Mr. Speaker, it is a pleasure to have this opportunity to speak to the bill introduced by the hon. member for the NDP, a bill that basically, and very briefly, will reduce the protection granted the drug manufacturing sector. There are patents that protect the industry for a period of 20 years but in fact have an effective duration of about ten years.
We should realize that it takes about ten years from the time a molecule is discovered that will be used to manufacture a drug to the actual marketing of the drug, so that unlike other products, where the actual marketing takes place very quickly after the development of a product, the actual protection of the patent extends well beyond the 20 years allowed by law, because the initial date applies from the time the new molecule was patented.
Of course when we are talking about the pharmaceutical industry, we are talking about one of the major sectors of the economy, especially in Quebec and Ontario, and in other provinces as well. But when we are talking about the innovators, the companies that do research and discover drugs in Canada, they are mainly concentrated in Quebec and Ontario.
In fact, more than half are located in Quebec, in the Montreal area, and quite a few in the Toronto area as well. This is the reason why both the Montreal Chamber of Commerce and the Toronto Board of Trade are recommending not only that we maintain a legislative framework to support and protect pioneering industries, but that we upgrade it.
As we know, this debate has taken place twice since 1987. The first time, in 1987, the law was changed to extend patent protection. If I recall, it was extended to seven years. The member is suggesting that we revert to a system of compulsory licences. In 1993, the Conservative government returned to the attack, increasing patent protection for drugs to 20 years.
Of course, there were very active lobbyists on both sides. These people are always part of the picture. Behind the humanitarian reasons often quoted to give less protection and allow for drugs to be copied earlier, on the grounds that they would be cheaper, there are the industries which make a lot of money copying these drugs.
It should be emphasized that since this bill came into effect, we have seen an increase in research activity in the pharmaceutical industry, and an increase in job creation both in the area of patented drugs and pioneering industries and in the area of generic drugs, or copied drugs. Both sides have been expanding.
This bill was aimed at striking a balance. It is true that there is always a risk when granting a patent. One should be very careful and monitor the situation closely. There is a risk of creating a monopoly, pushing prices upwards. The government created the Patented Medicine Prices Review Board to keep track of the situation. There are standards, guidelines that ensure that, when the drugs developed reach the market, their price will not be unreasonably higher than the costs involved.
So the review board tables reports. What do these reports say? I heard the member sponsoring this bill talk about sky-rocketing costs and give us some examples. In fact, since 1987, the cost of patented drugs has increased only by 2.1 per cent a year. According to the report of the Patented Medicine Prices Review Board, the increase has been lower than inflation. It is always appropriate to monitor the situation, but in fact the legislation and the regulations have been well enforced and are very efficient.
Sky-rocketing costs might be due to other factors. If health costs are increasing in Canada, it is also because the population is aging. There are other similar phenomena that have to be considered. I would like to remind you that, in 1993, when health costs were being examined throughout Canada, 3 per cent of expenses in the health system were related to patented drugs, that is, drugs coming
from the innovative industry. We must be careful, therefore, not to fall into the trap and stick to the facts.
I would like to remind the hon. member that the current act comes up for review in 1997. We are talking about spring 1997. Of course, people are wondering if election deadlines will change the situation. We will see. However, the current act must be reviewed in 1997.
At that time, each of the industries and groups concerned will have an opportunity to be heard and explain why they want changes, why they want more or less patent protection and how. They will have an opportunity to present their cases.
It would be premature for Parliament to draw conclusions from a very partial analysis of the situation-which, according to the arguments I heard, is not always connected to the actual figures-and pass this bill reducing patent protection to 17 years, as the hon. member proposes.
We know that in reality this would be reduced by three years. It is a lot. It is important to note that putting a drug on the market is very expensive and time-consuming. Many research initiatives never pan out. In all areas involving research and development, many research efforts never lead to real-life applications. Considerable amounts of money are invested in R and D.
If we limit the protection they enjoy and their ability to market their products and recoup their investments, how will this translate into reality? There will be a drop in research activities. The focus will shift to generic products, duplicating and selling various drugs.
This brings us to the social aspect. All of us in this House expect help if we take ill. We expect to have access to drugs or care, palliative or otherwise. Now, for these drugs to be available, someone has to do research in their applications. Unless our legal, fiscal and economic framework does not create incentives, these drugs will just not be produced and we will find ourselves with another problem on our hands: not having access to the drugs we want.
Caution must be exercised in saying that drug patent protection should be reduced on compassionate grounds. This has a serious and major perverse effect. Therein lies the social dimension.
Should the act be amended, the economic factor would also affect the balance that currently exists whereby, in Quebec and in Ontario in particular, a lot of people are involved in research and development.
Let me give you a few figures. In Quebec, there are over 6,000 jobs in the research sector for this industry. This is a large number. These jobs are in areas where knowledge and technology are important, and where major infrastructures and investments are required, in excess of $600 million for the companies located in Quebec.
So, we are talking about 6,000 jobs and, in 1994, the most recent data I have indicate that research activities totalled more than $240 million. This is quite a sum of money. The government itself could not do as much in the present context. Who is going to do the research if, through this bill, we reduce the incentives these companies have? Many of them are concentrated in the Montreal area. Some of them are also located in the Laval area, in Metro Toronto and just outside Toronto.
We find many generic drug companies in Ontario and Manitoba, and a few in Quebec. There has been a slight shift since 1993.
We now have a situation that makes development, research and job creation possible. The hon. member talked about jobs. Jobs have been created in both generic and new drug companies. It has been possible to achieve a good balance under the present legislation. Should we be doing more? We will have to take a look at that. Do we need to monitor more closely price control? We will also have to consider this issue.
Right now, the Patented Medicine Prices Review Board argues that the situation is under control and that everything is going relatively well. Under these circumstances, it would be ill-advised to jeopardize an industrial structure that is so important to our future. We need think only about the existing relationship between the scientific community, the universities, and the companies that have developed in the last few years a very important rapport, which will give our country an edge in this area.
Lastly, I want to remind the House of our international obligations. Canada has some obligations under NAFTA, the World Trade Organization, what was formerly known as the GATT. If we pass this bill, we will be violating these international agreements, which require us to provide the same protection we were giving in 1993. We have to be very careful before adopting such a bill and make sure that what we are doing will be good for employment and medical research and will promote economic growth in Quebec as well as in Ontario and in the rest of Canada.
In this regard, this is not a votable bill, but had it been a votable bill, we would have had to vote against it. I invite the member to come and express his views next spring when a broader and more public debate takes place. We will get the facts straight and review the situation.