Health committee  Subject to the strictures of the regulatory process and the duty to consult, etc., yes.

Health committee  We've been consulting on reforms to our own pricing guidelines since June of 2016. Health Canada put out a proposal in May of 2017 to sort of entrench the types of changes that were being contemplated in our guidelines discussion paper in a white paper. That was in May of 2017, and that eventually morphed into an actual set of proposed regulations that was pre-published in the Canada Gazette, part I, in December of last year, followed by a 75-day consultation period.

Health committee  I agree with you that it's problematic. That's why, in the three elements of the regulations I outlined earlier, one of the proposals is to enable us to get access to that information and regulate on the basis of the real prices that are being paid in the market. We would really like to do that.

Health committee  No.

Health committee  Yes.

Health committee  No, it was 10% of sales.

Health committee  Well, it was a handshake agreement. It's not a contract, so they're in breach of a handshake undertaking, I suppose, which—

Health committee  It was memorialized in a letter from the then head of what was called something different at the time, but is now called IMC, and the minister of consumer and corporate affairs at the time. The industry really takes issue with the way we are defining the scope of R and D today.

Health committee  That number, as far as I know, originates with a Tufts University study. I started off years ago in patent policy for the federal government. I was eventually transferred to—

Health committee  Right.

Health committee  No, not really. As I said, it could be compelled in a hearing context, but it's really difficult for most companies that are large multinationals with a huge inventory of products to disentangle the actual R and D that was spent, including the failures that got your product to market.

Health committee  You're in good company.

Health committee  Well, it depends on the circumstances. Oftentimes companies don't increase their price—

Health committee  That could work, I suppose, but again it's sort of outside our wheelhouse. I think I said that Innovation, Science and Economic Development would be better suited to answer those types of questions However, I think if we had the answer, the policy would be in place and we'd have a lot more clinical trials taking place in Canada.

Health committee  We do get that evidence, and if it turns out that they're not complying with their price ceiling, then we'll take appropriate action. An investigation will be commenced, and enforcement action will be taken; it could go to a hearing. The reality is, as I mentioned, ceiling prices based on list prices bear less and less resemblance to the outcomes of those negotiations between the pCPA and the companies.