Thank you very much.
It's nice to be back here. We were here not too long ago talking about the TPP agreement as well, which also affects pharmaceuticals.
The generic pharmaceutical companies in Canada, our industry, are primarily pharmaceutical manufacturers and exporters, and they are among the top R and D spenders across all industrial sectors. Our members operate the largest life sciences companies in Ontario and Quebec and directly employ more than 11,000 Canadians in highly skilled research, development, and manufacturing positions.
We are strong supporters of free and open trade, and we export quality made-in-Canada generic medicines to 115 countries. Our industry also plays a significant role in controlling health care costs. Generic drugs are now dispensed to fill 70% of all prescriptions in Canada but account for only 22% of the $26 billion Canadians spend annually on prescription medicines. Five or six generic prescriptions can be filled for the cost of one brand-name prescription today.
The outcome of CETA will require two main changes to Canada's pharmaceutical intellectual property laws. The first is called certificates of supplementary protection. This is the implementation of an entirely new IP, or intellectual property, measure for Canada. It will provide for two extra years of market monopoly for all new drugs in Canada. Importantly, generic pharmaceutical companies will be permitted to export from Canada during the period of additional protection. Most of the pharmaceutical IP text in Bill C-30 covers the implementation of certificates of supplementary protection.
The second large area in which changes will be required as a result of CETA is our PM(NOC) regulations, which involve the complex litigation system for pharmaceuticals in Canada, sometimes referred to as the patent linkage system. The details of these reforms will be spelled out in regulations, and draft regulations will not be published until sometime after Bill C-30 receives royal assent.
CGPA supports the general direction of the changes, which should address long-standing concerns of the generic pharmaceutical industry, such as the lack of finality to proceedings and the insufficient damages available for injured generic parties. That said, the devil will be in the details. At this point, we are both optimistic and uneasy about the impending changes.
Bill C-30 represents the most extensive legislative changes to Canada's pharmaceutical intellectual property laws in more than 20 years. In addition to provisions required to implement CETA, Bill C-30 also includes changes to the Patent Act that in some cases go beyond the requirements of CETA, and that is concerning to us.
CGPA has filed a submission with the clerk recommending six amendments to Bill C-30. On SPCs, supplementary protection certificates, CGPA believes officials generally did a very good job of drafting clear provisions that track the letter and spirit of the CETA commitments in this area. That said, we have identified three priority amendments for the consideration of the committee.
First, CGPA is proposing an amendment to make it absolutely clear that there will be no retroactivity of the SPC provisions.
Second, CGPA is proposing an amendment that would address circumstances under which a combination product can be eligible for a certificate of supplementary protection. We feel this detail is far too important to be left to regulations.
Third, CGPA is proposing a cap on the total period of drug monopoly that can be granted for a certificate of supplementary protection that's calculated from the date of market authorization. Such a safeguard exists in both the European Union and the United States.
We are proposing three other specific amendments to Bill C-30. The first pertains to what we believe are unintended consequences associated with the repeal of section 62, which has implications beyond the pharmaceutical sector. We propose that the substantive text from section 62 be reinstated.
The two amendments we are proposing pertain to concerns we have with respect to subsection 55.2(4) of the Patent Act, which is a critical provision for pharmaceutical IP litigation. CGPA is concerned that the changes to this subsection would facilitate the creation of new substantive rights or obligations that would be harmful to the generic pharmaceutical industry. At a minimum, the adoption of the changes would introduce more uncertainty into Canadian pharmaceutical IP law. These changes are not required by CETA. We have proposed that the existing language in the act be reinstated in both instances.
Now, these are overly simplistic descriptions of the issues, but we would be pleased to address them in greater detail if members have an interest. It is obviously impossible to cover such an important and complicated area in five minutes.
In addition to our proposed amendments, there are many other aspects that I would be pleased to speak to in the question-and-answer session, including the impact of the new measures on drug costs, and the role of pharmaceutical intellectual property in trade agreements.
While my remarks today were in English, we would be pleased to answer any questions you may have in either English or French.
Thank you.