INST Committee Meeting

STANDING COMMITTEE ON INDUSTRY, SCIENCE AND TECHNOLOGY

COMITÉ PERMANENT DE L'INDUSTRIE, DES SCIENCES ET DE LA TECHNOLOGIE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 17, 2001

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[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): We're here to discuss Bill S-17, an act to amend the Patent Act.

We have four groups of witnesses in front of us this morning. We have the Canadian Drug Manufacturers Association, Canadian Pensioners Concerned Incorporated, the Congress of Union Retirees of Canada, and the Canadian Health Coalition.

I know the clerk has informed you about the way the process will take place. You'll all have about five minutes for opening comments, and then we'll move to questions.

I will begin with the witnesses as listed. We have Mr. Jim Keon, the president of the Canadian Drug Manufacturers Association. Mr. Keon.

Mr. Jim Keon (President, Canadian Drug Manufacturers Association): Thank you, Madam Chairman.

With me is Ed Hore, who is legal counsel to the Canadian Drug Manufacturers Association. He will be quite prepared to answer any questions you have as well.

The CDMA represents substantially all generic and fine chemical producers in Canada. Generic drugs are lower-cost versions of brand-name prescription drugs that have been approved by Health Canada. That means they have been designated to be as safe and effective as their brand-name equivalents.

Generic drugs, on average, provide 50% savings when compared to brand-name equivalents and play a vital role in keeping prescription drugs affordable in Canada. I can illustrate this best by telling you that about 41% of all prescriptions in Canada are filled with generics, while only 14% of the dollars spent on prescription medecines are accounted for by generics. So 41% of all prescriptions translates into 14% of the dollars. When you look at the volume, we're a major player in the industry. When you look at the dollars, we're actually a very minor player, compared to our brand-name colleagues.

Regarding Bill S-17, the CDMA recognizes that the Government of Canada must make legislative changes to the Patent Act to comply with international trade obligations. We do not oppose appropriate patent protection laws. We recognize the benefits Canadians derive from pharmaceutical research and development when it occurs. What we do oppose is the abuse of existing regulations that deny Canadians access to lower-cost, beneficial drugs in a timeframe that is appropriate and fair to the original patent holder and to the Canadian public. We're not here today to oppose the main thrust of the bill before you, but we do believe the legislation could and should be improved.

There are two fundamental reasons we're appealing to the committee for changes. First, Bill S-17 contributes to the steadily worsening legal and regulatory environment for generic drugs in Canada. Second, and perhaps more important from your perspective as legislators, is the steadily rising cost of health care in Canada.

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Drugs represent far and away the fastest-rising cost for Canadian health care. The patent extensions under Bill S-17, combined with the prohibition on stockpiling, will make the problem of skyrocketing drug costs, paid by patients, employers who provide drug benefits, and provincial governments even worse.

Bill S-17 is also part of a trend, seen over the last 15 years in Canada, to steadily increase drug patent protection, as you're all aware, in 1987 with Bill C-22 and 1993 with Bill C-91, first limiting, then eliminating compulsory licensing, which had been a Liberal policy in Canada for 25 years. At the same time, in 1993, in third reading without debate, subsection 55.2(4) was added to the Patent Act, which enabled the patent medicine notice of compliance regulations. This section is now on the table in this bill and it's being amended. In that same year, again without consultations, the government rushed through the regulations that implemented the patent medicine notice of compliance regulations. These regulations made the pharmaceutical industry the only industry in Canada with its own set of rules for patent disputes.

In brief, the regulations give brand-name companies the automatic right to prevent Health Canada from approving a generic product for at least two years simply by alleging patent infringement. These automatic injunctions have kept many popular drugs off the market long after the first patents have expired. I would pleased to explain that in more detail, as we go. How is it that patents expire and generic products are not able to come on the market? I think that's a very important point in what we're trying to get across.

The biggest threat to Canada's publicly funded health care system is runaway costs. The single fastest growing cost of health care, according to the Canadian Institute for Health Information, is drugs. They now account for 15.5% of all health care spending, and that's up from only 8.8% in 1975. They are now the second largest component of all health care spending. Canadians now spend more on drugs than we do on doctors' services.

A lot of people don't realize this, but many Canadians, particularly seniors and those living on fixed incomes, are facing increased co-payment fees and deductibles that are affecting their ability to pay for prescriptions. There have been several studies in Canada that document that, including a study in Quebec last year out of the University of McGill. Given the cost savings generic drugs provide, the generic industry can play a significant role here. However, Canada's patent regime, we believe, must be rebalanced.

I'll just move quickly to what we think should be done. CDMA believes strongly that Canada's patent legislation should go no further than meeting its international obligations and should eliminate what goes beyond those obligations.

We recommend Bill S-17 be amended as follows. Amend the proposed section 45 to provide a twenty-year term from filing for all patents. If Canada must increase the term of some patents to comply with the recent WTO ruling, it should also roll back the term of patents that exceed that requirement. In the pharmaceutical industry 80% to 90% of the old act patents actually have more than 20 years, but they're not being rolled back. This bill only increases some patents up to 20 years.

Second, we would like to see the repeal of the existing subsection 55.2(4) to get rid of the regulations that provide for the automatic 24-month injunction. Patent disputes in the pharmaceutical industry should be resolved through the normal litigation process used by every other industry in Canada. The world's richest companies do not need their own special set of rules for patent disputes, particularly when these rules are being systematically abused to extend monopolies beyond the expiry of the basic patents and force Canadians to pay higher drug prices for longer. As I mentioned, we'd be happy to discuss with you the practice of evergreening and how it is that brand companies are able to keep generics off the market after patents expire.

I would also like to point out that only one other country besides Canada has a patent-related automatic stay on generic approvals, and that's the United States. In the United States two influential senators, John McCain and Charles Schumer—bipartisan, Republicans and Democrats—think the abuse has gone far enough with their system. Just three weeks ago, the senators stood with a broad coalition of consumers, employers, and unions and introduced a bipartisan bill in the U.S. Senate that would repeal the automatic stay. Just yesterday the same bill was introduced to the House of Representatives by Congressman Sherwood Brown, a Democrat, and Congresswoman Joanne Emerson, a Republican.

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The senators and the congressmen stated that the law has allowed brand-name companies “carte blanche to file frivolous patent challenges that stop a generic's approval in its tracks”. Their bill is intended to restore the intent of the patent laws. They have the same law in the U.S., the same abuses, the same attempt to fix it, and we have actually put out a release today saying that we're calling for the same measures that the bill in the U.S. Congress and Senate is calling for.

In conclusion, we believe that the regulations and the automatic stay should be repealed in Canada. Our suggested amendments would leave Canada in full compliance with our international trade obligations, and the brand-name industry would have full twenty-year patents and full legal recourse to protect their patents in the normal way. Along with meeting our trade obligations, these amendments would help restore balance to Canada's pharmaceutical policy and help control exploding prescription drug costs in Canada.

I know from talking personally with many members of the committee that some of you may choose not to address these concerns at this time and through this legislation. That would be very regrettable. If that is your decision, we respectfully request that you consider a separate examination of the regulations we have raised today and recommend that you do it in a timely fashion.

Thank you.

The Chair: Thank you very much, Mr. Keon.

We're now going to turn to Canadian Pensioners Concerned Incorporated, and Ms. Vera Brown is actually replacing Ms. Barbara Black on your schedule.

Ms. Brown.

Ms. Vera Brown (First Vice-President, National, Canadian Pensioners Concerned Incorporated): Thank you, Chairman Whelan. I am Vera Brown. I came from Edmonton, so I'm still half asleep, so don't expect—

An hon. member: So are we.

Ms. Vera Brown: On behalf of Canadian Pensioners Concerned, National, and Canadian Pensioners Concerned, Ontario division, I wish to thank the Commons committee for making it possible for me to participate in the committee stage of Bill S-17.

Canadian Pensioners Concerned, founded in 1969 in Ontario, is a provincial and national membership-based, non-partisan voluntary advocacy organization of mature Canadians committed to preserving and enhancing a human-centred vision of life. In our advocacy role we act on issues such as pensions, health care, housing, and transportation. We are concerned not only with those matters that involve older citizens, but also with all the factors that make a just, caring, compassionate civil society for all age groups.

We recognize the need to protect intellectual property rights in the interests of the developer of those ideas, as well as in the broader public interest. However, we see limits to those rights when they are balanced against the public interest. In a civil society such as Canada, no one has absolute rights to private property.

In 1993 Bill C-91 was introduced, eliminating compulsory licensing by extending twenty-year patent protections to the pharmaceuticals. We believed the 1993 legislation would allow prescription prices to rise to an unnecessarily high level. We predicted that the burden to the health care system as a whole would start to compromise the benefits all Canadians had received through national medicare. Meanwhile the Canadian generic drug industry had proven its capacity to produce safe and effective prescriptions at less cost. We understand that generic drugs sell at one-half to one-third of the cost of brand-name counterparts, and there was legal advice that said that the restrictions on generic drugs were not required under NAFTA.

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The Patented Medicine Review Prices Board sees these new drugs as providing moderate, little, or no therapeutic advantage over existing medicines, many of them marginally different drugs at increased prices. Drug costs have grown faster than any other cost item in our national health expenditures and now surpass the payments to physicians.

The national health survey, 1996-97, carried out by Health Canada, identified some disturbing information. Six million Canadians have inadequate insurance for prescription drugs. In Canada 61% of prescription dollar sales go to patent drugs. People are having to forego needed prescription medication in order to pay for their basic needs. All provinces now require co-payments from those on their drug benefit plans. Because you have this report, I have just hit the highlights, so this is quite short.

Finally, with the changing practice of health care, moving from institutions to the home, the burden of drug costs is increasingly falling on individuals and drug coverage plans. The people most likely to be covered to some degree for drug coverage are those working full time, social assistance recipients, seniors, etc. This leaves out many vulnerable Canadians.

The government must act to balance private property rights against the public interest of all Canadians. Let me reiterate, companies have the right to reasonable protection of their inventions, but we believe 20 years is far too generous. We are putting corporate wealth against public health. We must stop the growing practice of companies continually adding on new patents through minor modifications to their existing patents, thus extending the life of the original patent.

Given that the government has agreed to comply with the World Trade Organization and the trade-related aspects of intellectual property rights ruling by introducing Bill S-17, Canadian Pensioners Concerned recommend the following. First, impose an absolute limit of 20 years and roll back all the patents that exceed that twenty-year limit. Second, the twenty-year limit should begin the moment a filing is submitted to Health Canada. Third, repeal the special regulations targeted at the pharmaceutical industry and treat the industry like any other patent holder. Fourth, limit the number of patents per drug to a maximum of two. Fifth, ideally, we would like to see the institution of a national drug plan where the purchase and distribution of medicines are overseen by federal or provincial government bodies. This would save money for everyone and work for the benefit of all.

Thank you very much. This is a précis of the report you all received.

The Chair: Thank you very much, Ms. Brown.

We're now going to turn to the Congress of Union Retirees of Canada, and we have Mr. Larry Wagg, the first vice-president, and Ms. Mary Eady, Ontario national representative. I understand Mr. Wagg is making the presentation.

Mr. Larry Wagg (First Vice-President, Congress of Union Retirees of Canada): First, let me thank the committee for the opportunity to sit before you today and give the views of our organization. I do, however, want to bring one thing to your attention. I know there may be time limits on legislation and so on, there are those constraints. But it's very difficult for organizations like ours and some of the others that are sitting around this table, who mainly work as volunteers. So I'm just letting you know we're hopeful that more notice of hearings will be given to our organizations—and I can only speak for the retirees.

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We represent 500,000 affiliated retired union members across Canada, all of whom come from unions in the mainstream of Canadian life. In eight of the ten provinces we have federations of union retirees and we also work through our municipal and regional councils at the city level.

In 1997 we appeared before another committee—I believe some of you were on that committee—at which we had a much more extensive brief. I'm not going into that. As a matter of fact I'm going to edit as I go and give you the highlights. I will read part of it and my colleague Mary Eady will read the balance.

The astronomical cost of prescription drugs has now created social inequities in Canada's health care system. The Globe and Mail reported earlier this year that some six million Canadians have inadequate insurance for prescription drugs. Rising drug costs are particularly a problem for seniors. Older people are more likely to take medications and they typically consume more prescription drugs than younger people.

According to a StatsCanada survey conducted in 1996 and 1997, almost half of all seniors 75 and over are taking three or more medications, compared with 30% of the population as a whole. You have two of them sitting here in front of you, as a matter of fact.

When the provincial governments and insurance plans try to get these costs under control, it is the seniors who are hit the hardest by increased deductibles and insurance co-payment fees. The other way they try to control costs is by limiting the drugs they will cover—in other words, delisting them. Anyway you slice it, we're in the losing group.

I would also like to point out that amending this legislation would make more money available for governments to put into other areas of health care—like hospitals, nurses, new technology, home care, and, yes, new prescription drugs.

Some of you may be aware of a symposium held in Ottawa on May 1 called “Controlling our Drug Costs: Canadian and International Perspectives on Access and Affordability”. One of the speakers at the symposium was Professor Malcolm Anderson of Queen's University. This study made front-page news in the Ottawa Citizen that day, so some of you may have seen that. His research shows that Canadians are losing about $5 million a month because of delays in listing generic drugs.

Patent Act abuse: To sum it up, the patent medicines NOC regulations introduced in 1993 gave the brand companies the automatic right to prevent Health Canada from approving a cheaper generic drug for two years simply by alleging patent infringement. The brand-name companies have been abusing this automatic 24-month injunction and initiating legal proceedings under the regulations, regardless of the merits of their case. Obviously an extra two years or more without competition can mean millions in extra profit.

I would like to point out to the members of this committee that this extra profit is coming directly out of the pockets of hard-working Canadians.

The Canadian Drug Manufacturers Association, representing the generic industry in Canada, circulated material at the symposium showing that there have been more than 200 court cases started under the regulations and that the delays caused by these cases have cost Canadians more than $300 million in higher drug costs.

Another tactic the brand-name drug companies have developed for abusing the regulations is adding more patents to minor variants of the same drug. It is one thing for the brand companies to have their patents—and I think we all recognize that there should be patent protection to encourage them to develop new drugs—but when they abuse these regulations in order to tie up generics in court for years beyond those patents just to have longer monopolies, that's not right.

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I'll turn to my colleague to tell you what we want.

Ms. Mary Eady (Ontario National Representative, Congress of Union Retirees of Canada): We're asking the committee to recommend that this legislation be amended to repeal the patent medicines notice of compliance regulations. Short of that, there must be a limit of one patent that can be listed per drug. Fair is fair: if brand names get their 20-year patents, when those patents expire there must be competition so Canadians can have access to less expensive drugs. As far as we are concerned, this shouldn't be a partisan issue, either.

On May 1 of this year, Senator John McCain, a Republican, and Senator Charles Schumer, a Democrat, together introduced a bill in the United States that would do the same thing we are asking you to do. An outline of what that bill contained has been given by Mr. Keon. It proposes to eliminate the 30 months American companies now have for injunctions against generic manufacturers. They put out a news release the same day they introduced the bill, which said:

The broad coalition supporting this bill is a testament to the way it achieves monumental savings for seniors and families not by redrawing ideological battle lines, but by simply restoring the intent of our patent laws.

This seemed to us a good idea.

Finally, the Minister of Industry, Brian Tobin, has said publicly in the House of Commons and in the media that he understands there are problems with the regulations, but he won't consider changes until sometime in the future. We believe this is a mistake. The Patent Act is before Parliament now. We suggest that the opportunity should be seized. Why must we let these abuses continue and drug costs continue to climb, when we have the perfect opportunity to fix them here and now? We urge you to take this opportunity and make this your recommendation.

Thank you.

The Chair: Thank you very much.

Now I'm going to turn to our last group of witnesses, from the Canadian Health Coalition. We have several members here. We have Kathleen Connors, the chairperson; Joel Lexchin, policy adviser; and Daniel Benedict, the co-chair for the Ontario Health Coalition. I believe Ms. Connors is going to make the presentation.

Ms. Kathleen Connors (Chairperson, Canadian Health Coalition): We're looking now at how we're going to do this. I will serve as the spokesperson, though certainly many of us are here to participate and Joel has some additional information.

The Chair: I want to remind you that we're hoping your presentation will be five to seven minutes for all four of you. That's what the clerk advised, and in all fairness to the other groups, that's what the committee has already undertaken.

Ms. Kathleen Connors: Then I will simply introduce and then turn it over to people who have the full information.

I have to say, Madam Chair, we find this very contracted process very disturbing, a very short time to make an intervention, very little notice, when many of the... The Canadian Health Coalition isn't a huge functioning corporate entity; its work is done largely through volunteer efforts.

Anyway, having said that, I come to the Canadian Health Coalition as president of the Canadian Federation of Nurses Unions. Nurses represent 80% of the health care providers in this country, working on the front lines of health care in hospitals, long-term care, and communities. One of the first things we learn to do as workers in the health care system is advocate on behalf of those who can't advocate for themselves.

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There has already been very poignant testimony from the elderly. If the disabled were able to be here as well, those voices would be echoing the same concerns as have been put forward.

When we look at the skyrocketing prices of drugs in Canada, as nurses we see what is happening to the health care system—we recognize it, because there are only so many dollars. We call on the committee to very seriously consider... I'm not the expert on the trade stuff, but people have put in place some other recommendations.

Yes, we need to consider the issue of retaliatory trade treatment, but Canada stood up in the past. We have to say that on the issue of health care and escalating and skyrocketing drug costs, this needs to happen.

I'm going to ask Mike to do the brief overview.

Mr. Michael McBane (National Coordinator, Canadian Health Coalition): Thank you, Madam Chair.

I'll read the statement, since it's not being handed out to the members of this committee. With two days' notice, we didn't have time to translate it.

In speaking to Bill S-17, an act to amend the Patent Act, Industry Minister Brian Tobin said in the House of Commons—I believe it was on Monday during the debate on second reading—that Canada's patent laws affecting drug prices will be radically changed because of a WTO ruling that certain old act patents were inconsistent with obligations under the TRIPS. Bill S-17 will lead directly to significantly higher drug costs, and we are told that the bill's impact cannot be debated, or even discussed.

A ministerial edict has gone out, and Canadians will be denied the right to participate in a democratic debate about patents and the impacts of drug patents going through the roof for the sustainability of medicare, or debate on high drug costs and the lack of drug insurance coverage and the restricted access to medications resulting. The ministerial edict on Bill S-17 illustrates in a dramatic fashion how international trade agreements undermine democracy.

Now, I'm not sure how many committee members have actually read the ruling from the WTO trade dispute panel—I suspect none of you. Yet we are taking it on faith. We have great faith, a touching faith, in the WTO.

The WTO trade dispute panel ruled against a piece of Canadian legislation. The WTO panel held secret deliberations, no right of standing for citizens or public interest groups. The Industry Minister says not only can Canada not fashion its own laws with the express mission to expand access to essential medicines, but Canadians can't even debate the policy implications of extending monopoly drug prices in Canada.

If citizens in Canada were to accept the logic of Brian Tobin on Bill S-17, there would be no need to elect any of you to Parliament. There would no need for a parliamentary committee.

The Canadian Health Coalition will not abide by this ministerial edict on Bill S-17. We will discuss the implications of this proposed legislation for the health of Canadians. Bill S-17 is about drug patents, it's not about CD players. This is a health issue. Essential medicines are a core piece, an increasingly important piece of Canada's health care system, and it impacts directly on the sustainability on that system when we are increasing monopoly drug prices and denying millions of Canadians access to essential medicines.

According to the Canadian Institute for Health Information, spending on prescription drugs has soared almost fivefold in the last 15 years. The Minister of Industry would have us believe that the extension of patent monopolies has no impact on drug prices. He made this statement on Monday—“No impact on drug prices”.

The fact of the matter is that Bill S-17 alone, disregarding all the other drug patent provisions, if passed will cost Canadians almost $200 million extra in prescription drug fees, and this is extra in a context where prices are already out of control in the health system.

Bill S-17 forms a part of a drug patent system that in effect eliminates competition and drives up drug costs. One result of making drug costs more expensive is limited access to essential medicines. According to a recent Health Canada report—I have copies of it here as well, from the Globe and Mail of March 14—six million Canadians have inadequate insurance for prescription drugs; that's six million Canadians.

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The numbers are rising because the federal government is driving up the cost and the provincial governments are delisting drugs on the drug plans. Of the Canadian population, 10% have no drug insurance at all. Another 10% are under-insured, meaning they're reimbursed less than 35 cents on the dollar. The largest province in Canada with no drug coverage, to my surprise, is Ontario.

What is most disturbing about Bill S-17 is what it reveals about the Chrétien government's approach to medically necessary and essential medicine. It's being treated by an industry committee, for the sole purpose of pursuing pharmaceutical industry interests. Primacy is given to commercial interests and their monopoly drug patents, rather than to public health interests.

The moral corruption of this policy is illustrated today in Africa, where Big Pharma refuses to provide life-saving medicine to millions living with AIDS. Stephen Lewis, Canada's former ambassador to the UN, asked the question about those who put intellectual property rights ahead of the right to life-saving medicine. His question was, “I want someone to explain to me why it isn't called murder”. Can anyone on this committee or anyone in the Chrétien cabinet answer that question?

Madam Chair, it's not just Africa. Canadians too are being killed because of the irresponsible practices of Big Pharma, including skyrocketing drug prices, denying increasing numbers of Canadians medications. There are a number of documented studies—one by Dr. Tamblyn in Montreal—showing that as a result of delisting public drug insurance and unaffordable drug prices, seniors in Quebec are dying.

Monopoly drug patents are playing an ever greater role in Americanizing our health care system. What I mean by that is drug patents and legislation, like Bill S-17, are intended to drive up spending and limit access to those who can afford it. That is American health care.

To argue that we can't even debate drug policy because of the WTO is ridiculous. Anyone who says that has never read the trade-related aspects of intellectual property rights section of the WTO—the TRIPs.

It's time for Canada to rejoin the international effort to put people before drug profits by introducing what was a major Canadian innovation—compulsory licensing—and integrating medicine back into a public health system and a public policy. To quote from the National Forum on Health, in its final report to the Prime Minister, “We need a consistent application to drugs of the principles that apply to hospitals and physician sector services”. This would imply decommodification of drugs. In other words, we must stop treating drugs as a commercial commodity.

A practical way to do this is to reintroduce compulsory licensing. A number of options allow for compulsory licensing under the TRIPS. We have outlined three options that come to us from several international trade lawyers and policy experts. This is a discussion paper I'm tabling on the question of compulsory licensing and intellectual property, prepared by John Dillon. I'm tabling it with the clerk, and I have copies available for members. I hope the committee will translate it and distribute it to all the members.

The Chair: That will happen. Thank you very much, Mr. McBane.

I have to ask you to wrap up with your final comments.

Mr. Michael McBane: Yes. Thank you for this opportunity for a very brief discussion on an important health issue. I will hand it over to Dr. Joel Lexchin.

The Chair: Very briefly, Dr. Lexchin.

Dr. Joel Lexchin (Policy Adviser, Canadian Health Coalition): May I use the overhead?

The Chair: Dr. Lexchin, your time limit, as I tried to explain, was to be five to seven minutes. We're now at ten minutes. Is the overhead set up? I wasn't aware that we were using it. Is it ready to go?

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Dr. Joel Lexchin: This is to just briefly illustrate what's going to happen because of this legislation and other pieces of legislation that have been passed around patents.

Here we're just looking at the change in drug prices over the period since Bill C-22 came into effect.

We've gone from spending on prescription drugs of just over $3 billion a year, and even deflated, we're now up to close to $10 billion a year. There are a number of reasons for this, but the main reason here is because of the change in the price of prescriptions. The important thing consumers are concerned about is the price of prescriptions when they go into the pharmacy. You can see here that for new patented drugs introduced since 1993, the price has gone up by about 20% a year, versus existing patented drugs at 6% a year, and generic or unpatented drugs at 4% a year.

Here you can see that patented drugs are becoming an increasing proportion of the total of drug sales. So by 1999, although patented drugs in terms of the numbers were relatively small, in terms of dollar sales they represented 61% of prescription drug sales in Canada, in money terms. So 61% of close to $10 billion is about $6 billion.

What does that mean? Basically, what happens when you have competition because of generic drugs? You can see here that when two companies are marketing a product, with one generic and one brand, the generic is at about 25% of the brand-name product. When you get up to five or six generic products, you're down to savings of about 60%. This bill will delay the introduction of this competition for the drugs it affects, and delay the savings you will get.

I have just a couple more quick points. When we talk about these new products, if they actually were of any value, in terms of increased benefits in health, then there might be some justification for increased prices. But you can see from the figures from the Patented Medicine Prices Review Board that category two drugs, which represent breakthroughs or substantial improvements, represent under 10% of the drugs that are introduced into this country in any given year. In case you doubt the Canadian figures, these are figures from France, which show that out of over 2,200 drugs that were evaluated, just under 3.5% were really major innovations.

So we have legislation that is going to increase patent protection for drugs that have little or no therapeutic value for the most part, and delay the introduction of generic prices. Generic prices produce savings of anywhere between 25% and 50% on the brand. If you delay those savings, you increase the amount of money that's being spent on patented medications and drive up the overall cost of prescription drugs in Canada.

That means provinces will be forced to do a number of things. They will have to either delist products, restrict access, or increase user fees. Other groups here have mentioned the impact of all those things.

Thank you.

The Chair: Thank you very much.

We're now going to turn to questions. I have a long list of people who want to ask questions, so I'm going to remind committee members about timeframes. I would ask that you try to keep your questions brief and the answers brief, as well.

We're going to begin with Mr. Rajotte.

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): Thank you, Madam Chair.

I don't know how brief I can be. Frankly, you've raised a lot of valid concerns here today, and I'll just express my biggest concern.

My biggest concern is that we have an August deadline in front of us, yet we have some very big issues here today. These are all valid debates, but if we get into these debates, I frankly don't see us meeting that August deadline.

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I would just like to put it open to anyone who wants to answer. If we get into this big broad debate now about the cost of drugs and the relationship between patents and drugs, should we not be worried about the implications of not following the WTO ruling?

Second, the minister did make a commitment in the House to discuss the whole issue of intellectual property. Is there a big danger in waiting till the fall? What would be the effects of waiting till the fall to have this larger broader debate?

The Chair: I have Mr. Benedict and Mr. Keon who wish to respond.

Mr. Benedict, go ahead.

Mr. Daniel Benedict (Co-Chair, Canadian Health Coalition (Ontario)): I'm Daniel Benedict. I'm a member of the executive board of the Ontario Coalition of of Senior Citizens' Organizations. I'm part of the delegation of the Canadian Health Coalition, which we're happy to belong to. I'm also an 83-year-old human being with cancer who's fighting to overcome some very serious problems.

I would like to underline the human side of this. It's true that everyone is under pressure to get things done and avoid too many fights, but there are some things we should be fighting for. The history of drug patent legislation and drug patent costing has shown that every time the brand-name manufacturers get an extension of their monopoly practices, it isn't enough. They come back quickly for more. This is what is happening now. This is why the Speaker of the Senate said that the protested practice of lengthening monopoly time is “tantamount to an abuse of process”. This was in commenting on the Senate hearings. I know there may be a certain amount of rivalry, but listen to our human problems.

There's no law to stop you from acting like human beings. The human cost of the delisting and the user fees is tremendous, and it's more important than any of the profit-making mechanisms that are encouraged by legislation such as Bill S-17. The earlier speakers have mentioned some of the things that are allowed under it. It went from 17 to 20, and from 20 it's stretched to 22. This is an abuse, and it's part of your responsibility, as representatives of the Canadian people, to give this some thought and to do away with the abusive factors.

The Chair: Thank you, Mr. Benedict.

Mr. Keon.

Mr. Jim Keon: I have two points.

What we are calling for in this bill at this time is the elimination of subsection 55.2(4), which is open in the bill, it's not a section that's not already on the table. That could be done by an amendment. In the United States this issue is being dealt with now. The abuses are happening there. These are the same companies that operate in the United States and operate in Canada, and also operate in Africa, as was mentioned. If we don't take action now, we're allowing those abuses to continue.

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The second point is that I'm not at all clear on what the minister is intending in the fall. I have heard from some people that the government may publish a green paper or a white paper on innovation. As part of that discussion there may be discussion of the role of intellectual property. I think that's a very big debate, a very long debate, which will deal with all sectors, the high-tech sector, entertainment, manufacturing, and won't get down to looking at the specific issues we're asking you to deal with now, which are abuses of a very specific set of regulations that don't apply to any other sector. So I don't know that our debate will fit there. To us, it fits now with this drug patent bill.

The Chair: Thank you, Mr. Keon.

Last question, Mr. Rajotte.

Mr. James Rajotte: I have many more questions, but the second question is this. We've heard a lot about how we compare with the United States and about what Senator McCain and Charles Schumer are doing there, but how do other nations' patent provisions compare to Canada's? Do they have a similar twenty-year patent provision? Do they have the same regulations we have here in Canada or a different set? Again, this is an open question, but maybe, Mr. Keon, you can address this.

The Chair: Mr. Keon.

Mr. Jim Keon: Canada has twenty-year patent according to the rules of the World Trade Organization and the TRIPS agreement. As part of the submission defending its law at the World Trade Organization, when it was being attacked by the European Commission, Canada presented evidence that, I think, seven, eight, or nine countries it knew of had some variant of the early working provisions we have in Canada, which sometimes are used as a reason why we need these regulations, the automatic injunctions, because the generics can begin to work and get their approval from Health Canada. So in return we will give brand companies automatic injunctions against their approvals. Countries such as Australia, Israel, the United States, Canada, Hungary—those are the ones off the top of my head—all have similar provisions. Other than Canada and the United States, no country engages in these automatic injunctions.

So I think it's a stretch to say there's some kind of link between the two. There's certainly no link between the two under the rules at the TRIPS agreement or the World Trade Organization, and that was very clear in the decision that came down against Canada.

The Chair: Dr. Lexchin.

Dr. Joel Lexchin: Thank you.

In addition to what Mr. Keon was saying, the other issue here is what the impact is going to be on prices. Other countries act more aggressively to control prices than Canada does, so that when you look at us compared to Australia, which is quite similar in terms of its health care system, in 1995 the Canadian prices were about 30% above the OECD average, Australian prices were 30% below the OECD average. So whether or not other countries have similar pieces of legislation, at least some also act more aggressively in controlling drug prices, keeping expenditures down, increasing access to prescription drugs. One of the reasons Australia is able to afford a national pharmacare plan is that it aggressively controls prices, which Canada doesn't.

The Chair: Thank you.

Ms. Torsney please.

Ms. Paddy Torsney (Burlington, Lib.): Thank you.

My questions are primarily directed to the CDMA representatives. In 1992 one of your presidents said “the new legislation is not just a question of our not being able to grow, we will not be able to continue to exist.” In 1992 you guys said “the Canadian pharmaceutical industry will shrink to 2% of the total market”. In April of this year we have Mr. Sherman saying “the generic industry in this country is in a state of collapse”. I look and I say, wow, in August 2000 Mr. Sherman was the 11th richest Canadian, at $2.5 billion. This year he's the 10th richest Canadian, at $3.5 billion. According to Canadian Business, he's reneged on $25 million worth of charity commitments. The 16th richest Canadian is Eugene Melnyk, who owns Biovail. Leslie Dan used to be the head of Novopharm—he's the 27th richest Canadian.

I don't knock success, but I don't think these guys are inheriting this money. These guys are making it in the pharmaceutical industry. If you make these “the sky is falling” claims continually about the horrors that are befalling Canadians, while in fact you've become increasingly successful, first, how do we believe anything you say, and how can you say the innovative industry is overly profitable? How profitable is Apotex if its president has earned or has accumulated an extra billion dollars worth of wealth in a short ten months?

• 1025

The Chair: Mr. Keon.

Mr. Jim Keon: I wasn't aware that he had accumulated a billion dollars in ten months.

Mr. Reg Alcock (Winnipeg South, Lib.): Raise their fee.

Mr. Jim Keon: I doubt that's true, but I'm not sure where you get your figures.

I can't comment on the quotes in 1992. Maybe if you want to table them, I can look at them and see where they were made and who made them, and under what circumstances.

Generic drugs sell for less than the brand drugs. If companies have been able to grow, that's because they provide a quality product at a good price.

It is true that over the last four years, the share of the generic industry has gone down, both in terms of prescriptions and in terms of dollars. Our share of the market is going down. Of prescription medicines, we have 14% of the market. I'm not sure how much the brand industry wants. They already have close to 87%. At what point will they decide that the generics don't have enough?

The price of patented medicines, as indicated by the Canadian Institute for Health Information, is one of the major causes of increases. As Dr. Lexchin pointed out, the average price of a patented medicine has been increasing 20%. The average price of generic prescriptions has been going up 4%. What we're saying today is let generics on the market, eliminate the regulations, and let there be more competition in the generic industry. We want more competition in the generic industry.

Ms. Paddy Torsney: Speaking of competition, there are basically two big generic companies. They pretty well have a lock on the market for the generics, do they not?

Second of all, the PMPRB sets the price of any new drug that comes on the market. So let's say a pill is introduced at $10. All the generic drug manufacturer has to do is come in at 70% cheaper, $7. Do they have to justify that cost? Did the pill actually cost them $1 to produce? There are no price controls on generics.

Frankly, if the issue is just price, I'm surprised that the rest of the groups here didn't raise the potential to legislate the price of the generic drug to be a better reflection of what it is, because apparently these guys are doing really well financially.

The other question I have is that many groups today, and certainly the CDMA has led with this, suggest that the innovations on the existing drugs are apparently irrelevant, they're not necessary, blah, blah, blah. You guys don't actually want to introduce the first patent; you want to go straight to the newer one, the most innovative, the one that has had more additional research, whether it's slow release or whatever else. If all these newer innovations are irrelevant, not necessary, just trying to extend the patent, why don't you go with patenting the first drug that was introduced?

Secondly, if your complaint is about extending the timelines, which we heard from the industry officials is in fact not correct with regard to notices of compliance, the generic manufacturer controls when they ask for that notice of compliance. So if the issue is timelines, why don't you bring it in earlier in the ten years, roughly ten years from market?

Mr. Jim Keon: I will ask Mr. Hore to answer the question about why we can't come on the market after the first patent has expired. I think that's a very good question.

In terms of the two big companies dominating the market, that was true in the late 1980s or early 1990s. Today they represent less than 50% of the generic market, and their share is declining. There are other companies that are coming in with older products and taking the market from them for the older products. Frankly, they can't introduce new generics they way they used to, because the system has changed very dramatically against them.

On prices, the generics are subject to price regulation and control at the provincial level. The reason patented medicines are subject to federal price controls is that patents are a federal issue under the Constitution, and as I understand it, the federal government has no control over pricing, so they leave that to the provinces.

• 1030

As I said, Ontario has pricing rules that guarantee that there will be at least a 30% saving with the first generic, and at least a 37% saving with the second generic.

Maybe I'll ask Ed Hore to explain why we do not bring out products as soon as patents expire, because we'd dearly love to.

Mr. Ed Hore (Legal Counsel, Canadian Drug Manufacturers Association): The reason is this: There will be a basic patent on the product, and that will expire, but there will be other patents listed under the regulations. The brand is entitled to an automatic stay in connection with the patents that it has listed. There may be six, eight, or more patents. Every time the brand adds a new patent, it can restart the stay. It's like you're jumping over a hurdle, but every time you do it, the hurdle moves.

So in regard to your point about why we do not do the earlier version, that's exactly what they want to do, but the patent may be for a coating or for some kind of inert filler in the pill, and the generic won't use that. It's saying it's not using it. That's why it wants to come on the market, because it's not infringing that patent, but the brand gets the stay anyway.

You see, that's the point. Even if it's not infringing the patent, even if it's not doing that thing that's covered by the patent, it still can't come on the market. So what that means is Canadians are paying more. They're paying a monopoly price for the drug even though there is a competitor that could come on the market that would not be infringing a patent.

I have some examples here, which I'll table with the clerk, of some drugs where that's going on.

You have, for example, Omeprazole, where you now have eight patents. The basic patent expired in July 1999. There are a number of generic companies, not just two but three or four, that want to get involved, but now there are eight patents. The number of patents that are on the register, that is, are listed under the regulations, is increasing all the time, so it makes it, in effect, almost impossible for a generic to come on the market even though they may not be infringing any of those patents.

Mr. Jim Keon: The other point I would make is that in the United States again—and we're pointing to them because the same companies operate there and here—the Federal Trade Commission, their antitrust authority, has actually begun investigations of the abuse of patents that the multinational drug companies are using by these late listings of patents and the multiple patents.

Again, we're pleading with the committee here to look at this. It is a practice that goes on in Canada and in the United States and is aided and abetted by the regulations that are allowed by proposed subsection 55.2(4) of this bill.

The Chair: Do you have a question, Ms. Torsney?

Ms. Paddy Torsney: Thank you. It's really more of a comment.

Clearly lots of people are going to have lots of different opinions, but Mr. McBane, to suggest that any of us sitting on this side of the House are morally corrupt, or that somehow a minister, in all his incredible powers, is cutting off the tongues of Canadians, is really inappropriate. People in Canada can say anything they want, but to suggest that he has issued a ministerial edict to cut off debate... I'll tell you, I'll debate the issues all I want, and my tongue will be well intact.

The Chair: Ms. Torsney, thank you.

[Translation]

Mr. Brien, please.

Mr. Pierre Brien (Témiscamingue, BQ): To continue with what Ms. Torsney was saying, Mr. McBane, I would also like to say something to you. You may explain your point of view with all of the conviction you have shown, but to imply that no one here has read either the decision or the international agreements is difficult for me to accept. Particularly as, in your introduction, you who claim to be more expert than we, said that you were obliged to appear here on short notice. Yet it was very clear, according to the World Trade Organization's decision, that the deadline was one year. I am also certain that you are in touch with lobbyists from the generic sector, and that they must have warned you that you would have to appear soon. Therefore, as far as that goes, I take it with a grain of salt.

Just because we are members of Parliament, we are not obliged to listen to any old nonsense put any old way. I am not a Liberal member, from the party in power, but I feel as concerned.

My question is for Mr. Keon now. Personally, I have a problem with your association. I have been working on the pharmaceutical issue for a long time, in fact more or less since I have been in politics. The credibility of the information that your association has given us is sometimes dubious. I will give you an example; you say that you win in 80% of your cases, which seems to imply that this is proof that there is a problem regarding settlements. This is very incomplete data. You are not taking into account the cases that your industry has itself withdrawn.

• 1035

Do you think we can't examine this issue more in depth, to fill out the information that you have given us? Why not present us with a more realistic picture, which would allow us to listen to your arguments with more confidence and to give them more credence?

The Chair: Mr. Keon.

Mr. Jim Keon: The 80% of cases statistic was provided by Mr. Hore. It is therefore Mr. Hore's credibility that you are challenging, and I will ask him to respond.

Mr. Pierre Brien: Very well.

[English]

Mr. Ed Hore: I stand by the 80 figure, I think it's right. We're looking at the cases where a court has actually considered the patent issue, has actually said, is this generic drug going to infringe this patent or is it not? And in the cases where the court has actually looked at that issue, the very issue between the parties, the generics, since the last set of amendments in 1998, come out at about 80%. There are a lot of cases where it's an inconclusive result or where it's a procedural decision that has nothing to do with the patent merits, because the regulations themselves are enormously complicated and often don't resolve the civil issue between the parties. But when you have a decision by the court, either in a trial or under the regulations themselves, on the patent merit, the generics are winning about 80% of them.

So by and large, it appears that where these cases are being started—and we don't know about all of them, because many of them are still in process—the generics are winning the great majority of them, although it should be said that even if they win the case, as happened, for example, with Naproxen, it may be four or five years that they're delayed by a patent that may be found to be invalid.

[Translation]

Mr. Pierre Brien: Is the information I have to the effect that the 80% of cases won since 1998 is based on a grand total of five cases correct, that is to say four cases out of five? We are not talking about hundreds of cases. We are talking about five. Is that your 80%?

[English]

Mr. Ed Hore: No. It is a four out of five proportion.

[Translation]

Mr. Pierre Brien: How many cases are at issue? We are talking about 80% of how many? How many cases are there in all?

[English]

Mr. Ed Hore: If memory serves, there are about 65, something like that, where there's actually been a decision on patent merits. There have been many other cases where the result has been inconclusive, or the case is still going on, or there was a prohibition for procedural reasons. But what I said is that I'm looking at the cases where there's an actual decision that turns on the merits of the patent issue. In other words, how often are the cases started when there really is a patent concern? And the answer, on the evidence, seems to be not very often.

[Translation]

Mr. Pierre Brien: I have a problem because in the graph provided by Health Canada, the cases that were brought before the courts since 1998, do not add up to the number you gave me. Have you seen this Health Canada graph?

[English]

Mr. Ed Hore: Yes, I've seen that table.

[Translation]

Mr. Pierre Brien: There is a considerable difference between the number of cases that have been brought before the courts since 1998, according to the graph, and the number of decisions that you have quoted and that you studied, which corresponds to 80%. You say that your study was based on more than 60 cases. However, there have not been that many cases submitted to the court.

Mr. Jim Keon: I think that Health Canada's data concerns the number of cases submitted by the patent drug companies at the beginning of each year. Mr. Hore is talking about the decisions handed down after the changes in regulations, in 1998.

Mr. Pierre Brien: I would still like to have further explanations concerning the 80%.

Mr. Jim Keon: But obviously, we had some two or three years before.

[English]

Mr. Ed Hore: That chart, I think, shows something totally different. What it shows is the cases that have been started, not the cases that have been decided. I'm looking at the cases that have actually been decided and determined. Some of those cases decided since 1998, of course, were started long before. For example, the cases that went to the Supreme Court of Canada were started years and years ago, and the generics were held off the market the entire time, for the four or five years the cases were going on.

[Translation]

Mr. Pierre Brien: As your 80% is based on more than 60 decisions, I would like you to send us a summary of your analysis.

• 1040

[English]

Mr. Ed Hore: I'd be happy to do that.

[Translation]

Mr. Pierre Brien: I addressed my remark to Mr. McBane, but I did not give him the opportunity to respond. However, in asking him another question, I will give him the chance to say something. I can see that for some time now, he has wanted to say something.

Ms. Torsney alluded to price controls on generic drugs that are already on the market. You presented a chart showing that after a patent expires, whereas we pay 85% of the cost during the first years, the cost tends to diminish if there are more than two companies. Should we not see what we can do to ensure that the price of drugs remains reasonable, after the patent expires?

Seventy percent is a very arbitrary figure. This is the provincial control referred to by Mr. Keon. The provincial system's refunds do not go above a certain percentage. They are not based on production costs, etc. It is possible to buy generic drugs that are quite expensive, whether they are made by the generic companies or by the originals. This market still represents $4 billion per year.

Do you and your consumer groups not feel that it would be in order to examine the prices of generic drugs already on the market more closely?

[English]

Dr. Joel Lexchin: First, with respect to the brand-name products, the Patented Medicine Prices Review Board does not base its decisions as to maximum introductory price on the production costs of these medications. So there is no medication that's introduced into Canada or marketed in Canada where the price is decided based on production costs. In fact, production costs are very difficult to determine, because costs, especially research costs, can be attributed to a wide variety of different products. So what you're asking is that the generic medication should be held to a different standard from that applied to the brand-name medications.

Second, who is going to undertake the regulation of the price of generic products? Since the provinces are the ones that introduced them onto their formularies, it would have to be the provinces that undertake any regulation. It has been pointed out that in Ontario the first generic product has to come in at a 30% discount below the brand-name product. What we're doing here is essentially adopting the Patented Medicine Prices Review Board criteria. They say that a new brand-name product cannot come in any higher than existing products in the same therapeutic class. What the Ontario government is saying is that the generic products have to come in at 30% below the brand-name product they're competing with.

The Chair: Mr. McBane.

Mr. Michael McBane: I'd like to add a couple of points too. In respect of the comments that were read and you'll see in the text—I'm talking about the primacy given to commercial interests over public health interests—if there are any members of the Liberal Party who think Bill S-17 does not do that, they're not being intellectually honest. That is what I'm characterizing, that policy—I didn't name individuals. The policy of putting commercial interests in drug patents ahead of human health is—

Some hon. members: Oh, oh.

The Chair: Can I have some order here please?

Mr. McBane, could you please try to temper your remarks?

Mr. Michael McBane: With the second point, about cutting off debate, I'm quoting the minister, who said “there will be no debate and no discussion on the broader implications”. To have three days of hearings and to think that's adequate is not acceptable.

The Chair: Mr. McBane, you may not be aware of the parliamentary process, but the reality is that Bill S-17 has an S in front of it because it started in the Senate. The Senate had numerous days and numerous hours of hearings. When we do the reverse—and this is the reverse process when it comes to the House—we try not to repeat everything they've done. We try to air out the differences that may still be there before the bill comes to the clause-by-clause stage. If you go back and look at the history between this committee and the committee of the Senate, I think you'll see that when we have long hearings on a bill, they have shorter hearings. But everyone has had plenty of time since the WTO ruling to know that the hearings would be taking place some time in the month of May, when it was returned to this committee.

So with all due respect, we're going to move on to our next questioner, who is Mr. McTeague.

• 1045

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Thank you, Madam Chair.

I want to begin by expressing my deep regrets to all of you here that you've been bunched in. I see the industry is here with other interest groups, and I'll probably be doing the same thing with respect to what happens on the 29th, as the chair has explained, as a result of circumstances that are not in the control of this committee.

I am, however, enamoured with this issue, for obvious reasons. I am a member of Parliament, and I'm duly elected, as are all the members here. This issue of health care is foremost in the minds of every Canadian, irrespective of what side of the industry one wants to align oneself with. For that reason, I think the prime purpose for members of Parliament here is to determine what is in the broader public interest. I believe we all respect and understand the importance of our international obligations, but we can't forget our obligations to Canadians. So I want to signal to you a couple of concerns that have been raised.

As you know, industry officials were here yesterday. There was some rather interesting discussion. I want to ask the chair, or the clerk, to ensure that a copy of the Schumer-McCain bill is indeed distributed to members of Parliament. I think it's going to be extremely important for now and down the road.

This is the third time this committee has heard issues in the matter of regulations. To my understanding, neither the WTO nor the drug patent legislation, as it was contemplated in 1993, envisaged the issue of automatic injunction, which, as the industry department suggested the other day, is unique to this industry. What is not unique is the fact that the industry committee in 1997 heard—and I'm quoting one of the recommendations—“testimony from both sides suggesting that the system in its present form is problematic and has resulted in excessive litigation”.

On April 25, 1997, a day before the federal election was called—I'm wondering why I missed this one—a communiqué from the previous minister noted that the committee's specific recommendation on the regulatory framework for drug patent policy called for a change to address stakeholder concerns, achieve fairness and effectiveness, and reduce unnecessary litigation. The minister noted that in addressing the need for change, we must be guided by the need to strike the right balance.

Fast-forward to 1998. At that time we discovered that there was indeed a review by Industry Canada. It did indeed reduce from 30 months to 24 months the automatic injunction, but that has turned out to be irrelevant, because those who make the allegations still get extensions. We also know that at the same time, rather than addressing the issue specifically, as was intended in 1997 by this committee, the issue of earlier contests that might have allowed the whole process to take place on the twentieth anniversary has now been effectively removed and neutered, again by people who are not accountable to Parliament, but perhaps ought to be.

Because we have a number of members of Parliament who are interested in holding the PMPRB out as the best model through which to content ourselves that there's nothing wrong with this industry, the other day we were able to determine in the question of R and D, being $900 million, by brand name manufacturers, that a good portion of that is advertizing, and not direct research.

I have a couple of questions, then, because I know other members may want to allude to the fact that Canadian prices for drugs are generally lower. Mr. Lexchin, you refer to some of these with your tableau. I want to be able to ascertain the following. If I'm incorrect, please say so, because I have a couple of questions on this.

The U.S. has the highest drug prices in the world, and the Canadian exchange rate means that most things are cheaper in Canada. When we refer to being the cheapest in relation to percentages or costs of drugs worldwide, we're referring to the seven OECD countries that PMPRB uses as their reference for patented prices. All the seven countries, France, Germany, Italy, Sweden, Switzerland, the U.K., and the U.S., are on the high end of the drug price scale. Except for Italy, all those countries have something in common, but not with Canada, and that is that they have their brand name manufacturers headquartered in those countries.

My question is very simple—in fact, it will break into two points. Industry Canada officials told us the other day that there was a full and comprehensive review of the impact of regulations in 1998, after the five-year statutory review of the legislation. They went on to believe that the “correct balance” was in place. 1998 is not all that long ago. I was wondering if you could tell us if anything has changed, or are we still back at square one?

• 1050

The second question deals with early workings. The official stated, notwithstanding what they said at WTO, that early workings was only used by the generic industry. I asked those officials, based on the help from my good and capable researcher, Geoff Kieley. There were other such industries—pesticides, agriculture, chemicals, medical devices—and they promised to get back to the committee with an answer.

Can you shed some light on that issue, Mr. Keon?

Mr. Jim Keon: Yes. I'll address the issue of early working.

It was quite interesting. Early working and stockpiling were challenged by the European Union as being inconsistent with the TRIPS agreement. The Canadian government defended them and said, no, they are consistent. Because we were the industry targeted, they actually brought us in and worked with us, and we were very appreciative of that.

One of the points the European Union raised was that the early working provision violated TRIPS because it was discriminatory; it only applied to one sector, the pharmaceutical sector. Under TRIPS, you're supposed to apply patent rules more generally, to all sectors. One of the Canadian defences—a very strong defence—was, no, that's wrong; this is a provision of general applicability that can apply to any industry in Canada that is required to make a regulatory submission.

So a second-entry company, in any sector, including the ones you've mentioned, can take advantage of the early working provision.

I'll ask Ed Hore—in fact, there has been litigation on this, where the courts have in fact determined that, yes, the provision is of general applicability.

Mr. Ed Hore: There's a case called Visx, which went up to the Federal Court of Appeal. It had to do with optical surgery, I believe. One of the defences in that sector was the early working provision, and the court upheld the idea that that could apply in that industry.

Mr. Dan McTeague: Can you gentlemen explain to me... We've heard some very interesting testimony in the rejoinder by my good colleague, Mr. Brien. I note that in his province, as in mine, you have cited the fact that there is an inadequacy, in the sense that 60% or 70% of people may not be getting adequate drug care. Given the importance that has for all of us as policy-makers, but that the policies may be increasingly shaped, developed, and crafted by people beyond the scope of Parliament...

I also understand there was a study done some time ago in the province of Quebec, and I wanted to know if you might be able to shed some light on it. I don't know if it's McGill University that suggested that many people in that province are in a situation where they may often have to choose between purchasing drugs or putting food on their table, and that the effect of course of under-dosaging is a greater concern in that province, and certainly in its overall medicare bill.

Mr. Jim Keon: I can begin. I think Dr. Lexchin might be able to shed some light on that as well.

I believe you're referring to a study by Dr. Tamblyn at McGill University. She was commissioned by the Quebec government to look at the impact of the changes to their universal drug program.

Mr. Dan McTeague: By the Quebec government?

Mr. Jim Keon: By the Quebec government.

Starting in 1997 they introduced a universal drug program that is, arguably, available to everyone. But for the first time they required co-payments and premiums to be paid by people on social assistance and seniors. What Dr. Tamblyn's study found—and I will stop and let Dr. Lexchin explain more—was that because of these costs, people were not taking their medicines and therefore were becoming sick and in some cases dying because of lack of access to the medicines.

The Chair: Dr. Lexchin.

Dr. Joel Lexchin: Thank you.

Mr. Keon has essentially summarized it. What the study found was that if you looked at particularly vulnerable people, and in this case it was people on social welfare, the impact of the institution of user fees did result in decreased usage of necessary medications. We're not talking about taking an antihistamine for hay fever; we're talking about the use of medications for cardiac conditions, diabetes, things like that.

The result of that, when you looked at it, for people on social assistance was that there was an increase in hospitalizations of 194%, an increase in physician visits of 22%, and an increase in emergency department visits of just over 100%. This was as a direct result of the institution of the user fees in this group that had previously not been subject to user fees. There were also similar, although not as dramatic, increases in hospitalizations, physician visits, and emergency department visits among the elderly.

• 1055

If you add up the cost of these things, the cost to the Quebec government in terms of increased health care expenditure was probably significantly greater than what they accrued by virtue of the user fees.

The Chair: Thank you.

I'm sorry, Mr. McTeague, I'm going to have to move on. Your ten minutes are up.

Ms. Desjarlais.

Mrs. Bev Desjarlais (Churchill, NDP): I just want to recognize off the top that we obviously have some philosophical differences between members of Parliament on the trade rulings in the issue of health care, but I don't want to get into those because none of us have enough time to get into those whole issues. So I'm going to try to address my questions to clarify some things.

I'm not too sure who mentioned it, but someone said that in Australia they aggressively control prices. Specifically what procedures are used in Australia?

Dr. Joel Lexchin: Australia deals with drugs on a national level. Drugs first go to something called the Pharmaceutical Benefits Advisory Committee, which has a pharmaco-economic study done on the drugs and makes recommendations as to whether or not they should be listed on the national formulary. If they recommend that it should be listed, then that goes to a specific pricing committee, which then negotiates with the drug manufacturer. If the manufacturer does not accept the price that's being offered, they're still free to market it, but it is not covered under the pharmaceutical benefits scheme.

If you're not covered under the pharmaceutical benefits scheme, you effectively lose the majority of the Australian market. Therefore, it's in the manufacturers' interest in general to comply with the suggested introductory price.

Mrs. Bev Desjarlais: The comment was made that it's not necessary to leave the notice of compliance in place to meet the WTO ruling. I know there are a few of us around the table who have probably read the ruling, just to shed a little bit of light on that—maybe not in an in-depth way, but some of us actually have, and I think from both sides of the House. Accepting that the notice of compliance is not part of the ruling—because I agree with you, my view of it, from what we read, is that it's not part of the ruling; rather the position taken is that we just want to rush this through, so we're going to leave it in there and not touch it. But it's those abuses under that notice of compliance that you really want us to address at this point. Rather than get into the whole issue of the philosophical reasoning, it's those abuses under the notice of compliance that you want us to get into.

Mr. Jim Keon: That's right.

Mrs. Bev Desjarlais: Along those abuse lines, when you talk about the number of patents, just to be clear, and I'll use whatever comes to mind, if we have a situation where we have acetylsalicylic acid and we're going to put acetylsalicylic acid gum... and then we have acetylsalicylic acid liquid, are you saying at each different point there's a different patent for each of those?

Mr. Ed Hore: Not just that. Even if you have just a tablet, it doesn't have to be a different tablet. There might be six patents listed for that one tablet and new ones being added all the time. That's what's happening with Omeprazole, for example. It's the same pill.

Mrs. Bev Desjarlais: Would that be because it has a slow release, or is coated, or—

Mr. Ed Hore: Because there's a patent on something like we're going to make it this way as opposed to that way, or we're going to put this coating on it as opposed to that coating, or we're going to—

Mrs. Bev Desjarlais: So whether it's chocolate-coated, yogurt-coated—

Mr. Ed Hore: Yes. You might be able to get a patent on that, for example. So the patents are not very weighty, but they're there.

Mrs. Bev Desjarlais: So it's not even the medical component necessarily that's going to be doing the job that's following the patent specifically.

Mr. Ed Hore: That's correct. But it still triggers the 24-month stay. So the more there are—and the stay is restarted each time a new one is added. It can all go on indefinitely.

Mrs. Bev Desjarlais: And one would assume that those processes never cost those brand-name companies millions of dollars to research and develop.

Mr. Ed Hore: It's obviously very hard to say. It will vary.

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Mrs. Bev Desjarlais: I guess if it did, it wouldn't be the best business plan.

Mr. Ed Hore: But you see, the point is that the generic may not be doing it that way. They may say, “That's protected by patent and we're not going to do it that way; we'll do it another way.”

Perhaps we should stress that we're not saying they shouldn't be able to have patents. Of course, they should be able to patent these things. We're just saying there shouldn't be an automatic stay. They should be entitled to all of the remedies that any other patentee in any other industry has, such as suing people for infringement. We're just saying they shouldn't get the automatic stay.

Mrs. Bev Desjarlais: I think the industry people told us during their time here—or it could have been the department people—that there weren't any drugs that went over the 20-year period. They're going to make sure that everything falls within the 20-year period and move everything up to that, but those patents that were over the 20 years aren't going to be brought back to the 20 years. Are there any drugs that fall into that category that are over the 20 years and aren't going to be brought back to the 20 years?

Mr. Jim Keon: Yes. In fact, the vast majority of the old-act patents in the drug field—these are patents applied for prior to 1989, when the term was 17 years from the day they were granted—I think it's 80% to 90%, have more than 20 years.

Overall, I believe the government figures showed that 60% to 65% of all patents actually had more than 20 years. But when you look at just the drug industry, which is the sole industry concerned by this—and again, that's from the government's information—and it's the only industry that has expressed any interest in this, 80%-90% of those have more than 20 years.

The largest drug is one called Vasotec. It's a heart medication, and has about 27 years of patent protection. In Canada, that drug will be under patent until 2007. I think it's about the fifth largest selling drug in Canada. It's actually been made generic in the United States, and the price came down dramatically in the U.S. We have another six years of patent protection in Canada.

In our brief we called on the government to roll these patents back. We said “If it's fair that patents that got less than 20 years are going up to 20 years, shouldn't it also be fair that patents that got more than 20 years are brought back?” The government said “Oh well, the WTO didn't make us do that.”

Mrs. Bev Desjarlais: Let's pick that one drug alone. What would be the savings, on that one drug alone?

Mr. Jim Keon: If we use the information Dr. Lexchin mentioned, in Ontario, which is the biggest market, the first generic cannot come on the market unless it's at least 30%. The second cannot come on the market unless it's at least 37%. You're looking at a drug that's probably close to $150 million a year in sales. So at 37%, you're looking at over $50 million in savings from one drug, which Canada will not see for another six years. So on that one drug alone, this failure to roll back the patent to 20 years will cost Canadians about $300 million.

Mrs. Bev Desjarlais: Okay.

The Vice-Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): Are there any more questions?

Mrs. Bev Desjarlais: That's fine. Thank you.

The Vice-Chair (Mr. Walt Lastewka): Ms. Jennings.

[Translation]

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Lastewka and thank you for your presentations.

I would like to start by wishing you, Mr. Benedict, good luck and success in the battle you are waging.

Secondly, Mr. McBane, I join my colleagues from both sides of the House in saying to you that I found your comments ungracious and unfortunate. I believe that the chair of the committee explained the process and the rules to you very well, the way in which things are organized, and given the fact that this bill comes from the Senate, it is common practice for the House of Commons to spend less time on it and only examine issues where there seems to be some confusion or a lack of information.

I basically have one question. I am very interested in non- proprietary or generic drugs. The Coalition des médecins pour la justice sociale is in my riding, in Montreal. They are one of the strongest and most respected voices in Quebec on the issue of patients' rights, the rights of sick persons, on the need for people to have access to medical service, including drugs at a reasonable price, etc.

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I also have in-laws who are both taking drugs in order to stay alive, and if not for the fact that they are fortunate enough to have children who can help them financially, they would be in a very bad way, in spite of the pharmacare program in Quebec, and in part because of this.

Therefore I am well aware of this issue, but I still have some questions to ask the association. If we look at the last five years, how many patented drugs have there been whose patents have expired on the average, per year? We can presume that this gives the generic pharmaceutical companies the chance to produce these drugs. In a given year, how many are there?

If, for example, there are 90,000 drugs on the market and 80,000 of these are patented, each year, we could say that there are new patented medicines that come onto the market, but there are also drugs that are no longer under patent or that will be put on the market without patents, quite simply. This is a market that is available to generic pharmaceutical companies who want to make these products. I would like to know how many such drugs there are in a given year. How many of these do you consult Health Canada about in order to be able to start production? How many applications are filed annually with Health Canada? How many of these applications are challenged by patent-holding drug companies? Here, we are talking about the injunction.

I must tell that I am a lawyer by training, and before deciding if the information and the facts are correct, I want to have an overall view of the situation. Therefore, when you come here and say that the pharmaceutical companies producing patented medicines are abusing this power, I want to know in what way, and where this is happening.

When someone comes and tells me that police officers are abusing their power as concerns issuing speeding tickets, I want to see the data. I would ask how many cases of speeding there were, and of this number, how many resulted in tickets being issued, for example, before deciding if there was indeed abuse. I do not expect you to give me the data now, but I would like you to provide them to the committee. The clerk and the chair will certainly ensure that they are distributed to all members of the committee.

I heard of a study that was done in 1999, which showed that the 72 best-selling non-proprietary pharmaceutical products represented 10% of annual sales of pharmaceutical products. Is that correct? If it is correct, how many are products made by your member companies compared to products that are made and sold by the companies that do the research? If you cannot give me that information now, I would appreciate your sending us a written answer.

I have one last question. What is the average period of time between an application for approval for the production of a generic drug which has or had a patent, and the approval or rejection? I'm referring to the period of time it takes for our officials to come to a decision. This also has to be taken into account if we are to come to the conclusion that the companies are abusing their right to apply for an injunction. If you do not have the information now, you may send it in writing to the committee.

Thank you.

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The Vice-Chair (Mr. Walt Lastewka): Mr. Keon.

Mr. Jim Keon: On the market, the generic companies sell 41% of prescription drugs in Canada. However, the generic companies have only 14% of the revenues.

Ms. Marlene Jennings: That is not what I asked you.

Mr. Jim Keon: Our companies manufacture and sell hundreds of products in total. The big companies such as Apotex, Novopharm, Genpharm produce and sell... Apotex, for example, produces and sells 400 or 500 products. They sell a lot.

As for your other questions regarding the market, perhaps we could send the information and results in written form.

Regarding the legal questions, I will ask Mr. Hore to answer.

[English]

Mr. Ed Hore: Insofar as I understand your question, I think you're asking how we know if there's an abuse, and how we can quantify that. I think the answer is that we have to look at how often it appears, at the end of the day, that the generic is infringing on the patent. If it isn't infringing on the patent but there has been a stay, that would seem to be an abuse, because it means that a product has been kept off the market when it shouldn't have been. I think the data we'll be providing at the request of Monsieur Brien will answer your question.

I think part of your question has to do with the issue of whether cases are always started when an allegation has been sent.

[Translation]

Ms. Marlene Jennings: No, no. This is what I asked. Your member companies can apply to Health Canada for authorization to produce a certain number of pharmaceutical products. How many products do they do this for? If there are 1,000 pharmaceutical products that have been patented and that your company could be authorized to produce, how many of these products do you seek authorization for? Is it five out of a thousand? Is it five hundred? Is it one thousand out of one thousand?

[English]

Mr. Jim Keon: As I said, our large companies produce many hundreds of products. That's one of the distinguishing features between a generic manufacturer and a brand-name manufacturer. Most brand-name companies will have a very limited range of products—10 or 12 products. Large generic manufacturers produce hundreds of products.

The role of the generics is to bring cost savings to the health care system. If a drug has sales of $200 million in Canada and a generic comes on the market, it will bring far more savings than if it tries to genericize a drug that has sales of $2 million a year. Our companies, by and large, focus on the larger, more successful products. Those products are more valuable to the health care system, and they are the products they focus on.

We'll come back to you, because I don't have the figures in my hand, but there are several dozens of products that generics are trying to genericize each and every year.

[Translation]

Ms. Marlene Jennings: If I understand correctly, as you have said that your goal is to improve matters for Canadian consumers, you are non-profit organizations. Your goal is not to maximize profits. Therefore, as you have just said yourself, you do not necessarily choose the products whose sales show that you can generate profits for your shareholders in bringing them to market. This has no influence on the products that you choose when applying for authorization to bring them to market. This is not a factor taken into consideration in the choice of products that you wish to bring to market. This is why I asked you how many products you could be authorized to bring to market each year, and for how many of those products you submitted an application.

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[English]

The Vice-Chair (Mr. Walt Lastewka): Ms. Jennings, I will ask Mr. Keon if he can get back to the committee on that.

Mr. Jim Keon: Okay. Just to be clear, we represent what are hopefully profit-making companies. They're in the business of making generic drugs. Generic drugs are intended to be equivalents to brand-name drugs, and come on the market at lower prices. That's what they do, and they do it very well. As I said, there might be 5,000 drugs out there, but they only have so much room in their plants. They can't make every drug. They choose the drugs—

The Vice-Chair (Mr. Walt Lastewka): The member has asked the question. You don't have to answer it now. Get back to the committee. Out of the potential, what is the percentage? What are the numbers?

Mr. Rajotte, for five minutes.

Mr. James Rajotte: Thank you, Mr. Chair.

I want to touch on the impact of this bill. One thing that sort of surprised me about the presentations today was that the people here seemed to think that the impact was much broader than what I initially perceived. The information I have is that about 30 patents would be affected by this specific legislation, and the impact would be fairly small.

Mr. Keon, you can address this, or anyone else. Will more patents than those be affected? For the time period, it's sort of represented as three years, from 17 to 20, but again, the information I have is that it's more of a six-month time period. Is that information correct, or do you have other information?

Mr. Jim Keon: I think the information you're referring to came from Industry Canada. I don't believe it was 30 patents or products that would be affected in the pharmaceutical area. I think they indicated that something like 30,000 patents would benefit from this, but most of them wouldn't have any commercial value.

In the pharmaceutical area, if we accept Industry Canada's figures, there were approximately 30 products they pointed out, and something like $200 million in extra costs.

We should also remember that the section of the bill enabling stockpiling regulations has also been repealed. Under that provision, the generics used to be able to manufacture the product in commercial quantities, package it, and have it ready to be shipped, virtually on the day the patent expired, or on the day they won the court case.

They can no longer do that, so there's a delay there as well. On every new generic there will be a delay of several weeks or months, depending on how difficult it is to manufacture and get that product ready. That's under the stockpiling regulations.

In our view, the bill continues a trend of more patent protection.

The Vice-Chair (Mr. Walt Lastewka): I'm not sure if your question was answered. You were trying to get at the number of drugs?

Mr. James Rajotte: You don't dispute that there are 30 products?

Mr. Jim Keon: There are 30 products that are getting patent term extensions, that's right. I just tried to point out that each and every new generic that waits for a patent expiry, or the court case, will probably be delayed several weeks or months because of the removal of the stockpiling provision. The bill does both things.

Mr. James Rajotte: The next issue I want to touch on has been raised by other committee members. It's the issue of multi-patenting, I believe it's called. I'm not sure exactly how that works. If a patent is given for the elements of a drug and then, as Mr. Hore pointed out, you patent later on the coding, I still don't understand why the generic cannot use the elements of the first patent and perhaps develop a coding of its own. Would you clarify that for me please?

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Mr. Ed Hore: And that, of course, is precisely what it would do. It would say we don't want to infringe this patent on the coding, so we're going to have another coding. Because the patent on the coding is listed under the regulations, the point is the brand is entitled to get the 24-month stay regardless of whether or not the generic is infringing the patent. In other words, the generic says their product is different. The brand can say they're going to sue and get the 24 months automatically. They may know that the generic is not infringing, but they nevertheless get the 24 months.

Mr. James Rajotte: I want to make sure I have this right.

Suppose the elements of a drug are discovered, or as they are discovering it, they are patenting it. Then they get the 20-year patent on that. They develop a coding, or even a different type of coding, and say that's five years down the road. So the generic cannot use the elements on the first patent because of the second patent on a different coding.

Mr. Ed Hore: That's right. Let's say the first patent expires.

Mr. James Rajotte: Why could the generic not take the elements of the first patent and use a coding of its own, or a different one?

Mr. Ed Hore: It would do precisely that. It would use its own coding. It would have a separate coding, but because the second patent, in your example, which is on the coding, is listed under the regulations, the formal language is that the generic has to make an allegation to that patent. The brand can then start litigation. By doing so it commences automatically the 24-month stay.

I'm sorry if it's not entirely clear. What it boils down to is that even after the initial patent expires there will be litigation on other patents. There may be a coding patent. There may be a patent on a method of making the drug. There may be a patent on what's called a crystalline form. And each one of them is able to trigger the 24 months while it gets sorted out in the courts, whether or not the generic is infringing.

The Vice-Chair (Mr. Walt Lastewka): I apologize. I must go on.

Mr. Cannis.

Mr. John Cannis (Scarborough Centre, Lib.): Thank you, Mr. Chairman.

Quite frankly, I don't know where to start. We started talking about Bill S-17 and we've gone every which way but. I also want to pick up where my colleagues—

The Vice-Chair (Mr. Walt Lastewka): I would ask you to ask your question and be precise, or I'm going to cut you off.

Mr. John Cannis: I was reading recently a statement put out by Mr. Keon, I presume—the Canadian Drug Manufacturers Association—where he talks about the WTO ruling and the 30 brand names. Then he goes on to talk about the 24 months injunction, etc.

I read your statement, Mr. Keon, in terms of extending the term of protection by three years. You know very well that Industry Canada officials appeared just two days ago on this bill. They're saying it would extend the patents on approximately 30 drugs—I think you agree on that—for an average of less than six months. Are you disputing that, yes or no?

Mr. Jim Keon: They are two separate issues. The one issue is the patents that are getting extended because of the World Trade Organization ruling. Industry Canada has said there are 30 products that will get patent extensions. The separate issue is whether brand companies can extend their monopolies through the regulations.

Mr. John Cannis: The ruling is under Bill S-17.

Mr. Jim Keon: We've been quite clear. The ruling doesn't address the regulations. The ruling addresses patent term and the ruling addresses stockpiling. The clause of the bill that enables the regulations has been opened, because we have to eliminate stockpiling, but the ruling doesn't address the regulations.

Mr. John Cannis: Mr. Keon, you indicated in your statement that Canada was given 15 months to comply with the WTO ruling. It's my understanding we were given until August 12, 2001, that being 10 months. Are you saying we received 10 months or 15 months, just for the record?

Mr. Jim Keon: I don't believe I would have said 15 months. I accept the date as August 12.

Mr. John Cannis: You say here in your own release—

Mr. Jim Keon: What's the date on that?

Mr. John Cannis: It's your most recent release. I'll provide it if you like. Let me quote. It says:

The WTO ruled in October 2000 that Canada has 15 months to extend patents from 17 to 20 years. To comply with this ruling, the federal government introduces legislative changes to the Patent Act.

That's your statement.

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Mr. Jim Keon: August 12 is the date. No one's objecting to that. No one's questioning that.

Mr. John Cannis: I want to get to Mr. McBane. He talked about the ruling.

Do you know the ruling? Can you tell us about it? Perhaps we don't know what exactly it says.

Mr. Michael McBane: I read some commentary on it from Professor John Love—

Mr. John Cannis: You haven't read it completely, as you indicated earlier.

Mr. Michael McBane: —who mentioned it was an extremely long and very complicated ruling.

Mr. John Cannis: The ramifications of the ruling...

Mr. Michael McBane: It does not really get dealt with—

Mr. John Cannis: What does it deal with?

Mr. Michael McBane: —in the time allocated either in the Senate or in the House.

Mr. John Cannis: What do you know about it? What are the two areas it addresses, do you know?

Mr. Michael McBane: What I know about the ruling is... extremely technical intellectual property arguments and impacts directly on health issues.

Mr. John Cannis: Mr. Chairman, my understanding of Bill S-17 is that it will have only a minor impact.

Mr. Michael McBane: My point, which I think is not getting heard, is that intellectual property rights are given precedence over health policy in the area of drugs. I don't think anyone in this room would argue that drugs are a key component of the health care system. Commercial interests are given primacy over drugs, and that of course is included in Bill S-17 and the WTO ruling.

Mr. John Cannis: Nobody disagrees with you, Mr. McBane, but the ruling basically extends the patent terms of a few drugs and it eliminates stockpiling.

According to stockpiling, Mr. Jack Kay, the president of Apotex, has said, “Canadian generic manufacturers would not be hurt”. He goes on to say:

With modern production methods companies can make up to 10 million tablets per day, and they could have the generic version on the product line within two weeks...

So in essence this ruling doesn't really affect companies like Apotex. That's their statement, Mr. Chairman.

The Vice-Chair (Mr. Walt Lastewka): Mr. Keon.

Mr. Jim Keon: I would like to clarify that. I am speaking on behalf of Apotex today, and the ruling very much affects them.

Mr. John Cannis: I'm just quoting what he said.

The Vice-Chair (Mr. Walt Lastewka): Mr. Brien, I apologize for having to move quickly, but that's the job of the chairman.

[Translation]

Mr. Pierre Brien: I want to come back to an issue that is not directly tied to Bill S-17, but which was discussed. You spoke of an automatic 24-month injunction and you repeated that as if it was systematically 24 months.

My question is for Mr. Hore. Can the court not reject the allegations from the outset?

[English]

Mr. Ed Hore: Yes. There is an early motion that can be brought to get the case dismissed in certain circumstances. Generally such motions have not been successful and the litigation carries on.

[Translation]

Mr. Pierre Brien: You say that this was not a success. You are questioning the work of this court. You say that it was not effective, that it should have accepted the...

[English]

Mr. Ed Hore: No, we say that the courts, using ordinary civil procedure used in all other patent disputes in other industries, are quite capable of dealing with patent disputes in the pharmaceutical industry. Here what you have is special rules imposed on judges that basically make them do things differently from ordinary civil procedure, specifically to favour the brand. So the threshold for success on the kind of motion you're talking about is very high. It's specifically described as being frivolous and vexatious. It's a very high requirement, so it's very difficult to do.

In regular litigation on that sort of issue there's long case law on how you would establish that an injunction should be granted or not. That's how it would work for a patent that's granted to IBM, Motorola, or anybody like that. Patentees in those other industries are quite capable of defending their patent rights in the ordinary civil procedure used in the court system at large.

[Translation]

Mr. Pierre Brien: My problem is that you are citing cases in which, clearly, there was abuse of process with a view to stretching out the patents. It seems to me that if it had been so obvious, the judge would have been in a position to reject the application made by the patent drug companies at that time.

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[English]

Mr. Ed Hore: I don't think I used the term “bad faith”. I would say this. Remember these are very complicated issues. We're dealing with patents that are often very long and complex. They may have to do with organic chemistry.

It can be very difficult to arrive at a decision in a very quick motion on whether the case should go on or not. So, in general, because of the threshold, the courts let the cases go on. It takes a long time to get a date and the whole litigation tends to go on. Often as it's getting closer to a hearing, there may be another patent. So that means it has to start again. For a single drug, there might be several cases. It's very convoluted and complex and it just goes on. The whole time it's going on, the generic is kept off the market automatically.

The Vice-Chair (Mr. Walt Lastewka): Thank you very much, Monsieur Brien.

I'm going to allow Mr. Bélanger to ask a few questions, since he has not had the opportunity yet.

[Translation]

Mr. Mauril Bélanger (Ottawa—Vanier, Lib.): Thank you, Mr. Chairman. There are three things, and I will say them in the three minutes I have been allocated.

First of all, I would like to say something to Mr. McBane. I know that he is passionate about the issue of public health and that he believes in what he is saying. However, I will have him note that a great majority of the 301 members of the House of Commons share that passion for a public health service that meets Canadians expectations. On the other hand, the disdain that he has shown towards these members goes against the interests that he is attempting to defend. I will ask him to show less contempt towards the members in future.

Secondly, I was unable to attend yesterday's committee meeting because I was chairing another committee at the same time. If I had been there, I would have asked the representatives from the Department of Industry if the Consumer Affairs Office had been asked to study this issue and if they had any comments to make, and if not, if they would be prepared to do so in time for the 29th, when we will continue our consideration of this bill. That is my question.

[English]

On the matter of multiple patenting, which is not a part of Bill S-17, I believe this committee may wish to address that at a later date. I would certainly encourage the committee, come the fall session, to spend some time looking at that.

Thank you, Mr. Chairman.

The Vice-Chair (Mr. Walt Lastewka): I appreciate your comments.

Mr. Keon, one of the items a number of people have brought up... I want to use the words “abuse of the regulations” and so forth. I would ask that you bring forward your viewpoints on the abuse. Please be concise and detailed. It might help some of the questioners who were asking questions along that line.

Ms. Paddy Torsney: I have a point of order. I just want to remind all of our guests today, through you, Mr. Chair, that anyone is always allowed to send us information. It doesn't have to be verbal testimony. If members of your organization want to send members of the committee information, you do it through the clerk, and we're more than happy to receive it.

The only other comment is that we do not always agree with what our provincial colleagues do. We share many concerns.

The Vice-Chair (Mr. Walt Lastewka): You summarized my last comment very nicely.

Mr. Dan McTeague: I'm going to conclude on the same point.

I would hope that the Industry Canada officials who appeared here two days ago will also ensure that the questions they said they would fulfil will indeed be completed by May 29. It's not something that will happen after the fact.

Would you ensure that's the case, Mr. Chairman?

The Vice-Chair (Mr. Walt Lastewka): I believe the chairman is working to make sure that happens, as she discussed it earlier today.

I'm not going to allow her to speak. I'm going to conclude the meeting by saying thank you to all. Have a great day.

The meeting is adjourned to the call of the chair.