Industry Committee on Nov. 1st, 2010

[Mona Frendo]

It would eliminate the government's ability to remove from this eligible importers list countries that permit imported products to be used for commercial purposes contrary to the humanitarian objectives of the WTO waiver.

It would eliminate the government's ability to remove countries from the eligible importers list that import drugs under the waiver but fail to take reasonable measures to prevent these drugs from being diverted and re-exported outside of their territories, again contrary to the objectives of the waiver.

Finally, it would limit the government's ability to remove from the eligible importers list countries that state that they will only import drugs under the terms of the WTO waiver in situations of national emergency or extreme urgency. There were a number of countries that told the WTO they would only use the waiver in those special circumstances, but then they proceed to import in other circumstances, so they don't abide by their self-declarations to the WTO.

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

Does Mr. Garneau's amendment address any of those circumstances?

[Mona Frendo]

No.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Lake.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

The point is that some of those countries, such as Mexico, stated they would use it for domestic emergency circumstances only.

[The Chair, Conservative, David Sweet]

Mr. Malo.

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

Mr. Masse, I will put my question to you.

When Judy Wasylycia-Leis was drafting the bill, why did she think it was important to remove that barrier? What did it change? What did it add? Why was it necessary to do that?

[Brian Masse, NDP, Windsor West, ON]

Well, the Patent Act schedules of countries and drugs were never part of the WTO decision. That was something that we made up here in Canada; it wasn't required. It was never part of the original agreement internationally; we just invented that here.

When we invented that here, one of the things we raised was that there would be active lobbying to keep certain drugs and certain countries off the list. That happened with Bayer: they actually started to lobby to keep a drug off the list.

So the schedules become a big problem in many respects, because we just made up the rules and the countries and the drugs to put on a list when we didn't have to require that. Some of the testimony we've heard over this period of time is that the lists and schedules were not necessary.

In the spirit of compromise, I've agreed to maintain the status quo or, if Mr. Garneau has a better system here, to support that. That's the reason I will continue to accept the fact that if we have countries and schedules, it's because there seems to be a greater want for this made-up system that we created back in 2004.

However, I never believed it was necessary to begin with and it certainly created real problems that made headlines here in Canada. As I mentioned, there was an argument that companies would lobby the ministers and other people to keep their drugs off the list, and it turned out that Bayer was actually doing that as we had hearings here in Ottawa.

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

Do you understand why it might be important for the government, or even Parliament, to be able to determine what can be sent and where? Ultimately, do you think we can have that oversight?

[Brian Masse, NDP, Windsor West, ON]

Once again, the WTO didn't require that as part of the decision, so to me, as long as this is being done ethically—and there hasn't been an indication that it would not be—then I don't believe that lists are necessary. Because we see the problem that's emerging now, for example, with India, let's say. Their patent restrictions are coming into place and the new HIV drugs that are necessary to go to the next level of treatment are going to be problematic. That was the testimony we heard from several organizations here. To me, by putting in those lists, you restrict the formulary necessary to treat people, and that adds another level of barrier. To me, it's critical.

The WTO divines who is a developing nation. We've only seen one case in the last number of years that this has been used; we haven't seen the widespread abuse that was predicted, even under the current model, and the insinuations that places such as Mexico and so forth were going to abuse this type of regime just have not come to fruition, in my opinion.

Putting the drugs on a list requires another level of barrier to add those drugs that often could be the proper formula for treatment. But I'm willing to accept the status quo or a model similar to it for the greater good of trying to improve the bill.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Malo and Mr. Masse.

Now we'll go on to Mr. Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

I want to ask whether we could turn to the officials to ask what the purpose of the original country list was when CAMR was first drafted, why the countries were subdivided into the three different categories, and what the consequences of consolidating the list will now be. It is a question about background, purpose, and then impacts.

I have a couple of follow-up questions as well.

[Rob Sutherland-Brown]

Starting at the top, concerning schedule 1, the comment is correct: there is no WTO requirement of which I am aware that says you have to put drugs on a list. They just were happy with a definition of—

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I'm referring to the country list.

[Rob Sutherland-Brown]

Yes, the country list; I wanted to start at the top. The rationale for the country list, as I tried to explain earlier, was to recognize the different categories of eligible importer that the WTO negotiators had identified. For instance, the least developed countries are eligible by presumption, and they don't really have to do anything.

Others, as people have noted before me, have said to the WTO that they will only use this in case of a domestic national emergency. In giving notice to the WTO, they would have to call attention to the fact that they are having an emergency, in their view, and therefore that they are eligible.

That was the rationale for it. It made it very simple: you knew what class you were in and you knew, therefore, what you had to demonstrate to the Commissioner of Patents when you went forward with an application for an authorization. That's the simple rationale, the easy reference, and quick to do.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay. Hearing that drugs can be exported for commercial purposes and not for humanitarian purposes, either because of clause 3 or the consolidation of the country list—I'm not sure which, and perhaps both—greatly concerns me. Is it by virtue of clause 3 that this can happen or is it by virtue of the consolidation of the country list? And does this not set aside and abandon the ultimate purpose of the WTO negotiations on CAMR, which was to ensure that drugs were exported for humanitarian purposes?

[Rob Sutherland-Brown]

I think that's a fair comment. The non-commercial character of the scheme was something that was set out in what is referred to as the chairman's statement, and that, by definition of the General Council decision in the Patent Act, was incorporated into the Canadian legislation because we thought it was an important element of the whole scheme that was created at the WTO.

So it is an important element and it runs through our legislation as it exists prior to Bill C-393. It's reflected in the provisions whereby the Federal Court can review an authorization to see whether, at the price the drug is being exported, it is for a non-commercial purpose or at a commercial price as opposed to a “humanitarian price”. It was an important element in the scheme, yes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Finally, did I hear you correctly when the statement was made that, again, clause 3 opens up the risk of diversion because an importing country can re-export. Is that correct?

[Rob Sutherland-Brown]

There are a number of elements in Bill C-393. As I think I said last Thursday, this is very intricate: A goes to B to go to C, etc., so you have to follow the thread through the fabric, so to speak. But yes, I think that's a fair comment.

Some of the anti-abuse provisions that were in the Patent Act are removed by the proposals in Bill C-393. If you remove those anti-diversion or anti-abuse provisions, then you are in a very difficult situation if you try to enforce the limitations of the waiver agreement and the scheme for exporting drugs under compulsory licence.

Thank you, Mr. Chair.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Braid.

Mr. Lake.

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

I want to clarify the meaning of some phrases here. The area that's being struck out refers several times to this: “has failed to adopt the measures referred to in Article 4 of the General Council Decision”. We're talking about countries who have failed to adopt them.

What does that mean again...? Could you reiterate that? I guess it would be paragraph 21.03(3)(a), under the heading “Removal from Schedules 2 to 4”, in the Patent Act.

[Mona Frendo]

Article 4 of the WTO waiver--or the WTO decision, as we've being using those terms interchangeably--talks about the obligations that importing countries shall take. I can quote it for you, but basically they are measures they must take to prevent trade diversion.

If they import drugs under the WTO system, they have to make sure that the drugs stay within their jurisdiction and aren't re-exported. They must also prevent re-exportation of the products that have actually been imported into the countries. That's basically what it says.

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

Okay. In a couple of cases here, we're striking down the ability to remove the names of countries that fail to adopt the measures referred to in article 4 of the waiver that allows us to have CAMR in the first place, in a sense, right?

[Mona Frendo]

That's right. The WTO waiver set out or imposed requirements on both the exporters that would send the drugs to countries in need and the importing countries that would receive them. One of the requirements, as set out in article 4 of the WTO decision, is that importing countries that receive these drugs take reasonable measures to prevent trade diversion.

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

Okay.

By way of a comment, I'm surprised, Mr. Chair, that this is something that the Liberals would actually even consider. Clearly, the impact on a trade agreement.... I'll just leave it at that, I guess.