Thank you, Mr. Chair.
Good morning, my name is Grant Malkoske. I'm vice-president of strategic technologies at MDS Nordion. Accompanying me is David McInnes, vice-president international relations. We'd like to thank you for the invitation to appear before this committee on this most important matter.
l would like to mention up front that we were unable, regrettably, to have our remarks translated into French because of the short notice we were given to appear.
MDS Nordion is an Ottawa-based life sciences company with over 700 employees at locations in Laval, Quebec, Vancouver, and Belgium. As a leading supplier of medical isotopes, we welcome this opportunity to provide our perspective on the 2007 isotope supply shortage event.
This event had a significant impact on medical isotope production and our ability to supply medical isotopes to the nuclear medicine community and, in turn, that community's ability to supply to hospitals, physicians, and patients. This event has significantly damaged Canada's global reputation as a supplier to the nuclear medicine community and ours as well.
It is important to understand that there is a sequence of steps in the medical isotope supply chain before patients are actually treated in a hospital. These steps involve a reactor, a processor, a radiopharmaceutical manufacturer, and a hospital or radiopharmacy.
The AECL NRU reactor is our primary source of medical isotopes. MDS Nordion is the processor of these medical isotopes at our facility in Ottawa. It is important to note that MDS Nordion is not the direct supplier to hospitals. We distribute medical isotopes to our customers, radiopharmaceutical companies, all of whom are based outside of Canada. Our customers, in turn, manufacture the radiopharmaceuticals and distribute them to hospitals and radiopharmacies in Canada and worldwide. There are two American companies that are our customers and supply all of Canada's radiopharmaceutical products.
Every day NRU and MDS Nordion-produced medical isotopes enable some 5,000 nuclear medicine diagnostic tests and cancer therapies to be performed in Canada alone. Furthermore, Canadian-produced medical isotopes are responsible for supplying a total of over 50% of the world's medical isotopes, which would apply to some 60,000 procedures per day.
One important aspect in this supply picture is the global production capacity. NRU is the most reliable reactor in the world for medical isotope production. Its supply reliability exceeds 97%. There are only three other sources to call upon for backup supply: South Africa, Belgium, and the Netherlands. If one of these reactors goes off-line, NRU can quickly ramp up to meet 100% of the additional demand. However, the reverse is not true, as we saw last November and December.
If NRU is off-line for more than seven days, no other foreign reactor or combination of foreign reactors can fully fill the supply gap left by NRU. Even with the world's other reactors ramping up to capacity, there was still approximately a 35% total global shortage in medical isotopes. That gap would have persisted if the NRU reactor remained off-line.
On the evening of November 21 we were informed that NRU would not be restarting after its scheduled shutdown. At that point it was not clear when the reactor would resume isotope production. It is important to understand that the information we were provided was in constant flux with regard to resolution options and restart schedules.
Nevertheless, we immediately initiated our contingency protocol for such emergencies. With only two days of inventory remaining, we immediately began notifying affected customers, the radiopharmaceutical manufacturers. We remained in close contact with them over the course of the outage period.
On the morning of November 22, in a meeting with AECL, we were informed of the potential extent of the NRU outage. We advised AECL that this outage would cause a shortage of global supply of approximately 30%.
On the afternoon of November 22, we attended a regularly scheduled meeting arranged by AECL with Natural Resources Canada and us. At that meeting we reiterated the estimated impact of this outage on global supply.
On November 23, we contacted other suppliers in South Africa, Belgium, and the Netherlands in an attempt to source backup supply. Over the course of the outage event, we were in daily contact with these other isotope suppliers.
We also took a series of additional steps to try to facilitate isotope supply: we obtained from the U.S. Food and Drug Administration approval to combine any available backup supply in any proportion; we contacted the Belgian nuclear regulator to validate the shortage crisis and enable special dispensation for increasing processing limits at the Belgian processing facility; and we shipped licensed containers to our suppliers around the world to facilitate immediate shipments should any material become available that could be shipped to Canada.
Despite these persistent attempts to source backup supply, we were only able to get a marginal amount of isotopes from abroad, about 20% of what we needed.
All backup received by MDS Nordion prior to the time that Bill C-38 was passed on December 12 came from South Africa. We were not able to get any backup supply from Europe.
We believe we acted swiftly and worked diligently to address the medical isotope supply shortage caused by this outage. However, the reality is that there is no source of backup supply that can fulfill the worldwide gap that NRU creates as a result of an extended shutdown. Clearly, it is imperative that government, industry, and the nuclear medicine community collectively find a long-term solution for the reliable supply of isotopes from Canada.
Thank you for the opportunity. We're available for your questions.