Mr. Speaker, this is a very interesting bill that has been presented to us, Bill
C-311. I want to commend the purpose and the intent that prompted this private member's bill.
There is no question at all that we all would like to reduce the cost of medicare in Canada and in the provinces and in the individual lives of people. We would like to do that but we have to recognize within this context that we are entering into an extremely controversial area. In fact, the practice of medicine itself is rather controversial.
The whole concept seems to be evolving around the fact that there is a single variable that will change the cost of medicare and that is the matter of the cost of pharmaceutical drugs. Admittedly it is one factor and it is a variable. To suggest that it is one of the major points has as much to do with the cost of the drug itself as it does with the practice of medicine in the first instance. There was a time when the prescribing of drugs was not as rampant as it is today.
With all due respect to the intent and purpose of the bill, I think I will have to take exception to this bill on several grounds. The first of these has to do with our position in the overall world. We do not live any longer as an island called Canada on the globe. We must compete on an international, global basis.
We need to recognize that there are a number of countries that have accepted the 20 year patent protection. There is a list of not less than 50 countries that have accepted this as a way of doing business. If we are going to compete in that world we need to recognize that it is the field on which we are playing.
Let me give a sample of some of these countries: Germany, Israel, Japan, the Netherlands, South Africa, Sweden, Switzerland, Thailand, the United Kingdom and the United States of America. There are a number of these countries which have used 20 year patent protection. I could name more countries.
We need to recognize that there is a major competitive issue at stake here. I want to suggest that this bill take recognition of the fact that essentially the production of pharmaceutical drugs in the first instance is basically a knowledge based industry. Knowledge does not find itself limited by political boundaries. Knowledge can leave as easily as it comes.
The one thing we want, which leads me to the second point as to why we want to protect this particular patent, the intellectual property, is the business of attracting the skill, the ability, the knowledge and the know how of doing the research necessary in order for us to be competitive in the international field.
I would like to refer to what happened in 1987. With the 1987 amendments to the Patent Act the Pharmaceutical Manufacturers' Association of Canada made a public commitment that its members would increase their annual R and D expenditures as a percentage of sales to 8 per cent by 1991 and 10 per cent by 1996.
I just received the annual report of what actually has been the experience. As a result, the ratio of R and D expenditures to sales revenues for the patented pharmaceutical industry was 11.8 per cent in 1995, up from 11.3 per cent in 1994. They have lived up to their particular suggestion.
I would like to give the House some numbers that I think illustrate this rather well. In 1988 the amount of money spent on R and D expenditures by the pharmaceutical companies was $165.7 million. Then it rises all the way to 1995 when that number went to $623.9 million. Somebody will immediately suggest that it includes certain government grants. Indeed it does. In fact in 1995 the government grants to the pharmaceutical industry doing research were $7.6 million out of $623.9 million, a small amount.
We then also have to ask in what areas these companies have done their research. Have they done their research in basic research, which is the curiosity driven research, how we find a new idea, a new way of treating various ailments and applied research. The distribution goes this way: 22.2 per cent of the R and D expenditures were for basic research which is the basis on which new discoveries are built. If we do not have that, we do not have advances in knowledge and we do not move back the walls of ignorance. There was 61.9 per cent given to applied research.
What else would one expect? Here we have manufacturing agencies that recognize the need for new knowledge to be developed and at the same time how that knowledge can be commercialized. Logically they would put more money into that area. In total, that was $623.9 million in 1995 alone. Look how many jobs that created.
When the hon. member presented his bill he said that jobs were lost, some 1,200 in Ontario and some 800 in Quebec; $623.9 million was spent, whether it was the research people who lost their jobs or whomever, I do not know, but $623.9 million created other jobs. I wish the member had indicated that perhaps not only were some jobs lost but there were a lot of other jobs created.
The net position on $623.9 million has to have created some jobs. Therefore, I will not accept that we had a net loss in this particular area. When we put $623.9 million into the economy, nobody can tell me there is a reduction in the number of jobs in Canada.
I would like to move now to a couple of provisions in the bill itself. Bill C-311 is suggesting that we replace the Patented Medicine Prices Review Board with a patented medicine review board, taking out the word prices. The member is probably suggesting that the marketplace will maintain that the prices be
kept in some sort of a competitive position. Essentially if the playing field were level, I would agree.
However, knowledge and the advancement of knowledge sometimes require special protection which is exactly what the patent law does. It provides protection until that knowledge has grown to the point where it can play its competitive role in the world and where the marketplace has indeed determined the prices.
The important thing to remember here is that the Patented Medicine Prices Review Board has in fact been able to control the prices during the time when the pharmaceutical companies did have a monopoly in the distribution of those drugs. There is evidence and there is an annual report. If it has not been the case, then the time has come to review what that board is doing. If it is not doing its job, then the House of Commons needs to take issue with that board. It does not become a matter of standing up and saying that this ought not to be the case. Therefore, we have to be careful as to just exactly what it is that this bill does.
In conclusion, I need to remind all members that the provisions of Bill C-91 are coming up for a major review. At that time we need to look not only at this particular aspect but at the whole business of medicine and how pharmaceuticals fit into the medical patterns as such in Canada. We have a big job before us. It is a challenging and wonderful job. I wish that we and medicine would do the right thing.