Madam Speaker, I am pleased to rise today to begin third reading of Bill S-17, an act to amend the Patent Act. Bill S-17 is the end result of two separate World Trade Organization challenges, one by the European Union and one by the United States, against different aspects of Canada's drug patent regime.
As a result of these challenges the WTO ruled that certain aspects of our drug patent regime, namely stockpiling and our old act patent term, were inconsistent with our international obligations under the WTO agreement on trade related aspects of intellectual property rights, also known as TRIPS.
On a more positive note, Canada won an important aspect of the challenges when the WTO validated our early working exception that accelerates the market entry of generic drugs by a period of three to six and a half years.
Overall these rulings neither undermine nor threaten the underlying balance of Canada's patent regime. They do, however, mean the Patent Act needs to be amended to comply with our obligations under TRIPS.
The bill before us deals exclusively with issues of patent term and stockpiling. Its primary objective is to bring Canada's Patent Act into compliance with the WTO ruling. It is very important therefore that we proceed expeditiously with the amendments before us because the WTO has imposed an August 12 deadline for compliance with the patent term ruling.
The amendments in the bill have deliberately been kept as simple and straightforward as possible to help meet the deadline. If we do not respect the deadline we could face retaliatory trade sanctions. To avoid such a result requires that the bill be passed by parliament and given royal assent before the summer recess.
Some would say that Bill S-17 would alter the balance of Canada's drug patent regime. That is not the case. We have demonstrated that the amendments would not increase the price of drugs. They would affect only a small percentage of drugs on the market, less than 1%, and would not affect the speed at which generic drugs enter the market.
This demonstrates that the amendments would not undermine the balance of Canada's drug patent regime, a balance that rewards innovation and guarantees access to affordable drugs for all Canadians.
Because some have expressed concerns about how a change in the terms of patent protection would affect drug costs, I will go into the issue in more detail. We heard in committee that the number of commercially significant drugs that would benefit from patent term extension is approximately 30. That number is relatively insignificant when compared to the 5,200 patent and non-patent prescription drugs available to Canadians. The average term extension for patents on the 30 drugs I mentioned is less than six months.
The proposed amendments would not increase the overall price of drugs. Rather, they could delay by a few months the potential savings offered by generic alternatives. Even under the most generous of assumptions, the forgone savings would amount to less than one-tenth of 1% of drug sales over the next eight years.
Our current patent regime serves Canadians well. According to the latest report from the Patented Medicine Prices Review Board, prices in Canada are 11% below the median foreign price and Canadians pay 40% less for patent drugs than do Americans. The amendments contained in Bill S-17 would not hinder the PMPRB's role of ensuring that Canadians do not pay excessive prices for drug prescriptions.
Bill S-17 has undergone scrutiny by committees in both houses of parliament. The Senate Standing Committee on Banking, Trade and Commerce held hearings in March and April. As a result of the hearings I understand that committee members developed a common understanding that Bill S-17 was necessary to comply with WTO rulings.
On the more divisive issue of NOC linkage regulations, there was a general recognition from the Senate committee that they fell outside the scope of Bill S-17 and that now was not the time to address broader intellectual property rights.
The House of Commons Standing Committee on Industry, Science and Technology held hearings in May. I would venture to say that there was a general recognition by most members of the committee that meeting our international obligations was important and that the passage of Bill S-17 was necessary to do so.
On the issue of the NOC linkage regulations, we heard that the early working exception and the NOC regulations, taken together, were an important part of our balanced approach. For the most part, members of the committee agree that it was a matter for another time. The immediate priority is the passage of Bill S-17 before the summer recess.
Bill S-17 contains the amendments necessary to bring the Patent Act into compliance with the WTO rulings. Neither the WTO rulings nor the proposed amendments would undermine the structure of the Canadian patent regime as it currently exists.
It is very important that innovation continue and be rewarded and that Canadians continue to have access to affordable drugs. The government's objective is to build a world class leading economy driven by innovation, ideas and talent. We need a strong and modern intellectual property framework to do so. The amendments contained in Bill S-17 would help maintain Canada's leadership in the global knowledge based economy.
I urge all members on both sides of the House to work together and move expeditiously to support the bill.