Madam Speaker, I am pleased to speak to Bill C-9, particularly because I feel this is a historic moment. In fact, it is not every day that parliamentarians agree to act with diligence and speed. It is a historic moment because the members of the Standing Committee on Industry, Science and Technology have worked very hard, entirely without partisanship, and also because it is an important contribution to the north-south dialogue.
The bill before us at report stage is a legacy from the previous prime minister, who must be recognized. It is first and foremost an extremely significant contribution to the advancement of the north-south dialogue.
What will happen if the bill is passed? Canada had rejected the compulsory licensing program. Before the Conservative government amended the Patent Act, it was possible, indeed compulsory, to obtain a licence, not only for the approval of a drug but also for its sale and marketing. In 1989, the licence system was terminated. Once a patent holder has been recognized by the commissioner, there is a 20-year period of exclusivity. Nevertheless, this period did not permit the export of pharmaceuticals to the third world.
The bill before us suspends this process. It proposes that we re-establish—and I think it is important to say this—the licensing system, for exports to a specific list of countries. What is the situation now? It means that it will be possible for generic companies to negotiate contracts to supply designated developing or third-world countries.
I understand that in its original form Bill C-9 contained a much more restrictive list. The government, responding to the arguments of various NGOs, decided to expand the list. That deserves to be recognized.
This, then, is the situation. A generic company will be able to satisfy or fill an order from a government on the list of eligible countries. What is known as the right of first refusal has been set aside. This right applied to situations in which a generic company could have negotiated a supply contract with a third-world country, but would have had to give up the contract to the initial patent holder. The NGOs were worried, saying that this would be dissuasive, that it was not the kind of practice or legislation that would encourage generic companies to negotiate to supply the designated countries.
Under the amendments introduced by the government, the right of first refusal will not only no longer exist, but the innovative companies will not be required to reveal their contracts before they are signed, even when there is still a patent holder.
Second, generic drug companies must still obtain a licence, at first on a voluntary basis. If a licence is denied, the Commissioner of Patents will decide and it will become a compulsory licence.
So clearly, the fundamental mechanism underlying the bill is a schedule designating countries eligible to import pharmaceutical products. Generic drug companies will be able to ensure adequate supply, but they will first have to obtain a compulsory licence. It must be noted that, out of respect for our international obligations, companies granting the licence, initially voluntary, will receive royalties. There is a formula for calculating these royalties. They should be the equivalent of 2% of the product's commercial value.
But an index has been provided that takes into consideration the United Nations' human poverty index, so that the allowable royalties for the patent holder could be less than 2%, which is also an extremely positive amendment for third world countries.
Some witnesses and some NGOs, as the member for Notre-Dame-de-Grâce—Lachine knows, asked for the right to contract directly with the manufacturer and the importing country. I believe that it would be a mistake for the government to give in to this demand.
I understand that some amendments to the legislation ensure that the identified entity can be an NGO, but the government, at all times, must be involved in the negotiations. This is normal, first because the subjects of international law, the ones with international sovereignty, are naturally governments. Second, those who will dispense and organize care, ultimately, are still governments. They are the ones responsible for this plan to provide public health.
I am pleased with what we have accomplished and with the increased role being given NGOs.
It is particularly vital to adopt this bill with diligence because of the three realities that must be kept in mind. Every year, 10 million children die of diseases relating to malnutrition which could have been avoided. As well, every year one million people, most of them children under the age of five, die of malaria. Every day, 8,000 people in the world die of HIV-AIDS.
The bill we are preparing to adopt with this splendid parliamentary unanimity that is being promised, must give particular precedence to HIV-AIDS. As hon. members are aware, HIV-AIDS is a terrible reality on certain continents, Africa in particular. When it was first discovered in the 1980s, here in Quebec, in Montreal, people had no idea of the extent to which this disease was going to ravage all of humanity. Resistant strains have developed in some of the African countries, and these require urgent attention.
If it were not for this bill we are preparing to adopt, whole segments of the population would not have access to anti-retrovirals. As hon. members may know, there is a resistant strain in Africa that differs from the HIV/AIDS we are familiar with in North America. It is our duty to do something about this, as a rich country, one with great wealth, even if ours is not a perfect country and we have our own problems relating to the supply of these drugs. Yet our reality as a country, in Quebec and in Canada, bears no relation to the realities in the third world, Africa in particular.
My colleagues in caucus know I have sometimes been critical of the innovative companies. I do not think I have ever been overly critical, but I have sometimes been harsh on them and I must now thank them for their maturity and compassion in agreeing fairly readily to grant voluntary licensing rights. Once the bill is adopted, we will be ready to move.
There are, of course, provisions in the bill so that, if there is no agreement on the royalty to be paid once the voluntary licence has been applied for, it will fall to the Commissioner of Patents to set the amount.
With the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, we met with the innovative companies, which are of course a very important industrial sector for Quebec, particularly the Montreal area.
I will stop there, since my time is up. It is my hope that this bill will be passed as promptly as possible, and I congratulate all the members of the parliamentary committee.