Evidence of meeting #22 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.
A recording is available from Parliament.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Yes.
On the science side, it's not just about tariffs. It's great to see tariff walls come down. It gives you that footprint to get in there. Then it comes down to agreements on maximum residue levels and low-level presence, MRLs and LLPs. Those are all done under Codex internationally, but Codex is so far behind the eight ball. Do you see an opportunity here for like-minded countries within a trading bloc to make changes, agree on the science on MRLs and LLPs?
Vice-President, Government Affairs, CropLife Canada
That's certainly what we're hoping for. We talk about a coalition of the willing, if you will, made up of the major exporting countries, which all have a science-based regulatory system. To your point earlier, we don't see any reason that countries that have a science-based regulatory system can't come to agreements on these very basic matters. It facilitates trade greatly. Nothing is a bigger barrier to trade than those non-tariff barriers that we run into.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Predictability and stability make trade work. That's to Jim's point about science harmonization.
I turn it over to my colleague, Mr. Van Kesteren, if I have any time left.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
Dr. Pullen, we didn't finish off the point I was trying to make. We all know that health care costs are rising significantly. You would agree the rise in cost is not just for pharmaceuticals; it's nurses, doctors, personnel in the hospital, the buildings. It's everything. I think that's a point we all have to recognize, as well.
I just want a clarification. You said earlier that you were concerned about the cost for first nations. Was that correct? Did I catch that? I just caught it. I wanted to make sure—
Director, Policy, Advocacy and Strategy, Canadian Nurses Association
The linkage there is that the federal government is the provider of health services, including medications, to first nations and Inuit health in Canada. They are both a funder and a provider, so they're going to be hit doubly by any changes to the cost of drugs in Canada.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Leamington, ON
The federal government. We're aware that the first nations costs are 100% covered by the federal government.
Director, Policy, Advocacy and Strategy, Canadian Nurses Association
Yes.
Conservative
Liberal
The Chair Liberal Mark Eyking
Thank you.
We're going to go over to the Liberals. You have a bit of a split time for five minutes.
Go ahead, gentlemen.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you, Mr. Chair.
To the panel members, I'd like your thoughts about a fair scenario that will balance a pharmaceutical company's ability to develop a drug without rushing, but the generic drugs need to enter the market and compete.
Mr. Elliot.
Executive Director, Canadian HIV/AIDS Legal Network
Thank you.
I think we can debate a bit what would constitute a fair scenario. I think it's fair to say that all WTO members agreed on the TRIPS agreement, the agreement on intellectual property rights, back in 1994.
All of the discussion now globally, except in the context of these particular trade agreements, is about the need to preserve the balance that was struck in the TRIPS agreement, whether the balance that was struck there was the right one, or whether we need more flexibility for countries because we're not getting either the innovation that we need in the pharmaceutical sector to address global health needs or the access to those products.
Rather than sign agreements that restrict that flexibility further, the discussion is about ensuring that flexibility is preserved where it exists, and that balance was struck at the WTO, and possibly it will increase. The TPP seems to be going exactly the wrong way. There's no need for us to move off of what was already agreed in the TRIPS agreement at the WTO. Some might say it's not a fair balance, but it's certainly a fairer balance than the TPP would strike.
Liberal
Chief of Staff and Vice President, Legal Affairs, Innovative Medicines Canada
I'd like to make the observation that when member companies of our association are competing for R and D, and trying to promote Canada as a destination, they're not competing against the lowest common denominator. They're competing against other developed nations, most of whom have TRIPS plus IP, and have had TRIPS plus IP for many decades.
The level playing field is not with China or India. The level playing field is with the European Union, Japan, the United States, and other developed countries because that's the competition for R and D investment.
President, Canadian Generic Pharmaceutical Association
One of the things about the balance between the pharmaceutical patent protection and generic entry is not just the term of patent protection; it's also the complexity. We have a complex litigation system in Canada. Mr. Elliott mentioned it earlier about patent linkage. We're blocked from going into market simply by someone claiming we're infringing a patent, which forces enormous amounts of litigation in Canada if you want generics to come on the market. It's expensive and complex, and with the pricing regime that I mentioned earlier, the price is coming down. One of the problems that we have now that doesn't get a lot of attention is, what the incentives are to bring generics to market.
If you're going to market and you're selling it at 18¢, but your potentially liable for a patent infringement at a dollar, and you start selling a number of these prescriptions, you're liable for lots of potential liability. We need to have a simpler system.
One of the problems with the TPP is that it is imposing this system on a lot of other countries, particularly developing countries, which probably don't have the infrastructure to handle it.
As people talk about access to medicines, it's not just patent terms; I think it's the complexity of the system. In the TPP, we're importing further complexity into that pharmaceutical patent litigation system.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Mr. Hamill, you mentioned India and China. It's my understanding that most of the generic drugs are produced in India, and for the nations that we are getting into the TPP with, that is not going to be an issue, countries like India. Do you agree with that?
Chief of Staff and Vice President, Legal Affairs, Innovative Medicines Canada
Well, I think Mr. Keon and Ms. Cox would probably take issue with most generic drugs being produced in India, since they produce generic drugs in Canada. It is true there are economies of scale which are to be had in developing nations, so if most product ingredients that are the foundation of pharmaceutical products are already made in India and China and labour costs are lower there, you will see a flow of generic manufacturing—you already have seen a flow of generic manufacturing—to those markets. There's that, combined with the increasing size of the market, which can't be denied either, the growing middle class in India, for example.
That said, as I said before, we're not competing...we can't compete on that basis with those countries. We're competing with the European Union, the U.S., Japan, and other developed nations, on the innovative side of things.
Liberal
The Chair Liberal Mark Eyking
Time to wrap up there, boys, it's all done.
We're going to have one more MP, and that's Madam Ramsey, for three minutes.
Go ahead, and that will wrap up our session here.
NDP
Tracey Ramsey NDP Essex, ON
Thank you so much. You've given us so much to think about. I think we could go on and on, digging down further.
The interesting thing you're talking about, Mr. Elliott, is that we're actually going to restrict our flexibility, and I think the reason that this is part of CETA and the TPP is that if CETA isn't ratified, then it comes into force in the TPP. There's an assumption that CETA will be ratified, but we don't know that. We're looking at what's happening in the EU.
My question is really simple. Is there a need for Canada to increase the intellectual property protections that are provided to pharmaceutical products?
I'll start with Ms. Cox and go around the table.
Vice President, Federal and International Affairs, Canadian Generic Pharmaceutical Association
I'll give you a simple answer, no. Mr. Keon might elaborate on that.
President, Canadian Generic Pharmaceutical Association
No, we have strong intellectual property protection. I think in trade agreements, as I said earlier, we would like to see more focus on regulatory convergence. That would reduce costs, improve quality and, I think, make medicines much more available in Canada and in developing countries.
Executive Director, Canadian HIV/AIDS Legal Network
The answer is no.
I think it's worth noting that in the CETA negotiations one of the major areas of concern has been the investment chapter, and that has been one of the major stumbling blocks, particularly in Europe, because of the potential negative consequences of it. I'm not sure why we would want to replicate that in the TPP, especially when we already know, from our own experience under a similar chapter in NAFTA, that it creates the opportunity for pharmaceutical companies to try to challenge our flexibility, in this case, patentability criteria.