International Trade Committee on Feb. 25th, 2020

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

Mr. Erickson, knowledge is power and our knowledge comes only from experts like you. It makes us very powerful when we have this dialogue. It's very important.

I'm trying to understand this, particularly because we will be implementing a pharmacare policy at some point as well. That's where we're heading. I want to make sure that, on the one hand, Canadians are able to get the medication they need at affordable prices. On the other hand, we want to make sure we are able to protect the supply as well.

How can we have that balance? How can we achieve that if we are moving forward in that direction?

[Darren Erickson]

One way to prevent it is to let the market forces work for themselves.

In terms of compression, we've had the experience with generic products being compressed in price, or being controlled in price. We have manufacturers dropping out of the manufacturing business for certain molecules.

We are also getting into a situation where we have contamination in factories being picked up very easily. There are very sensitive tests now, so we're having factories shutting down because of it.

With that compression and lower amounts of stock, when we have a contamination, we have a major problem. It doesn't just happen to a single drug, such as valsartan. It has dominoed into all the other angiotensin reuptake blockers. About seven of them are short now because of one product, valsartan, being contaminated about a year and a half ago.

I say to let the market decide a little more. As pharmacists, we're scared that, with pharmacare, somebody is going to compress the prices even more and just say, “You know what? For metformin, it's going to be one company.” If that one company gets a contaminant, we are going to be looking for metformin. We're going to have trouble.

We need to keep a number of manufacturers in the loop, and we need to keep prices less compressed. That's how we can protect ourselves.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you.

To the dairy sector, I've been listening to you and I know that, particularly with the cap we have, you cannot do business in other nations besides the two that are involved, the U.S. and Mexico. One thing Mr. Wiens said was that we should have a direct cash subsidy to the farmers to make sure they are able to innovate and to be sustainable in these circumstances.

In terms of that comment, is there anything else? Even though I take pride in the fact that we were still able to protect and preserve supply management, this 3.9% that I am hearing about from you is now starting to bother me as well. Therefore, I'm trying to see what concrete steps or solutions you have, besides just the cash payment that the government should be making, to ensure that the dairy farmers are able not only to be sustainable, but to progress further.

[David Wiens]

That's a good question. There are a number of things that can happen.

The thing about the direct payment to farmers, as has already been described, is that it's going to help us through this difficult time of transition. It will obviously impact the revenues on the farm and the investments we make, so there is a benefit there.

We also see that our government is in other trade agreement negotiations around the world, with the South American bloc, and now potentially Brexit is going to result in more discussions.

One thing that is going to be very important for the dairy industry is no further markets of ours being given away to other countries. That is an important step to restoring confidence in the dairy industry, both from the farmers' side and the processors' side, to be able to make the investments that we're going to need to continue to be productive and efficient as dairy farmers.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We are moving on to Mr. Savard-Tremblay for two minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

My question goes to Mr. and Mrs. Erickson.

As you said, the price of drugs is higher in the United States than in Canada. You mentioned a number of internal policies that could be implemented here.

However, I want to direct your attention back to the agreement. You said that the only change there could be is for the protection to be extended, but actually, that was in a previous version of the agreement.

So today, in its current form, what are the effects?

[Darren Erickson]

In relation to data protection, it is continuing the same, from what I understand. They did have an extension. The data protection was going to last for 10 years initially, and all of a sudden, on December 11, when CUSMA was signed, it came out at eight years, I believe. I'm still not very clear on that, but from what I understand, it's eight years now. That is a continuation, which is okay. It will be good for my patients. To make it longer would be a real loss of dollars. It looks like it will continue the same.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Basically, there would have been effects with the previous version if there had not been an extension. However, in the current version, what will be the concrete effects of the agreement?

[Darren Erickson]

In the current version, it looks like there will be no change for data protection for biologics—for biologics only.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Blaikie, you have two minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

There's one thing I'm trying to square in your testimony. We heard, on the one hand, that lower prices have led to supply issues, and you guys have concerns about that. We also heard you speak positively about not extending drug patents, which have been, as a result, keeping prices low. I'm trying to understand what seems to me to be a tension between advocating for higher prices to maintain supply and expressing pleasure at seeing provisions in the agreement that keep our prices low.

I'm just trying to figure out what my take-away from your testimony should be.

[Darren Erickson]

I'm kind of talking about two groups of drugs. One is the generic experience for simple molecules in the last 10 years. We've had the pan-Canadian pharmaceutical alliance controlling prices, pushing them down and decreasing the number of manufacturers. We've also had these drug catastrophes coming along, and manufacturer contaminants.

That's one area. The price is so low on them that manufacturers are dropping out and we're having trouble supplying.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is that because manufacturers aren't making a profit or because they're not making the kind of return they would like to see?

[Darren Erickson]

Generally, I think there will be more profitable molecules available for the manufacturer. Metformin is quite a popular drug, so they would decide—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

So it's more about the marginal benefit of producing other generic drugs, as opposed to the idea that they can't make any money at all on producing at the prices they manufacture at.

[Darren Erickson]

I think it's the simplicity of manufacturing certain products or what fits into their machinery best. Lots of decisions go into deciding whether they will make a molecule or not. We do know that when this price compression came in over the last 10 years, we lost I'm sure 30% to 40% of our manufactured product, which went to fewer sources, and even a single source in some cases.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I think one of the take-aways—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Blaikie. I'm sorry, but the time is up.

It's amazing how with every panel there is such an opportunity for all of us to learn. We appreciate your taking the time to be here.

I will suspend. We will resume again at 3:30.

Thank you very much. Again, thank you to the witnesses.