limited. Only then should alternatives be considered.

Changing the legislation now runs the risk of providing the wrong response to the challenges facing health care in the developing world. We encourage this committee and the Government of Canada to reach beyond the current legislation and consider a comprehensive approach to the delivery of medicines to people most in need.

Canada's access-to-medicine regime is only one piece in a continuum of efforts to address the health requirements of developing countries. By broadening its approach, Canada can continue to play a leadership role in the area of greater access to health care overseas.

Thank you. We look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McCool.

We'll go now to questions from members. I'll just remind witnesses that members are limited to either five or six minutes in their time, so we would ask you to be brief in your responses and I'll ask members to be brief in their questions.

We'll start now with Mr. McTeague.

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

Chair, thank you very much.

Mr. Byrne is not here today. He is back home with a bit of an ear infection as well, so he may be calling all of you very soon to help him.

Gentlemen, thank you for being here today, but you're here because there is one succinct, compelling message that was given to us last week by Stephen Lewis, the same individual who in my view is responsible for forcing the issue and turning the government towards this regime to begin with, to try to help deal with the undeniable tragedy that is unfolding. That's something I think you all agree with. It's just how we approach it that seems to the problem, the stumbling block.

I have a real concern when I hear numbers of 300,000 children in any part of the world dying as a result of our inability to get necessary drugs to them. At the same time, I think most Canadians recognize the importance of ensuring that diseases of opportunity are contained, so that they don't spread elsewhere throughout the world. We know about those circumstances. I come from a city that knows all too well the devastation of SARS.

I'm asking this to all of you here. I hear what Jack has had to say and, Terry, what you have had to say. We have an example of a drug that is ready-made, available to be there, and as in 2001, an NGO community that tells me that where Canada can have an impact in 5% or 10% of the places that are currently affected, they can in fact provide the regime, can provide the opportunity for and the delivery of proper medicines. So I don't think that's at issue here. Certainly, in terms of impact even 1% would be better, if it even saves one life. I think we all agree with that.

The condemnation of this regime, of CAMR, comes as a result of its inability to actually help. There are examples of situations where, I'm sure, you provided medicines, and the Prime Minister has been there to launch the HPIC initiative. That's great.

I'm wondering, going forward, how credible it is for us to sit at this table and conjecture about what the problems are, when in fact today thousands of children are going to die in that part of the world very much as a result of our rhetoric here. I know you all have your vested interests; you have interests in doing what you're doing. I'm wondering why, in your view, we cannot go from a voluntary system to a compulsory system, allowing the country to make that decision, working with our good and well-intentioned NGOs?

I'll leave that open to you, Mr. Kay, and to you, Mr. McCool, if you don't mind, or Mr. Russell.

[Jack Kay]

That's exactly what we've been advocating, to remove the process by which we have to go through a voluntary licence. All that does is tie us up. Then, if we're refused a voluntary licence—and we have been refused—I then have to engage lawyers to go through the process of applying for a compulsory licence. Remember that I am going to tie up resources from within my company, people who are doing other things, researching other products on which we make a profit.

We are prepared to provide these life-saving products at our cost, but we cannot tie up our resources to fight a battle in order to get the licence. When the licence regime was established, it was flawed. We told the government of the day at the time that no company would take advantage of it, the way it is currently structured.

MSF came to us and told us they had a country that wants the drugs. They want to buy made-in-Canada products because of the quality. We told them we could produce the drugs and asked them to help us get a licence. We're still trying to get a licence.

[The Chair, Conservative, James Rajotte]

Mr. McCool.

[Terry McCool]

Certainly. I'd be happy to comment. The voluntary licence is a very simple process. It's 30 days. That's no more than notification to a brand-name company; it's not a delay. It's a notification that you have an order, what the quantity is, and where the order is going. For the brand-name company, which often has to go to its global headquarters to determine what patents are being...where the compulsory licence is being issued, 30 days is not a very long period of time to do that.

If the decision isn't made in 30 days, you don't need a lawyer to go to the Commissioner of Patents. The Commissioner of Patents is instructed to approve these things very quickly. It's not going to take you time and effort to do that.

To our knowledge, in spite of what Jack claims, no one has gone that far to get a compulsory licence. Until somebody actually does it, I can't see that being an impediment.

[Jack Kay]

The impediment in this case was the fact that the country that wanted the product did not want to be identified.

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

So there's an issue of identification.

Let me turn a little bit to the other issue that has been raised by the committee and by many of the people who have come before us. There is concern now about the possibility that the diseases are taking on new characteristics and morphing into different, more virulent types of disease, and that those are giving way to the possibility of other diseases of opportunity. Five years ago, we had a certain regime of drugs that were available. We now have a second generation.

Mr. McCool, I'm wondering how much of those second-generation drugs your industry has provided, at their cost, to various regions to alleviate and to bring down the number of cases of individuals afflicted.

[Terry McCool]

I think there has been quite a bit provided. If you look at some of the background that was presented, there are aid programs in many countries in Africa. The newer drugs are being reduced in price and are available in some of those countries.

One of the issues you brought up is if the drugs aren't used properly.... These are prescription drugs. You can't just ship them and give them out. You have to have some supervision by a health professional. There's such a shortage of health professionals that I think there's an issue with drugs being able to get to those countries.

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

Mr. McCool, when I had Médecins Sans Frontières and Oxfam do a joint letter--the letter is still on my website--to the Prime Minister, they said they could in fact deliver proper medications with the assistance of physicians, or whoever.

I'm wondering how much success brand-name companies in this country have had in working with those same NGOs, who are highly critical of the role of the brand names, as we saw here last week. I'm not pulling any punches here. This is a reflection of the fact that we've heard from two.... We've had a chance to hear from the representative from Gilead.

Have you in fact been working with NGOs? Who are those NGOs, and how successful have you been?

[Gregg Alton]

I could answer that question.

Our products are second-line therapy. They're considered second-line therapy in the developing world. As mentioned, we're providing product to about 50,000 patients in this area. I think we work well with MSF, with UNICEF, and a variety of other organizations throughout the world.

We have a fixed dose combination: a full regimen--one pill once a day--that we've co-developed with Merck. We're making that available through our access program in all these countries, and this is available from us today.

[The Chair, Conservative, James Rajotte]

Thank you.

Sorry, we're over time. We'll have to go to Madame Brunelle.

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

Thank you, sirs. We're glad you could join us today.

I'm trying to understand why the legislation hasn't worked and why no pharmaceuticals have actually been delivered. The Canadian HIV/AIDS Legal Network told the committee that a number of developing countries were not in a position to buy patented medicines, besides which they lacked the industrial capacity to manufacture their own generic pharmaceuticals. They must depend on countries that export pharmaceuticals. Hence the need, of course, for this legislation. It's clear that a need for such products exists.

Moreover, during the course of two meetings, many reasons were given as to why the legislation has failed. Mention was made of the lack of information about the regime— you pointed that out again today. We heard that there wasn't even website up and running. We heard comments such as the complex nature of the regime, the lack of support measures, whether in terms of transportation or clinics. We were even told that at times, some areas are without water. Therefore, the process of sending pharmaceuticals has been hampered by major, fundamental problems. We heard how drug shipments were being diverted. We've seen news reports on this problem and it's easy to understand why it is that in war-torn countries, where even food shipments are diverted, pharmaceuticals are also valuable commodities. We also heard that in some cases, the list of pharmaceuticals in the schedule was overly restrictive. Many other reasons were also cited.

My question for Rx&D officials is this: what efforts are your companies making to supply affordably priced pharmaceuticals? It's clear a need exists. I would also like to ask all of the witnesses to explain why the regime isn't working and what steps they have taken to come to an agreement as to how to make this legislation work.

[Russell Williams]

With your permission, I'll go first. Thank you for asking such detailed questions. I'm not convinced that the process is not working. I don't think that has been proven yet. One of the reasons why the program hasn't been used thus far is the price of generic products in Canada. You can add that to your list of reasons. However, I'd like to explain that the act isn't quite that complex. There are certain requirements: where does the request originate, what quantity of product is being sought, who will be using them and for how long. It doesn't seem all that complicated to me.

Unfortunately, to date, generic companies haven't proceeded to step two, that is to test the system. If we want assurances that new HIV drugs are effective, we need to do some research. We're trying to strike a balance between protecting intellectual property and providing access to drugs. One does not preclude the other. First we need to let countries know that we have legislation on the books. That's why I visited 25 embassies to explain the act. We can start by letting the public know that this act does exist. In addition, we have documented proof that our R&D companies have partnered a great deal with other countries and with NGOs, the non-governmental organizations. We operate in the field successful programs providing access to drugs, clinics, and health, education and professional training systems. In my view, we need to take a comprehensive approach. We can continue to support the act while advocating that Canada take a comprehensive approach to this issue.

Summing up, I hope that we will be successful and that very soon, we will have a product that passes the test from every angle, a product that will allow for the system to be used while other countries continue to develop access programs.

[Jim Keon]

Clearly, it is the generic companies, and not the large multinationals, that need this act. The legislation refers to patented medicines. The changes that we have proposed need to be made in order to make the act more effective. The existing act is overly complex and negotiations must be conducted with patented drug companies. In the case of Apotex, three companies held a patent on this product. The license is valid for only one country, but often, companies want to export the product to several different countries. A company needs to be have a license that is valid for a certain period of time. Right now, under the act, a license is valid for only two years. In many ways, the act's provisions are restrictive and, as we mentioned two or three years ago, it's impossible for a generic drug company to work with the legislation. Therefore, it's important that changes be made. This act is important to all countries, and especially to developing countries.

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

So then, in your opinion, Mr. Keon, a number of amendments are warranted. Do you consider the list of pharmaceutical products appearing in the schedule of the act to be another hindrance? Should this list be modified?

[Jim Keon]

We would rather see the list abolished, but in actual fact, that's not what is most important. However, the list is an example of a superfluous provision. Anytime we want to add new products to the list, it requires a great deal of work on the part of government officials, companies and just about everyone. In the past three years, I believe we've added two new products to the list and each time, the process has taken six or seven months to complete. In my view, the preferred option would be to do away with the list, but that isn't our top priority.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go now to Mr. Carrie.