Thank you, Mr. Chair and members of the committee, for permitting me to testify about why, in my opinion, Bill C-393 fails to comply with Canada's international treaty obligations.
I am a partner at Gowling Lafleur Henderson. I have practised international trade law for over three decades. You'll find a short biography in tab 1 of my written submissions. Those written submissions, members, explain why Bill C-393 violates the TRIPS agreement and also the carefully negotiated international solution to the access to medicines problem embodied in the WTO's General Council decision of August 2003.
Today I wish to address two points for your consideration, if I could. Firstly, Bill C-393's one-licence regime is not authorized by flexibilities found in the TRIPS agreement. And secondly, TRIPS article 30's limited exceptions provision does not authorize Canada to abrogate its compulsory licence obligations that Canada has agreed to, both in the TRIPS agreement and in the General Council decision.
Now, point one, you'll hear some people argue that you can replace CAMR, Canada’s access to medicines regime, through flexibilities available under the TRIPS agreement. The 2001 Doha declaration required members to maintain their commitments in the TRIPS agreement but recognized that there were flexibilities in the TRIPS agreement. And it gave several examples, one of which was compulsory licensing. But the compulsory licensing obligation that existed at the time was only predominantly for the supply of the domestic market, so it didn't solve the problem.
That's why, Mr. Chair and members of the committee, the WTO ministers gave the following instructions to the TRIPS council. And they're found in paragraph 6. That's why you hear of it as the “paragraph 6 system”. It reads:
We recognize that WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem....
And that expeditious solution, Mr. Chair and members, is what you find in the 2003 General Council decision.
So Canada can only rely on this decision to issue compulsory licences for export if it complies with the conditions in that decision. And in my respectful opinion, CAMR does that and Bill C-393 does not.
I'd also, as a sidebar here, point out to you that my submissions only deal with TRIPS, but NAFTA has an almost identical compulsory licence obligation in article 1709(10). And you should know that Canada and the U.S. entered a memorandum of understanding that suspended the compulsory licence obligations you find in NAFTA article 1709(10)(f), which was identical to the TRIPS compulsory licensing obligation. That suspension is only valid with respect to the compulsory licence issued in accordance with the WTO General Council decision.
So if the Bill C-393 system were allowed, in my respectful submission, it would be violating NAFTA article 1709(10) because it allows for any drug, in unlimited quantities, for an unlimited term, for export to 140 countries. And that is not in accordance with the General Council decision. It would be offside the NAFTA obligations. And Canada, in my opinion, would end up in a dispute settlement panel under NAFTA.
My second point, Mr. Chair, is with respect to an argument that the single-licence regime proposed by Bill C-393 would be authorized by a limited exceptions provision we find in article 30 of TRIPS. Now, let's not forget, Mr. Chair and members of the committee, that the WTO membership rejected TRIPS article 30 as an expeditious solution to the access to medicines problem. But even if article 30 was available to Canada, the burden would be on Canada to demonstrate before a WTO panel that this one-licence regime is a limited exception; does not “unreasonably conflict with normal exploitation of the patent”; and does not “unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties”.
Canada lost a WTO case involving a Patent Act provision that allowed generic manufacturers to stockpile pharmaceutical drugs for the last six months of a 20-year patent term. We lost that. Canada defended it by arguing that it was okay using the limited exceptions under article 30. The panel rejected that, saying six months was a commercially significant period of time, especially since there were no limits at all on the volume of production allowed or the market destination of such production. So rather than being a limited exception, Mr. Chair, Bill C-393is an unlimited exception because it authorizes a compulsory licence for any drug, in unlimited quantities, for an unlimited duration of time. It does not take into account the legitimate interest of patients who benefit from the incentives that patent protection provides for research and development of life-saving drugs or drugs that improve Canadians' quality of life.
In conclusion, Mr. Chair, what are the proponents of Bill C-393 asking you to do? They're asking you to bypass the WTO and unilaterally renegotiate Canada's compulsory licence obligations through this one licensing system. But what has changed in terms of compliance with our international treaty obligations since the Minister of Industry's 2007 report on the statutory review of CAMR? The only change has been that Canada has accepted the protocol amending the TRIPS agreement that would make the general council decision a permanent amendment. So rather than Canada retreating from CAMR, Canada has in fact further entrenched its commitment to CAMR.
Thank you, Mr. Chair and members.