Madam Speaker, I am pleased to rise today to comment on Bill C-282.
As I mentioned earlier in the House, I congratulate the hon. member for having raised the question of drug prices, even though I believe the bill he proposes does not address the real problems.
As I said, the real issue is Bill C-91, which was adopted by the Mulroney government some time ago, and which extended drug patent protection. This extension, unfortunately, has added immeasurably to the drug prices paid by ordinary Canadians and our governments.
It is unfortunate because we must now act to control this increase in prices. In fact, the most significant aspect of the health care system at present is the increase in the cost of drugs, which puts even more pressure on our health care system.
Companies do need to make profits, as was mentioned earlier. When we talk about Bill C-91 and attacking the real causes of why our pharmaceutical products cost Canadians more and more, it has to do with reasonable profit making.
We know that pharmaceutical companies regularly rank number one in Canada in profits as a percentage of the revenues, as a percentage of their assets and as a percentage of their equity. As they are ranked number one in the country, the profits made in the pharmaceutical industry are actually higher than in any other industry in the country.
There have been claims that the cost of research and development are enormous. In fact, according to one American industry study, it costs up to $1.3 billion to develop an average new medicine.
A 2001 study by the Patented Medicine Prices Review Board states that of the 82 new patented drugs for human use developed at that time, total expenditures for all those 82 products were $1.06 billion. That averages out to about $13 million per new drug. We are talking about a factor of 1% compared to what is normally trotted out as a figure for actual research and development costs.
The question of drug prices is an important one. When we are talking about Canadians having to pay more for pharmaceutical products than they should, while at the same time we hear about record profits for the pharmaceutical industry, there obviously is a problem.
My colleague from Windsor West has actually proposed with his bill, Bill C-274, a way of resolving some of these problems. I will quote briefly a release put out by the member for Windsor West concerning Bill C-274. He mentions that brand name drug companies now list several patents on the same drug so that they can start the automatic injunction against competition again and again. This is ever greening. This keeps lower cost generic drugs that are not infringing patents off the market and forces Canadians to pay monopoly prices for their medicines longer than they should.
Canada's prescription drug costs are increasing by 15% each year, which is faster than any part of our health care system. Bill C-274 would help control prescription drug costs by making lower cost generic drugs available more quickly.
It is important to mention that from 1993 to 2003 the price of brand name drugs increased by 75% while generic drugs increased by 42% over that same period.
The Romanow commission and the Competition Bureau have called for a review of the drug patent legislation. The Supreme Court has described the regulations as a draconian regime. Obviously it is time to provide Canadians with clear rules to ensure access to prescription medicines is fair for everyone.
This brings me back to the issue of Bill C-282. Very clearly we have a problem. Canadians are paying far too much for pharmaceutical products, which is as a result of Conservative policies that were first opposed and then continued by the Liberal government.
Does Bill C-282 in any way address those serious problems? I believe that it does not. In a sense it would allow multinational drug companies, which are mostly American based, to then dictate, in a way, what conditions should be attached to our drug exports to the U.S. retail market.
It is clear that pharmaceutical companies would love to level the price playing field between Canada and the U.S., not by lowering prices to the Canadian level but by jacking them up to the U.S. level. I think this would be a mistake.
The American drug insurance system does not cover 60 million American citizens. If we look at the course of any one year, 40 million Americans at any particular point in the year are uninsured. As the hon. member for Hochelaga mentioned earlier, 2 million of those 40 million to 60 million Americans in any one year are trying to escape the fact that they do not have access to medical insurance by purchasing through Canada.
When we talk about health care costs, 14% or more of GDP in the United States is devoted to health care, even though those 40 million to 60 million Americans are not covered by medical insurance.
The United States has outrageously high drug prices because its drug pharmaceutical companies resort to massive and very costly advertising for their products and the cost of advertising is built into the price of their products. This, as we know, is banned in Canada.
We now have a situation where American pharmaceutical companies would like us to cut off access to Americans who are uninsured and Americans who are paying too much for their pharmaceutical products.
I believe we should be seeking some sort of legislation that would provide relief and would address the issue of an importing country, such as the United States, using its laws to evoke either public policy safety or health safety technical standards with the primary goal of frustrating or eliminating Canadian exports. We certainly have seen that with softwood lumber and with BSE where laws were put into place as basically fences for Canadian exports.
We need to ensure that our exports from legitimate industries in Canada are protected but at the same time we need to ensure that Americans, who are desperate because of the lack of full medical coverage, have access to our medical products when it does not affect the Canadian national interest.
We know that a number of speakers in the United States have cast doubt on our pharmaceutical products by questioning our safety standards, but we all know that is ridiculous. Canadian safety standards are some of the strongest in the world.
We do need to deal with this issue but we need to deal with it in the Canadian context. I will come back to my initial comments that the real issue is the question of pharmaceutical costs and how much Canadians are paying now because of extended patent protection. We should be looking at a regime that provides for recouping research and development costs but which does not cost an arm and a leg for the Canadian taxpayer just to fuel industry profits in the pharmaceutical sector that are without parallel elsewhere in the country.