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.
2:25 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you, Ms. Silverman.
Mr. Blaikie, I'm sorry, but your time is up.
We'll go on to Mr. Hoback, for five minutes, please.
April 16th, 2021 / 2:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
Thank you, witnesses, for being here this afternoon on a Friday.
I am amazed how quickly we actually did get a vaccine developed and established around the world. I think it's phenomenal and it shows you what the private sector can do when given the appropriate incentives to do that.
If we went down the path where we brought in TRIPS, would that same motivation be there for these companies to actually do that for the next phase or a variant phase, or something else down the road? What kinds of dangerous precedents would that set?
Ms. Fralick, I'll go to you to answer that question.
2:25 p.m.
President, Innovative Medicines Canada
We've made comments about that. My colleague Mr. Hamill mentioned that, as you and most of your committee members would know, any business needs as much predictability as possible. If the lay of the land is changing on the spur of the moment, there is no incentive to invest or to continue along that path. It would have a very chilling effect on the industry, especially as we keep saying that things are working well as they are right now. This would be viewed as, frankly, a punitive or a difficult, very disruptive act on behalf of the government.
Declan, could you—
2:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Maybe I'll just stop you right there, because that said, and I tend to agree with you, it doesn't mean we can't help those countries. It doesn't mean we can't be compassionate.
You talked about some ideas in regard to training and making sure we have capacity in the actual manufacturing process that we can provide to these other countries so that they would have, in the future, the ability to take on projects like COVID vaccines and say, “Yes, we can do that.” We can put forward a combination of things. We could donate vaccines. We could donate the expertise to do that.
Wouldn't that be a way to actually accomplish the end goal of making sure these folks are vaccinated and still keep the industry at the top of the leading edge to make sure we have the latest and greatest vaccines coming to the market at all times?
2:25 p.m.
President, Innovative Medicines Canada
The industry has been open, and in fact, suggesting these sorts of solutions from day one when this pandemic started. From it being, as I said earlier, a founding member of the accelerating access to COVID tools, the COVAX facility is part of that. It's very clear that they are negotiating, and it is a business. There are differential prices, as previous witnesses just mentioned, making sure that those prices are affordable for those countries that do not have the resources that some developed countries do.
There are a number of initiatives that industry has been very open to. There is no lack of understanding that this is a global pandemic and we need solutions. I can't speak to the individual arrangements for every company as that gets into commercial sensitivities, but we do know that some companies are offering at cost. They are not making a profit on this at all. There's a differing range and different models of approach to making sure that companies are able to be viable and continue the work they do, but also to make sure that every citizen of the globe is receiving their vaccination.
2:25 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Mr. Evenett, looking at your position in the EU, what things are you looking at in regard to the most effective and fastest way to vaccinate people in third world countries?
2:30 p.m.
Professor, University of St. Gallen, As an Individual
The one thing we have to do is to keep these supply chains open with vaccine ingredients, vaccine production and vaccine distribution. Anything that impedes this is going to be a major source of problems.
The nature of vaccine production is that it's typically geographically concentrated. We have a lot of concentration here in Europe, but also in places like India. It's imperative that we persuade governments here not to engage in export controls and not to fragment the single market, which could possibly happen under the existing EU treaties if different countries, like Belgium for example, decide to ban exports.
The trade policy side of this is extremely important if we are serious about ensuring distribution. It's very important for the commercial case for producing vaccines, because most countries, other than the biggest, need to be able to export in order to make a business case for building such a plant and making such a risky investment.
2:30 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Is there a strategy—even more of a global strategy—that would be better than TRIPS in regard to meeting those ends?
If it means adding capacity in some of these third world countries, why wouldn't we go down that path in making sure that capacity is there, not just for COVID but for anything else that may come along in the future? Why didn't we learn from AIDS, for example, that we needed that type of capacity in third world countries?
2:30 p.m.
Professor, University of St. Gallen, As an Individual
That's a very good question.
I would also put on the table the H1N1 pandemic, which ended much faster than expected. As colleagues have said, a lot of vaccine manufacturers actually felt burned because that pandemic ended earlier. They had put in massive investments and were unable to reap particular revenue streams.
I think we really need the public sector and the private sector to understand the risks associated with vaccine investments and to structure public procurement contracts and financial incentives to build capacity in a way the ensures that the world has a lot of vaccine capacity.
Remember, though, that having vaccine capacity and then being able to repurpose it to whatever new pandemic comes up are two very different matters. One needs to have the base, but one also needs to be able to repurpose it. That takes time. Still, having the base would be a lot better than not having it.
2:30 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Evenett.
I'm sorry, Mr. Hoback. Your time is up.
We're on to Mr. Sarai for five minutes, please.
2:30 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Thank you, Madam Chair.
I want to thank all the witnesses. We've heard very impressive background and knowledge from you on this committee.
I want to commend the industries that created vaccines in such a short and accelerated period of time. The current model we have shows that if you invest in research and development and the world puts its minds together, you can come up with solutions very quickly.
Having said that, Mr. Evenett, I heard you saying that you want to ensure that trade rules are solidified so that vaccines get to the right people at the appropriate times. However, vaccine production is concentrated. That model used to work. That seems to be the previous case. That's what we relied on. That's what the whole world expected and that's what Canada did. It invested in them. It contracted with agencies. It tried to do so with some of the better countries that had good trade relationships.
However, as someone said earlier, desperate times call for desperate measures. Countries don't exactly abide by those rules when things get rough and when their own population starts saying, “Me first, and then we'll take care of our backyard afterwards.”
What's your thought process on that? Doesn't that call for more domestic production, even if it's not concentrated and even if perhaps, going forward, it might not be economically as wise? The government may have to put some efforts—as we have done in Saskatchewan and Quebec—into ramping up production for the future.
Do you not see that countries will be having more domestic production facilities so that this predicament doesn't happen again?
2:30 p.m.
Professor, University of St. Gallen, As an Individual
I would make two observations.
First, I would note with caution the Korean experience. Korea was exactly at this point 10 to 15 years ago. It drew exactly the same lessons you have from this and spent a huge amount of money on building a vaccine industry that has not delivered this time around. Having the vaccine capacity there is, at most, an unnecessary condition for success.
The alternative I would put to you is much smarter sourcing. It has been said by one CEO of a pharma company that the reason they wanted to source from Switzerland is that Switzerland only has seven million people and its production capacity was into the tens of millions of doses. Even if the Swiss government needed vaccines for every single Swiss person, there would still be a huge amount that would be left—
2:35 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Mr. Evenett, you wouldn't know if Switzerland is going to come up with the vaccine at a time like this, in a pandemic. You have to hedge with several industries and several countries.
2:35 p.m.
Professor, University of St. Gallen, As an Individual
I agree that one needs to hedge, but please remember that there is a difference between vaccine development and contract manufacturing of vaccines, and the Swiss have, for example, contract manufacturers that are particularly good. I think a combination of smarter sourcing and diversified sourcing, where I'd fully agree with you, is an alternative to spending a lot of funding on building up production capacity, which might not be well directed.
2:35 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
I will say that I agree that sourcing is imperative, and Canada has tried to source it from countries we felt were much better at it. For research, you have to throw it out to everyone and then pick out of that lot which one you think is the most promising to get that.
Is it positive to have production abilities, like the Serum Institute of India, which doesn't necessarily have to develop its own vaccine but can have licensed facilities, which we've heard has been very effective. To have those types of facilities here....
I think getting the licensing has not been as big of a challenge, but the lack of that facility has been. For Canada, it might be important to have that going forward. Regardless of who creates it, we would be able to have domestic production, not only to help ourselves but to help others.
2:35 p.m.
Professor, University of St. Gallen, As an Individual
There's some merit to what you're saying about the contract manufacturing side of this.
2:35 p.m.
Liberal
Randeep Sarai Liberal Surrey Centre, BC
Mr. Yadav, maybe I can go to you. You see it from a global perspective. Would that be something that Canada should put some resources into so that we are not caught off guard?
I think that licensing has not been the issue but production has been. Something that we noticed, with some of our members here being on the trade committee, Canada-U.S. committee and others, is that, yes, it looks great on paper, but when times get tough, even when your stuff is getting loaded onto an airplane in China, somebody pays a bigger buck and it gets switched off one cargo plane and onto another. If we have our own domestic capacity; however, we can probably protect ourselves from this event in the future.
2:35 p.m.
Senior Fellow, Center for Global Development
I'd like to add two comments. First, Professor Evenett mentioned the example of South Korea. While I largely agree that South Korea hasn't been able to vaccinate as many people as some other countries have, SK Bioscience in South Korea is indeed a manufacturer of AstraZeneca's vaccine and will be a manufacturer of Novavax's vaccine when that is approved, so the investments that South Korea has made have yielded some benefits. We cannot completely write them off. That's the first point.
The second is that, given what we've seen around trade and export controls, if we assume a state of the future that will not let this happen again, and if we have a global treaty that prevents this from happening, then perhaps we don't need to think about every country looking at domestic manufacturing.
If we assume that future scenario will still have similar kinds of export controls, the important consideration becomes, if Canada or any country thinks about having a domestic manufacturing side—a contract manufacturing type—then how does that case remain sustainable so that the manufacturing plant is not only serving the needs during a pandemic but has a steady demand to supply something that is required during routine times? As Professor Evenett said, it must be flexible so that it can switch from one vaccine platform to another, or one vaccine type to another, so that its overall demand remains sustainable.
Those would be areas to examine when you think about domestic manufacturing.
2:35 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
Thank you, Mr. Sarai. By the way, happy birthday, Mr. Sarai.
Now we're on to Ms. Gray for five minutes, please.
2:35 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Thank you, Madam Chair. I would like to ask some questions of Professor Evenett.
First, would you be able to talk about the importance of vaccine producers being able to work with manufacturers globally to ensure the vaccines being produced are up to standard and effective, specifically where there could potentially be risks that might arise with quality control if vaccines are produced under the TRIPS waiver?
2:40 p.m.
Professor, University of St. Gallen, As an Individual
One of the consistent messages that you hear from the manufacturers of vaccines and the developers of vaccines is the need to find manufacturing facilities that meet best practices, including the highest standards of safety and regulatory compliance. This is something that would have to be taken very seriously.
If there were a TRIPS waiver and a free-for-all for production, then I suspect there would be concerns about this. Presumably the production would be in the countries offering the waiver, however, so the risks would be taken by the population in the countries offering the waiver and that may be a very unsatisfactory situation from a health point of view.
2:40 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Thank you.
You have written about the unclear standards in the EU measures. Canada is not specifically on the EU's exemption list alongside roughly 100 other countries. We were told that it wasn't a concern, because countries such as Japan and Australia were also not exempted. Since then, however, Japan has stated that the EU restrictions are already affecting their vaccine supply schedule, and Australia had a vaccine shipment to them blocked as well.
Would you consider this a concern, or something that would be a big deal for Canada to be worried about?
2:40 p.m.
Professor, University of St. Gallen, As an Individual
Yes, I would consider it a concern. We are seeing more evidence within Europe of what's called a chilling effect; that is, that some vaccine manufacturers are not even asking for permission to export, because they suspect the national authorities and then the European Commission will deny it. There's no guarantee that Canada's interests are protected under those circumstances.
2:40 p.m.
Conservative
Tracy Gray Conservative Kelowna—Lake Country, BC
Thank you. This leads into my next question.
Another concern that you've highlighted, in a paper you wrote on EU export controls, is with the authorization decisions. Even if vaccine shipments are authorized, in the end, these measures may add delays between the time of a shipment's being prepared and its then landing in the intended country.
What types of delays could Canada see in receiving vaccines versus those for a country that is specifically exempted from these types of measures?
2:40 p.m.
Professor, University of St. Gallen, As an Individual
As I'm sure you know, a company that wants to seek an authorization from the European authorities must provide the information to the authorities. Then the authorities check it, and then Brussels checks the national authorities. Both of those authorities can ask for more information. All of this delays potential exportation.
Again, how this plays out will depend very much on a member-state by member-state basis, and it must be a source of concern, which is why I wrote that earlier in the year.