Evidence of meeting #16 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.
3:55 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
I was wondering if you had more information than we do.
So that would be one of your concerns?
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Yes, absolutely.
3:55 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
It's that we would lock in at one of the country's highest years that they would give or provide patent protection for?
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
It's that in total we would have a longer period of patent protection, given these various different elements that are being incorporated into that agreement.
3:55 p.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Yes. Now I understand your point.
I don't know if you have a comment, but we heard from somebody—I think it was yesterday—who said that even though Canada would provide longer periods of patent protection, in countries like those in Europe the drug costs are actually less expensive even though they're provided with a longer length of time for patent protection. Do you have a comment on that?
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Take the U.K., for example, with NICE, which is their national purchasing agent. They're a unitary country, but they have the advantage that they're essentially bulk purchasing and negotiating with big pharma for the drugs that people are using.
We're very fragmented in the way in which we deal with this. Provinces try to do that, but arguably not nearly as successfully as would be the case if, for example, we had a national drug purchasing system, which many people have recommended.
3:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Thank you.
Just on that note, what's the obstacle to a national drug purchasing system?
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
If you go back to the Hall commission, that's something that was recommended way back in 1964. Unfortunately, the federal government at the time and in the subsequent years did not get around to doing that.
The federal government has to provide leadership on this issue. It's the one government that could provide the provinces with the support, and arguably with the competency, to do that effectively. So there's a big gap in terms of federal leadership on drugs.
The federal government is in a very odd position, because it extends patent protection but it only pays for 5% of the drugs we use. The provinces pay for a good hunk of that. You and I as individuals, or private insurance companies, pay for the rest.
So it's able to extend patent protection, but it doesn't face the costs. Somebody else does. That creates the kind of odd dynamic we have between the federal and provincial governments around this issue.
That's why I say the federal government has to take leadership on this issue if we are going to make progress.
3:55 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
How do you respond to pharmaceutical companies that say they need these extra years of patent protection to recoup the costs of the research and development to make the drugs in the first place?
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Well, they've said that for the last 25 years. We gave them a huge extension on patent protection. We have a very good system of compulsory licensing, which was introduced in 1969 by legislation that didn't fall from the sky. There were four major commissions in the sixties that looked at drug prices in Canada. That legislation in 1969, which advocated an extension of compulsory licensing, was very successful in controlling drug costs.
Over the years, we came down compared with other countries so that by 1987 we were among the lowest in terms of drug costs in the OECD. Now we're the second highest.
3:55 p.m.
Conservative
3:55 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
We extended patent protection up to 20 years. Then, with some other bells and whistles that the industry has managed to arrange, it's probably in the vicinity of 22 or 23, depending on the drug and so on.
So we extended patent protection, which means it takes much longer for generics to get on the market.
4 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Yes, but my colleague Mr. Pacetti just said that the patent extensions in Europe are even longer than they are in Canada, yet their drug costs are less.
4 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Yes, and I explained that they have national negotiations—
4 p.m.
Conservative
4 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Yes.
The other thing that's important to recognize is that our pharmaceutical industry—in quotation marks—is all basically foreign-owned. In Europe we're talking about countries that are negotiating on behalf of large companies that see huge benefits in terms of their balance of payments.
Our balance of payments, as I mentioned, is now $7.5 billion in deficit, and it's going to increase. There's no evidence that the extension of patent protection in the TPP will in any way benefit us with regard to that. There's lots of evidence to suggest that our balance of payments will get much worse as a result of that and CETA.
I guess that's my frustration. Why can't we learn something from this?
4 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
During your opening testimony, you were kind of cut short, for lack of time, in your comments on food safety and investor rights. Could you elaborate on those topics?
4 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
Let me start with the second one, the investor rights issue.
There are many dimensions to it. On the whole question of the number of countries that now would be in a position to sue Canada, it would be greatly extended. Currently it's our NAFTA partners, so we're adding I think another 10 countries to that list, which obviously will mean a lot more lawsuits. That's one element of it.
The Eli Lilly $500-million lawsuit is one that we should be very worried about. Eli Lilly is not suing primarily under TRIPS; it's trying to overturn a Federal Court decision in Canada that had invalidated two patents it had. It's trying to do that by creating the idea that the patents it was applying for were essentially an investment. That has not been done before under NAFTA.
The TPP would effectively enable companies like that to treat them like investments. That opens the door to lots of new lawsuits like the Lilly one. The Lilly one is not yet resolved, but it's very worrisome if that's the case. We should be very concerned about that, and we should be concerned that the TPP does not include provisions that would give all of those companies the same kind of rights that Eli Lilly is trying to establish through its NAFTA challenge.
4 p.m.
Conservative
4 p.m.
Associate Professor, Health Sciences, Simon Fraser University, As an Individual
There's a lot of concern about the whole issue of packaging and marketing in terms of labelling, in terms of what people are able to find out about what's in the foods. Here, arguably, if you want to talk about Europe, their food packaging and safety legislation is stronger than ours.
Also, there's the question of imports of food and the extent to which we have some control over ensuring that food safety is a major requirement. We're importing a lot of food, and there's nothing wrong with that, but the question is this. Do we have the regulatory capacity domestically to ensure that if we have any issues about something that's coming in, we're in a position to be able to regulate it effectively, or to stop it, if that's what's necessary, to protect public health? Those regulatory powers should not be in any way compromised by what's in this agreement.
4 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Mr. Kassam, you have a very educated workforce. You have 355 employees. A lot of them are engineers. Are you having any difficulty attracting an educated workforce in your current location?
4 p.m.
Vice-President, Business and Corporate Development, Ballard Power Systems Inc.
No, not at all. In fact, as I said, companies such as the Automotive Fuel Cell Cooperation company, which includes Ford, Daimler, Nissan, and others, specifically come to Vancouver for this workforce.
We have a 25-year history of this engineering capability here. Between Victoria, UBC, and SFU, we have three universities that are committed to progress in the educational workforce so that there's an ongoing work stream coming up. We collaborate with them through co-ops. We have a very strong capability here in Vancouver that I don't see going away any time soon.
4 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
You mentioned that you have some emerging competitors in South Korea and China.
4 p.m.
Vice-President, Business and Corporate Development, Ballard Power Systems Inc.
Yes.
