INST Committee Meeting

37th PARLIAMENT, 3rd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Wednesday, March 10, 2004

º

1605

The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.))

Mr. Brian Masse (Windsor West, NDP)

The Chair

Mr. Brian Masse

The Chair

Mr. Brian Masse

The Chair

Mr. Brian Masse

The Chair

Mr. Brian Masse

The Chair

Dr. Frederick Abbott (Edward Ball Eminent Scholar, Professor of International Law, Florida State University College of Law, As Individual)

º

1610

The Chair

Dr. Frederick Abbott

º

1615

The Chair

Mr. John Kelsall (President, Health Partners International of Canada)

º

1620

The Chair

Mr. Kevin Perkins (Executive Director, Canada-Africa Partnership on AIDS)

º

1625

The Chair

Mr. Dave Toycen (President, World Vision Canada)

º

1630

º

1635

The Chair

Mr. James Rajotte (Edmonton Southwest, CPC)

Dr. Frederick Abbott

Mr. James Rajotte

Dr. Frederick Abbott

Mr. James Rajotte

Dr. Frederick Abbott

º

1640

Mr. James Rajotte

Dr. Frederick Abbott

Mr. James Rajotte

Mr. John Kelsall

The Chair

Hon. Joe Fontana (London North Centre, Lib.)

º

1645

Dr. Frederick Abbott

Hon. Joe Fontana

Dr. Frederick Abbott

º

1650

The Chair

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ)

Dr. Frederick Abbott

Mr. Paul Crête

Dr. Frederick Abbott

º

1655

Mr. Paul Crête

Dr. Frederick Abbott

The Chair

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)

Dr. Frederick Abbott

Mrs. Marlene Jennings

Dr. Frederick Abbott

»

1700

Mrs. Marlene Jennings

Dr. Frederick Abbott

Mrs. Marlene Jennings

Mr. Dave Toycen

Mrs. Marlene Jennings

Mr. Dave Toycen

Mrs. Marlene Jennings

Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.)

Mrs. Marlene Jennings

Mr. Dave Toycen

Mrs. Marlene Jennings

»

1705

Mr. Dave Toycen

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Brian Masse

Dr. Frederick Abbott

Mr. Brian Masse

»

1710

Dr. Frederick Abbott

Hon. Joe Fontana

The Chair

Dr. Frederick Abbott

The Chair

Mr. Brian Masse

Mr. Dave Toycen

Mr. Brian Masse

The Chair

Mr. Andy Savoy (Tobique—Mactaquac, Lib.)

Dr. Frederick Abbott

Mr. Andy Savoy

Dr. Frederick Abbott

»

1715

Mr. Andy Savoy

Dr. Frederick Abbott

Mr. Andy Savoy

Mr. John Kelsall

The Chair

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CANADA

Standing Committee on Industry, Science and Technology

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NUMBER 006

l

3rd SESSION

l

37th PARLIAMENT

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EVIDENCE

Wednesday, March 10, 2004

[Recorded by Electronic Apparatus]

º  (1605)  

[English]

    The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good afternoon, everyone.

    I am pleased to start this Wednesday, March 10, meeting of the Standing Committee on Industry, Science and Technology as we continue our study of Bill C-9.

    We appreciate the indulgence of witnesses as we took care of a vote in the House of Commons. It is an important bill.

    We are pleased to have with us representatives from the Health Partners International of Canada; the Canada-Africa Partnership on AIDS; World Vision Canada; and, as a professor of international law, Frederick Abbott.

    Without any further ado, I'm going to--yes, on a point of order, Brian.

    Mr. Brian Masse (Windsor West, NDP): Thank you, Mr. Chair.

    I only wanted to clarify, at the end of the last session, Mr. Fontana indicated that the right of first refusal was off the table. I think we need to have some clarification of that.

    The Chair: Mr. Masse, we're going to be starting that process tomorrow. We will talk about amendments and that tomorrow.

    Mr. Brian Masse: What is the government's actual position?

    If the parliamentary secretary is giving an indication that he has different information to what the committee is working with, I think we have the right to--

    The Chair: Brian, I'm sorry, your point of order is not a point of order. If you want to chat with the parliamentary secretary afterward, you may, but we're going to be dealing with amendments starting tomorrow at 11 o'clock.

    I remind members to be here on time, and we will do that then.

    I should remind members that Mr. Louis, who was scheduled for the first hour at 3:30, could not make it for personal reasons. We have asked our witnesses, who are here at the table now, to come a bit earlier, and we appreciate them doing that.

    Mr. Brian Masse: With all due respect, Mr. Chair, I think it undermines your chair, and I think it undermines the committee's work, when we have different information that the government has, or has planned, as opposed to what we have been dealing with here.

    The Chair: Mr. Masse, the minister herself said, in her opening remarks, that the government was open to amendments.

    Mr. Brian Masse: Apparently, it is off the table, from the parliamentary secretary.

    The Chair: There is no secret about that. I think tomorrow is the forum in which we can discuss amendments, including amendments that you may have to bring forward as well.

    Mr. Brian Masse: Well, I still object.

    The Chair: With that, I'm going to ask Professor Abbott to speak.

    We will go in the order that you are on the agenda. I will limit the opening remarks to five-plus minutes, but allow me to use my judgment on that.

    Mr. Abbott, we ask you to start. Thank you.

    Dr. Frederick Abbott (Edward Ball Eminent Scholar, Professor of International Law, Florida State University College of Law, As Individual): Good afternoon.

    I'm honoured to be here to speak to this distinguished committee on a matter of such vital importance to the world community.

    It's of course a great thing that the government and people of Canada have stepped forward to address one of the most serious problems confronting individuals throughout the world, that is, the lack of access to affordable medicines.

    I prepared, and it was distributed to committee members, two submissions: my prepared remarks and an annex to those remarks.

    One of the principal objectives of the main remarks was to address the so-called right of first refusal in the present version of Bill C-9. I understand that a statement was made yesterday by a member of government to the committee that this right of first refusal is now off the table. I'm not quite certain what that means in a Canadian legislative sense, but there appears to be at this stage a fairly wide recognition that this aspect of the bill is very fundamentally flawed.

    The annex attached to my principal remarks addresses in some detail the alternative to the right of first refusal put forward by the research-based patent holders. The annex addresses the ways in which that proposal is unrealistic, unworkable, and anti-competitive. It remains very important for the committee members to appreciate why that is so. Because I have a very short time to address the members, I'll give you only a synopsis of my prepared remarks and identify an important and attractive alternative to Bill C-9.

    I'd also like to briefly note that in discussions with the clerk, I understood that I perhaps might have 10 minutes to make these opening remarks, so with whatever consideration, you may take that into account.

    The decision on paragraph 6 was negotiated intensively over a period of close to two years, following extensive preparations of backgrounds and analysis, policy review, meetings in and outside of Geneva, and the tendering and review of multiple draft texts. In the November to December 2002 period, these negotiations proceeded virtually around the clock. Throughout these negotiations I worked closely with developing country delegations that played a major role in the negotiations. These negotiations were undertaken by delegates who knew what they were doing. They're among the best and brightest of their respective countries. We were besieged endlessly with proposals and criticisms from industry and NGOs.

    There's been some suggestion here that if only the parties had given some matters additional thought, some different substantive and procedural elements would have been included and oversights would have been corrected. This is not true. Every line of the decision and its relationship with the TRIPS agreement was painstakingly considered by all sides. Consensus was reached and compromises on all sides were made, ultimately reflecting a very delicate balancing of interests.

    The terms of the decision on paragraph 6 are not accidental. And the decision must be read in tandem with the TRIPS agreement, which was subject to eight years of negotiations with a very extensive background in negotiating history.

    The foremost objective of the decision on paragraph 6 was to facilitate the low-priced supply of medicines by making the market more competitive for the benefit of countries with insufficient or no manufacturing capacity in the pharmaceutical sector. The way to create a competitive market in pharmaceuticals is to encourage generic producers.

    There was a suggestion in earlier testimony from the patent holder industry that this is an historic opportunity for the patent holders and generic producers to work together to solve the access to medicines problems. With all respect, accepting this as the basis for Bill C-9 ignores the reality of the world pharmaceutical market and the history leading to developing country demands at the WTO.

    Patent holders and generic producers are fierce antagonists. They are fighting constant battles in courts around the world and certainly here in Canada. The decision at the WTO was in no way predicated on friendly relations between patent holders and generic producers; just the opposite. It is based on the assumption that strong, new legal rules were needed to allow the generic producers to make and sell medicines.

    In this setting the right of first refusal in Bill C-9 is a monopolist's dream. It is designed to assure the generic producers will never be able to develop as a competitive source of supply. Patent holders will always be able to preempt negotiated contracts.

    It's remarkable that the right of first refusal was ever put in Bill C-9, but for the moment let's assume that everyone realizes that generic products would not be sold for export from Canada under a right of first refusal regime because patent holders would have an incentive to take up the contracts and generic producers would not behave so irrationally as to continue to pursue fruitless negotiating.

º  (1610)  

    Perhaps sensing that this committee would not in fact recommend the monopolist's number one dream, the patent holder industry made a counter proposal. It's equally difficult to explain what might induce the committee to recommend this alternative, which is unrealistic, unworkable, and also highly anti-competitive.

    The first part of the proposal contemplates a global multi-source bidding process, using a WTO website-based system. That part of the proposal neglects to mention that no such system exists at the WTO. It would have to be negotiated by the members and agreed upon by consensus that the last set of negotiations on this subject took close to two years, and there's good reason to believe WTO members would be skeptical of the exercise, not wanting the WTO further embedded in their public health decisions.

    Even assuming this hurdle was overcome some time in the next several years, the industry proposal hypothesizes a global bidding process, but then refers only to the Commissioner of Patents of Canada for making licensing decisions, yet Canadian companies would not be involved in the results of much of the foreseeable bidding. The proposal fails to address this, nor is it mentioned that Bill C-9 proposes to restrict its solution to a narrow scope of medicines.

    There are so many defects in this part of the proposal that it is not really worth bothering about if Canada intends to adopt legislation some time in the next few years.

    The second part of the proposal requires generic producers to invite the patent holder industry into its negotiations. So you take a situation in which you have a dominant market actor, the patent holder who is attempting to enter a market. Smaller and much less powerful generic producers are intending to enter the market, but they have to be sure to invite the dominant actor into the room, where the dominant actor can preempt any offer on price, and in circumstances in which the generic producer doesn't have a licence to make and sell the product and in which the patent holder will ask its own government to place pressure on the potential purchaser not to buy generic. The dominant actor would certainly be able to shut potential competitors out in this arrangement.

    I want to turn now to the key point. The key point is that the government proposal in Bill C-9 is constructed around the complete misapprehension of what's required under the TRIPS agreement, and building on this fundamental misapprehension creates an entirely flawed work product.

    Paragraph 31(b) of the TRIPS agreement establishes two very distinct regimes for how compulsory licences--

    The Chair: Sorry, but I'm going to have to get you to wind up.

    Dr. Frederick Abbott: Okay.

    The first is the ordinary commercial context, an automobile manufacturer seeking a licence for fuel injection technology. The second distinct regime is for emergencies, circumstances of extreme urgency, and public non-commercial use.

    In the first regime, prior negotiation with the patent holder is required. In the second, it is not. The critical thing is, HIV/AIDS is universally recognized as a global public health emergency, and addressing it by compulsory licensing requires no prior negotiation with the patent holder. Bill C-9 does not account for this very obvious and incontrovertible fact.

    There are other points I would like to make about the bill, but I want to conclude with my final observation.

    Yesterday I was in this building and spoke with some parliamentarians. Mr. Masse, a member of the committee, asked me if I knew the status of the Norwegian proposal to implement paragraph 6.

    This morning I telephoned the Norwegian ministry of foreign affairs and spoke with the chief negotiator for TRIPS at the WTO, who also worked on the implementation of the decision. Some months ago he had sent me a copy of the draft bill, and this morning he sent me a copy of the regulations.

    It's anticipated that they'll enter into force this summer.

    What struck me very forcefully on reading the Norwegian proposal was how consistent they are with the TRIPS agreement and the decision, compared to how inconsistent Canadian Bill C-9 is.

    The main points. The Norwegian regulations expressly contemplate that prior negotiations with the patent holder are not needed when addressing an urgent situation, such as HIV/AIDS in the importing countries. And the Norwegian regulations contain no list of medicines or diseases; instead, the importing country with the public health problem makes the determination about what it needs.

    There are small flaws in the Norwegian regulations, which, interestingly enough, the Norwegian delegate told me they had picked up from the Canadian Bill C-9, and they're sympathetic to changing them, but because of time limitations, I won't revert to that. I strongly recommend that the committee take a look at the Norwegian proposed regulations to implement the paragraph 6 decision. I'll be happy to provide you with a copy of those.

    Thank you very much.

º  (1615)  

    The Chair: Thank you, Professor Abbott.

    Any points you've missed you can make possibly during the question round. I believe our researchers do have the Norwegian legislation and the regulations, so thank you.

    We're going to proceed with John Kelsall, president of Health Partners International of Canada.

    Mr. John Kelsall (President, Health Partners International of Canada): Thank you, Mr. Chairman, for this opportunity to address an issue that is dear to the heart of an organization that cares much about the health care needs of those in the developing world. We are seized with bringing healing and hope to those who can't afford it.

    Health Partners International of Canada is a Canadian non-profit medical aid agency that provides donated medicines, medical supplies, medical devices, and vaccines to Canadian physicians and non-governmental organizations that treat people in many of the poorest regions of the world. We have also over the years worked in partnership with the Canadian International Development Agency and a number of government departments to bring medical aid to countries such as Cuba, Afghanistan, Bosnia, and Armenia.

    The medicines and supplies we receive are donated by Canada's health care industry. Thanks to their generosity, since 1990 HPIC has safely and effectively distributed desperately needed products to over one hundred countries of the world. The total value of this humanitarian aid to date approaches $130 million in wholesale value.

    Health Partners is here today to say how happy we are that the Government of Canada has strengthened, in the Speech from the Throne and now in legislation, its earlier commitment to help prevent death and to alleviate suffering related in particular to the shocking effects of the HIV/AIDS pandemic. I think it is safe to say that by now few in Canada fail to understand the scope of the situation, especially as it affects the poor in sub-Saharan Africa, but it is another matter to feel deep in our heart the devastating effects of this horrible reality of our age.

    Mr. Chairman, as recently as last fall I saw with my own eyes the faces of abandoned HIV/AIDS-impacted orphans and despairing mothers. During a needs assessment trip to South Africa, Mozambique, Swaziland, and Madagascar, I saw the emaciated bodies of dying men, women, and children, and I have come back a very different man. I think anyone who has eyes to see their desperate plight, ears to hear their sorrowful pleas, and a heart to feel compassion can only be moved to help in whatever way we can. For more than a decade our humanitarian organization has provided medical aid to the poor in Latin America, the Caribbean, Asia, eastern Europe, the Middle East, and Africa.

    Africa has now become the principal focus of our efforts. HPIC stands ready to work with our partners to deliver Canadian-sourced antiretroviral drugs to the points of focus and need in Africa. We can and do provide needed products that deal with opportunistic infections related to HIV/AIDS. These volumes, however, need to be greatly increased.

    We are also very much aware that HIV/AIDS drugs must be delivered in a coordinated framework that includes patient counselling, home-based care, trained medical professionals, blood testing laboratories, and the consistent supply of ARVs, other medicines, and medical supplies. HPIC therefore assists in improving the general health of people who would die were it not for the medicines and supplies that are generously donated to us by the Canadian pharmaceutical industry, primarily from the research-based companies.

    Mr. Chairman, we are very pleased that there is in Canada a broad consensus about the underlying purpose of Bill C-9, which is to give expression to the generosity and compassion of Canadians by facilitating access to pharmaceutical products that address public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS and other epidemics. With many others we applaud the federal government's commitment to ensure the delivery of affordable medicines to some of the poorest regions of the world. It is our hope that this initiative will enable Canadian humanitarian organizations such as ours to be the outstretched hand of Canadians in a way that is both reasonable and responsible.

    We are not unaware, however, that this committee must resolve practical, legislative, and regulatory issues, and we trust that people with a heart to do so will find workable and equitable solutions. We also understand that there is much work to do to ensure that vital medicines are delivered and used in ways that are intended by the legislation. Proven Canadian organizations such as ours can serve to ensure that this happens.

    With all that is at stake, we are very pleased to commend the research-based and the generic pharmaceutical companies, as well as other stakeholders who have addressed this committee, for working diligently to respond to the current crisis in the developing world. We also commend our biotech and our over-the-counter health care industry partners for their active participation in bringing healing and hope throughout the world.

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    The main thing, the chief reason for my speaking to you today, is to remind us all of the purpose of this proposed change in policy, which is to bring desperately needed health and hope in a planned and coordinated way to our sisters and brothers, out of sight but very much in our hearts and on our minds.

    For millions of people in impoverished countries, the desire of caring Canadians to help is their only real hope. Many of them are counting on the will and the ingenuity of men and women in the industrialized world to bring practical solutions to bear in alleviating so much needless suffering and to prevent an alarming situation from deteriorating even further.

    The situation urgently calls for new approaches and strategies to consolidate Canada's humanitarian response in a determined and sustained way. Mr. Chairman, we are confident that we have the heart in Canada to encourage our government to do this.

    I thank you very much.

    The Chair: Thank you, Mr. Kelsall.

    We'll proceed to Kevin Perkins of the Canada-Africa Partnership on AIDS.

    Mr. Kevin Perkins (Executive Director, Canada-Africa Partnership on AIDS): Thank you.

    I'd like to begin by thanking the standing committee for inviting me to speak on behalf of CAP AIDS about this vitally important bill.

    CAP AIDS is a relatively new NGO, created with the mission of helping Africans resist, survive, and overcome AIDS. We support the grassroots efforts of small community-based African organizations that are on the front lines in the battle with AIDS.

    As has been said, AIDS is a global health crisis. During the five minutes that I'm speaking here, some 20 people will die from AIDS in Africa alone. These deaths and the 6,000 deaths that will follow them over the next 24 hours will leave children orphaned, spouses widowed, grandmothers burdened with more mouths to feed, factories and farms without workers, schools without teachers, and countries without their future leaders.

    This coming Saturday, a Toronto man named Joseph van Veen is boarding an airplane bound for Nairobi. Three days after arriving he will get on a bicycle and ride 6,000 kilometres to Cape Town, South Africa. It's the CAP AIDS Ride for Hope. This is a remarkable feat in the best of circumstances, but Joseph has been HIV positive for almost 18 years—over 12 years longer than doctors told him he could expect to live when he was first diagnosed in 1987. Now his doctors tell him that AIDS is a chronic, but manageable, illness that need not kill him. This is in large part because he has had access to antiretroviral treatments.

    Joseph knows that the 32 million Africans infected with HIV aren't so lucky; the huge majority have no access to the medicines that can keep them alive, or even reduce their suffering. His question is, why don't they?

    Canada, by contemplating the proposed amendment to its Patent Act, is attempting to answer this question by saying, “They must have access to these medicines.” This bill has the potential to be a profoundly important humanitarian gesture, one that rises above domestic partisan politics or commercial interests. It is a kind of benevolent international commitment that makes so many of us proud to call ourselves Canadian.

    Because this is strictly or exclusively a humanitarian deed, it must be judged on its efficacy, I believe, by only one measure: to what extent does it save lives or extend lives, by making medicines cheaper and more available to poor people in poor countries?

    There are a few ways of lowering the cost and increasing the supply of medicine for developing countries. One would be to just legislate lower prices, I suppose—although that's probably impossible in fact. A second is to buy them at the patent protected prices and give them away, or sell them at a lower price with public subsidy. A third is to allow free enterprise essentially to bring down the cost of medicines in countries that cannot afford the patent protected prices. It seems that this is a method that Bill C-9 wishes to advance. The question is, will it work? Will it actually foster the competition that is needed to lower cost and increase supply?

    I'm afraid I must join with many of my colleagues in civil society and say that as the bill is now written, there's a good chance that it won't. I say “afraid” because everyone concerned about this issue is extremely anxious for the legislation to go forward at the earliest opportunity. Further delay just costs lives.

    There are four problem areas that have been ably identified and described by others, such as the Canadian HIV/AIDS Legal Network and the CCIC. I'd like to focus my comments on the right of first refusal provision. I believe the provision was put there in an attempt by the drafters of the bill to ensure that generic producers really do offer the best prices possible to developing countries. By giving patent holders an opportunity to take over contracts negotiated by generic producers, perhaps the intention was to ensure that generic competitors would be honest in their negotiations and genuinely offer low prices with the threat of competition over their shoulders.

    The problem with this is that it assumes that the competition begins with the start of contract negotiations and ends once a licence has been issued. I believe that true competition can only start after a licence is issued; multiple firms need to have licences to produce the same medicine before there would be a sustained reduction in prices. So anything that delays or discourages the entry of licensed competitors puts at risk the effectiveness of the bill.

    Would a compulsory licence give a generic producer a new monopoly by blocking competition from patent holders? In my view, not at all. There is a huge global need for medication.

º  (1625)  

One contract between one country and one generic manufacturer will not put much of a dent in the need or the demand. There will be, God willing, an abundance of opportunity for patent holding firms to win contracts in developing countries—and indeed I hope they do.

    In any case, developing country governments have skilled negotiators, and they can be trusted to drive for the best bargains possible in all contract negotiations. We don't need to ensure competition for them. As long as there are multiple competitors, I'm sure they'll do a great job of driving the best bargain possible.

    For Bill C-9 to have the desired humanitarian impact, which I suggest is the exclusive measure by which we must judge this bill, the right of first refusal provision, and other provisions like it, should be dropped. Far from encouraging competition, it will discourage it, and may tragically eliminate it.

    Thank you again for inviting me to appear before this committee. I wish you every success in your deliberations and pray that a truly effective bill will be turned into law at the earliest opportunity.

    The Chair: Thank you, Mr. Perkins.

    World Vision Canada, Dave Toycen, president.

    Mr. Dave Toycen (President, World Vision Canada): Thank you, Mr. Chair, for this opportunity to talk with you about the significance of Bill C-9 and the importance of getting it right. I have a submission that's been given to the clerk, as well as a copy of my remarks.

    I'm here as president and chief executive officer of World Vision Canada. We are the largest international NGO in this country. Right now we have more than 315,000 children who are sponsored by Canadians through World Vision. We have more than half a million Canadian supporters. I simply share that for you to know that there are many people in Canada who care deeply about children and about the issue of HIV/AIDS.

    We operate in 90 countries and we incorporate a comprehensive HIV/AIDS response, including prevention, advocacy, and care for children, families, and their communities. Our estimate is we have roughly 60,000 sponsored children in the highly affected HIV/AIDS countries. That means some of these children are HIV-positive, and many of them are living in families where they have either a parent or a close relative who has passed away.

    We welcome this legislation. It will complement the work being done by so many agencies and governments, and particularly in communities devastated by HIV/AIDS. The urgency of Bill C-9, I think, is clear. UNAIDS predicts the pandemic will have orphaned 25 million children by the year 2010. Currently, 2.5 million children under 15 are living with HIV/AIDS. Last year alone, some 700,000 children became infected.

    Bill C-9 becomes very personal for me because I've witnessed the devastation of HIV/AIDS for almost 20 years now. The statistics are no longer just numbers, because of the children who are dying. I've met parents so many times whose biggest worry is about who's going to look after their children when they're gone. I've wept with them, and like so many people in the kind of work we do, I just can't understand why this can continue.

    I'm encouraged by what Canada is proposing to do. It's a wonderful step forward. So why are we here today? We're here for one reason. While we applaud the legislation, we have some concerns about the precise nature of Bill C-9.

    First of all, we're asking that schedule 3 be amended to allow all developing countries the right to benefit from medicines they consider necessary to their public health concerns. There are no clear grounds in the agreements or declarations for this provision, which prevents certain countries from importing generic pharmaceutical products from Canada. Instead, the provision undermines the ability of some developing countries—countries, for example, such as Venezuela and Vietnam—to address their very real public health concerns.

    Second, we propose that schedule 1 be removed. Schedule 1 restricts the list of pharmaceutical products covered by the legislation. The restrictions are unwarranted. In fact, the provisions under schedule 1 indicate that Canada is backsliding from agreements made in the Doha declaration. There are no provisions in TRIPS, the Doha declaration, or the August 30 agreement to limit the use of pharmaceutical products. We need to allow medical experts closer to the problems to decide what medications are essential.

    Finally, we propose that the second right of first refusal clause be removed. This is an unnecessary barrier that could jeopardize achieving the objectives of this bill. There are clear provisions in TRIPS under paragraph 31(b) that allow patent holding companies the right to issue voluntary licences “on reasonable commercial terms” and “within a reasonable period of time”. The current provision creates a disincentive for generic companies to negotiate contracts if they know that patent holding companies have the right to undermine their deals.

    With these three changes, we would strongly recommend that Bill C-9 receive quick parliamentary approval. Then, in our work in the field, agencies like us can continue to address concerns about access. Our programs are already addressing the issues of stigma and discrimination that prevent people from seeking help. We're working to raise awareness and to develop capacity in communities. National governments and NGOs are working to make sure that delivery systems are in place to get antiretrovirals and other medicines to people who need them. In Kenya, for example, we're piloting a program, and other agencies are doing similar things, to prevent mother-to-child transmission. Simply one drug like nevirapine can cut that in half.

º  (1630)  

    Clearly there are challenges, but we must not be deterred. Bill C-9 offers tangible hope to people living with HIV/AIDS and many other diseases. They deserve a chance to live and to contribute to their communities. Let's not make them wait any longer for medicines we know how to make and to deliver.

    Finally, there's a recent report by a Canadian polling company called Globescan that indicates that 93% of Canadians believe rich countries have a moral responsibility to ensure poor countries receive affordable drugs. It's out there. People believe in this, and there's no question that Canadians support this legislation.

    Our concern is that it has to be the right legislation. If I may speak personally, in the last nearly 20 years of my life I've met so many people suffering from HIV/AIDS. Some have already passed on and some are living. Even in these deliberations in this room here—a small group of people—they're the gallery of people who are watching these kinds of proceedings: mothers who have approached me and said, “Why can't we have the drugs? You have them; why can't we have them?”

    Finally, my wife and I are new Canadians. We came from the United States and Australia in 1988. We fell in love with this country. Nine years ago we became Canadian citizens. One of the greatest moments in our lives was the citizenship ceremony and making a choice to become part of a country that has a history of generosity and justice.

    A next seminal moment for me was my experience in Canada of listening to Roméo Dallaire speaking about the Canadian UN troops who on one occasion rushed in to save people in Rwanda when it was beyond their mandate—people were being slaughtered. That made me so proud to be a Canadian. It is this belief in Canada—that if someone is diminished somewhere else by injustice, by oppression, by lack of concern, it somehow diminishes all of us in this country.

    I urge this committee to move forward with this legislation and make the changes we're asking for. I can name the names of so many people living with HIV/AIDS right now who are hoping and praying that something is going to change, that they're going to have a chance: Margaret Talu and her baby, Hope, in Kenya; Esther Mathias in Tanzania; Marungwa Mepomisene in Rwanda; Gloria Mlango in Zambia; Alex Mutiso in Uganda; and millions of others like them.

    I urge this committee to take action. This is not the only solution, but it's another one of the things that are so critical. We must get this bill right, because other nations will also follow our example. For the countries and the countless people who are looking to Canada in support of public health, we cannot let them down.

    Thank you.

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    The Chair: Thank you, Mr. Toycen.

    We'll start with Mr. Rajotte and then go to Mr. Fontana.

    Mr. James Rajotte (Edmonton Southwest, CPC): Thank you very much, Mr. Chairman. Thank you all for coming here today and for your presentations.

    Mr. Abbott, I'd like to start with you and with your presentation. You're quite critical of the brand-name industry. Certainly you're right, but I wonder if I could perhaps draw out exactly what you're recommending us to do in this legislation specifically. You want us to take out the right of first refusal, obviously, but what sort of system would you see in its place? Would a simple compulsory licensing royalty rate of 2% be the system you'd recommend we put in place?

    Dr. Frederick Abbott: Yes. In other words, I think I would foresee the kind of system the Norwegians have adopted; that is, that in circumstances of emergency, extreme urgency, or public non-commercial use, no prior negotiation with the patent holder is required; that the generic producer submit a licence application to the commissioner of patents and the royalty be established under which the licensing can proceed. In circumstances in which there is no urgency, as with respect, for example, to HIV/AIDS, you could then have a period for prior negotiation between the generic producer and the patent holder—perhaps a 60-day period—with representations before the patent commissioner, following which a licence would or would not be issued.

    Mr. James Rajotte: Would you have a fixed royalty rate or would you have a variable one?

    Dr. Frederick Abbott: I am very satisfied with the royalty rate proposed by the government; that is, a fixed royalty of 2%. There are also ways you could structure a rate that would use a 2% rate as a benchmark rate, with a certain margin of appreciation on variability—say up to 4% or down to 0%, depending on the situation of the importing country.

    Mr. James Rajotte: Would you allow the commissioner of patents to say no to a compulsory licence? Would the commissioner have the latitude then to make that judgment call?

    Dr. Frederick Abbott: In situations of emergency and urgency, and so forth, no, I wouldn't provide the commissioner of patents with that latitude. I wouldn't be troubled by permitting the patent holder to make representations to the commissioner of patents, and so forth, but no, I wouldn't provide for that discretion.

º  (1640)  

    Mr. James Rajotte: The commissioner would only have, basically, a simple bureaucratic function of granting it. They wouldn't have any judgment aspect to their position.

    Dr. Frederick Abbott: That's correct.

    Mr. James Rajotte: Thank you for that.

    Mr. Kelsall, I wanted to ask you a number of questions, because I very much appreciated your presentation. I think you raised some very important points about the fact that we can change the Patent Act and we can change the Food and Drugs Act, but there's so much more that actually has to be done in order to get medicines to people who need them.

    Could I get you to highlight that? You can even talk about some of the examples that you know of on what's going on now and what needs to be done.

    You mentioned, I believe, $130 million in terms of the wholesale value of the medicines and supplies that are currently being donated by the health industry. Could you educate us as to what's working, what's not, and where we need to work in a better way.

    I want to commend you. I think you did credit both industries for having some initiatives right now. Could you give us an idea of, for the $130 million, how much is by the generic industry and how much is by the research industry? What initiatives are they taking that we should, from a government angle and from a CIDA perspective, try to complement?

    Mr. John Kelsall: Dealing with the sourcing of the $130 million, I would say at least $100 million of that, or more, has come from the research-based companies. We have worked with the research-based companies since 1990 to right up to date.

    On our relationship with the generic industry, a number of the companies operated their own programs, such as Novopharm, which has an agency known as CanMap, which distributes medicines; Apotex handles their own distribution of their drugs to particular doctors or agencies that they donate to.

    Out of the $130 million, at least $100 million has, as I say, come from the research-based companies. In fact, I can tell you that a large part of it, particularly in the last few years, is that they're actually manufacturing for us; they're giving us long-date product.

    You should know that as an agency we have formally endorsed the World Health Organization guidelines for drug donations, which means nothing goes overseas that's not needed. It's coordinated, and it has to have a sufficient expiry that it can be used before the expiry date is reached.

    We are trying to treat people overseas as if we were there ourselves. We have found that attitude within the companies we work with. Not only have we endorsed the World Health Organization guidelines, the Rx and D has. The NDMAC, which is the over-the-counter industry, has formally endorsed the guidelines. I believe that a number of the generic companies have as well.

    The biotech industry has supplied us with millions of dollars worth of vaccines that we have distributed to needy areas around the world; and the over-the-counter industry, as well as our friends in the generic industry, particularly Novopharm, RhoxalPharma, Ratiopharm, and others.... Apotex still distributes their own products to doctors and agencies around the world. We applaud them for that.

    That's the overall scene.

    The Chair: Thank you, Mr. Kelsall.

    Thank you, Mr. Rajotte.

    Mr. Fontana, please.

    Hon. Joe Fontana (London North Centre, Lib.): Thank you, Mr. Chairman.

    Let me first thank the three distinguished NGOs we have before us that do some absolutely fantastic work. You make us very proud that you come from Canada and do some of the great work that you do across the world. We thank you for being on the ground, because sometimes that's where the real pain and sorrow is felt.

    Mr. Abbott, I'll start with you. You have a pretty impeccable c.v. here. I just want to talk a little bit about the negotiations, because you seem to know a lot about negotiations and what transpired in order to get to where TRIPS is, and so on. Let's face it; it wouldn't have taken two years if it had been that easy.

    Obviously there were a number of countries, including your own, for which it was about give and take, about patent rights, but at the same time the much nobler cause, of course, of getting absolutely the most inexpensive cost of drugs to the very people that Dave, John, and Kevin are talking about, who are dying because they can't get access to those.

    So when these patent holders have these rights, TRIPS and the two years were obviously to try to balance those rights, because those brand companies can now send or sell those drugs today, if they wanted, to those areas. But obviously we want to make sure we have a competitive, transparent system that will guarantee that either the generic or the brand companies deliver the drugs the people require. The TRIPS article 31 clause essentially tries to balance those rights.

    What they've come up with essentially recognizes...and I'll talk a little bit about right of first refusal. I agree it has some problems. In fact, some other proposals have been put forward that talk about voluntary negotiations between the generic and the brand, and failing that, a compulsory licence regime would be put in place.

    Don't we want to make sure that both generic and brand get an opportunity to bid in order to make sure the price is as low as possible? If you don't have the brand companies bidding, what makes you think the generics are going to drive the cost down? Or the fact is that the brand companies do have an advantage because they already have these pills. They've created them. All we have to do is get our hands on them, change them, stop diversion, and get them to the very people who need them.

    So I'm wondering, what kind of regime, similar to what James is talking about, would you put in place to make sure there's transparency, competitiveness, and the lowest possible cost of those drugs so that the people who need them get them?

º  (1645)  

    Dr. Frederick Abbott: The best system is a system in which all parties are functioning in an open market and in which the purchaser has the right to approach any supplier with which it wishes and negotiates such terms and conditions as are available to negotiate. That is the current market system that exists, and the only reason the market isn't competitive is that the generic producer doesn't have the opportunity to supply the product because they're precluded from doing that by the patent protection.

    Hon. Joe Fontana: So this agreement will allow the generics to at least enter negotiations, be able to take something--property rights--that is not now theirs, and our country is prepared to waive those rights of the patent holders so that they can gain access and be able to negotiate, either with the purchaser or the brand companies for the purposes of getting the drugs.

    I understand that both the brand companies and the generic, on the alternative proposal to the right of first refusal, are now pretty close to agreement. So if the two suppliers are in fact talking about roughly the same thing in terms of negotiating before a compulsory licence is put on the table, what would be wrong with that kind of a regime?

    Dr. Frederick Abbott: Let me start by saying there's a difference between negotiation between the patent holder and the generic supplier and the generic supplier being required to send an invitation to the patent holder to sit down with the prospective purchaser and make sure the prospective purchaser is somehow on the same wavelength as the generic supplier.

    What that kind of system does.... Imagine that in the basic Canadian market you have a dominant supplier in the market, an exclusive supplier that has its own purchasers, and you have a much weaker, much smaller potential competitor that wants to get into the business and tries to talk to prospective customers that are currently dealing with the dominant supplier. But when it goes to deal with those customers it sends a letter to the dominant supplier saying: “Dear dominant supplier, I'm going to talk with your customer next Tuesday. I want to make sure you know about that just in case you think I might get a deal that will take away your market. You'll be in the room there with me and can make the counter proposal to the prospective purchaser and make sure that I can't outbid you on this particular business.”

    I don't think there's any business that works that way, where someone seeking a potential customer is required to send a letter to a dominant supplier in the market saying, excuse me, I'm thinking of taking your business, but I want to make sure you have the opportunity to come here and undercut me.

    The major pharmaceutical companies have an extensive network in every country in the world--they have representatives, they talk with governments, they know what's going on, they talk with doctors. There is no lack of information on the part of the pharmaceutical patent holder side.

    What it also does, and I want to address the reality, is create a situation where the patent holder then goes to its home country government--let's call it the United States, or Great Britain, or Germany--and says “You know, I have some generic producers here talking with X government in Africa and I'm really disturbed about that; I don't want them to buy generic. I want you to send the ambassador to talk to the public procurement authority.”

    I regret that I've been involved in so many of these situations. I think you need to provide the generic producer with the right to conduct business without that kind of intervention, and that is very important.

º  (1650)  

    The Chair: Thank you.

    Mr. Crête, please.

[Translation]

    Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman.

    My first question is for Mr. Abbott. On the first page of the appendix to your presentation, you say:

The WTO does not have a website which members use to participate in a bidding process and it is not within the province of this committee, the Canadian government, or the patent holder industry to establish such a website.

    However, after checking—I have the copies in my hands—there is in fact a website entitled “TRIPS and public health: website page for notifications” which already exists and allows people to register. It even says at the end: “No notices have been presented to date”, because no one has yet registered.

    I would like you to explain how it is that in your brief you state that the WTO does not have a website, whereas in reality this website does exist on the WTO site.

[English]

    Dr. Frederick Abbott: I'm afraid there's a bit of a misunderstanding on your part on what that website is. That website is the website provided for in the decision on implementation of paragraph 6, under which a country notifies that it is an eligible importing country and intends to make use of the system. It is a one-time notification that does not in any way involve any kind of negotiation or bidding process. It's merely a declaration of eligibility, and that in fact is specifically provided for in the draft of Bill C-9. The notion of a WTO tender-based bidding system website absolutely does not exist.

[Translation]

    Mr. Paul Crête: Perhaps I am not understanding this correctly, but in the text it says:

Members may present this notification at any time and may advise that they will be using the system in its entirety or in a more limited way, for instance only in situations of national emergency or other circumstances of extreme urgency.

    They explain on the site how notifications will be made for registering requests.

[English]

    Dr. Frederick Abbott: I'm afraid it's a misunderstanding. Those notifications relate to the notification under provision 1(b) of the decision on paragraph 6:

(b) “eligible importing Member”...and any other Member that has made a notification (2) to the Council for TRIPS of its intention to use the system as an importer, it being understood that a Member may notify at any time that it will use the system in whole or in a limited way....

    This is a much different thing from what is discussed in the industry proposal, where we're actually talking about a bidding process. This isn't to say there aren't some systems in the world where you have bidding processes, even multi-sourced bidding processes for different kinds of supplies. For example, the World Bank uses multi-sourced tenders in quite a number of its projects. But it's simply not a WTO function, and I think I can give you a fairly high degree of assurance that the system that is described in the patent holder proposal is much different from this website you're describing and something that would have to be negotiated and agreed to by the members in Geneva.

    As I said in my annexed presentation, WTO members, particularly developing country members, have a strong preference for a health-oriented organization such as the World Health Organization to be more involved in the pharmaceutical supply. They're not so happy about the WTO and the situation they face at the WTO. So I wouldn't make any presumption that such a system would be successfully negotiated at the WTO, as distinguished, for example, from the WHO.

    I'm well aware of the existence of the website. I'm well aware of the fact that the WTO website says no one has at present made a notification, but there simply is no system in the manner that the proposal describes.

º  (1655)  

[Translation]

    Mr. Paul Crête: Yes, but in any case, this indicates that it is possible to have a website that can be used for these purposes. Your presentation seemed to indicate that it was impossible.

[English]

    Dr. Frederick Abbott: No, no, I didn't say that at all. My statement didn't say that.

    My statement said that after several years of negotiations there might be agreement on such a website, but that before tomorrow, when this committee sits, I think I can say with a fair degree of confidence that no consensus will be reached on the WTO on that system.

    So to the extent you're talking about something realistic, I don't think the committee and Canada, or the patent holder industry, has the capacity to simply announce that a new WTO system has been created and will be implemented in Bill C-9.

    Now, that is entirely apart from the merits or demerits of a global multi-source bidding system. As I said in my submission, the merits or demerits of a global multi-source bidding system are a different matter, and there might well be ways you could establish a good system. But it's much more complicated than what's in the industry proposal.

    The industry proposal says that the winning bidder goes to the Canadian Commissioner of Patents. But the winning bidder is most likely to be an Indian, Argentinian, or Brazilian patent producer who has no nexus or relationship with Canada. The Canadian Commissioner of Patents has nothing to do with that. So they would then be going to the Indian commissioner of patents or the Brazilian commissioner of patents and so forth. And the Canadian system is also limited in terms of the medicines that are described and so forth.

    So it is not--and I don't want to be understood as saying it is--theoretically impossible. I'm just saying it's not going to happen by tomorrow.

    The Chair: Thank you.

    Marlene Jennings, please.

[Translation]

    Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Chairman.

    Thank you for your presentations. I listened to your presentation with a great deal of interest, Dr. Abbott, and here is my first question. As an expert on intellectual property, are you in favour of having a law governing patent drugs, and if so, do you think it would be useful for us to pass one? I am not talking about Bill C-9 here, but about a Canadian act on patent drugs.

[English]

    Dr. Frederick Abbott: Madam Parliamentarian, let me note that, for example, I serve as an arbitrator for the World Intellectual Property Organization.

[Translation]

    Mrs. Marlene Jennings: I read your curriculum vitae in its entirety.

[English]

    Dr. Frederick Abbott: I frequently am enforcing intellectual property rights in favour of their holders. I am not against intellectual property. I'm not even against patents.

    What I personally cannot bear is people dying because of them.

»  (1700)  

[Translation]

    Mrs. Marlene Jennings: Thank you, you answered my question well.

    From what I understand from your presentation, you consider that the control measures included in clause 31 of the TRIPS are sufficient to protect the interests of pharmaceutical research and development companies. In your opinion, then, they will be able to protect their rights sufficiently, and to justify the fact that they invest a lot before developing a drug, obtaining a licence, the patent, etc. Did I grasp your position correctly?

[English]

    Dr. Frederick Abbott: Yes, and in this particular context, a combination of the TRIPS agreement and the decision, the two of them together.

[Translation]

    Mrs. Marlene Jennings: Thank you very much.

    Mr. Toycen, your presentation was very touching. I am taking note of your recommendations, for instance the elimination of appendix 1, since the restrictions in your opinion are not justified. But you also say that appendix 3 should be amended in order to allow all companies to benefit. But according to what I understand the agreement negotiated with the WTO addresses only the members of the organization. Am I mistaken?

[English]

    Mr. Dave Toycen: My understanding is that what we're asking for is that all of the developing countries classified as developing countries—and there's a specific list of them—should be eligible to receive these pharmaceuticals.

    At this point, it's been limited in the legislation here in Canada. All we're saying is that countries like Vietnam and Lebanon have major—

[Translation]

    Mrs. Marlene Jennings: But the question I am asking you is this one: is the agreement of the WTO on the accessibility of affordable drugs applicable only to the members of the WTO, or, on the contrary, according to them, can the agreement be accessed by all countries, wether they are members or not?

[English]

    Mr. Dave Toycen: I'm not sure I'm getting the question.

    Mrs. Marlene Jennings: I'm asking, because I'm not an expert on the TRIPS agreement, on the Doha declaration.... I understand the principles.

    We've had a number of witnesses who have come before us and said that schedule 3, which lists the countries Canada will allow to benefit from Bill C-9 once it becomes legislation, is restricted; that there are developing countries that do not appear on Bill C-9, on this schedule 3; and that Canada should simply open it up to any developing country.

    The question I'm asking is, does the agreement of WTO, TRIPS, Doha, etc.—all of the components—say it should be opened up to every single developing country? When I read some of the articles, they say, “eligible members” of WTO. That's why I'm asking. Is there some piece that I've missed?

    Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.): Is there anything in the WTO that prohibits--

    Mrs. Marlene Jennings: That's not what I'm asking.

    Mr. Dave Toycen: Bill C-9 applies to Canada as a WTO member.

    Mrs. Marlene Jennings: Yes, I understand that. But Bill C-9 is supposedly to achieve the objectives that were agreed upon at the WTO. We're being asked to remove schedule 3 that lists those countries that Canada will allow to benefit from Bill C-9. I'm asking whether it was the agreement of the WTO that any country could benefit from the opening up of intellectual property as it pertains to medicine, or did that agreement create restrictions?

»  (1705)  

    Mr. Dave Toycen: Yes, they allowed benefit to any country.

    Mrs. Marlene Jennings: What sections?

    The Chair: We'll get it to you.

    Mrs. Marlene Jennings: Could you send to the clerk, in writing, the precise sections that say that the agreement should be made available to any country by eligible members of the WTO?

    Thank you.

    The Chair: Marlene, that's a very good question. Thank you. With the help of Mr. Toycen and our researchers we will try to get a good answer to that.

    We'll proceed to Mr. Masse.

    Mr. Brian Masse: Thank you, Mr. Chair.

    My first question is to Mr. Abbott. We heard yesterday about the Norwegian legislation that's underway, and we're doing some research on it right now. There's been a lot of talk about Canada being the first nation to proceed in this fashion, but it appears that we are in fact behind the Norwegian legislation right now.

    Do you have any information on the status of it and more specifics on what they're doing differently compared to where we are at this time?

    Dr. Frederick Abbott: Thank you, Mr. Masse.

    As I indicated earlier, Norway approached this task by providing for general authorization in its patent act to the King and council to make regulations to implement an exception that would allow for the export of pharmaceuticals under the decision. That occurred in late 2003. It was adopted and entered into force on February 1, 2004. The government then proposed regulations in accordance with that legislative act, and those regulations have been published and are open for comment.

    The regulations having to do with the patent act will include a section, one of seven, that begins by referring to the eligible countries, which is similar at this stage to the Canadian system. As I said, I discussed the criticism that was coming from the NGO community about that, and the Norwegians are very sympathetic to changing that and expanding the eligible countries.

    Then it provides that except in circumstances under which it's not required by the TRIPS agreement--that is, circumstances allowed by paragraph 31(b) of emergency, urgency, or public non-commercial use--there will be prior negotiation for a licence. But in those latter situations that condition will not apply.

    Then it provides that the determination of the product requirements will be made by the importing country--and Norway has no list of medicines that are or are not eligible for the system. That is left to the importing country determining what its public health needs are. Then, of course, there is the compliance with the provisions of the decision in terms of notifications, and so forth.

    So the main differences are that the Norwegian legislation does not require prior negotiation with the patent holder and does not have discretion in the hands of the patent commissioner--going to a question raised to me earlier. The Norwegian patent commissioner doesn't have discretion to make a determination as to the granting of a licence, provided it complies with the provisions of paragraph 6. So it's a ministerial review, in that sense, going back to this other question.

    Finally, and again very importantly, there's no limitation on the list of products.

    Mr. Brian Masse: You've been described as an expert witness, and your curriculum vitae has been noted as well. Is it your opinion that the Canadian legislation could benefit from a review of the Norwegian legislation that is currently in existence in order to improve what we have here? In your expert opinion, would your advice be that we should examine that legislation?

»  (1710)  

    Dr. Frederick Abbott: Yes. When I reviewed the Norwegian regulations, which I received just this morning, I was struck by how very well they address the basic problems that aren't addressed by the Canadian proposal in Bill C-9 and how much more compatible they are with the spirit and intent of the decision on paragraph 6. So I would recommend that it be reviewed by the committee and the government.

    Hon. Joe Fontana: I have a point of order, Mr. Chairman. I'm sure Mr. Abbott would want to correct the record. The Norwegians have not passed the legislation. It's still in the consultative stage. I'm sure that Mr. Masse in asking the question is seeking your expert advice. But that legislation is only consultative. We should also make it clear for the record that the Norwegians do not have a generic drug industry, and therefore there is a big difference.

    The Chair: Your point is made.

    Dr. Frederick Abbott: May I address that? I was pretty precise in what I said. The Norwegians passed the amendment to the Patents Act authorizing the King and council to adopt the regulations. The government has proposed the regulations, and it anticipates that they will enter into force this summer. I was pretty clear--and I made this point in my opening comments--about the status. There is a difference between the authorizing legislation and the regulations. There is a distinction.

    The Chair: Let's deem it clarified.

    Go ahead, Brian. You have another minute.

    Mr. Brian Masse: Thank you, Mr. Chair.

    Mr. Toycen, you mentioned the nations that are being left off the list and that could be impacted by this bill. Can your organization help people in those nations that have been left off the list?

    Mr. Dave Toycen: I don't have the whole list in front of me, but, for example, we have program work in Vietnam and Lebanon. Those are two on the list. We've done relief work in Venezuela. That would be three on the list that I know of. There is no question that there are major health needs. Vietnam is obvious, I would say, and so is Lebanon. It is still recovering from the terrible fighting and killing over the last decade. So there are a number of opportunities to do that.

    Mr. Brian Masse: Thank you, Mr. Chair.

    The Chair: The last questioner is Mr. Savoy.

    Mr. Andy Savoy (Tobique—Mactaquac, Lib.): Thank you very much, Mr. Chair.

    Gentlemen, welcome.

    I think we all share the same goals in the very spirited debate about how we get there.

    In looking at the right of first refusal provision, Mr. Abbott, in the event we have to include that in the legislation, can you think of other pragmatic measures we could use to make sure that generic manufacturers participate in the access scheme? Are there any other avenues or directions, aside from taking the right of first refusal out of the legislation? Are there any roads we can go down to make sure we maximize the participation of the generic sector?

    Dr. Frederick Abbott: It's difficult, if not impossible, for me to answer the question because I can't imagine what would require you to keep that in the legislation.

    Mr. Andy Savoy: I understand your opinion.

    Does anybody else wish to comment on that?

    On the issue of developing and least developed countries, we know we are looking at a situation where all least developed countries are included in the legislation, but in terms of developing countries, we are looking at a situation where you have to be a member of the WTO to participate. In my mind, that's unfair, especially in emergency situations. Denying this medicine to people who are most in need of it based on WTO membership really defeats the purpose of this legislation and this initiative. Mr. Abbott, can you comment on the necessity of including only those developing countries that are WTO members in schedule 3? Is it for accountability reasons? What's your take on that specific issue?

    Dr. Frederick Abbott: There is certainly nothing that requires you to include only WTO members. Just by way of observation, let me note, for example, that in addition to the WTO membership you have quite a number of countries that are in the process of accession or, in doing so, are currently serving as observers at the WTO. So you have a class of countries that have already indicated they wish to be members of the WTO, but it's a matter of getting through the process, which can in some cases be quite a lengthy process. There are a fairly substantial number of them, and then there are other developing countries that are not members of the WTO.

    There is certainly absolutely nothing about WTO rules that says Canada can't extend the benefits of its system to other developing countries. It may certainly do that. Now, Canada might well want those countries, through diplomatic representation, to say to Canada that they intend to behave like good citizens, as do other parties that are working within this system, and that it is their good faith intention to pursue this in the way other countries are pursuing it, taking on whatever obligations there are in the system with those other members. Canada, through its foreign affairs department, certainly has the capacity to negotiate those kinds of diplomatic understandings with those countries so they're on the same footing as other developing countries, and then you also have least developed countries.

    So I think this is an eminently fixable problem from the standpoint of the legislation.

»  (1715)  

    Mr. Andy Savoy: So in your expert opinion, in terms of the developing countries, the requirement that they be WTO members is not in fact something we have to stick with. That is something we can change, and doing so would make sense in terms of reaching out to these developing countries.

    Dr. Frederick Abbott: In my opinion, yes, that's absolutely correct.

    Mr. Andy Savoy: Do other witnesses have anything on this?

    Mr. John Kelsall: I would just add that, as I mentioned in my remarks, it's very important that antiretroviral drugs dealing with HIV/AIDS be delivered in a coordinated and planned framework. You don't just fly in with a Hercules C-130 and drop them from a thousand feet. You have to have blood testing laboratories, you have to have trained professionals, and you have to have counselling available to the people who are going to take these drugs. I would think one of the real issues is that the focus countries Canada is going to be interested in have some form of capacity and have the therapies in place to deal with ARVs. I think that's probably one of the primary points that really needs to be considered.

    The Chair: I want to thank our witnesses very much for taking the time to participate today, especially those who came from far away to be here. I appreciate that.

    We're going to adjourn, but I'll ask members to stay for about one minute. I just have a suggestion to make about tomorrow.

    With that, we're adjourned. Thank you.