International Trade Committee on April 23rd, 2021

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

Thank you to all of the witnesses for appearing this Friday for this important discussion on TRIPS.

I think I'll start with you, Mr. Warner.

Before I do, seeing as how the topic of booster shots and possibly other vaccines was raised by Mr. DiCarlo, I thought it important to mention that Canada today reached a deal with Pfizer to secure 35 million booster shots for next year and 30 million in 2023. We also have options for 120 million more doses over the next few years.

Mr. Warner, getting to the crux of the matter on TRIPS, you mentioned being involved in helping a multinational pharma company distribute HIV-AIDS drugs globally. Can you let us know about the technology transfers involved in that process, maybe some of the knowledge sharing that went on there, and how we might learn from that experience in this case?

[Mark Warner]

Those were voluntary licences.

The starting point was that companies made the decision that they wanted to give the drugs away to get them to the people who needed them quickly. Those are what we call access programs. Some of them were supported by the Clinton Foundation and PEPFAR, if you're familiar with that.

After people got to a certain point with that, then came the licensing. As I said before, the licensing started not with the state-of-the-art drugs but with, let's just say, the drug of the last generation or the two generations before. It was still effective, but it might not have been what was coming on the market. You basically had to train people. You had to bring them from around the world. Then you had to get to some comfort level with the Indian and South African companies that there wasn't going to be leakage because they were exporting back into the developed world. You didn't want the AIDS drugs that were being made in India showing up in a pharmacy in Amsterdam or San Francisco because the companies were still trying to recoup their costs.

That's one of those issues that we have to confront that makes the world slightly different and a little bit awkward in the conversations that are going on now in Geneva and ones that we're familiar with in Canada. When we created our generic industry in Canada, we also created a very powerful company that got to a point where we were paying more for generic drugs in Canada than other countries were paying for generic drugs. We were paying less for the branded drug, but we were paying more for the generic drugs.

Similarly, in the case of South Africa and India, we created Aspen in South Africa, and various other people in India kind of have monopolies when you look at it. When anyone goes to produce something in India, they go to Serum largely, and they go to Aspen in South Africa. You have to ask yourself what you really achieve when you move it off of the branded or innovation company that came up with it and turn it over to a local monopoly in another country. That's something that we didn't necessarily have to think through 20 years ago. The concern with intellectual property is that you're trying to make sure that you don't get leakage and that you're not taking the state-of-the-art form with you, because, honestly, you have to put people in place around the world to show people. It's not just the patents; it's the know-how. It's all that comes with putting these things together.

I heard the last speaker from the Trade Justice Network talk, and I have tremendous sympathy for that, but it's not even close to what we're talking about here. To take these mRNA vaccines that weren't even in existence 12 months ago and share them around the world.... We can't even get the inputs. We're having blocks on the inputs we need to get the stuff made in India and Europe. Now we're going to set up other places for those inputs to go in India and South Africa.

It sounds good; it doesn't work.

[Rachel Bendayan, Liberal, Outremont, QC]

It doesn't work. I guess in order to summarize, then, in your view, signing onto the TRIPS waiver won't solve the problem.

In addition to that, I heard you say earlier that you were concerned about investment in our own life sciences sector here in Canada, which, as you know, we're ramping up significantly. Do you feel that in addition to a TRIPS waiver not working, we would be hindering the ability for Canadian manufacturers in the long run?

[Mark Warner]

I don't think it would be to the benefit of Canadian manufacturers to do that right now, because if you want to get the big companies into Canada to start investing in a big way, it all comes back to respect for their intellectual property. There's a tension there.

I'm not against the waiver at some point. I just don't think we're there now. I think we may get to a waiver a year from now, when we have more familiarity and standardization with some of these vaccines. Maybe it will be around boosters, but we're nowhere near a point where that would be a useful device.

I do think it's useful to get the conversation focused on intellectual property and development concerns. The waiver is really a completely different thing from what we faced 20 years ago with HIV.

[Rachel Bendayan, Liberal, Outremont, QC]

I understand.

I have one more question for you, Mr. Warner.

The existing TRIPS agreement already includes flexibilities. For example, it allows for compulsory licensing. My understanding from previous witness testimony is that no country has been accorded that compulsory licence yet.

I wonder if you have any insight as to why, or as to what circumstances might be preventing countries from using the flexibilities we already have.

[Mark Warner]

Canada tried to use it before, in the old context. The reason it didn't work at that time is that voluntary licensing was already occurring with people like my client. There was no way that anybody in Canada was going to produce it more cheaply than what we licensed Aspen to do in South Africa. At the end of the day, why wasn't it used? It wasn't used because it wasn't useful.

You might argue otherwise. In political science somewhere, someone might say that the waiver's existence induced my clients and other people's clients to enter into those voluntary licences. That's not how I remember it, but who knows? Someone else will research that one day and come to a conclusion. I mean—

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Warner. I'm sorry to cut you off.

We'll go to Mr. Savard-Tremblay for six minutes, please.

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

Thank you, Madam Chair.

I want to thank all the witnesses for their presentations.

I have a question for Ms. Whattam.

In March, the committee heard from you at a meeting on the reform of the World Trade Organization. You pointed out that the globalization regime, business investments and supply chains have led to the outsourcing of certain industries. In particular, pharmaceutical production capacity is now centralized in developed countries, meaning wealthy countries. In many respects, even in wealthy countries, we can see this approach.

As we know, Canada and Quebec once had real pharmaceutical capacity. However, this capacity has declined as a result of unscrupulous and unregulated privatization or public-private partnerships.

Have we missed a great opportunity, in Canada and in Quebec, to have our own industry?

[Jesse Whattam]

I'm not sure if I have enough expertise to answer that question correctly, to be honest. I haven't done enough research on the Quebec industry.

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

No problem. That's why I wanted to reframe the question.

During your last appearance, you spoke about developing countries losing their pharmaceutical expertise. You referred to the pharmaceutical industry in a list of examples. You were talking about agricultural, financial and other companies under the sole control of wealthy countries.

However, doesn't the same contradiction exist even within wealthy countries? You may prefer this simpler way of asking the question.

[Jesse Whattam]

I definitely do, and in my statement that's what I was trying to get to. The imperatives here for the few multinational corporations that are dominating the market right now, as we can see in the COVID pandemic, are monopolizing and restricting the global production capacity.

Right now there is an opportunity for the global community to say that this is the moment when we can challenge the status quo and make the global network a place where IP rights being waived is not the only solution. The companies do need to share know-how, intellectual property and data with other qualified vaccine manufacturers. There needs to be a strengthening of regulatory capacity, and there needs to be an investment in local vaccine manufacturing.

As I was saying in March, over the last few decades there has been this deterioration of that regulatory capacity and local investment. It is a long-term game, but right now we're in extraordinary circumstances and there's no better time to take extraordinary measures.

The last speaker said we're so far off from being able to consider this, but I would say that now is the time. Sure, there are a lot of other barriers and complexities to it. That is why we need to be talking about it right now.

I hope that answers the question.

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

That certainly answers the question, but I want to take it a step further.

As you said, there's a lack of preparedness right now. Let's imagine a scenario where the World Trade Organization waived intellectual property rights for COVID-19 vaccines. That's what you want. As far as you know, other than India, which we know has capacity, would developing countries be ready right now to mass produce vaccines? Of course, intellectual property rights are an issue. However, you also need the expertise and the plants to produce vaccines.

[Jesse Whattam]

I do. There needs to be a global effort to support that effort. Even if the capacity is not there right now, there needs to be a global effort to invest in it worldwide. The waiver opens up that policy space for that to happen.

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

I want to make sure that I understand your proposal. In other words, to support this expertise, there needs to be a global effort. However, who will lead and fund this effort? I'm wondering how your recommendation could work.

[Jesse Whattam]

I think of C-TAP, which isn't being used, but there are structures there to pool resources and know-how. The waiver provides a will to do so and a global commitment to do so. The pharmaceutical companies could be doing voluntary licensing right now, but there is no push or consensus by the WTO to make that happen. C-TAP is one example of how that could play out.

[The Chair, Liberal, Judy Sgro]

We will go to Mr. Blaikie for six minutes.

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

Thank you very much.

Mr. Warner, I was hoping to come back to a comment that you made about eventually getting to the point where the waiver makes sense. If there are companies out there, and presumably there are....

One of the things in this conversation that I find very hard to believe is the suggestion that's been made by a number of witnesses at committee that somehow India, South Africa and other countries that are proponents of the waiver don't understand that waiving the IP rights isn't the end of it, that there isn't a lot more to do. Presumably they're talking to people who are indicating they have some manufacturing capacity and that intellectual property rights are a barrier or they wouldn't be devoting the time and energy that they have been in seeking the waiver.

Even if that capacity is a way down the road—which in fact would make sense, given what we've heard and people's reasonable expectations that manufacturing vaccines is not a simple process—isn't it hard for them to make those investments if they don't know they're going to have access to the intellectual property? Granting the waiver now allows those interested to know they're going to be able to make use of and access that IP, so they can start planning to bring production online in eight, nine or 12 months—whatever is going to make sense for them—as they try to satisfy the other aspects of production, such as technology transfer and skills transfer. However, if they don't know they're going to have access to the IP, then that's another significant barrier on the table.

I think the idea of the waiver is to take as many barriers off the table upfront as possible so that companies that think they can pull this off are able to proceed as far and as quickly as they can.

I wonder if you want to comment. If we wait another eight to 12 months to implement the waiver, that's an eight- or 12-month delay on this additional capacity, on being able to plan for the future and beginning to engage seriously in the other aspects of vaccine production.

[Mark Warner]

There are two separate issues that I think are important to keep in mind.

One is that within the existing WTO TRIPS agreement, there is an exception that allows countries to do compulsory licensing. That's why we have that as a function of our law. South Africa and India could invoke compulsory licensing.

Two, the waiver issue is slightly different. We, as Canada, could do that for ourselves. As we did at the beginning of this pandemic, we could have a waiver that would allow us to have a compulsory licence for treatments or vaccines for COVID, but for our domestic use.

Where the waiver comes in is it would allow us to export to another country. The waiver is all about whether we have a Canadian company that will waive this right so they can export to some developing countries. The funny thing about the waiver is it isn't so much facilitating tech transfer as it may sound at first blush.

The other point is that we're seeing voluntary licensing. Remember, Serum Institute of India, which likes to call itself the biggest vaccine producer in the world, is making AstraZeneca or this Verity product under licence in India. I believe Aspen is going to be making Johnson & Johnson in South Africa. They are the go-to company, so if you were in South Africa and you were going to license somebody and you've already got Aspen making Johnson & Johnson, I'm not sure where you would go in South Africa. You might make Aspen even bigger, so that Aspen would end up doing Johnson & Johnson, Pfizer and the rest.

Then you've got some other questions that we didn't have to ask 20 years ago, but now, with the passage of time, I think we know that we're.... Look at Serum Institute. Serum Institute was initially licensed to make AstraZeneca product for sale into the least developed countries, but they're selling to Canada and they're talking about selling to Europe because of the short supplies in Europe. That's not what anyone had in mind when we started talking about licensing to those countries.

We're in a whole different world. I do think there is an important part about tech transfer. We've seen that. That's why Aspen's there. That's why Serum exists. The question is whether you would do that with something that wasn't even in existence a year ago and that we can't even get produced with stability, as we see if you take a look at the front pages of the papers now about Johnson & Johnson in Baltimore or AstraZeneca in their Belgium plant. This is tough stuff. What happens if there's a mistake and everybody around the world sees that on CNN and decides they don't want any part of these vaccines?

It sounds good; it's just that we're not there yet. We might get there at some point when the technology becomes more standardized.

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

I do want to explore also—and maybe I'll go to Ms. Whattam for this—the moral dimension, because we talk about how the waiver isn't likely to spur vaccine production here in Canada, but in all fairness, I don't think that's ever really been the major claim that proponents of the waiver have been making. It's about world supply and it's about trying to address the current very real inequity in vaccine distribution globally by making more supply available and making it more available closer to places that aren't getting their fair share of the current vaccine supply.

I wonder if you could address a bit of that moral dimension for the committee.

[The Chair, Liberal, Judy Sgro]

Please be very brief, Ms. Whattam.

[Jesse Whattam]

Yes, definitely the core of this issue is the moral imperative. If you just look at the way the COVAX program is playing out right now, you can see that it's very clearly not sufficient. It's underfunded, and the pledge for two billion doses by the end of 2021 is nowhere near enough to reach global herd immunity. Right now, with the numbers in India the way they are, the supply from the Serum Institute isn't even being exported to the other 91 lowest-income countries that it was promised to at the rate that it was promised, which is an impossible decision to make, because when COVID is anywhere, it's everywhere, and the moral imperative is also that if it's not going to be stopped everywhere, then it's going to be everywhere.

[The Chair, Liberal, Judy Sgro]

Thank you, Ms. Whattam. I'm sorry, but I have to interrupt.

We go to Ms. Gray now for five minutes.

Go ahead, please.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair.

Thank you to all of the witnesses for being here today.

My first question is for the Centre for International Governance Innovation. In your opening intervention, you briefly touched on COVAX. We've heard that COVAX is underfunded, and yet Canada is the only G7 country presently taking vaccines from the program. Would you see this as a concern?

[Rohinton Medhora]

As we say in the brief, and we use our words carefully, Canada has the technical and legal right to take vaccines from COVAX. COVAX is a global fund. Canada remains the fifth- or sixth-largest contributor to COVAX, but it does go against—and this is the word we use—the ethos of COVAX. COVAX was meant to provide access to vaccines—to be purchased at market rates, by the way, so it does nothing about the IP and innovation and other issues for developing countries.

We, along with a couple of rich non-G7 countries, have accessed COVAX. I don't think that particular episode does much for our reputation as a global humanitarian country. To put it in the context of our larger contributions to COVAX, we are still net contributors, but on balance, I don't think that was very good optics, nor was it good policy in terms of preventing these other mutants from arising in other parts of the world.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

That's great. Thank you very much for that.

I have a couple of questions for Mr. Warner. It's good to see you back at our committee.

I want to touch on the proposed TRIPS waiver. In past meetings of this committee, we have heard from some experts on the importance of quality control in the production of vaccines and about how this waiver may reduce that ability. Would you agree with that assertion? Do you have any comments on that?