Industry Committee on April 23rd, 2007

[Brian Masse, NDP, Windsor West, ON]

No, no, I'm asking for it so that we can help write a report. I would imagine that these agencies would have some basis of allocated time resource and management they'd be able to put forth on this issue. I mean, it's not that hard a question.

[The Chair, Conservative, James Rajotte]

Okay.

Just for future, Mr. Masse, perhaps we could inform the chair so that we might be able to get agreement rather than taking up the time of witnesses and other members.

Monsieur Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I'd just like to say for the committee's information that they likely had to answer that question about two months ago, during a consultative process. I've received some documents to that effect. Therefore, the government should easily be able to produce this in fairly short order.

[The Chair, Conservative, James Rajotte]

Okay. Well, if we could have....

Mr. Masse, if you could submit the question to the clerk, we will submit that to the four departments.

We will go now to Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

This is just a question on a policy that would achieve the end that everyone is seeking.

Recognizing that the R-and-D-based pharmaceutical industry is providing drugs at cheaper prices, in certain cases in the developing world, if CIDA were to approach the pharmaceutical industry and say that these are the drugs we need for these countries, and agree that we would pay for them, would the R-and-D-based pharmaceutical firms offer the drugs at cost? If the concern is patent protection, if the concern is the potential loss of the integrity of the patent system, would the R-and-D-based industry provide, at cost, drugs to the developing world if CIDA, acting on behalf of the developing world, were to offer to buy them?

[Terry McCool]

I think in the majority of cases, because of preferential pricing, there exist either at cost or below cost in the least developed countries. They're usually either at cost or have a very small markup in the developing or more developed countries, with the anticipation that in the developed world they're going to pay the full price.

So as long as we encourage a preferential pricing system where the products don't get diverted back into developed markets, I think the industry is willing to come to the table. But what you're talking about is increasing this global pool of funding to purchase pharmaceutical products. That can be brand or generic. I think there would be certainly an interest in doing that, but I can't speak on behalf of the government's willingness to do that.

[Jack Kay]

If that were correct, there would be no need for this legislation.

[Russell Williams]

Yes. And that's happening already in many...before CIDA. In terms of your question about CIDA, there is preferential pricing, at cost or free.

So we are interested in doing that and we continue to be interested in doing that, with whatever partnerships. I think CIDA could be helpful in terms of this mandate of making sure that people understand about this bill. They could be helpful in communicating that.

[Scott Brison, Liberal, Kings—Hants, NS]

MSF's report on drug prices--I'm untangling the web--indicates that in a lot of cases the companies that actually hold the patents are offering low-price medications in the developing world already. It's not that they're not doing that currently.

Are you saying, Mr. Kay, that the only companies that are providing low-cost medicine to the developing world are the generics?

[Jack Kay]

No, sir, I am not saying that. All I'm saying is if that in fact is correct, that the brand industry is offering these products to the developing countries, there would be no need for our organizations such as the World Health Organization or MSF to come to the generic industry and ask us to provide these products.

[Gregg Alton]

To answer your question directly, the answer from us is yes, we would make it in Canada and we'd provide it at cost. In the least developed countries you have the other pricing providing the materials for middle income markets. I'd also just point out that to my knowledge there's not one HIV product that is in need in the developing world that cannot be manufactured in India.

[Scott Brison, Liberal, Kings—Hants, NS]

Some witnesses have referred to the cost of the manufacturing issue in India and the generics in India and the low cost. Is that part of the reason why we're having a problem making this legislation work, the fact that we're seeing the low-cost generic manufacturers from India actually produce generics lower and more competitively? Is that part of the problem?

[Jim Keon]

That is part of the problem. The other issue has been that in India they have not faced patents, so they were able to go ahead and make a product. And again, you've heard the difficulties that Apotex had in getting through the regulatory and legal requirements in Canada. They don't have any of those issues in India. Yes, cost is an issue, but so also are the legal difficulties.

Earlier someone mentioned the manufacturing capacity in Canada. Apotex itself--and if Jack wants to speak to this, he can--has more capacity to manufacture medicines in Canada than all of the brand-name industry combined in Canada. We have about eight or nine companies that have major manufacturing facilities on the generic side. That is why Canada wanted to have this legislation, because we do have a robust generic drug industry.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair. You have my permission to cut me off if I get too long-winded.

I do have a couple of questions left. One was for the Rx & D guys. Many NGOs in the generics believe schedule 1 should be eliminated. In your opinion, what's the value, if any, of maintaining schedule 1?

[Terry McCool]

In our opening comments we addressed that a little bit. The value in schedule 1 is that it addresses the intent of the legislation and the intent of the WTO decision, which was to address the very serious diseases, such as HIV/AIDS and malaria and tuberculosis. Having no list would mean that there's a potential for those diseases to be ignored while you try to copy drugs in other categories where they could be either more profitable or more broadly used. So it was really an attempt to define what were considered emergency-type medications.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much.

The second question is for Mr. Alton. We in the government are trying to get an idea of the big picture of things. We see this legislation and we're dealing with CAMR right now. We're trying to figure out whether the legislation is broken, needs fixing, or needs a little bit of tweaking. The bottom line is this. How are we going to get out and help the people who need it?

I was wondering, let's say you're the health minister of Uganda right now, and you're given a budget of say $10 million for your entire country, and you're sitting around thinking how you are going to spend that. Are you going to be thinking of CAMR at all, or are you going to be thinking of things like clean wells, infrastructure, educating more doctors, educating more nurses, providing infrastructure there? What would you be doing right now if you wanted to address western countries and ask how they can best help you? What would be your opinion on that? Because this is driving me crazy.

[Gregg Alton]

I can't speak for what a particular minister of health may want to be doing in a particular country. To start off, I'd say $10 million would not be nearly enough to deal with the issues, but assuming that they had resources to develop health care, they're going to prioritize their health care and they're going to determine how much they want to prioritize to HIV and to the other diseases they're dealing with, whether it be tuberculosis, malaria, dysentery, whatever it may be. I

In the area of HIV, where we've seen countries be successful is when they put together national HIV programs. This is not dependent on the economics of the country, but it's actually the prioritization they put in. Botswana is a very good example. Botswana has done a fantastic job in reducing the HIV rate in their country by actually putting together a very progressive program, tapping into the international funding that's available and really making it a priority of that country to deal with it. I think Brazil and Thailand are other very good examples of where they've actually done a very good job of dealing with HIV. Other countries with similar economics have done a horrible job of actually managing the issue. They need to step up and do more, if they want to, in that area.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Carrie.

We'll go to Mr. McTeague.

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

Thank you.

I want to build on the beginning of Mr. Carrie's questions.

Mr. Kay, at the outset of this presentation you talked about the need for countries to be specific and to identify themselves. I have no doubt in my mind as to the reputation of a corporation or group or NGO like Médecins Sans Frontières and their good work.

I was speaking to their founder this weekend, Richard Heinzl, who is still shaking his head that we can't seem to break through on this. In his commentary, a company or an organization such as MSF can negotiate a contract and go to Apotex and make a solid argument for the purchase of these products to actually provide necessary medicines to those individuals, but is blocked by the brand-name industry because they do not reveal the country. Is this correct?

I want to ask Mr. McCool and Mr. Williams.

[Terry McCool]

It's in the legislation and it's also in the agreement of the WTO. It's not blocked by us at all.

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

A country would then have to declare beforehand for safeguards? Is this why the block?

[Terry McCool]

A country just has to declare that they have no ability to manufacture the drug, that's all. They just have to send a letter to the WHO and post it. That's all they have to do.

[Gregg Alton]

One thing we need to understand is that a lot of times these governments actually do not want a compulsory licence. They would rather work things out. The NGO community has had a very vocal public campaign to break intellectual property rights throughout the world. They want to do that. They claim victory when a government threatens a compulsory licence, and they claim failure when it doesn't do so. This may be a situation where the NGO is actually trying to encourage a compulsory licence, trying to encourage the use of CAMR, when the government itself is not in a position where it wants to do that.

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

Mr. Alton, we all had the embarrassing spectacle--all of us, I think, would agree at this table--of one country having to be dragged into court because it decided it wasn't going to necessarily follow the rules in order to assist its people.

But I'm asking the question: is it necessary, in your view? Why would you want to defend having the country name itself if there are existing safeguards to protect abuses, or do you actually believe that without naming the country there will be abuses?