Industry Committee on Oct. 7th, 2010

[The Chair, Conservative, David Sweet]

Order, please.

Good morning, ladies and gentlemen. Bonjour à tous.

Welcome to the 37th meeting of the Standing Committee on Industry, Science and Technology, the third meeting of this session.

We have a small piece of business that I'd like to deal with.

Members have in front of them the budget for our study regarding Bill C-393. Could I have someone—

[Mike Wallace, Conservative, Burlington, ON]

I'll move the items.

[The Chair, Conservative, David Sweet]

Mr. Wallace moves the items.

All in favour of this? None opposed.

Thank you very much.

(Motion agreed to)

We have quite a full roster today.

Maybe I'll let you start, Mr. Masse, and then I'll introduce our witnesses from the four departments that are represented, and then I'll be introducing the person who I understand is going to actually be the delegate to move the conversation through all the departments.

Go ahead, Mr. Masse. You have five minutes, I believe.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'll be brief. I think it's important for us to talk to the witnesses who are here today.

I want to start by thanking my colleagues for continuing with the study of Bill C-393, as Judy Wasylycia-Leis, the original sponsor of the bill, has moved on. I want to thank my colleagues for living up to the commitment they made to have hearings in this committee. I do appreciate that.

I want to provide a little bit of context. I won't get into many of the details of the bill, but I will maybe talk a little bit about why the bill is important and provide a little bit of the history for members who weren't around at that time.

I was elected back in 2002. When I came to Parliament Hill, there was already a movement to have a bill or a law to deal with some of the world's poorest and developing nations to help them get access to pharmaceuticals and medicines, since the simple status quo was not acceptable.

A year later, the WTO and a series of other global endeavours led to an opportunity for Canada to be one of those countries to actually put a system in place for generic drugs to be produced in advance of patents to help those suffering from tuberculosis, malaria, HIV/AIDS, and other types of catastrophic diseases and health problems. Bill C-56 was tabled in the House of Commons, and a subsequent government tabled Bill C-9, known as Jean Chrétien's Pledge to Africa bill.

At that time, the committee had lots of hearings. We had several different panels come forward. There were really comprehensive examinations. And just so my colleagues know, I actually proposed 100 amendments to that bill at that committee, believing at the time that it was flawed. Now, that's not to say I was right, but, at the end of the day, in the House of Commons all political parties ended up agreeing unanimously to a bill.

The explicit goal of everybody in that room and in the House of Commons was to have Canada put in place a system to be able to get these drugs to children and people across the globe who are suffering. As things stand, each day around 14,000 people die of HIV or AIDS, and when children actually have HIV/AIDS, one-third die by the age of one, and one-half by the age of two. We simply have the tools necessary to correct this situation.

Only one patent has gone through this regime to date. That was to Rwanda. It's been very limited in scope. That's from Apotex. There have been generic drug companies that say they will send more drugs overseas if we fix the legislation, and that's what we're proposing to do.

Once again, I'm proud to sponsor this bill, but, at the same time, I'm ashamed of my record on this, because I voted for a bill, and we promised the world we would do something that hasn't taken place. It certainly hasn't met what people said in the House of Commons and what they said here at committee, so I want to seek solutions to fix that.

I voted for the bill even though I thought it was flawed, because we stand unanimously together, as parliamentarians, to try to make a difference. We put those things aside to see whether or not the bill would actually work and if the problems we thought would happen weren't going to take place. But the reality is that they have.

So I stand here today to once again try to correct this situation, and to work cooperatively with everyone, because I think there was honest and sincere debate from all members and all parties to actually have a country that actually has a solution for this and that contributes and shows leadership. But we have failed people on this. There's no doubt about it. People are suffering. People are dying. People are not getting treatment. We put a lot of weight behind this and we need to solve it. I think it's a moral and ethical obligation for us, and I think Canada has the tools to be, once again, a leader in this field.

I thank you again for continuing with your commitment to have this heard in the halls of this committee, and hopefully in Parliament as well.

Thank you, Mr. Chair.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Masse. I appreciate your efficiency.

I'll briefly introduce our witnesses today.

From Industry Canada, we have Colette Downie, director general, marketplace framework policy branch.

I understand, Madam Downie, that you're going to be doing the main presentation and directing the others.

[Colette Downie, Director General, Marketplace Framework Policy Branch, Industry Canada]

With my colleagues, that's right.

[The Chair, Conservative, David Sweet]

Okay.

We also have with us: Louise Clément, senior director, regional and geographic programs, southern and eastern Africa; Christine Reissmann, director, AIDS and tuberculosis programming and health institutions, multilateral and global programs branch; Brigitte Zirger, director, policy bureau, therapeutic products directorate, health products and food branch; and as well, Robert Ready, chief air negotiator, Department of Foreign Affairs and International Trade.

We will begin with you, Madam Downie. I understand that your presentation is approximately 20 to 25 minutes among all departments. Is that correct?

[Colette Downie]

Yes. We're going to try to keep within that timeframe.

[The Chair, Conservative, David Sweet]

Thank you.

Please proceed.

[Colette Downie]

I think everyone has a copy of our deck before them...? Fantastic. That's what we'll be going through.

I'll start by thanking you for the invitation today to speak about Canada's access to medicines regime, or CAMR, as it's often called, and to speak about the possible implications of private member's Bill C-393, which proposes to significantly change this regime.

Together, my colleagues and I will be speaking about CAMR and Bill C-393. Our presentation will be divided up according to our various responsibilities, but it will, I hope, highlight the following.

First, there is the complex problem of delivering medicines to the developing world and what the Canadian government is doing about that. An access to medicines regime like CAMR, like Canada's, can't by itself solve the main problems of access to medicines, which are really the result of poverty, not patent laws.

A number of risks are associated with removing the conditions that exist in CAMR to give what would be essentially a blanket licence well beyond what would be needed to deal with some of the humanitarian problems that motivate this private member's bill. In particular, it would allow for export of almost any patented drug made in Canada for an unlimited time and to many countries that are relatively well off, like Poland, Mexico, and Brazil. There would be no policing mechanism to ensure good faith in the shipments, all of which potentially would have--at least we're concerned about it--concerns for Canadians' access to innovative new medicines and research and development jobs.

So while the proposed bill raises these risks, at the same time the government's view is that it's very unlikely to achieve its very laudable goals, which are to increase the exports of much-needed medicines to developing countries.

Following our joint presentation, all of the officials here would be happy to answer your questions.

I'll turn over the beginning of the deck to Louise Clément.

[Louise Clément, Senior Director, Regional and Geographic Programs - Southern and Eastern Africa, Canadian International Development Agency]

Thank you very much. I'd also like to thank the committee for the opportunity to come and speak about Canada's support to improved health, including access to medicine, in the developing world.

As was mentioned, my name is Louise Clément and I'm with the southern and eastern Africa directorate of CIDA.

The health needs and challenges of developing countries vary greatly. Improving health care, including access to medicines is a multi-faceted challenge, and you will see some of those challenges on slide 1 of your deck. We have to use the most effective, cost efficient, and accountable means to improve the health and the health care of those living in poverty in developing countries.

Through CIDA, Canada is working with the global community to address health needs in developing countries. We are committed to doing so effectively and accountably. We have the lives of millions depending on Canada and our international partners to improve their health and reduce their mortality. Millions are losing their lives from lack of access to medicines that prevent disease and death. This means increasing the medicines available, increasing the access to the right medicines, and ensuring safe delivery and administration of the needed medical interventions.

CIDA's policy is to improve health in the most effective and cost efficient way. To ensure safe delivery and administration of medicines and vaccines, we work with qualified, experienced organizations as partners.

As president of the G-8 in 2010, Canada championed the Muskoka initiative, a major global effort to improve maternal, newborn, and child health in developing countries and to save their lives. Of the Canadian contribution, 80% will go to sub-Saharan Africa, which has the greatest burden of maternal and child mortality.

The Prime Minister recently announced Canada's contribution of $540 million over three years to the Global Fund to fight AIDS, Tuberculosis and Malaria. An estimated 45% of Global Fund grants go to procuring health products, including medicines.

Canada is also a founding donor of the global drug facility and has been the single largest donor country for first-line TB drugs since the facility started in 2001. The global drug facility, a program of the Stop TB Partnership, works to improve access, supply, and distribution of TB drugs in developing countries. It is the only global bulk procurer of anti-TB drugs.

Another example is the GAVI Alliance. This global partnership brings stakeholders in immunization, from private and public sectors, together to accelerate access to new and existing vaccines for developing countries. The alliance works to strengthen health systems in countries and to increase the predictability and sustainability of financing for immunization programs.

Yesterday, Canada announced a contribution of $50 million over five years, bringing our total to $238 million in support of alliance efforts to increase access to life-saving vaccines against hepatitis B, yellow fever, rotavirus, and pneumococcal diseases.

Canada has consistently supported measures that would improve the delivery of needed medicines in health care support to achieve healthier populations in developing countries.

Over the past few years, CIDA has taken significant steps to advance its aid effectiveness agenda to deliver real results for those CIDA is mandated to help.

To reduce poverty, a population must be healthy. To learn and be educated, a child must be healthy, and to improve your livelihood, you must be healthy.

We want to ensure that Canada's aid dollars are resulting in more medicine, more access to safe and quality health care, and, in the end, a healthy, thriving world population.

Thank you.

[The Chair, Conservative, David Sweet]

Now we'll go on to Mr. Ready.

[Robert Ready, Chief Air Negotiator, Department of Foreign Affairs and International Trade]

Thank you, Chairman.

I'm speaking to slide 4. This part of the presentation really wants to emphasize three broad points: first of all, that the purpose and scope of the CAMR is limited; second, that CAMR is not an administrative burden for countries and applicants; and finally, that eliminating CAMR's administrative provisions could leave Canada vulnerable to challenges at the WTO. I'll just spend a few minutes going over these three points.

First, with respect to the purpose and scope of CAMR, I would maybe just note a couple of points of general context.

Approximately 95% of the drugs on the World Health Organization's essential medicines list are currently off patent. The subsequent point is that CAMR can assist in the international supply of low-cost drugs only if there is an external demand for a Canadian-made generic product.

CAMR, and the WTO decision or waiver on which it was based, was not intended to solve the broad problem of access to medicines on its own. It was part of a broader international strategy to combat diseases that impact the developing world: HIV/AIDS, tuberculosis, malaria. CAMR effectively implements the WTO decision, which is a small component of a broader effort to promote access to medicines. The WTO decision was an intensely negotiated instrument in that body that sought to bring together divergent stakeholder views and to respond to specific public health problems on the one hand, while at the same time assuring that intellectual property protection is maintained on the other hand. CAMR in turn was the result of extensive consultations here in Canada to balance differing Canadian stakeholder views. It essentially sought to balance facilitating access to medicines while at the same time ensuring that incentives for innovation for new medicines and technologies remained.

As one of the first WTO members to implement the waiver, Canada faced a number of competing objectives: first, facilitating access to lower-cost pharmaceutical products in countries facing public health problems; second, respecting Canada's obligations under the TRIPS agreement at the WTO, the trade-related intellectual property agreement, and other international treaties; respecting Canada's patent system; encouraging generic companies to participate in CAMR; and ensuring products exported under CAMR met the same safety and quality standards as those in the Canadian market. The bottom line, I guess, is a balanced and focused instrument with important specific elements that provide clarity and safeguards.

The second point I would focus on, Chair, is the issues around administrative burden, in other words, the length of time it takes to ship medicines. Here I think we need to look carefully at two timeframes. The first is the process in general, which began in 2003 when the WTO adopted its decision or waiver; then the coming into force of CAMR in 2005; and then in December 2005, the receipt by Health Canada of a submission for a medication Apo-TriAvir. In June 2006, Health Canada completed a review of the submission that was made, essentially in a period of six months rather than the allowable 12.

That's by way of introduction to the more specific timeline related to CAMR, which I would like to focus on now. CAMR essentially kicked in with respect to this submission on July 13, 2007, with the company in question, Apotex, sending letters seeking voluntary licences to three pharmaceutical companies to use their relevant patents to produce and export Apo-TriAvir to Rwanda.

On July 19, 2007, under WTO rules, Rwanda became the first country to notify of intention to use the waiver, stating it would import this medication.

On September 4, 2007, Apotex filed application with the Commissioner of Patents for authorization under CAMR to produce and export to Rwanda.

On September 19, 2007, the commissioner granted Apotex authorization, completing the government's role in the process.

The point I want to stress there is that for the CAMR part of the process it took roughly two months to complete the required elements, and subsequently, there was a series of next steps that involved Canada notifying the WTO of the first authorization using the waiver.

In May 2008, some time later, Apotex announced that it had won the Rwanda public tender to supply the drug, and in September 2008 the first shipment occurred.

In sum, on the second point, the challenges and delays with respect to Apotex's export of medicines to Rwanda can be separated from the CAMR process itself.

The year that elapsed between Health Canada's approval of Apo-TriAvir in June 2006 and Rwanda's notification to the WTO can be attributed to the fact that no country had come forward to request drugs under the waiver.

The third point is potential WTO concerns.

In negotiating the waiver, WTO members adopted certain safeguard provisions to prevent the diversion of generic medicines to unintended recipients. The administrative procedures under CAMR are based on these required safeguards.

In closing, it is important to reiterate that the WTO waiver was very limited in its scope, purpose and what it could achieve and so in turn was the design of CAMR.

Expanding the scope of CAMR beyond the WTO requirements could threaten existing elements in CAMR that secure Canada's compliance with its international trade obligations.

Since the adoption of the WTO waiver, the international environment for procurement of drugs has also changed significantly with the introduction of a variety of other global mechanisms and alliances that offer greater choice to countries to obtain medicines.

Thank you, Chairman.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Ready.

Ms. Downie.

[Colette Downie]

Thank you, Rob.

I'm on to slide 5 now. I'll just back up for a second to say that Canada's patent system rewards the extensive investment that's needed to develop new, innovative products, including medicines, by giving patent holders exclusive rights to sell the results of their research for a number of years. In Canada, it's 20 years. When the patent expires, of course, others are free to sell the product, as when we see generic drug manufacturers selling copies of formerly patented medicines.

The access to medicines regime is an exception to our patent system. It allows the Canadian government to authorize someone other than the patent holder, whose property the patent is, to manufacture a patented drug or a medical service for export to a list of particularly needy countries. In recognition of the tremendous investment that's needed to develop these products, and because we want to continue to encourage companies to develop innovative new products, and medicines in particular, Canada's access to medicines regime, CAMR, was designed in a specific way to clearly define its limits, essentially.

While the process for applying for a special authorization under CAMR is actually pretty straightforward—and if the committee is interested, I could share the forms that are required, because when you see them they're actually quite straightforward—CAMR does contain some important disclosure provisions, which were designed first of all to promote transparency and prevent abuse, including the diversion of products back to Canada or to other markets where they might not actually be needed for humanitarian reasons, and, as I said, to ensure that the drugs manufactured are actually used for humanitarian and public health reasons and not for commercial purposes. Also, it's to allow the government or the Federal Court to cancel a licence if, for example, it's abused, is not used in good faith, or is used for commercial reasons. It's important to know that the regime relies on patent holders and not the government to police the use of products licensed under CAMR.

What Bill C-393 proposes to do is remove some of the important anti-diversion and transparency measures that make the regime enforceable. For example, it reduces the information that an applicant must disclose before it gets government approval—basic things such as the requirement to identify the patents involved, the name of the patent holder, the quantity shipped, where it's being shipped to; it would make the authorizations unlimited in duration and quantity; it would remove requirements to notify the patent holder when the medicine is being shipped, how much is being shipped, where it's being shipped to, and who will be handling it in transit as well; it proposes to remove requirements that licensed products have special markings, colouring, and labelling, to make them distinguishable from the patented versions available in Canada. It would significantly also narrow the ability of the government to terminate an authorization, and it eliminates the ability of a patent holder to challenge the shipment of goods, if they're for commercial purposes, in court.

What this means is that anyone could apply to the government for a licence to sell unlimited quantities of products outside Canada, and the government would be required to issue a licence on the basis of not a lot of information and without a mechanism at the back end to make sure that products are actually being shipped for commercial reasons, or to the country they're intended for.

Research and development-focused pharmaceutical companies have global reach, they have global perspective, they have flexibility about where they invest their R and D dollars, and they naturally favour jurisdictions that provide strong and predictable IP regimes. We're concerned that reducing the safeguards provided in CAMR will result in pharmaceutical companies' hesitating to invest in Canada for lack of certainty about the protection of their investments. If they believe the patented products they sell in Canada could also be sold in an unlimited way to other countries, including perhaps being diverted to relatively well-off countries like the ones I mentioned earlier, such as Mexico or Poland or Hungary, they might hesitate to invest the time, money, and resources to bring new and innovative products to Canada.

Another key concern with Bill C-393 is that it introduces a double standard: it would no longer require—it makes optional—that drugs manufactured and exported under the regime pass the Canadian health and safety review at Health Canada.

Many of these developing countries do not have the infrastructure in place to make sure that drugs they are purchasing are safe and effective. The Health Canada review process under CAMR makes sure that they receive the same level of protection as is provided to Canadians.

I'll just turn for a moment to Brigitte, who can expand a little on that point.

We're really now just getting to the end of slide 5, and on to slide 6 in a second.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Just in the interest of getting the accurate information, I don't have a problem if we go a few minutes over in their time to present. I'd rather hear the information to its full extent. If it takes five extra minutes, so be it, I think.

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

Mr. Chair, on the same point of order, the proviso would be to add an additional five minutes at the end of the meeting, if that's the case, Mr. Lake—if that's okay.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Sure.

[The Chair, Conservative, David Sweet]

If it's required.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

That's fine as long as the witnesses are going to stick to Bill C-393. I don't think we need to hear about other issues.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Masse.

From the rest of the nodding heads, it looks as though we have unanimous consent. So please go ahead, and understand that we're ready to hear all of the information.

[Colette Downie]

Thanks very much.

[Brigitte Zirger, Director, Policy Bureau, Therapeutic Products Directorate, Health Products and Food Branch, Department of Health]

I'll try to do this on the fly, then.

As Ms. Downie has already mentioned, Health Canada's regulatory role within Canada's Access to Medicines Regime is three-fold.

Firstly, the department is responsible for undertaking a regulatory review of a drug submission to verify that the product meets the same requirements for safety, efficacy and quality as drugs available to Canadians.

Secondly, Health Canada is responsible for ensuring that the pharmaceutical product is distinguishable from the patented version available in Canada. This is aimed at preventing diversion or re-importation of the product.

Third, Health Canada is responsible for performing pre-export inspections to verify, among other things, the distinguishing features and the quantities to be exported. These details would be stated on the manufacturer's application for compulsory licence that is sent to the Commissioner of Patents.

Now, the products of most interest under CAMR are antiretrovirals used for the treatment of HIV/AIDS. In Canada, the vast majority of these drugs are still under patent protection, which means that Canadian generic versions have not yet been developed. This was the case with Apo-TriAvir.

I would add that submissions that are received and have been received under CAMR are taken into review immediately upon arrival and are completed well within the performance target. These reviews are undertaken with the same diligence as any domestic submission review we undertake, and that is mainly because at the end of that review, and when the patents expire, those drugs can come to Canada.

Companies, whether they are brands or generics, don't develop risk-free products. If they did, Health Canada would never have to issue a negative decision. And it is Health Canada's view that there should be no question of a double standard, nor should there be any concern that a drug leaving Canada destined for humanitarian purposes might be unsafe. Bill C-393 could put this in jeopardy. By removing the mandatory review, it is unclear what safety, efficacy, and quality standards would be applied to drugs exported from Canada under a government-issued compulsory licence.

Maintenance of quality once drugs are in that country and the trade of substandard, falsely labelled, counterfeit, and falsified medicines are serious public health problems. These pose significant challenges to developing countries, which receive drugs from many different sources, including Canada, and where the capacity of national drug regulatory agencies varies significantly. Removing Health Canada's review of drugs exported under CAMR simply moves the drug assessment to lesser-resourced agencies in developing countries or to WHO, which itself depends on regulatory agencies such as Health Canada to do the reviews.

Health Canada, its regulatory counterparts, and organizations like WHO work collaboratively to build regulatory capacity in developing countries. For example, there are quite a number of international harmonization projects, which I've named here but will skip, which focus on the development of lesser-resourced regulatory agencies.

In 2009, Health Canada replaced numerous annual ad hoc visits from these agencies with an international regulatory forum aimed at providing training. The forum is being repeated in two sessions this year and it involves some 27 participating countries. One of them is taking place next week.

We have an HIV vaccine initiative, which is a collaboration between the Government of Canada and the Bill and Melinda Gates Foundation, that is aimed at advancing the science of HIV vaccines and the prevention of mother-to-child transmission of HIV. An element of this collaboration, again, is aimed at capacity-building in the area of vaccines.

Most importantly, Health Canada works with WHO's pre-qualified program, which is actually mentioned in the bill. It aims to ensure that medicines and vaccines for high-burden diseases meet the global standards for safety, efficacy, and quality. The pre-qualified list is used by UN procurement agencies as well as by developing countries when making procurement purchases. Health Canada and many other countries undertake product reviews for this program, and it's because of this work that Apo-TriAvir was added to the pre-qualified list on the basis of Health Canada's product review.

In summary, Canada is committed to increasing access to high-quality medicines and health care in developing countries. Health Canada's role in CAMR is one aspect of this commitment, and so is Health Canada's contribution to building capacity in lesser-resourced regulatory authorities.

[Colette Downie]

Thanks, Brigitte.

In conclusion, CAMR addresses only one small part of the problem of global access to medicine, and that's to make generic versions or copies of patented medicines available under certain tight conditions, as I explained.

The proposed changes will not resolve other global problems associated with access to drugs. These include the delivery of health care and disease prevention in developing countries. Without solutions to these other key problems, it is possible that the health-related problems of many countries will not be resolved.

For these same reasons, it's unlikely to result in more countries demanding to use CAMR. There are already many publicly available mechanisms to procure low-cost off-patent drugs to treat public health diseases in the developing world, and it's unlikely that developing countries will use CAMR when less expensive sources of generic medicines exist.

Changing CAMR won't lower drug supply and labour costs in Canada, and it can't, by itself, make medicines manufactured here more competitive with those made in, say, India or China. This has been acknowledged by the CGPA, the Canadian Generic Pharmaceutical Association, during the CAMR review. Some of the witnesses, from whom you may be hearing and who appeared before the Senate committee on Bill S-232, also pointed that out.

Canada has the only access to medicines regime in the world that works.

In the case of Rwanda and Apotex, this objective was reached because of the regime which made it possible to ship over 14 million doses of an AIDS-fighting drug to Africa. For now, we are concerned that the proposed changes could adversely affect the way in which CAMR works, without providing sufficient performance guarantees and in the process weakening Canada's patented medicines regime and making our investment climate less attractive.

I'll end there.

I'll simply point out a couple of things. There is an annex to the deck presentation we gave you that, hopefully, gives you some useful background on CAMR, and there's a chart that explains how it works, on slide 10, the process, which I hope is simple.

We've also provided the committee with a copy of the timeline of the events that led up to the shipment of medicines to Rwanda, which I hope you all have. It's a fairly long piece of paper. It shows you in black the different events that happened on the timeline and in red the parts that relate to the access to medicines regime itself.

With that, we'd be very happy to answer your questions.

[The Chair, Conservative, David Sweet]

Thank you very much, Madam Downie.

Does everybody have those documents? I noticed a couple of members didn't. I'm certain the clerk will be glad to get you more if you need them.

We'll go to our regular rounds of questioning, with seven minutes for this round.

Mr. Garneau, for seven minutes.