Industry Committee on Nov. 1st, 2010

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

No. It's strictly a renumbering.

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

Okay.

(Amendment agreed to)

[The Chair, Conservative, David Sweet]

Now we're back to where we left off the last time. We're resuming debate on Lib-2 on page 8 of your amendments, pertaining to clause 4.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Can we have Mr. Garneau explain this?

[The Chair, Conservative, David Sweet]

Yes.

Could you please give a recap on this, Mr. Garneau?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Yes, certainly.

The proposal with respect to subclause 4(2) specifically was that under the current legislation, a pharmaceutical manufacturer applying for a compulsory licence under CAMR--under the current legislation, not under Bill C-393--is required to include information about the version of the product, the quantity of the product to be exported, the name of the patent holder, the name of the importing country, and the name of the importing entity. I would like to restore the legislation. I would like to make sure that Bill C-393 reflects that requirement.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Garneau.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm speaking against this amendment. This virtually guts the one licence solution. We heard testimony from witnesses who, first of all, explained that what we did created a regime that wasn't necessary. It wasn't required under the WTO to create some of the barriers that we have.

One of the problems that we faced in the access to this legislation is pure-out intimidation and threats. Some of them have been public, as in the Indonesian situation, for example. Others have been impossibly difficult to get over, requiring a series of attempts to move, to get CAMR to work, especially the one in the Rwanda situation. We heard that, yes, some elements from the technical aspect, once it got through, were okay, but because of the process involved in terms of identifying the country right away, identifying the drug right away, and identifying the quantity, it restricted the interests of those who wanted to use this legislation. Hence, the Canadian model, which is sometimes proposed as being very effective, really isn't being accessed.

It's also important to know that for some of the things that were contentious in this bill, we've decided to drop those clauses. Some of the things I don't think are necessary, but at the same time, there have been some good concerns raised on everything from the food and drug and safety act--that's the Health Canada provisions--to others as well, relating to diversions. But this particular element here would create the same system that exists today. We have our only customer--that being Apotex, which looked at this as a potential thing--saying they won't do it. They've also identified that they would actually, if we'd traded a different regime, look at getting pediatric drugs immediately overseas as well.

It's very important that this part of the bill be defeated in terms of this amendment. I believe we won't see the wanton abuse of patent elements in Bill C-393, which has the one licence solution in it. I don't think any evidence of that has been produced. I haven't seen any evidence from the generic companies or from the pharmaceutical companies that there would be problems.

It was interesting, though, because when we had GlaxoSmithKline testifying in front of us here about how they wanted to ensure safety and a series of products that weren't substandard, they were actually settling a $760-million lawsuit in the United States for having products that were deficient, including baby ointment.

We've set up a system here that clearly isn't working. It's one that we've designed. This is a critical part that I hope gets defeated. If not, we will see similar situations take place, in my opinion, where the licensing won't be granted.

Once again, I think the best evidence we have is from the one company that actually tried to use this bill. We had incredible testimony here from a number of different NGOs about the restrictions and the problems. We had some other good testimony from experts like Mr. Abbott who were there and who know we're not violating anything by going ahead.

I'm hoping this motion will be defeated. I would call for a recorded vote when it is appropriate.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Masse.

Mr. Malo.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you very much, Mr. Chair.

Obviously, I will have some questions for my Liberal colleague, but I want to come back to one thing first.

On Thursday, we discussed this clause. You will recall, Mr. Masse, that you suggested removing a certain number of clauses. I asked the officials who were testifying a question. I asked them how they viewed or interpreted the removal of the clauses you suggested.

I just want to know whether you had time to take a closer look at that in the past few days.

[Rob Sutherland-Brown]

As I recall the proceedings from last Thursday, the proposal was that the sponsors of the bill would be prepared to drop clauses 6, 7, 8, 11, 12, 14, 16, and 17.

Clause 6 proposes to repeal section 21.06 of the Patent Act, the website disclosure, and in its place it proposes a more limited disclosure: the name of the product; the name of the importer; and distinctive features and labels in accord with the regulation requirement, which is not yet in place.

If you drop that proposal, you would revive subsection 21.06(1) of the Patent Act, so there would be a duty to disclose the authorized quantity. That would conflict with the repeal of section 21.04 in clause 4. It revives Health Canada's review and regulation--product features, labels, and packaging. Depending on the outcome of these other things, that would also conflict with the clause 4 authorization provisions. It revives the duty to disclose the name of every known party that would be handling the product while in transit from Canada to the importing jurisdiction. It also uses WTO language, but I understand that some of the amendments probably fix that.

Clause 7 of Bill C-393 purports to repeal section 21.07 of the Patent Act. This is the provision that requires the exporter to give an export notice. It is required to give that notice to the patentee, to the importing jurisdiction, and to whoever it is within that jurisdiction, or on behalf of that jurisdiction, who has purchased the product. This would create some problems for the anti-abuse provisions. By virtue of the repeal of section 21.04, application requirements, there is no way you can verify the disclosure to the patentee, as they are not identified in the new authorization process. It also uses WTO language, which would be fixed.

Clause 8 in Bill C-393 would amend the existing royalty provisions and it would remove the Federal Court review, at the instance of the patentee, of a royalty rate, which would be determined in accordance with the regulatory scheme but nevertheless in the judgment of the patentee was inadequate in the circumstances. The revival will bring this back into compliance with that review process. The review process is not required by the waiver decision itself but there is a requirement in article 31 of the TRIPS agreement that any decision as to the remuneration given to the patentee must be reviewable by a distinct higher authority. In the Canadian case, for a federal decision, that would be the Federal Court. This provision also uses the WTO language, which may well be fixed.

Clause 11 in Bill C-393 deals with section 21.13 in the Patent Act. That is a clause that deals with termination on the happening of a statutory event. These events are things such as the expiry of the two-year term certain for an initial authorization and the expiry of a two-year term certain renewal authorization, on the happening of the Minister of Health notifying the commissioner and others that the product at issue is no longer compliant with Health Canada efficacy regulations or the labelling and appearance regulations.

It also allows for automatic termination where a country has been removed from one of the country lists. So if you revive section 21.13, as the proposal to drop would do, you revive the concept of a two-year set term for initial authorization. You also revive a reference to re-authorization for another up to two years. So there's a conflict there between what's in Bill C-393 and what would stay in the Patent Act. Well, as the trade dress issues as defined by Health Canada regulations would be revived, and it revives the concept of a named product in an authorized quantity, all of that creates some tensions within what would remain if the bill proceeds.

Clause 12 is a termination clause on the instant or the suit of the patentee for a number of reasons. The termination for failure to label accurately and failure to give export notice--that could be okay if clause 7 is dropped, because that would revive the export notice. It would also replace Bill C-393's definition of a regional trade agreement with the original version in the Patent Act that was drafted to comply with the definition used in the WTO waiver decision.

Clause 14 would repeal sections 21.17 to 21.2. Section 21.17 is on termination in circumstances where bad faith is alleged because the contract is being used for commercial purposes. Section 21.18 is on the advisory committee designed to assist the Governor in Council and ministers in determining whether a drug should be added to schedule 1.

In section 21.19, a website is to be established by Canada to disclose applications that are made to it by a non-WTO member that would not have had an obligation to give notice to the TRIPS council under the WTO scheme. Canada went beyond its strict obligations in this regard, because they thought everybody should have access to the system on equal footing. We had to design something where a focal point for the notice from the demanding jurisdiction could be made public and transparent to the world.

Section 21.2 was a requirement for a ministerial review and reporting to Parliament, and that's essentially spent, so it would be removed in a housekeeping bill and not with whatever you do here.

That's it. There are several places where Health Canada is referenced. I'm not sure in which particular clauses. Perhaps we can deal with those when we come to them.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

My understanding, from your comments, was that a number of the clauses that could be dropped had little or no effect on the rest of the bill. In other cases, removing those clauses from Bill C-393 could have an impact on other clauses in the bill. That was my understanding, especially with regard to the first two clauses that could be removed, clauses 6 and 7.

The last clause you mentioned, however, clause 14, might be worth keeping, because it directly addresses the question I put to Mr. Masse on the addition or removal of listed products. That could give Parliament somewhat of an advisory role in the process. Of all the clauses you mentioned, I think that would be the one most worth keeping. So we are talking about clauses 21.17 to 21.2.

It is not with this addition or removal of clauses, as far as Bill C-393 goes, that we can really consider the second Liberal amendment. That amendment deals with another aspect of the bill and seeks to delete lines 15 to 18 of clause 4. My understanding, from what most of the witnesses said, was that that part was the real bone of contention.

I first want to ask Mr. Masse about that, since he is the one responsible for the bill right now. In your opinion, lines 15 to 18 of clause 4 speak to the heart of the bill. Without them, there is no bill.

[Brian Masse, NDP, Windsor West, ON]

No. It's this amendment here. I think the other ones that I'm prepared to drop are going to enhance certain elements of the bill. I would point to the food and drugs and safety act amendments in particular, because concern was raised about Health Canada saying that it would not be part of the process to look at drugs for export. We've already said, for example, that's off the table, so that's off the table and the objections from Health Canada are off the table. Objections from any member here about Health Canada drugs going out are off the table.

The others, the changes to the website and a whole series of reporting changes and so forth, were seen by other members and the department as not being good ideas. Facing that, we're willing to go back to the other parts of the bill. There will be some reporting things that water down even what I'm suggesting by keeping the one licence and one solution. But it's still better than what we have. If we go ahead with this amendment, it will gut the bill significantly.

Lib-3 is problematic as well. We might have a solution for that.

But at any rate, I think this is critical. If we don't defeat this amendment, it will all be for naught. We've heard that in the testimony from the non-governmental agencies and we've heard it from the generics that wanted to try to use this. It's about making sure that the preconditions by which a country can procure medicines are done in a way such that they can do so without intimidation, without fear, and according to the needs of their nation. Then we will still follow a lot of the regimental regime behind CAMR that was originally created in the first legislation.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

So you see lines 15 to 18 as being the heart of clause 4.

[Brian Masse, NDP, Windsor West, ON]

Yes.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Now I will ask Mr. Garneau. If lines 15 to 18 are at the heart of clause 4, why not vote against clause 4? Why put forward this amendment? Do you have a different understanding of all the testimony we heard in favour of Bill C-393?

As Mr. Masse said, everyone who argued in favour of Bill C-393 saw the problems that lines 15 to 18 presented. Yet it is those very lines that your amendment seeks to remove. Why not just vote against clause 4? Why do you want to remove those lines? Is your understanding different from mine?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

When I began studying Bill C-393, I wanted to understand why Canada's Access to Medicines Regime, CAMR, did not seem to be working—meaning that it worked once. I took it upon myself to do an in-depth analysis of why that was. I was also aware that similar regimes in other countries had not worked. I would say I approached the matter objectively. Of course, CAMR was almost never used, except in the case of Rwanda, with Apotex.

I wanted to know why a system that had been put in place with such good intentions and that, I would repeat, was designed to provide very important medicines to developing nations—especially to treat AIDS, malaria and tuberculosis—had not worked.

Let's consider the case of Rwanda with Apotex. I always come back to one thing. When Apotex applied for a licence to three pharmaceutical companies, the process took 68 days the first time. One year later, the first shipment of medicines arrived in Rwanda. Then, when they applied a second time, it took the pharmaceutical companies a week to authorize the application, if memory serves.

In my view, that does not explain why CAMR seems to be hampered or ineffective. The Liberal Party, which wants to provide medicines to the third world, where the need is greatest, has a proposal to guarantee that much-needed medicines will get to where they need to go. That is the approach the Liberal Party wants to adopt, one that does not include the proposed changes in Bill C-393.

Keep in mind, as well, that what this private member's bill, Bill C-393, inherently does is alter our obligations regarding intellectual property, our international obligations. Of course, there are arguments both in favour of and against that position. Some say that it could lead to problems with the international community, while others claim that would not be the case.

I think that Canada has to send a message about intellectual property, because it is crucial to research and development. After all, it is the pharmaceutical companies doing the research and development to come up with products that can then be passed on to generic drug manufacturers.

In short, we cannot lose sight of the real source of the problem. Everything I discovered regarding Rwanda has led me to believe that the problem does not lie with CAMR right now. It may be necessary to make some minor adjustments, but we need to find another way to accomplish what we all want to accomplish.

That is why I cannot support the proposed change in clause 4; I do not think that it focuses in on the real problem.

[The Chair, Conservative, David Sweet]

Mr. Malo.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

I am still trying to wrap my head around this. Why do you not simply vote against clause 4, instead of trying to amend it by removing, as I was saying earlier, the heart of the changes that all the witnesses who spoke in favour of Bill C-393 want, as does the New Democratic Party, which introduced the bill?

Why not just vote against clause 4? Why did you decide to move an amendment that would remove lines 15 to 18?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

I will repeat myself. I wanted to make sure that the application process would be restored. In speaking with the experts, I learned that amendment LIB-2, dealing with clause 4, reflected my concerns.

[The Chair, Conservative, David Sweet]

Thank you.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

I want to quickly correct the record from the testimony we heard. The problem that Apotex faced, as well as the NGOs, was identifying the country up front. That process took a year or more. That was the real problem.

The way that CAMR is built requires certain elements that create the barriers from the operational standpoint to be triggered later on, once those things are completed, so this is what this is about. It's to fix that critical fatal flaw of process that will allow the medicines to be negotiated from the countries, the NGOs. From Mr. Abbott's testimony, we do know that this is WTO compliant.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Masse.

Are there any other questions or any other debate? All right. I'll call the question on the Liberal-2 amendment. We've been asked by a member for a recorded vote.

(Amendment negatived [See Minutes of Proceedings])

It's quite clear. The amendment is defeated.

[Applause]

We will now move to the question on clause 4 as amended. Those in favour of clause 4?

[An hon. member]

It was amended?

[The Chair, Conservative, David Sweet]

Yes. It was amended. We passed two amendments to clause 4: Lib-1.5 and Lib-1.6.

Mr. Malo.