Evidence of meeting #23 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was countries.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Simon Evenett  Professor, University of St. Gallen, As an Individual
Rachel Silverman  Policy Fellow, Center for Global Development
Prashant Yadav  Senior Fellow, Center for Global Development
Pamela Fralick  President, Innovative Medicines Canada
Nathaniel Lipkus  Past Board Member, Intellectual Property Lawyer and Patent Agent, Intellectual Property Institute of Canada
Declan Hamill  Vice-President, Legal, Regulatory Affairs and Compliance, Innovative Medicines Canada
Clerk of the Committee  Ms. Christine Lafrance

1:05 p.m.


The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro

Welcome to our meeting this Friday. I'm calling this meeting to order.

Welcome to meeting number 23 of the House of Commons Standing Committee on International Trade.

Today's meeting is webcast and is taking place in the hybrid format, pursuant to the House order of January 25, 2021.

Before I begin, there is a bit of committee business. I need approval from the committee for the budget of the study relating to COVID-19 in the amount of $2,625. If somebody could move approval of that.

1:05 p.m.


Sukh Dhaliwal Liberal Surrey—Newton, BC

I so move, Madam Chair.

1:05 p.m.


The Chair Liberal Judy Sgro

Okay. We have everybody's approval.

(Motion agreed to)

One other thing is that we did receive a joint written brief from Professor Dupras and Professor Parent on the WTO study. It came in after the deadline. It was distributed to all of the members. Is it the will of the committee to accept that brief that came in slightly late, since we have not started consideration of the draft report?

I do not see any objections. I appreciate that.

Pursuant to Standing Order 108, and the motion adopted by the committee on March 12, 2021, the committee will proceed with its study of Canada's international trade and investment policy regarding selected considerations concerning COVID-19 vaccines.

I'd like to introduce our witnesses today.

From England, as an individual, we have Simon Evenett, professor at the University of St. Gallen. From the United States, on behalf of the Center for Global Development, Rachel Silverman, policy fellow; and Prashant Yadav, senior fellow. From Canada, on behalf of Innovative Medicines Canada, Pamela Fralick, president; and Declan Hamill, vice-president, legal, regulatory affairs and compliance. From Intellectual Property Institute of Canada, Nathaniel Lipkus, past board member, intellectual property lawyer and patent agent.

Professor Evenett, you have the floor, please.

1:05 p.m.

Simon Evenett Professor, University of St. Gallen, As an Individual

Thank you, Madam Chair.

I will go through the points that were raised in the notice one by one.

With respect to TRIPS waiver, I'd like to make the following points. Speedy and equitable access to COVID-19 vaccines is imperative. The end is not in dispute; the means are. The key question is how to ramp up production quickly. The point of contention is whether waiving elements of the TRIPS agreement would help.

I would urge members to distinguish between those who are advocating for real solutions to today’s vaccine challenges versus those who are fighting yesterday's trade battles, especially with respect to intellectual property.

Notwithstanding the letter that has apparently been sent by former government leaders to President Biden and mentioned in yesterday's Financial Times and a campaign by certain NGOs, I have yet to read a single expert on vaccine production who says that compulsory licensing of intellectual property is the principal bottleneck to scaling up production of COVID-19 vaccines. I have read trade policy experts make such claims. I have not read any vaccine production experts who make such claims.

If one thinks about it, I think it's fairly clear why this is so. By now it should be evident that even the firms that have developed the intellectual property in question have faced significant challenges scaling up production. Moreover, AstraZeneca’s experience with contract manufacturing provides a shot across the bow to anyone who believes that solving this problem is merely a matter of transferring intellectual property.

The production of vaccines is a sophisticated, complex process that requires well-trained talent and specialist facilities. It is quite likely that the real bottleneck is the availability of talent able to manage these processes. I can understand the frustration of some listeners who would like to pass a law, introduce a new regulation or suspend a trade agreement to fix this problem, but I fear that is not the right place to start.

With respect to the CETA agreement and making sure that Canada’s advance purchase agreements will be respected, I do not see, in short, how CETA helps in this regard.

My remarks will focus principally not on the vaccine manufacturers but on the governments where those manufacturers are located. Those governments can block exports through a variety of means, some of which are very subtle. Many of those subtle means have been documented by my colleagues and me over the past year.

Few trade agreements contain provisions, let alone strong provisions, that curb the use of export controls. Agreements like CETA certainly indicate a high level of goodwill and trust between the signatories, but whether that goodwill amounts to much in times of crisis is far from clear. Clearly the lack of disciplines in trade agreements on export curbs is an oversight that should be fixed in the years ahead.

Let me turn, then, to the question of building domestic vaccine capacity. I'd like to make the following points.

The first is that American vaccine production is ramping up very quickly. Depending on the choices the U.S. makes concerning inoculation of children and the building up of vaccine reserves in the second half of 2021, the U.S. may well have very significant surpluses available. In this respect, an expert in London and I circulated a note this morning with estimates of what the scale of those surpluses would be.

What the Americans do with those surpluses is the key question. Already the U.S. has lent Canada AstraZeneca vaccines, and the White House has gone on record defending that action, saying that it is in the U.S.'s interest to ensure its neighbours have vaccines.

In light of these considerations, there is both a short-term and a long-term answer to the question of building vaccine capacity.

In the short run, we have to remember that such investments are costly and will take time to implement. What you may find is that, by the time any new capacity is installed, there may already be vaccines being shipped to Canada from the United States and elsewhere.

The longer-term answer to the question points to a precedent that is not particularly promising. Since 2012, Korea has built up its biopharmaceutical sector. It too vowed that it would never be short of vaccine production capacity; however, according to press reports I've seen, the Korean government has spent over two trillion won on this sector, yet this has not delivered during this pandemic.

Vaccination in Korea did not begin until February 26, 2021. According to the World Health Organization, Korea had administered fewer than 1.9 million doses of vaccine by April 5. That is just enough for 2.5% of its population. In other words, a decade-long effort of building production capacity for vaccines in Korea has not given that country a leg-up in terms of COVID-19 inoculation.

What I take from the Korean example is that, if one is thinking about engaging in industrial policy to build up vaccine production, one should learn form the Korean mistakes and understand why, despite spending over $2.2 billion Canadian in public money, they were unable to have in place production facilities to be able to deliver COVID-19 vaccines when this crisis arose.

Thank you very much, Madam Chair.

1:10 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Professor Evenett.

We go now to Ms. Silverman.

1:10 p.m.

Rachel Silverman Policy Fellow, Center for Global Development

Good afternoon. My sincere thanks to the honourable members of this committee for the opportunity to testify today.

In the context of appalling inequities in access to COVID-19 vaccines between wealthy countries and the global south, as this committee knows, South Africa and India have requested that the World Trade Organization adopt a temporary waiver on intellectual property protections related to COVID-19 health technologies. I would like to briefly make a few comments in relation to the merits of this specific proposal before handing over to my colleague Prashant Yadav to discuss the intricacies of a manufacturing scale-up.

First, I think we would all agree that Canada has a moral imperative and self-interest in taking all possible actions to accelerate the timeline for global vaccine manufacturing, distribution and administration. I understand that there has been frustration in Canada and in many other wealthy countries about the pace of vaccination to this point. Nonetheless, that is now ramping up.

However, in large African countries like Nigeria, South Africa, Kenya and Angola, it is still the case that less than 1% of the population has been vaccinated. The most optimistic projections suggest that widespread vaccine coverage and herd immunity are roughly a year away in many of these countries. Others suggest a much longer timeline, into 2023 and 2024. Ongoing circulation of the virus will also create ongoing opportunities for mutation, potentially creating new variants that evade existing vaccines and that will threaten countries like Canada anew.

Finally, the optics of Canada's return to normal life and full economic activity amid ongoing death and devastation across the global south would be a foreign policy disaster, driving justified anger and resentment. Canada must therefore examine the merits of this specific proposal vis-à-vis the goal of rapidly ending the global pandemic and mitigating these moral and practical risks.

It is my view in this context, however, that the proposed waiver would have very limited impact, in practical terms, on efforts to scale up manufacturing and make COVID-19 vaccines available to poorer countries. This is not to say that patents never pose a problem; they do. To the contrary, for many drugs, including HIV drugs in the 1990s, patents have created an artificial monopoly that has kept many in the global south from accessing life-saving health innovation.

It is important to understand that there is a key practical distinction between HIV drugs, for example, and COVID-19 vaccines. HIV drugs and most essential medicines are relatively simple chemical compounds that can be reverse-engineered by a competent generic manufacturer. In these cases, it is patents and patents alone that would prevent a generic manufacturer from imitating and selling these products for affordable access in low- and middle-income countries.

COVID-19 vaccines, in contrast, cannot be easily reverse-engineered. Generic manufacturers require not just IP rights, which could be waived under the TRIPS waiver, but also access to proprietary know-how, cell lines, manufacturing processes and so forth, to produce equivalent versions of approved vaccines. With or without a patent waiver, this is almost impossible to accomplish without the active assistance and co-operation of the originator pharmaceutical company.

For these reasons, it is my view that the adoption of the proposed waiver would have roughly zero net impact on the availability of COVID-19 vaccines in low- and middle-income countries. However, Canada's trade policy posture can still play a constructive role in increasing global access, and it must not signal apathy or indifference to poorer countries' need for affordable, timely vaccine access.

G7 countries have used all policy levers at their disposal to increase the pharmaceutical industry's sense of urgency in meeting domestic vaccine demand in their respective countries via voluntary licensing deals, contracted manufacturing and technology transfer. They should use the same tool box, while leveraging global advocacy, to drive that same sense of urgency around prompt and affordable global access.

Canada, along with its G7 allies, should leverage the TRIPS waiver campaign and use trade policy and leverage to further the pharmaceutical industry's sense of urgency vis-à-vis this goal. As one specific measure, for example, Canada could unilaterally declare a policy of non-retaliation for any use of existing TRIPS flexibilities—not adoption of this waiver—vis-à-vis COVID-19 health technologies and encourage its allies to follow suit by a broader G7 declaration.

Thank you. I yield now to my colleague Prashant Yadav to further discuss the intricacies of manufacturing challenges.

1:15 p.m.

Prashant Yadav Senior Fellow, Center for Global Development

Thank you.

Thank you to the members of this committee for giving me the opportunity to share my viewpoint on this very crucial topic.

We acknowledge that there is an urgent need to further scale up the production of safe, efficacious COVID vaccines, but also to keep in mind the need for versatility of the vaccine platform to deal with new COVID variants of concern and preparedness for any future pathogens.

Preliminary estimates of capacity show us that in the aggregate—that is, across all vaccine types—we may have sufficient manufacturing capacity to reach global herd immunity by quarter one or quarter two of next year. However, in the disaggregate—implying for specific vaccines such as the messenger RNA vaccines—the overall manufacturing capacity today is lower than the potential market demand.

How can we raise manufacturing capacity and expand it for specific platforms?

Expanding manufacturing capacity to additional secondary manufacturing sites is a complex process that has four main prerequisites: new manufacturing equipment or significant upgrades to existing equipment in the new site; skilled and experienced chemistry, manufacturing and controls staff and quality management professionals at the receiving site; a strong regulatory agency in the country of the new site, which can evaluate and approve the manufacturing process; and lastly, the open and free flow of international supply lines for vaccine ingredients and equipment and, in particular, single-use equipment.

All the companies that have received authorizations for their COVID-19 vaccines have already expanded manufacturing to a few additional sites. Given that the medium- and long-term demand for additional COVID-19 vaccine capacity remains uncertain and that, as such, the long-term sustainability of new manufacturing sites remains unclear, the vaccine developers may not be willing to make additional capital investment and incur the additional operating costs of adding more manufacturing sites to their network.

Public support in the form of capital subsidies or firm purchasing contracts can help resolve this medium- to long-term demand uncertainty and can incentivize the company to further expand manufacturing capacity in new locations. It will strengthen the business case for them to explore and evaluate not only vaccine manufacturing sites but also contract manufacturing sites or sterile manufacturing sites, which could be added to the global manufacturing network. In some cases, the efforts of individual companies could be further strengthened if publicly funded third parties can work to identify new sites that can meet the above-mentioned criteria and have some spare capacity.

More important, the success of existing capacity expansion efforts and of any new manufacturing capacity expansion efforts depends on the free flow of vaccine ingredients and equipment. I'm sure all of you have heard recent news about the shortages of single-use bioreactor bags and specialized filters, which could put manufacturing plants at risk of not being able to produce sufficient doses of vaccine. These would be manufacturing plants that already have the technology transfer, the manufacturing know-how, the intellectual property licence and all the other prerequisites.

Any restrictions on global supply chain flows create the risk of jeopardizing even the existing manufacturing capacity and delaying the start of new sites that are currently getting ready for COVID-19 vaccine production. This is an extremely important area to address through the World Trade Organization and other trade partnerships.

In the medium- to long-term, we need to focus on four key areas to achieve higher production capacity. The first is investing in manufacturing sites that are flexible and can easily switch from one vaccine platform to another. Second is creating a larger pool of human capital that is specialized in biologics manufacturing. Third is further strengthening regulatory co-operation across countries. Fourth is preventing trade and policy barriers in the supply chains for vaccines and other critical health products.

Thank you for the opportunity to share my thoughts. I look forward to questions or any other ways in which I can help the work of the committee.

1:20 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Mr. Yadav.

For the witnesses at our committee, you can leave your cameras on even though you've completed your testimony so that you'll be available to participate in the question and answers. Please feel free to leave your cameras on.

Ms. Fralick, president of Innovative Medicines Canada, please go ahead.

1:20 p.m.

Pamela Fralick President, Innovative Medicines Canada

Thank you, Madam Chair and honourable members, for this opportunity to address this motion to study Canada's trade and investment policies and the impact they are currently having on the production and distribution of COVID-19 vaccines within our borders. These efforts, I'd like to note, have been remarkable for the degree of co-operation we are seeing across governments and our health systems during a time of unprecedented challenges. As someone who has worked in the health sector for most of her career, I would like to commend this government's unwavering focus and commitment to the health and safety of Canadians.

Before I speak to the scope of your study, I would like to provide you with some background information on Innovative Medicines Canada and how it informs our organization's perspective on aspects of the current motion. There are 47 companies that constitute our membership. Together they support 100,000 high-value jobs. They contribute $15 billion annually to the Canadian economy and $2 billion in research and development. Though so much of the spotlight is currently on our sector's biomanufacturing capacity for vaccines, it's also important to remember that even now there are more than 500 new products and medicines in development in Canada. This work includes the discovery and development of therapies for cancers as well as rare and infectious diseases.

Canadians can be proud of how our industry has taken up the fight against COVID-19 and the evolving challenges the variants of this virus present. The focus for our members from the very beginning has been on collaborating with each other, governments, researchers and patients to develop and deliver appropriate testing tools for diagnostics, medicines to treat those infected with the virus, and vaccines to stop its spread. This has been our industry's approach in Canada and across the sector's global ecosystem.

One aspect of your study is in relation to a proposal to the World Trade Organization's trade-related aspects of intellectual property rights council, or TRIPS, to essentially waive countries' core obligations under the TRIPS agreement to protect intellectual property for a broad range of technologies related to COVID-19 for the duration of the pandemic. Proponents of this initiative argue that revoking IP rights would lead to an increase in the supply of new vaccines in developing nations. However, there is no credible evidence validating this assumption. We recommend that Canada stand with leading innovative jurisdictions to oppose this proposal.

In the heat of a battle like the one we're currently fighting against COVID, we do risk making decisions without substantively analyzing their anticipated efficacy and potential consequences. We must look at the nature of vaccines themselves, as other witnesses have already mentioned. They are complex biologics that require highly specialized manufacturing facilities. Some of the new vaccines have been created using advanced processes and technology that did not exist until a few years ago.

As collaborative as the industry has been, we would not have been able to develop them without the support of a strong global innovation ecosystem rooted in competitive research and protected by globally agreed-upon IP standards. Pfizer's vaccine, as an example, involves 280 components, 86 suppliers and 19 countries. Sanofi and BioNTech's partnership will allow the latter to have access to the infrastructure and expertise to produce 125 million doses of the vaccine for Europe.

Companies and governments have worked together around the world, identifying other manufacturers with the appropriate expertise, technical capabilities and facilities, and entering into partnerships and agreements to speed up and scale up the production of vaccines. These are success stories based on the strong network for support and collaboration.

While we are open and receptive to policy measures that would improve on current processes and timelines, they must be evidence-based. Some may argue that desperate times call for desperate measures, suggesting that eliminating IP rights is worth trying, given the current issues with vaccination production and rollout in many nations.

Let me be clear: This will simply not address the problem, but it will have negative consequences. Biological vaccine-manufacturing capacity expansion requires expertise and know-how to be successful. Even if IP rights are no longer an issue, they cannot be efficiently and safely manufactured in a timely manner without the assistance and collaboration of the original manufacturer. However, the proposed IP waiver would create potential impediments to current technology transfer partnerships, which may in turn negatively impact the response to the current pandemic.

It is also important to look at the long-term effects of such proposals in detail. Weakening IP protections for vaccines will actually undermine the global response to the pandemic, and to the pandemics we could face in the future. It will create confusion in the ecosystem, and that will inevitably delay research and innovation. It will also undermine the confidence in what has proven to be a functioning IP system, one that has allowed industry to confidently partner with academia, research institutes, foundations and other private companies.

However, there are constructive improvements to our current processes that can be implemented. We can increase manufacturing capacity with technology transfer, voluntary licences and partnerships between companies. We can also identify and address regulatory inefficiencies, while maintaining strict safety standards. We can eliminate export barriers to mitigate situations, like what recently occurred in the EU where vaccine shipments to other countries have been delayed or blocked.

Canadian officials should be commended for their swift action to strengthen international supply chains in the wake of this incident. This is indicative of our core strengths in advancing multilateral solutions and international regulatory harmonization.

Biopharmaceutical companies are also working with international partners and NGOs to accelerate the delivery of COVID-19 vaccines. Our industry is working with the WHO's COVAX facility for global vaccine distribution, which began rolling out two billion vaccine doses for low- and middle-income countries in February this year.

Companies are also working with the Bill and Melinda Gates Foundation, Wellcome Trust and Mastercard on the COVID-19 therapeutics accelerator. Innovative life sciences companies are uniquely suited to collaborate in such partnerships, and know which partners will be best to help maintain an increased supply.

Canada's leadership role in the Ottawa Group, a group of 13 WTO members that was formed pre-COVID to ensure better coordination and co-operation among their countries, has been an important development. They have launched a trade and health initiative, outlining concrete measures that can be taken by members to strengthen supply chains and facilitate the flow of essential medicines and medical supplies, including vaccines. They've also promoted the implementation of trade facilitating measures in customs and services, limiting export restrictions, temporarily removing or reducing tariffs on essential medical goods and improving transparency overall.

Diluting IP protections will also have the effect of deterring investment in our own country's life sciences sector. At a time when the pandemic has shown just how important the life sciences sector is to the health and well-being of Canadians, we can ill afford supporting any measure that could drive out investment.

IP is one of the key elements for Canada to take into consideration if it wants to grow its life sciences sector and improve its biomanufacturing capacity in a sustainable way. While further domestic IP improvements could be and should be undertaken, the Government of Canada made incremental life sciences IP improvements in the landmark Comprehensive Economic and Trade Agreement with the EU. We're also supportive of a new trade agreement with the U.K. that protects IP and promotes greater regulatory harmonization.

This progress must be reinforced with more agile regulations, timely public access to innovation, skills and talent development, and other elements of a comprehensive life sciences strategy that we are eager to discuss with Canadian governments.

Of course, we can do better. To that end, all changes affecting the Canadian life sciences sector and the innovative pharmaceutical industry should be addressed by a whole-of-government approach in order to properly evaluate the impacts on the various other components of the sector. Indeed, we have made such recommendations through this government's biomanufacturing consultations.

These recommendations include references to an urgent need to suspend the July 2021 implementation of damaging changes to the Patented Medicine Prices Review Board, or PMPRB, at least until the COVID-19 pandemic has abated.

The PMPRB changes are having a destabilizing impact on our industry at a highly sensitive time. They are strongly opposed, not only by industry but by patient groups and life sciences stakeholders, due to concerns about impacts on access to new, innovative medicines in Canada's future domestic life sciences capacity. We maintain it is the innovative research companies who have proven uniquely qualified to create and sustain the partnerships to maintain and increase supply.

Canada's trade and regulatory policies can and should be used to improve conditions for investment, ensure the acceleration of approvals, advance the most effective solutions to address supply chain bottlenecks and strengthen our health systems around the world to get vaccines to citizens as quickly as possible.

We continue to welcome an enhanced dialogue and partnership with the federal government in these efforts.

Thank you for the time you have provided to me to speak to you today. We would be happy to take your questions.

1:30 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Ms. Fralick.

We'll go on to Nathaniel Lipkus, please.

1:30 p.m.

Nathaniel Lipkus Past Board Member, Intellectual Property Lawyer and Patent Agent, Intellectual Property Institute of Canada

Thank you, Madam Chair and honourable members of the committee. I represent the Intellectual Property Institute of Canada, or IPIC, as a past board member and a past chair of its international trade policy committee.

For those who don't know, IPIC is the professional association of patent agents, trademark agents and lawyers practising in all areas of intellectual property law. Our membership totals over 1,800 individuals in Canada, consisting of practitioners in law firms and agencies of all sizes, including sole practitioners, in-house corporate IP professionals, government personnel and academics. Our members' clients include virtually all Canadian businesses, universities and other institutions that have an interest in IP in Canada or elsewhere, as well as foreign companies that hold IP rights in Canada.

My comments today will focus on Canada's position with respect to the WTO TRIPS waiver.

The purpose of the waiver is to remove IP barriers that prevent WTO members from manufacturing and accessing COVID-19 medical products. A primary goal is to get as many vaccine doses as possible into the arms of the world's 7.8 billion people.

My organization, IPIC, is not here to take a position on whether a TRIPS waiver or any other IP solution will enhance vaccine access. Rather, we are here to provide necessary information about the IP rights framework and Canada's role within it. Our hope is to assist this committee to make recommendations that appropriately balance effective IP protection with the imperative of access to essential medical products. I will make three principal points.

First, the TRIPS waiver is not about enhancing domestic biomanufacturing or Canadian vaccine access. It is about empowering less-developed countries.

Second, TRIPS was designed to provide certain flexibilities to address national health emergencies. The sensibility of a waiver, or any TRIPS-based solution, depends on what needs are unaddressed by those flexibilities.

Third, Canada's experience shows that the effectiveness of a TRIPS solution requires careful consideration and implementation.

My first point is that this committee should not view the proposed TRIPS waiver as being about enhancing Canadian manufacturing or access to COVID-19 vaccines. Removing TRIPS obligations would empower TRIPS members to suspend patent and other IP rights without violating TRIPS. For some countries, such as South Africa or India, provided other important barriers already mentioned are removed, this waiver may clear a path to enhanced COVID-19 vaccine access, both domestically and for export.

This is not so for Canada. Canada's most significant trade agreements over the last 30 years have included IP commitments over and above TRIPS. If TRIPS obligations were suspended, Canada would continue to be subject to such commitments in the Canada-U.S.-Mexico agreement that replaced NAFTA, the trans-Pacific partnership and CETA. These additional barriers mean that Canada would need to negotiate with the U.S., Mexico, the EU and the CPTPP member countries in order to give domestic effect to a TRIPS waiver in those agreements in Canada. After that, domestic amendments would be required to suspend domestic IP provisions to facilitate any extraordinary measure facilitated by the TRIPS waiver.

It is unlikely that all this would be accomplished in a time frame that would be meaningful for enabling Canadian vaccine access, if at all. Canada benefits from near- and medium-term vaccine commitments, and it is unlikely to be capable of large-scale biomanufacturing for export any time soon.

My second point is that the sensibility of a waiver, or any TRIPS-based solution, depends on what needs are unaddressed by the current TRIPS flexibilities for addressing public health. COVID-19 is not the first international health crisis that has led to the rethinking of international IP rules. In fact, the international consensus on IP rules embodied in TRIPS was forged in the fire of the AIDS crisis.

The TRIPS agreement, which was signed in 1994, harmonized a minimum standard of 20 years of patent protection for pharmaceutical inventions, but the agreement also created certain flexibilities. Article 8 of TRIPS authorizes members to adopt measures necessary to protect public health and nutrition, provided that such measures are consistent with TRIPS.

Article 31 of TRIPS enables a government, or a third party authorized by government, to use the subject matter of a patent without the authorization of the patent holder. This authorization is called a compulsory licence. The scope and duration of a compulsory licence must be limited to the purpose for which it was authorized, as well as non-exclusive, non-assignable and predominantly for domestic supply.

Prior to gaining a licence, efforts to obtain authorization from the rights holder on reasonable commercial terms must have be made and been unsuccessful. However, there's no need to seek a voluntary licence in the case of a national emergency or other circumstances of extreme urgency, or in cases of public, non-commercial use.

Lastly, article 6 of TRIPS provides for parallel importation of patented medicines. Parallel importation allows countries to obtain patented products from other countries without the authorization of the patent holder. This can be legally permissible in countries applying the legal doctrine of exhaustion of rights.

These three flexibilities—measures to protect public health, domestic compulsory licences and parallel imports—were the only TRIPS flexibilities available until it became clear that they were inadequate to address HIV/AIDS. Countries requiring AIDS medicines did not have the domestic capacity to manufacture the drugs they needed.

In 2003, countries with manufacturing capacity were empowered under TRIPS to export patented products to eligible importing countries having insufficient or no pharmaceutical manufacturing capacity. Compulsory licences for export could be issued for amounts necessary to meet the identified needs of an importing country, with imported medicines clearly identified as produced under this system, and with the importing country required to take reasonable measures to prevent re-exportation of products.

The wisdom of a TRIPS waiver must be assessed against the backdrop of these flexibilities I've just described, taking into account today's barriers—not the HIV ones but the ones that confront manufacturing and access of COVID-19 medical products in light of our collective experience under the current TRIPS framework.

This brings me to my third point, which is that Canada's experience shows that the effectiveness of a TRIPS solution requires careful consideration and implementation.

Canada was the first country to attempt to implement compulsory licences for export to enable access to AIDS medicines after AIDS killed three million people in 2003 alone. The Jean Chrétien Pledge to Africa act would have empowered Canadian generic drug manufacturers to manufacture and export medicines to least-developed countries being ravaged by AIDS.

The political and corporate will was there in spades, but the implementation was unsuccessful. Only two drug shipments were ever exported. The restrictions were considered by manufacturers to be impractical, because new operations were needed just to enable the licences, which themselves, were valid for only two years and only eligible for one renewal. There is no other success story to speak of anywhere in the world.

Contemporaneously, brand name manufacturers of AIDS medicines began to issue voluntary licences to generic manufacturers to supply AIDS drugs to the developing world. This campaign started slowly around 2006, but many millions of generic AIDS medicines were being exported at pennies on the dollar within a few years. This approach was replicated for hepatitis C drugs in the mid-2010s. Although domestic compulsory licences have continued to play a meaningful role in enabling domestic access to essential medicines, brand name manufacturers have developed their own global access solutions that have played a significant role as well.

It's 2021, and the cauldron of access to medicines policy solutions continues to stir as we confront COVID-19. We have learned what we can and can't do with TRIPS. We've learned what brand name companies have been able to do to support global access. A good decision regarding the TRIPS waiver will be based on identification of the true barriers to access and the successful targeting of those barriers, taking into account extraordinary global health efforts over decades across the stakeholder spectrum.

To determine if a TRIPS solution is warranted, TRIPS member countries should identify what COVID-19 vaccine access will be enabled by the solution, over and above what's already enabled by existing TRIPS flexibilities, and members should co-operate to facilitate and remove barriers to that increased access, whether they be imposed by TRIPS or otherwise.

If, on the other hand, a TRIPS solution is unlikely to enable meaningfully faster or broader vaccine access, or there are other more effective solutions, then TRIPS members should come together to support other solutions that will facilitate that access. Canada should not place the burden of proof on proponents or detractors of the TRIPS waiver, but rather undertake its own critical assessment and support what it thinks will work best.

The common goals are shots in arms and saving lives. We at IPIC applaud the committee for taking seriously any initiative that will help achieve these goals in Canada and around the world.

Thank you.

1:40 p.m.


The Chair Liberal Judy Sgro

Thank you very much, Mr. Lipkus.

On to our members, we will start with Ms. Gray, please, for six minutes.

1:40 p.m.


Tracy Gray Conservative Kelowna—Lake Country, BC

Thank you, Madam Chair.

I'd like to thank all of the witnesses for being here today.

My first questions are for Ms. Fralick at Innovative Medicines Canada.

I appreciate your comments today on intellectual property with respect to innovation in biomanufacturing. We know how important it is to get COVID-19 vaccines to developing countries. If it's not intellectual property concerns slowing down the distribution of vaccines to these developed countries, what would you say the issues would be?

1:40 p.m.

President, Innovative Medicines Canada

Pamela Fralick

I think the answer to that question is complex. There are multiple possible answers, from supply chains to the fact that it is a revolutionary technology. As I mentioned in my comments, the technology we're using for most of the current vaccines didn't even exist a few years ago, etc.

I will, by the way, call on my colleague, Mr. Hamill, to jump in. His expertise is on the IP side of things as well.

Again, my quick response to you would be that there are multiple reasons for it. This is why we are pushing to make sure we don't move too quickly to any one solution that is nice and shiny on the outside but will not have the intended effect in terms of the goals of this particular committee.

Declan, did you want to add any comments?

1:40 p.m.

Declan Hamill Vice-President, Legal, Regulatory Affairs and Compliance, Innovative Medicines Canada

Yes, thank you.

Thank you, Madam Chair, and thank you to the committee for allowing the IMC to speak to you today.

I would just add—and this was already touched upon by some of the witnesses to the committee—that the issue of regulatory barriers and impediments to international supply chains is right now a clear and present danger. Canada has directly experienced this in the context of the European Union and some of the measures the EU has undertaken. Fortunately, and partially because of the great work of officials at Global Affairs Canada, this hasn't been a significant issue for Canada, but it has been for other nations.

Impediments to global supply chains are certainly a significant issue. Regulatory co-operation, in terms of recognition of vaccines, is also a very important issue that needs to be addressed.

1:40 p.m.


Tracy Gray Conservative Kelowna—Lake Country, BC

Great. Thank you.

You actually answered the second question I was going to ask, so thank you for that.

Your organization has suggested publicly that the relationship between the present federal government and your industry is not the most friendly. Would you say this type of working relationship has an impact on Canada's rapid access to vaccine doses?

1:40 p.m.

President, Innovative Medicines Canada

Pamela Fralick

I do believe there is a relationship. Without pointing fingers at any particular government, for decades now it's not been an, I'd say, “ideal” relationship. The life sciences sector writ large—the pharmaceutical industry is one part of that—has not been viewed as the contributor to the health and the economy of the country that we feel it should be.

Despite multiple attempts on the part of the industry, from our global CEOs—this is a global industry—pre-pandemic, global leaders were concerned about some of the measures being taken by the current government. They had reached out in an effort to find that more balanced approach that we're seeking. We understand there are sustainability issues for the cost of drugs, but there's a huge value to the economy as well. Our global CEOs have reached out to meet with Mr. Trudeau, Ms. Freeland and others on at least four occasions over the last three years, but they have not been successful in that regard.

I should say, by the way, that the Canadian CEOs have also worked very hard over the last few years to engage with the government and to have a more productive conversation about how we can work together but with.... I was going to say “limited success”, but “no success” is probably more legitimate.

Yes, when you don't have a relationship with the industry, it is difficult to achieve some of your other options. The industry does not see Canada as an attractive country in many ways, from regulatory, access, IP and data protection perspectives, to come and invest in the country. While the government did do a good job of procuring through contractual agreements, actually getting a lot of vaccines into the country and being at the top of the list simply have not been happening.

1:45 p.m.


Tracy Gray Conservative Kelowna—Lake Country, BC

Thank you for that. It's really shocking to hear that you were reaching out to the Prime Minister and to other leadership, and they're not returning your calls. I'm sure that will be pretty shocking for people to hear, considering what's going on.

Last week Canada received our first shipment from COVAX of about 300,000 doses. We know that we're the only G7 country to be accepting vaccines from the program at this point, with current vaccines procured through the program going mostly to developing countries.

Would you say that Canada's not raiding vaccines meant for low- and middle-income countries would be important to get vaccines to those countries that need it right now?

1:45 p.m.

President, Innovative Medicines Canada

Pamela Fralick

I think there is a global ethical and moral obligation to make sure that everyone in this world has access to vaccines, absolutely.

In terms of the COVAX facility, it was very clearly set up to do that, but also to be of assistance to countries that were contributing the vaccines. I'm not an expert on the COVAX facility, although we're very aware of it, obviously. In fact, I would go further to say that COVAX, being one pillar under the accelerating access to COVID-related tools initiative.... Our international body is a co-founder of that initiative, so we're very supportive. I'm not the expert on it; however, I do know that it was set up to allow for both actions to take place.

Beyond that I really can't—

1:45 p.m.


The Chair Liberal Judy Sgro

Thank you, Ms. Fralick and Ms. Gray.

We go on to Mr. Dhaliwal, please, for six minutes.

1:45 p.m.


Sukh Dhaliwal Liberal Surrey—Newton, BC

Thank you, Madam Chair.

Madam Chair, I would like to thank all the presenters here.

My question will go to Mr. Lipkus of IPIC.

It has been indicated that concentrating on the TRIPS waiver as a magic bullet for vaccine access and production will not work. First, am I right in saying that the TRIPS member countries must be pragmatic and realistic, and agree on what are truly effective solutions first based on, as you said, flexibility?

Second, seeing that we need to seek an agreement with other member countries on these broader considerations first, am I right in saying that this would be your recommendation?

1:45 p.m.

Past Board Member, Intellectual Property Lawyer and Patent Agent, Intellectual Property Institute of Canada

Nathaniel Lipkus

I started my comments by saying that we were not going to recommend a solution, and I'm certain that, if I were to canvass the membership of IPIC, there would be a diversity of views.

What I can say is that a pragmatic solution is needed. We're trying to get vaccines to as many people as possible, and talking about intellectual property rules is just one means for consideration. It may be a tool that's useful. It may be that a TRIPS waiver is an option. It may be that there's something short of that which makes sense, depending on whether other capacity can be marshalled.

We heard from Mr. Yadav about four barriers: manufacturing equipment, skilled workers, regulatory agencies and the free flow of supply lines. If there is a solution that somebody puts forward where a TRIPS waiver will couple with those and lead to better outcomes than any other solution that's on the table, then we shouldn't ignore it.

At the same time, there are a lot of good people trying to do good things, and we need to make sure we look at everything. This is one where some might say the more the merrier, but others might say there are too many cooks in the kitchen. Some smart people need to figure out which one we're dealing with here.

1:50 p.m.


Sukh Dhaliwal Liberal Surrey—Newton, BC

We all know that it took significant innovation to develop the COVID vaccines around the globe. How would the uncertainty created by a potential TRIPS waiver damage innovation in life sciences and biotech industries?

1:50 p.m.

Past Board Member, Intellectual Property Lawyer and Patent Agent, Intellectual Property Institute of Canada

Nathaniel Lipkus

Is that question posed to me?

1:50 p.m.


Sukh Dhaliwal Liberal Surrey—Newton, BC

Yes, please.