Thank you very much, Mr. Chair.
On behalf of the Canadian Generic Pharmaceutical Association and our member companies, I would like to thank the chair and honourable members for this opportunity to participate in your study of the Trans-Pacific Partnership Agreement.
I am joined by Ms. Jody Cox, CGPA's Vice-President of Federal and International Affairs, who leads intellectual property and international trade files for our association.
The generic pharmaceutical industry operates the largest life sciences companies in Ontario and in Quebec. We are Canada's primary pharmaceutical manufacturers and primary exporters, and we are among the top research and development spenders across all industrial sectors in Canada.
The CGPA member companies directly employ more than 12,000 people, primarily in Ontario and Quebec but also in Manitoba. These are highly skilled research, development, and manufacturing positions.
Our industry is a strong supporter of free and open trade, and we export our high-quality, made-in-Canada generic medicines to more than 100 countries. These include many Asia-Pacific countries and many, if not most, of the TPP member countries. The Asia-Pacific region is also an important source of raw materials and other input for our made-in-Canada medicines.
Canadian generic pharmaceutical manufacturers are globally focused, and they all play an integral role in their companies' sophisticated global supply chains.
In addition to being of industrial importance to the Canadian economy, the generic pharmaceutical industry plays an important role in controlling health care costs in Canada. Generic drugs are dispensed to fill 66% of all prescriptions—so two out of three prescriptions in Canada now are with generic medicines—but we account for less than one-quarter, only 24%, of the total spending on prescription medicines in Canada.
We have had a strong interest in the TPP right from the outset of the negotiations. We participated in the early TPP consultations through the Canada Gazette process, and we're participating in the webinar updates provided by the chief negotiator. CGPA, in particular Jody, also attended some negotiating rounds of the TPP and participated in the stakeholder days held during the negotiating rounds, which the chief negotiator mentioned earlier this week during her testimony. As well, we've had meetings with negotiators from all of the TPP countries.
We understand that reaching consensus with 12 parties at the negotiating table will be no easy task. It is a very unique negotiating dynamic. Domestic policies, priorities, and motivations vary from country to country, making for a messy and complicated business. While the negotiations present opportunities in many areas, this dynamic also poses considerable risks.
We paid particular attention to the appearance earlier this week of the chief negotiator, who shared with you the Government of Canada's objectives with respect to pharmaceuticals and indicated that the current position of the Canadian government—which we support—is not to exceed current Canadian law and policy. Kirsten Hillman also noted that she and her negotiating team are pushing very hard to achieve this objective.
To exceed current Canadian law and policies on pharmaceuticals we believe is clearly not in the best interests of Canadians, particularly given the challenging and carefully balanced outcome on pharmaceuticals that was made to reach an agreement in principle, announced just a few short months ago, in the CETA negotiations. We'd be happy to explain that further.
There are a wide range of proposals on the table in the TPP negotiations, and other proposals that have been discussed but not formally tabled. The generic pharmaceutical industry remains concerned that some of these proposals are aimed at providing excessive monopolies going beyond Canada's already high intellectual property standards. Others are aimed at respecting intellectual property rights without creating new obligations for TPP countries.
The CGPA supports the position taken by the Government of Canada in the TPP pharmaceutical IP negotiations. We specifically request that the Government of Canada refuse to sign a TPP or any other trade agreement if it includes provisions exceeding our current law, policies, and treaty obligations, including the recently announced CETA obligations with respect to pharmaceutical intellectual property. We also ask members of this committee to include that recommendation in their report on the TPP.
What are the generic pharmaceutical industry's interests in the negotiations? From a domestic market perspective, we want to ensure that no provisions in the final text have the effect of denying pharmaceutical competition in Canada. Delayed generic market access in Canada would have a direct impact on the ability of our member companies to attract new R and D and production mandates, particularly to our major industrial plants already existing in Ontario and Quebec. In addition, drug competition saves Canadians between 75% and 80% on each purchase. Longer delays until savings can be achieved mean higher drug costs for Canada.
As nearly half of our domestic production of generic pharmaceuticals is exported, ensuring that no new barriers to trade are erected for our industry is also a key priority. The final outcome on TPP must not undermine in any way the commitment of the Government of Canada in its CETA negotiations to allow for the unfettered export of generic medicines following the expiration of a 20-year patent but during the term of the patent extension.
We also look at the TPP from a global policy perspective. Along with our colleagues in the International Generic Pharmaceutical Alliance, with whom we work carefully, we have an interest in the precedent that the negotiated outcomes may have for future trade negotiations. It is our view that less emphasis should be placed on intellectual property provisions in trade negotiations and more emphasis should be given to other areas, such as regulatory harmonization, regulatory cooperation, and mutual recognition of inspection standards. These are areas that reduce cost, introduce efficiencies, and benefit the entire life sciences sector, not just one part of it.
In addition to advocating for a non-excessive level of pharmaceutical IPR provisions, the generic industry also encourages negotiators to table proposals aimed at establishing safeguards against abuse and misuse of IPR. By penalizing both abusers and infringers, countries can help to ensure balance between the goals of rewarding innovation and promoting competition.
We also advocate for provisions that help to promote competition and support well-functioning intellectual property systems in pharmaceuticals. I won't go into detail on these, but these include such things as a strong Bolar provision, which is an early working exception; a best mode for patent disclosure, so that the information can be clearly and effectively identified; and incentives to encourage generic companies to challenge patents and come to market. I'd be happy to answer questions about those when we get to the question period.
Before concluding, I would like to leave the committee with a few other important thoughts with respect to pharmaceutical IP and trade negotiations. Negotiating pharmaceutical intellectual property is not the same as a negotiation around a reduction in tariffs. A tariff line can be reduced on a bilateral basis or on a plurilateral basis. Intellectual property obligations in a trade agreement, in contrast, have national treatment. You make changes to your national laws and you give the protection to all inventions regardless of where the invention was made. It is not country-specific.
As a second point, Canada already had high and internationally competitive levels of intellectual property protection for pharmaceuticals before the announcement of the CETA agreement in principle. The implementation of CETA provisions will be crucial.
CGPA is aware of some brand name efforts to undo the Government of Canada's important commitments to end dual litigation under our patent linkage system. We are also aware and are wary of any attempt to make the export exception cumbersome and unworkable, which would not preserve Canadian manufacturing jobs—the Government of Canada's objective in making the commitment.
Excessive intellectual property standards for pharmaceuticals, which have been proposed in TPP by some countries, would disadvantage the generic pharmaceutical manufacturing facilities in TPP member countries, including Canada. That would put us at a disadvantage compared with non-TPP countries such as India and China.
My final point is that excessive intellectual property standards in TPP would undermine the objectives of the Government of Canada and other countries to have still other further countries, perhaps Korea and others, sign on to TPP after the negotiations conclude. It would create a major barrier to entry that in our view many Asia-Pacific countries would be unwilling to accept.
Thank for this opportunity to appear. My colleague and I will be happy to answer questions afterward.
Thank you.