International Trade Committee on April 16th, 2021

[Nathaniel Lipkus]

It's hard for me to answer on behalf of an industry. I note that you have the representatives of the industry sitting here, and they can provide a view.

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

I would love them to—

[Nathaniel Lipkus]

I'll let them explain what they perceive as the impact to their industry.

[Pamela Fralick]

Declan, this probably is a good one for you to take on.

[Declan Hamill]

Yes, certainly. Thanks for the question.

The industry has established in record-breaking time a network of voluntary licensing agreements with other parties. It's interesting that the IP always seems to be the focus of these issues.

The CEO of the Serum Institute, which is a huge India-based producer of vaccines—basically licensing the Oxford-AstraZeneca vaccine currently, but they plan to produce other vaccines as well—was asked straight out whether there's a problem of collaboration and voluntary licensing with originator entities.

He said no, that's not the problem. He said the problem is that it takes time to ramp up facilities. The scale of facilities needed to deal with COVID vastly eclipses the existing capacity in the world. There's an exponential ramp-up needed by existing vaccine makers, and they're doing it as quickly as they can. Nevertheless, it takes time and effort.

His focus, and this is on the public record.... I think it was in the The Guardian. He said the issue is his problems with the U.S. FDA and with the European Medicines Agency, in terms of rapid approval of medicines.

When we consider TRIPS and existing flexibilities, we have to ask ourselves what problem we are trying to solve. If voluntary licensing agreements and other forms of tech transfer partnerships between innovative companies and entities such as the Serum Institute are working—granted, everyone would like them to work faster than they do now, and everybody would like more production—we have to ask ourselves, is a TRIPS waiver going to contribute to this?

The answer from the innovative industry would be no. If anything, it would be disruptive to existing arrangements, which, while everyone would like these things to move faster, are actually yielding real world benefits in terms of vaccine production.

I hope I have addressed your question.

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

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Dhaliwal. I'm sorry, but your time is up.

Thank you, Mr. Hamill.

We will go now to Monsieur Savard-Tremblay, for six minutes, please.

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

Thank you, Madam Chair.

Good morning to all the witnesses. I thank them for their presentations and for their time.

I would like to put my first question to Ms. Silverman.

You mentioned the idea of temporarily lifting patents on vaccines. That is an idea that we are hearing about more and more. I understand the principle and am even relatively favourable to it. Yet, it might make less of a difference than we think, since the problem seems to be a lack of factories, technology, and labour to make vaccines.

How would a patent waiver fill these gaps?

[Rachel Silverman]

Thank you very much for the question.

I agree with you that the patents are not the primary barrier, which is why I do not think the TRIPS waiver will be particularly effective. However, that's not to say that IP, broadly speaking, is not an issue at all.

I would distinguish between two things. One is the legal right to produce a product, which is what the patent would cover, roughly speaking. There are some intricacies here, but it's the legal right to produce a product. The other is the knowledge, the know-how, the trade secrets, the proprietary info required to actually do so.

There's a process called “technology transfer” whereby an originator company can impart this knowledge to a generic manufacturing firm. There are still generic manufacturing firms who are saying that they have the capacity to produce and are not doing so and that they have not received technology transfer or that information from the originators.

The specifics of any individual case are a little bit hard to parse. It's hard to parse the economics of whether this is actually viable to do and scale up, or whether they actually have the necessary capabilities. It's on a case-by-case basis.

However, I think what we would like to see is a bit more pressure being placed on pharmaceutical companies—and they're already doing this. I'm not trying to say that none of this is happening. It is. We would, however, like to see a process whereby they are evaluating tech transfer and voluntary licensing opportunities and making use of the capacity that does exist.

None of this is a magic bullet, but to the extent we can feed and motivate rapid evaluation and discovery of such capacity and help facilitate voluntary licensing deals—which, by the way, would protect IP within the balance of that licensing deal.... This is not about freeing IP for everyone. It's about a voluntary process of technology and product knowledge transfer and sharing.

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

Thank you for the response.

You are targeting the problem, essentially. Tell me if I'm wrong, but, if I summarize what you're saying, factories are seeking to obtain this technology nevertheless, but it gets stuck and doesn't transfer. So you don't see a lack of factories per se.

Do you see a shortage of manpower, though? That's what we've noticed so far.

[Rachel Silverman]

I might turn it over to my colleague, Prashant Yadav, who would be more knowledgeable on this point.

[Prashant Yadav]

Thank you.

It's fair to say that there are many facilities globally, some of which—and I'm underscoring the words “some of which”—may have the required equipment to start manufacturing COVID vaccines of different types, but equipment is only one part of the multi-dimensional needs for a facility to start manufacturing. Like I emphasized earlier, having trained chemistry, manufacturing and control specialists and having trained and—

[The Clerk of the Committee, Ms. Christine Lafrance]

Mr. Yadav, it's the clerk here. Could you raise your mike a bit? It would help the interpreters, please.

[Prashant Yadav]

I'm sorry about that, yes.

Having trained chemistry, manufacturing and control staff and having quality management specialists is an important prerequisite. Even when we have facilities around the world that have equipment to manufacture COVID vaccines, they do not necessarily have the human resources that are required.

One way to think about it is that we can supplement their human resources with the company that has the originative product, helping them out, but again those are the things that require both larger public investment and also time and resourcing on the side of the innovative company.

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

Thank you for your answer, Mr. Yadav.

What do you think about the COVAX initiative, which aims to provide vaccine doses to a minimum of 20% of the population?

We know that Canada has invested heavily in this and for every dose they receive, they will donate an equivalent number overseas. Canada revealed that it would receive between 1.9 and 3.2 million doses of AstraZeneca vaccine by the end of June.

Is this a good or bad initiative, in your opinion? Is it incomplete or insufficient?

[Prashant Yadav]

My viewpoint is that it's a very good initiative. For a large number of countries that either do not have the financing, the working capital, the size of the market or the ability to negotiate vaccine access for themselves, it does it collectively for them. In addition to this, it also provides them a pooled indemnity insurance. Therefore, many aspects are addressed by pooling the needs of multiple countries.

The challenges have been how we guarantee enough supply to the COVAX facility so that it can deliver on its promise of providing at least 20% to all of the countries. In reality, we would want to ask the question, why only 20%? Perhaps this should be a structure we use for providing 40% or a higher percentage of coverage for each country.

The current constraints have been the supply coming into COVAX.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Yadav.

We will go to Mr. Blaikie, please, for six minutes.

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

Thank you very much.

We certainly heard today, and I think members probably reasonably expected this going in today, that there are a number of factors beyond simple access to intellectual property that go into the manufacture of a vaccine. Certainly intellectual property is one of those factors. Even in the case of negotiating a voluntary licensing agreement, presumably that takes a fair bit of time and resources.

We now have countries that have come to the WTO asking for, not a blanket exemption to the entire intellectual property infrastructure, but a temporary waiver for a very specific purpose, which is to make the recipes for COVID-19 vaccines able to be used by as wide a cross-section of those in the vaccine manufacturing industry as possible. It is a recipe that has benefited, and its development has been made possible, not by the typical process where you have a lot of private investment and risk-taking, but by a considerable amount of public investment by governments the world over, not just in Canada but the world over.

It does seem to me that taking one of those complicated elements off the table would help facilitate a speedier expansion of global supply. That's not to say that it helps overcome all of the obstacles, but it helps overcome one of the obstacles. I haven't heard anybody here today say that intellectual property rights present no obstacles at all to the expansion of the global vaccine supply, just that it's only one among many. It seems to me that if our goal is to try to increase that supply, taking as many obstacles off the table as possible is a prudent approach.

In terms of direct questions, one of the things that I also haven't heard.... I have heard that this waiver is not a panacea. Fair enough. In fairness, I don't know that anyone is really suggesting that it is. It's just a step in the right direction. I don't see that the waiver would do harm in the sense of relaxing some of the typical intellectual property restrictions for a very targeted purpose and for a temporary time frame.

I don't know if we have a witness who wants to speak to that issue, but it seems to me that taking this off the table would be helpful. It would give facilities where they believe they have capacity the opportunity to explore that with fewer restrictions in their way.

I see Ms. Fralick has her hand up. I'll giver her the opportunity to respond.

[Pamela Fralick]

Thank you so much for raising that issue. It's such a good discussion point.

I will turn to my colleague, Mr. Hamill, in a moment, but I wanted to make one quick comment.

We actually do believe there could be harm. I mentioned this in my comments, but we'd be pleased to go into that in a little bit more detail. The other piece I wanted to raise...and you may have information we don't have, by the way. There's so much going on in the world these days, it's hard to keep up, but we simply have not seen any evidence that any of the COVID-19 vaccine developers, when asked, have refused to license their IP. The system does seem to be working as far as we can tell.

Of course, the other piece that I think all the witnesses have made reference to is that it's not quite as simple as just having—as someone referred to it today—the recipe, the IP information, and then you can suddenly produce a vaccine. There is a practicality behind this that we feel is quite a significant barrier.

In terms of the harm piece, the undermining of the process that is working well, I'll turn to Declan to answer your question a little more clearly.

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

I do have a quick question just in follow-up to that comment, because we've heard often today already that there are other pieces in order to be able to effectively manufacture vaccines, and that's quite a reasonable claim. As I say, I think many people are not surprised to hear that.

We have the governments of India, South Africa and others coming to the table pursuing an initiative that takes time and resources for them, in order to try to mobilize a global campaign of governments signing on to this waiver to take this issue up repeatedly at the World Trade Organization. Surely, it can't be your position that it will be news to them to find out, once they have broader access to the intellectual property involved, that there are other dimensions to manufacturing a vaccine. I find it very hard to believe that they put the effort into organizing behind this waiver in ignorance of the fact that there are a number of factors that go into the manufacturing of a vaccine, and it'll be a surprise to them, when they get the IP, that the people they've been working with domestically aren't able to produce the vaccine.

I find it insufficient for me to hear of these other factors. As I say, I think reasonable people would expect that there are many things that go into this kind of complex manufacturing process. However, the idea that somehow the proponents of the waiver would be ignorant of that and that they wouldn't have promising leads within their own country, where intellectual property is either the primary barrier or a significant barrier to increasing their production, strikes me as very hard to believe.

I see that we have another witness with their hand up, who just moved on their screen. It might be Ms. Silverman and her colleague from the institute.

Perhaps you'd like to weigh in on that question.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Blaikie, but your time is up.

Perhaps we could get a brief answer from Ms. Silverman, please.

[Rachel Silverman]

I'll just make one point briefly on that. I think our colleague from the IP association referenced this briefly. A lot of the history regarding these access-to-medicine sites has to do with threats to IP, compulsory licensing and other measures that then extract concessions around voluntary licensing and other more voluntary measures.

I think that's one potential explanation. If you increase the pressure on industry and you make it clear that you are willing to take more dramatic actions, that is going to create some amount of momentum around voluntary action on behalf of the pharmaceutical industry.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Silverman.

We will go on to Mr. Aboultaif for five minutes.

Go ahead, please.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you, Madam Chair.

Thanks to the witnesses. It was a great presentation this morning.

I have an article dated November 13, 2020, from Reuters: “Canada's reliance on supply contracts to secure COVID-19 vaccines from drugmakers like Pfizer Inc has put...life for Canadians, and prospects for the economy over the next year, in the hands of a few foreign companies facing overwhelming global demand.”

The article adds that, “As other governments pour hundreds of millions or billions into vaccine development, Canada has earmarked C$1 billion ($761 million) to buy doses abroad.”

The first question is this: To what extent do you think this article is accurate? Second, what have we done wrong in Canada, in racing against the time, to be able to provide Canadians better results at such a difficult time?

I will start with Ms. Fralick, and then maybe I'll move to Mr. Evenett after that.

Ms. Fralick, go ahead, please.

[Pamela Fralick]

Thank you.

I will invite my colleague to jump in on this one because I would be repeating a few things that I said earlier.

I do believe that there's a history of a less-than-ideal relationship between this industry and government, which has led to a very unattractive business environment for the industry to be present here in Canada. That has lessened our domestic capacity, which I think is what you're referring to primarily in the article.

There are a couple of aspects that I'm quite sure Mr. Hamill would like to comment on, if you don't mind.