Evidence of meeting #37 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was generic.
A recording is available from Parliament.
11:05 a.m.
Conservative
The Chair Conservative James Rajotte
Order, please.
You seem to have a point of order, Monsieur Vincent.
11:05 a.m.
Bloc
Robert Vincent Bloc Shefford, QC
I would like to add an item to the agenda. I would like us to discuss Bill C-454, that deals with the Competition Bureau, at the end of our meeting today.
May 8th, 2008 / 11:05 a.m.
Conservative
11:05 a.m.
Conservative
The Chair Conservative James Rajotte
I think it was on division, but it was adopted by the House.
The bill has been referred to the committee, but this is a substantive motion with respect to discussing when we are going to look at Bill C-454. So I need direction from the committee on whether they want to bring this up today.
We have two panels today of fairly substantial witnesses. Does the committee want to do this at the end of business? I guess this would be at the end of panel two today.
Mr. Carrie.
11:05 a.m.
Conservative
Colin Carrie Conservative Oshawa, ON
Mr. Chair, we already have a very busy schedule today, and what we have is a subcommittee that we bring out. We've set our schedule on the science and technology. I think maybe that would be more appropriate to discuss at the next subcommittee meeting.
11:05 a.m.
Conservative
11:05 a.m.
Bloc
Robert Vincent Bloc Shefford, QC
I think that it is appropriate for us to study the bill now, because the price of gasoline is skyrocketing every day and every week. I feel that we should make this bill a priority by the summer so that it can be passed as quickly as possible and so that the Competition Bureau can be given the power it needs to investigate the oil companies.
If you ask the Liberal Party for their opinion, I am sure that they would agree.
11:05 a.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
Thank you, Chair.
In theory, I don't have a problem with looking at this. I'm just not sure we have the opportunity to do it today. I note that we are here until two o'clock, at which point we will be asked to go to the House. The question is whether or not Monsieur Vincent would have, in essence, unanimous consent to have us discuss this now or at some point in the not-too-distant future.
I don't think we have any objections to doing this, but I'll leave it to the chair.
11:05 a.m.
Conservative
The Chair Conservative James Rajotte
Monsieur Vincent, could we have a subcommittee meeting on Tuesday? It's Thursday today. We could have a subcommittee meeting at 10 a.m. on Tuesday, and we could make this the first item of business.
11:05 a.m.
Conservative
The Chair Conservative James Rajotte
All right, it's 10 a.m. on Tuesday. Then we'll have a subcommittee meeting with Monsieur Vincent, either you or Madam Brunelle, Mr. McTeague, Mr. Carrie, and Ms. Nash.
We are continuing our study pursuant to Standing Order 108(2), our overview of Canadian science and technology. We have five witnesses today, representing four organizations.
From Bioniche Life Sciences Inc., we have Ms. Susan Goebel, the E. coli project manager. From the Canadian Generic Pharmaceutical Association, we have Jim Keon, president. From Canada's Research-Based Pharmaceutical Companies (Rx and D), we will be hearing from Mr. Rob Livingston, vice-chair, federal affairs committee; and Mr. Normand Laberge, vice-president, federal government affairs and federal-provincial-territorial relations. Finally, from Trojan Technologies, we have Ms. Linda Gowman, chief technology officer.
Welcome to all of you. We will start with Ms. Goebel.
11:10 a.m.
Susan Goebel E. coli Project Manager, Bioniche Life Sciences Inc.
Mr. Chair, members of the committee, on behalf of Bioniche Life Sciences, I want to thank you for the opportunity to speak to you today.
Bioniche is an innovative biopharmaceutical company based in Belleville, Ontario. Our mandate is to act on innovation and improve the quality of life. We are publicly traded and invest heavily in research and development. Bioniche works hard to successfully commercialize our products for the benefit of our stakeholders and Canada. We currently employ over 200 people in highly skilled scientific jobs, with revenues in excess of $27 million.
I am here to speak to you about E. coli O157:H7, a deadly bacteria that continues to affect Canadians.
Bioniche's commitment to science and innovation has led to the development of a vaccine that is the first of its kind in the world. This vaccine was developed through strategic alliances across Canada and is truly a national success story.
The initial discovery occurred at the University of British Columbia. The Alberta Research Council assisted with the vaccine scale-up. Testing was conducted at the Vaccine and Infectious Diseases Organization at the University of Saskatchewan. Commercialization is being achieved by Bioniche in Ontario, and we are exploring supplementary manufacturing in Prince Edward Island.
Throughout all of this, the Government of Canada has been a strong supporter of the vaccine, providing funding through programs such as the Industrial Technologies Office, the agri-opportunities program, and the scientific research and experimental development program.
Canadians remember all too well the tragic outbreak in Walkerton, Ontario where thousands fell ill, seven people died, and many will never return to full health, all due to this pathogen. At the time, governments at all levels vowed to ensure that tragedies such as Walkerton never happen again.
Cattle are the primary reservoir of this bacteria. This deadly strain of E. coli does not make cattle sick, because these animals are not susceptible to the bacteria's toxin; people, however, are. Each year approximately 100,000 cases of human infection with E. coli O157:H7 occur in North America. This bacteria causes diarrhea in most people; however, in 15% of the cases people will develop a bloody diarrhea, and a further 10% of the cases will lead to kidney failure or death.
Although this innovative vaccine could easily be defined as a public health vaccine because it reduces a public health risk, it's given not to Canadians but instead to cattle. This way it helps to prevent the E. coli strain from entering the environment at the source.
An independent economic report estimates that vaccinating Canada's national cattle herd will result in a two-to-one return on investment, with annual savings of $63 million--$30 million in health care costs, and $33 million in benefits to the agricultural economy.
Canada is currently the only country in the world where regulators have granted cattlemen access to an E. coli O157:H7 vaccine. Given the numerous benefits resulting from vaccinating beef and dairy cows, one might assume that cattlemen will move quickly to use this vaccine. However, it's not that simple.
In late 2007 there was a recall of over 20 million pounds of hamburger in the U.S.A. that was linked back to Canadian beef. The negative publicity was yet another blow to Canada's beef industry, a commodity-based system struggling with increasing input costs and recovering from mad cow disease.
Cattlemen receive no direct benefit for spending money to vaccinate their animals. This bacteria does not make cattle sick. Canadian cattlemen are willing to administer the vaccine, but at this time they cannot incur the expense without receiving an offsetting increase in revenue. For this reason, cattlemen are reluctant to spend money to vaccinate their beef and dairy cows.
A Government of Canada program that encourages the adoption of E. coli O157:H7 vaccine over a period of three years would provide leadership for the agricultural sector, use innovation for the benefit of public health, and position Canada as a global leader in food safety. The end goal of this program would be to vaccinate the national cattle herd by 2010. After three years, the benefits of vaccinating cattle against E. coli O157:H7 are expected to be readily evident and justify continued use.
In summary, this Canadian vaccine is a world first and a shining example of innovation. Widespread adoption of this vaccine will position Canada as a global leader in food safety and provide much-needed assistance to the agricultural sector, particularly the beef industry. It will also preserve consumer confidence in Canadian food safety and benefit public health.
Thank you. I'd be pleased to answer any questions you have.
11:15 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much, Ms. Goebel.
We'll go now to Mr. Keon, please.
11:15 a.m.
Jim Keon President, Canadian Generic Pharmaceutical Association
Thank you, Mr. Chair.
On behalf of the Canadian Generic Pharmaceutical Association and our member companies, I thank you for inviting us to appear during your study of Canadian science and technology. The CGPA is the national association representing the generic drug industry in Canada.
Generic medicines are inexpensive versions of the original brands, manufactured by a number of companies once the patents on the brand-name originals have expired.
There are no differences as far as the quality, purity, effectiveness, and safety of generic and brand name drugs. All drugs sold in Canada must be reviewed and approved by Health Canada, and Health Canada stands by the quality of both brand and generic drugs. That gives Canadians the confidence in both brand and generics. Both brand and generics must meet the same standards and regulations established by the Food and Drugs Act.
Generic drugs in Canada, for 2007, were dispensed to fill 49% of all prescriptions. I'm actually pleased to say that according to industry data, for the first quarter of 2008, for the first time ever, generic drugs are now the dominant sector in Canada. More than 50% of all prescriptions are now filled with generics in Canada. However, in the United States generics are used to fill 67% of all prescriptions, so we feel we have a long way to go to catch up to our big neighbours to the south.
Generic drugs filled 49% of all prescriptions last year, for only 20% of the cost. When I've been at committee in the past, I've been asked about our pricing. I'm pleased to say that our prices have come down close to 25% in both Ontario and Quebec as a result of intensive discussions with those provinces over the last couple of years. We're now in similar discussions with the western provinces in Canada. Generics will be an even better value and even more important to the health care system on a go forward basis.
Canadian generic pharmaceutical companies are proud of their contribution to affordable health care in Canada. We're equally pleased that we can play a role in getting made-in-Canada medicines to countries facing crises, where they are desperately needed. CGPA member companies donate about 100 million doses of medicines each year, at an approximate value of $20 million. We participated with the Prime Minister at the opening of Health Partners International, and we're strong supporters of that organization.
Also, as announced earlier this week, one of our member companies, Apotex, the largest pharmaceutical company in Canada in terms of research and development spending and employees, will be the first company in the world to obtain and use a licence to export generic drugs for humanitarian purposes under the landmark WTO decision and Canada's own access to medicines regime.
Canadian generic pharmaceutical companies are making significant investments in Canada, and we have aggressive plans to expand these investments over the next five years.
Today generic pharmaceutical companies spend 15% of Canadian revenues. It says here that it's about $450 million--it's actually greater than that now--on domestic research and development activities. Our member companies are actively seeking to expand their domestic sales and increase exports. And we have committed to doubling our industry's employment over the next five years to 21,000 highly skilled jobs. We have a very good news story to tell in terms of being an export-oriented industry, and the high-quality R and D and manufacturing jobs we have. We hope to tell that story more often, and in a better way, than we have in the past in the Ottawa circles.
In regard to issues today, I'll touch on a few.
Canada's generic pharmaceutical industry supports patent rights and the right of any pharmaceutical company--brand or generic--to recoup their investments and turn a profit to help grow and sustain their business. What we do not support, however, is excessive intellectual property protection that guarantees longer periods of monopoly prices to brand-name companies without bringing additional benefits to Canada. Our current intellectual property regime in Canada for pharmaceuticals goes beyond our international trade obligations, through NAFTA and TRIPS.
In the last 21 years, successive Canadian governments have strengthened the commercial monopolies of manufacturers of brand-name medicines with no resulting increase in expenditures, as a percentage of sales, in research and development in Canada. Historical data from the Patented Medicine Prices Review Board in fact shows the opposite. In 1987, holders of pharmaceutical patents made a commitment to Canadians to increase their annual expenditures in research and development to 10% of sales. In 2006, they devoted only 8.1% of Canadian sales to research and development, and, in real terms, an amount of less than 2% of Canadian sales has been invested in basic research on new medications.
11:20 a.m.
President, Canadian Generic Pharmaceutical Association
I have a couple of comments on the regulatory situation on patents in Canada.
In October 2006 regulatory changes were made to the patented medicine notice of compliance regulations to stop the practice of evergreening of drug patents by brand name companies. We applauded the government for those changes. These tactics had unfairly kept generic competition off the market and forced Canadians to pay monopoly prices. In our brief we indicate other areas where we had problems with those changes, particularly in regard to data exclusivity.
I would like to mention, in closing, that following those changes in October 2006, very recently the Government of Canada published proposed further amendments to the regulations in the Canada Gazette, part 1, on April 26 of this year. Those regulation changes would reopen the loopholes to allow brand name companies to abuse the patent system to unfairly delay generic competition.
We're urging the government to withdraw those proposed amendments. The government has allowed only 15 days for public comment. The deadline is fast approaching. We would ask this committee for its urgent support in also opposing those amendments.
Thank you.
11:20 a.m.
Conservative
11:20 a.m.
Rob Livingston Vice-Chair, Federal Affairs Committee, Canada's Research-Based Pharmaceutical Companies (Rx & D)
Actually no, I'm not.
11:20 a.m.
Normand Laberge Vice-President, Federal Government Affairs and Federal Provincial Territorial Relations, Canada's Research-Based Pharmaceutical Companies (Rx, & D)
I will start. We are going to divide our time in two, but we will not exceed it.
Mr. Chair, we appreciate this opportunity to appear before the committee today on behalf of Rx&D. You have our written submission; we will use our time today to underline four recommendations.
Rx&D comprises more than 50 innovative companies employing 20,000 Canadians in highly skilled jobs. Our goal, and the goal of our member companies, is to develop new medicines and vaccines that can help Canadians live longer, healthier and more productive lives.
Rx&D firms are the largest single funder of health research and development in the business enterprise sector. They have funded more than $1 billion in research and development investments in 2006, a figure exceeded only by the telecommunications sector. We are a proud partner of Canadian Institutes of Health Research (CIHR) with whom we have invested more than $320 million in biotechnology research.
We are pleased that your committee is looking at science and technology policy in Canada. Our sector has been supportive of the government's science and technology framework launch, but we also feel that there is a great deal that remains to be done.
11:20 a.m.
Vice-Chair, Federal Affairs Committee, Canada's Research-Based Pharmaceutical Companies (Rx & D)
In particular, there are a number of public policy factors that affect Canada's ability to attract the investments critical to ongoing pharmaceutical innovation. We put forward recommendations in our submission to address these public policy factors today, and we will focus on four of them.
To put these recommendations into context, I refer you to your graphic on the timelines for the development of an innovative medicine from laboratory to pharmacy. We've also taken the liberty of expanding it on this billboard so we can refer to it when we're talking about some of those issues. On it is the 20-year patent life. As you can see, a good part of that gets used in drug development and then you go through the various regulatory steps to get on to the market and you end up with what we call your period of market, which ranges anywhere from five years up to nine years. So I'll talk to you about some of those regulatory steps.
A fundamental driver of business investment is intellectual property. In this industry it takes approximately 10 years to develop a new medicine and costs an average of about $1 billion. That's a global figure, that's not a Canadian figure. It's a global effort, so it's in total. Intellectual property protection is our primary asset, given the high cost and risk of developing a new medicine or vaccine and the relative low cost and risk of copying it. Our regime needs to remain competitive if we're going to continue to be able to compete internationally for R and D investment.
After approvals and reviews, there's often only a five- to seven-year window in which a medicine can recoup its costs. We are the only G8 country without some form of patent term restoration. This is an instrument in which the time to develop and get a medicine on the market is recouped on the back end; it's added to the end. As well, there are significant incentives to infringe our patents, therefore, we need to be able to effectively enforce them.
We therefore recommend that the government deliver on its throne speech commitment to improve the scope and duration of intellectual property protection in Canada and maintain a stable, reliable, and globally competitive footing.
The Patented Medicine Prices Review Board was established 20 years ago with a mandate to ensure a balance between pricing patented medicines fairly and encouraging innovation and investment. Price increases were not to exceed the consumer price index, and over the past 10 years they have not. CPI has gone up about 2% on average per year, and the price increases of patented medicines have declined about 0.2%. We feel it's evidence that the board is exceeding its mandate.
Our second recommendation is that the government implement an innovation review of the PMPRB to ensure that it does, in practice, adhere to its mandate.
Every aspect of a pharmaceutical's life cycle is subject to intensive company and governmental review and oversight, a process that can and does take years. We accept this; we are, after all, talking about people's health. But inefficiencies and duplication are a disincentive to access to both new medicines and innovation and don't necessarily always enhance patient outcomes. For instance, the common drug review was established in 2003 with the intention of reducing duplication and effort in streamlining the review process among the provinces. However, we found that it is now prolonging and complicating the process, without any direct benefit to patients.
Our third recommendation is that the drug review and reimbursement evaluation process in Canada be evaluated for its competitiveness and should include standards of measures to improve efficiency, eliminate duplication, and strengthen transparency and patient involvement.
Our final recommendation is that there should be a framework in which to implement these recommendations. Global R and D investment is declining. There's greater competition, and we have new markets like India and China. We feel that other countries are implementing comprehensive strategies to look at some of these issues and that Canada needs a similar strategy upon which to look at some of these changes. We therefore would look for the committee's support for a recommendation to the government for a sectoral strategy.
Thank you very much. We look forward to your questions.
11:25 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much, Mr. Livingston and Mr. Laberge.
We'll go now to Ms. Gowman, please.