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Standing Committee on Health



Thursday, February 12, 2009

[Recorded by Electronic Apparatus]



     Good afternoon, ladies and gentlemen. I welcome you to the health committee, the most exciting committee on the Hill, I have to tell you.
    We are so pleased that you could make it today, because there are some very astute people around this committee table who are very anxious to ask you some questions.
    Before we start, I would just like to ask the committee if we could suspend the committee at 5:15 today to deal with some business. Could I have a show of hands? Is that okay with everybody, at 5:15?
    Some hon. members: Agreed.
    The Chair: Thank you. So at 5:15 today we're going to suspend the meeting and deal with some committee business that has to be attended to.
    I would also like to remind members to please submit your lists of subjects that you would like the committee to study to the clerk by Wednesday, February 18. Just forward it to the clerk's office, and they will bring all of the lists back to committee.
    Today, pursuant to Standing Order 108(2) and our study of the departmental expenditure plans for Health Canada and related agencies, I would very much like to welcome the members of Assisted Human Reproduction Canada: Beth Pieterson, the executive director; and Elinor Wilson, president and chief executive officer.
    We have representatives from the Canadian Institutes of Health Research: James Roberge, chief financial officer; and Pierre Chartrand, vice-president of research. We welcome you.
    We also have, from the Patented Medicine Prices Review Board, Brien Benoit, the chairperson; and Barbara Ouellet, the executive director. Welcome to you as well.
    And we have members from the Hazardous Materials Information Review Commission: Mary Hill, assistant vice-president, corporate services and adjudication branch; and Sharon Watts, president and chief executive officer. Welcome.
    We are more than privileged to have you very learned people here today to really add to our committee.
    We will start the questioning now with Dr. Bennett, for a seven-minute round.
    Thanks very much, and thanks to all of you for coming.
    I guess I wanted to start by saying that in looking at the estimates again, it seems that things that should have gone to Health Canada have gone to pay for ministers of state in every other department. So it must be bit annoying to some of you who needed some money that you didn't get it, that it instead went to pay for ministers of state in every other department.
    Maybe we'll start with the agency that seems to have a lot of trouble getting money out the door, Assisted Human Reproduction Canada. We continue to be unable to get you going, it seems. I'm not quite sure why the $75 million went to CIHR.
     Dr. Wilson, although the minister tried to explain why we still haven't seen the regulations, how are you functioning without a law or any regulations, and how do you spend any money at all, seeing that you don't really exist?
    In terms of the amounts of money that we are spending, as you are aware, the agency actually opened its doors two years ago this February 14. During that time, we have been working in two major areas.
    The first major area, obviously, has been to establish the infrastructure in order for us to do our work. When the agency opened, it had one employee—me—and there was no block transfer of staff, so we had to bring staff in.
    We have to create the systems, for example, for the personal health information registry. We have to create the systems for the computerized issuing of licences. We have to create all of the things so that once the regulations are passed, we are ready to be out the door within a very short period of time in order to do the work.
    Obviously, we are also working—
     I just want to know how you can do that when you don't know what's going to be in the regulations? How do you know you'll be in compliance with the regulations before the regulations have even been passed? This committee has only seen chapter 8.
    Thank you.
    We do know, according to the act, that we will be issuing licences and we know that we will need to have a system and materials developed in order for people to apply for licences. So, gradually, as we're working through that.... Without the regulations, you can automatically assume that there are certain things you're going to want to ask of the community in terms of their applying for a licence—certain common information that everyone is going to have to have. But the most important part is starting to build those systems so that we can have a complete system ready to go, an automated or virtual system whereby people can apply via computer, etc., so that it's not burdensome to the community.
    The second major area in terms of this is outreach. It's really necessary to learn the business of the community that will regulated, to learn what they are doing, and to start to build those relationships, both with patient organizations who will have a very important role to play in this and with organizations such as the Canadian Fertility and Andrology Society, the Society of Obstetricians and Gynaecologists of Canada, and the Canadian family physicians, many of whom—especially the family physicians—were not necessarily aware that some of their activities would be covered by the regulations.
    So we've done some survey work with them to find out the practices in the field for both family physicians and gynaecologists, and we have been doing a lot of outreach.


    And regarding the $75 million that's going to CIHR, is it normal to be sending money back and forth among organizations?
    It's $75,000, Dr. Bennett.
    The rationale for this, first of all, is that as an agency who will be regulating in these highly scientific areas, it's vital that we have a very strong evidence base on which to base things.
    We knew that CIHR has just finished funding, over the last several years, a healthy embryo research project, and this was an opportunity for us to perhaps provide some funding to ensure that the information from that project would be translated to the appropriate stakeholders so that it could be utilized.
    I had a quick question for the PMPRB. The Institute on Governance report showed there was a bit of mandate creep, in that you were operating outside of the original mandate set up in the Patent Act. So I am just wondering how you would respond to such a criticism when you've asked for such a massive increase in funds.
    Well, Dr. Bennett, if I could ask the question back, has that Institute on Governance report been distributed to the members of this committee? I ask because we were provided with this report in September of last year.
    The document that we received is dated April of 2008 and is marked as confidential, and we were assured by Rx&D, the organization that mandated this report, that we would be permitted, if the report were to be made public, to respond to some of the questions, one of which you're presenting today.
    The issue of mandate creep is something that is easy to throw out there, but our mandate has not changed: we operate under the Patent Act and we have regulations. The Patent Act has not been changed since 1993; our regulations have not been changed since 1994.
    Now, we have a dual mandate. We have both a reporting role and a regulatory role. If you didn't like the regulatory role, you would say that our mandate is mostly reporting; but we do have a double mandate, and one doesn't take precedence over the other. The Patent Act clearly gives us a mandate to regulate the prices of patented medicines.
    So between the spring and the fall there's a lot of money—
    Thank you, Mr. Benoit.
    Monsieur Malo, you are next.


    I will pursue Ms. Bennett's line of questioning . It is very interesting to delve further into this issue.
    You will agree with me that an additional $4.7 million for a budget that was previously $5.5 million is quite a top-up. It is practically double the original amount.
    Why, over the course of the year, did you need to practically double your budget?


    Mr. Malo, our budget was increased by 80%. You are right in saying that it has almost doubled. However, one must remember that our workload practically doubled as well, and we were not responsible for that. This is a result of the fact that more patented drugs were introduced into the Canadian market and we had to conduct investigations to determine if prices were consistent with our guidelines. Therefore, we were not the ones responsible for creating the work. The pharmaceutical industry introduced more products into Canada.
    In fact, we are now able to amend our guidelines. This project began more than three years ago, and we hope to complete it by June of this year. Things are taking longer because of the high number of consultations we have to carry out with people involved in the issue. All of this creates more work for us.
    Does your mandate not cover mainly regulations and monitoring so as to ensure that patented drugs are not sold at excessive prices?
    Indeed, our mandate is focused on excessive pricing. To determine whether or not a price is excessive, all of the issues surrounding a particular product must be examined. We have a very complex comparative analysis system for drugs that are used to treat the same disease. This allows us to determine what their prices are, etc.
    Do you also review the discounts offered by manufacturers? Doesn’t this fall slightly outside your mandate?
    The Patent Act clearly stipulates that we are to review net prices, or, to be more precise, discounted prices, etc. We are currently holding consultations with both provincial and industry representatives to identify and assess these rebates.
    Certain pharmaceutical companies seek to postpone their discounts because this reduces their average prices; on the other hand, there are many others, perhaps even the majority, that do not. It's an example of the push-pull concept.
     Do you not think that this is interfering with areas that fall under Quebec and provincial jurisdiction? The provinces are essentially the buyers and it is they who are in charge of regulating this issue.
    We act in full compliance with the Patent Act, a federal statute. We fully recognize that health care falls within provincial jurisdiction, but we are acting under the Patent Act. Our mandate is a federal one.
    So if I understand correctly, you adjust your mandate according to what you want your team to do; at least that’s what it seems like.
    No, I wouldn’t say that. We comply with rather stringent regulations that have not been amended for 15 years because they work rather well. We are often called before the courts by pharmaceutical companies that don’t like the decisions we hand down during our hearings, or for other reasons.
    Is that why you are asking for additional funding through the estimates, so that you can go to court?
    It is because of the marked increase in our workload. All of the things you mentioned are part of our workload.
    Are you able to tell me what percentage of this amount will be spent on litigation?
    We can say that half of the supplementary amount we requested and received will be spent on hearings.
    That also includes the SPA. These funds are set aside exclusively to hold hearings. Therefore, if there are no hearings, we will not spend this money.
    Your 2007 report states that you found problems with only 22 out of 1,114 drugs. Therefore the compliance rate is 98%. There isn't anything really egregious there that would require such a huge litigation fund. I was wondering about that.
    Approximately 90% of drugs are in compliance with our guidelines, so let us say that 10% are priced too high. Let's look at the issue from another angle: I would say that this is a sign that our system works very well.
    Suppose that only 10% of drivers exceed the speed limit. If 90% of drivers respect the speed limit, does that mean that the police should not pull over the 10% who exceed the speed limit?


    I don't think that that's the goal. Supplementary appropriations are requested in order to carry out work within the limits of the guidelines, or the limits of the mandate of a program.
    We are fulfilling our mandate. As you know, we are updating our guidelines, in view of addressing some of the problems raised during our hearings. We believe that modernizing our guidelines will provide increased flexibility to pharmaceutical companies so that they can set slightly higher prices.
    Therefore, a portion of the budget will be used to complete this process. When is the expected completion date?
    We hope that it will conclude in June. We were hoping that it would be completed in December 2008, but there were delays. Consultations with pharmaceutical companies are underway. Two weeks ago, in fact, we met with a small committee from Rx&D. Discussions are ongoing.
    You also carry out a number of generic drug assessments. You make a distinction between drugs that are—


     Time is running out, Mr. Malo, sorry. We have to move on to Ms. Wasylycia-Leis.
    Thank you, Mr. Benoit.
    Ms. Wasylycia-Leis.
    Thank you, Madam Chairperson.
    I think we're going to have to carry on with Mr. Benoit. There are so many questions with respect to PMPRB and the amount of money as part of the supplementary estimates.
    I have a couple of questions. The first has to do with the fact that you say you don't use manufacturing costs to determine the price of new drugs because prices are not related to the manufacturing costs.
    Actually, that's one of the items we can look at if we cannot decide by other factors whether the price is excessive or not.
    We've not yet done that. Going into the costs of making and marketing would be extremely difficult from a financial point of view. We're advised that companies would basically have to open their books and tell us how much it costs and so on. It would be extremely difficult to do that.
    But this is one of the items in the Patent Act that we can look at.
    I would assume, then, that there's really no justification for doubling the price when the dose is doubled. We know that the manufacturing costs of doubling the dose are quite trivial, but companies often double the price, right?
    Yes, they often do.
    I don't know if you're dealing with that. I guess I'm wondering if you're able to look at the price they're demanding and to reassess it based on the fact that they're inappropriately increasing the cost for a very small cost to the system.
    Madam, we do actually look at that. We have a price test called the “reasonable relationship” test. For instance, if it's $1 for a 5-milligram pill, should it be $2 for a 10-milligram pill?
    At the moment, this is one of the things being discussed in our revision of our guidelines. It's possible that the 10-milligram pill might bring an advantage to the patient, and the pharmaceutical manufacturers are allowed to make that case--and the reverse, a smaller dose.
    Are you saying that you actually use that now, or is it under review?
    No, that is one of our tests.
    So can you tell us how many times you send a company back, telling them, “You can't charge that, because that's way too high in terms of the costs associated”? Is there any way you can tell us how often that happens?
    I couldn't tell you an exact number, but I can tell you that we have about 90 investigations. That doesn't mean that 90 of them are going to result in a determination of excessive pricing, but it means that something in their reporting has triggered a red flag and our staff is looking into it in more detail.
    I appreciate that.
    I'm going to go on to the issue I've raised in the past when PMPRB has been before our committee, and that's the question of the averaging based on comparing the seven countries. I think it's the top range of seven top European countries, right?
    Those countries were determined...and I've asked this question since I've been there. Those European countries were determined.... They're in the Patent Act, actually.


    Right. Is there any reason--
    Now, the Patent Act was written in 1987. You might ask, well, what about Japan? What about Australia? But they're not in our comparator countries.
    Would you suggest that perhaps we--the committee or the government--should look at this fairly old legislation to see if it's still current and try to reassess the effectiveness of the formula?
     There are a lot of economies and health care systems that are similar to Canada's that are not included in the seven comparators. I understand that the seven were chosen because their health care systems were similar to Canada's.
    Okay, I appreciate that.
    I'm going to stick to drugs for now, and then hopefully we can get to some of the other areas. There's more we need to know on this front. As you know, drugs are the second fastest growing part of our health care system, and if we don't figure out a way to get on top of it, it's going to kill medicare, so we have to find a way to do it.
    One of the issues is about brand name drug companies agreeing to spend 10% of their expenditures on research and development in return for patent protection. We know that's not taking place. In fact, I think you reported back in June 2008 that 8.9% had gone into R and D. That even seems high, but it's still below the 10%. I'd like to know, first of all, how you evaluate research costs. Do you rely on independent auditing or industry self-reporting? What do you do to try to correct this shortfall, and is there any consequence for the manufacturers?
    I'll answer the last part of the question first. We have no mandate to regulate how much percentage of gross revenues are invested in R and D in Canada; we simply report that. The figures come from the companies themselves. We have not audited the R and D expenditures of any company, and I'm not sure it's in our mandate to do that. We have no authority to do that.
    In the 20-some years that the board has existed, I believe the industry has invested more than 10% on one or two occasions, but usually it's a bit less than that.
    You report and you hope that some among us will take some action. Okay, we'll try to follow that up.
    Let me ask about some of the high-cost new cancer therapies and biologic drugs that have been appearing on the market of late, not just here but internationally. Given that you rely on international comparisons, what are you doing at the international level to address these expensive treatments to keep them accessible for Canadians at the lowest cost?
    First of all, we have various price tests. If you have a new cancer drug, let's say the cure for lung cancer, that would be deemed a breakthrough drug. The price that would be permitted under our concurrent guidelines would be the median international price. We would go to the publicly available price in those seven countries and determine the median of that, and this would be the price that would be permitted in Canada.
    Let's not forget that provinces have different reimbursement priorities. Whereas Alberta may say we're going to pay for that drug, Prince Edward Island may say the cost-effectiveness is not enough to justify paying for it, and that's why there's a lot of discrepancy across Canada on these major drugs. So they get paid for in Alberta, not in Ontario, and we can't control that.
    What if we had a national formulary? What would that do overall?
    That'd be nice to have.
    Nice to have?
    Thank you very much, Ms. Wasylycia-Leis.
    Can we now go on to Mr. Carrie? I understand you're sharing your time with Mr. Brown. Thank you.
    I'll be splitting my time. Thank you very much, Madam Chair.
    I did want to change the topic a little bit. I see that we have Assisted Human Reproduction Canada here. If you're paying attention to the news lately, we hear about these octuplets being born and a 60-year-old with twins. And I know friends of mine have used this technology successfully.
    I do understand the statistics. Infertility is on the rise in Canada. I have two questions. First, how can your agency address this issue? Then the second one is, understanding that your agency has been in operation for about three years, how are you seeking to engage stakeholders?
    Dr. Wilson, do you want to take that one?
    Thank you very much for the question.
    Yes, you are correct, infertility is on the rise in Canada and is of great concern. It's due to many factors, but one of the largest factors is the increasing age at which women are choosing to have their families. There are other issues as well, as you are aware: obesity, smoking, and sexually transmitted infections.
    But whatever the cause of infertility, it is actually written into the act that the agency does have a mandate to educate the public about infertility. This has been part of our outreach in terms of starting to explore who else is engaged in educating the public about infertility. Also, where are the gaps in that education and how can we as an agency best fill those gaps?
    A project that's under development is looking at what young people in the school system are taught about infertility. In the school system we spend a lot of time teaching young people about how to prevent fertility at an inappropriate age, as you know, but there's not a lot of emphasis on the issue of, yes, we do not recommend people perhaps getting pregnant at 16; however, this does not go on forever in terms of your window of opportunity. That's one project under development. As well, we already have phase one of our website in place, with questions and answers about that, and we're working on phase two.
    The second part of your question, if I recall, sir, was about our outreach strategy.
    One of the key issues of being a regulatory agency is understanding extremely well the field that you're regulating in. We've had an extensive outreach strategy to identify not only the patient groups but the professional side.
    We've established relationships with the Infertility Awareness Association, IAAC, which is one of the major patient groups in Canada, as well as the Lesbian, Gay, Bisexual, Trans Parenting Network. These agencies have helped us learn more about patients' concerns in this area. They've also had the opportunity to educate our board about what the patients' concerns are.
    On the professional side, our outreach has been to two major groups, the Canadian Fertility and Andrology Society, which is a subset of physicians who specialize in this area, and the Society of Obstetricians and Gynaecologists of Canada, and then other groups, such as, for example, the Canadian College of Medical Geneticists, and the Canadian family physicians, first of all to find out what their challenges and issues are in this area and also to start to already educate about the act, its provisions, and the kinds of things that we will need to be overseeing as the regulations are brought into force.


    Thank you.
    Mr. Brown.
    Madam Chair, I wanted to go back to the topic of the Patented Medicine Prices Review Board, which Ms. Bennett and Judy have already touched upon a little bit.
    I am concerned. I would like to hear a little bit more of an explanation on this budget increase, the $4.7 million, which would be a 76% increase. Just looking at the annual report leading up to this, the note I saw in the 2007 annual report is that of the 1,114 drug products, 22 were currently having hearings. It looks like there's a high compliance rate. Are things changing? What would equate with the need for this growing budget?
    Looking at this from a broader perspective, if you look back from 2004 to today, it looks like the budget has gone from $5 million to $11 million and the number of staff has gone from 44 to 62. Could you explain what the causes of this significant budget change have been?
    Mr. Benoit.
     As I was trying to answer to this side of the table, the volume of work has increased. We have 22 drugs of the 1,100 that are deemed to be non-compliant. This is more than in the past. There has been a trend towards relative non-compliance. You may say that 90% are compliant and that's really great. That's a reflection on the success of the regime, I might say, but there are more that are not compliant. There are various reasons out there for that.
    In Canada, there are fewer breakthrough drugs being introduced, so the pharmaceutical companies, in order to improve their margins and so on, are creating incremental improvements for which they ask a higher price than our scientists, our staff, and our regulations feel is warranted. That's basically the issue of it. That's why we have the hearings.


     Just on that note, how has that changed in terms of compliance today compared to four years ago when the budget was $5 million? Was the compliance different?
    The act hasn't changed and our regulations haven't changed.
    Have the compliance rates changed? If it's 22 out of--
    The compliance rate has gone down slightly, and that's why we're having more investigations.
    Do we have any sense of the numbers for how it has changed?
    Ms. Ouellet is just telling me that four years ago there were 45 investigations; now there are 90 investigations. So that means there are more drugs that seem to be offside in terms of the price. The rules haven't changed. We're hoping to modernize our guidelines, as we've mentioned before, in order to allow for a premium for these incremental innovations.
    Thank you, Mr. Benoit, for your answers.
    Now we're going into the five-minute round. I'd like to start with Ms. Murray and Ms. Duncan. They'll be sharing their time.
    Ms. Murray.
    I'd like to ask a question about the CIHR supplementary. I notice that's a fraction of 1% of what I imagine the whole budget is, so it's a very small amount of extra.
    I also noticed in some documents the granting council reduction in funding of $87 million over three years, so I'd like to ask what the CIHR share of that was, and in what way that ties into effectiveness, aligning of programs, and closer coordination.
    As the minister reported at this table on Tuesday, we're still in the process of reviewing the impact of strategic review on our programming. We expect to be able to explain what the impacts are very soon, and we'll return to this table to give the details at that time.
    Can we assume that basically the budget cuts were given to the organization and then you were told to find these good-sounding words like “improving effectiveness” and “alignment” and “fostering development” of new things to fit the budget cuts that were given to you?
    The budget is prepared by the Department of Finance, not by CIHR, so I can't comment on the language that is in the budget.
    Will there be grants affected by it? Obviously, this kind of research sometimes takes a few years to do. There may be a five-year program or whatever. Can you assure us that research under way will not have to be cancelled in mid-air because of funding cuts?
    Again, we're still looking at the impacts, but of course we'll do everything we can to avoid disrupting commitments we've already made to researchers or research that's already under way.
    So there are no new grants?
    No, we'll still have close to $1 billion of funding to distribute next year.
    Thank you.
    Ms. Duncan.
    Mr. Benoit, I'm struggling with some of the same issues. The number being asked for is close to $5 million. This is an increase of 76%, and you've attributed this to more drugs coming on board. How many new drugs have come on board, and what is the percentage increase that would require that huge increase in money?
    Madam, I can tell you that last year there were 74 new drugs introduced in Canada, which is a little bit more than in the years before. As we've said, previously these investigations and hearings and so on have led to the determination of excessive revenues in certain cases and those moneys have actually been collected back for the federal treasury. It's not a wasted exercise. In the first 18 years of this regime, we recovered approximately $25 million in excess revenues, and in the past two years it was approximately the same amount.
    I understand that.
    A lot of that is part of a voluntary compliance undertaking.
    I also understand that, and it's my understanding the compliance rate is at 98%. So if 74 new drugs came on board last year, what percentage increase does that represent, and does that equal that 76% increase in funding?


     I can't answer that offhand. Are you asking me basically how many of those 74 would ultimately go to a hearing and incur all those extra costs?
    If we take what's happened in the past of 98% compliance, yes, what percentage is going to be tested? But if there is 98% compliance, do you require that 76% increase in funding?
    Let me just say it's a hard question to answer. We're not wasting the money. Hearings are extremely expensive and we try to avoid them as much as possible. This is one of the reasons why we think our guidelines need to be modernized, because we might avoid a lot of the seemingly repetitive issues that come up in our hearings.
    What is the average cost of a hearing? And of that 74, how many would go to hearings, please?
    I don't know the answer, but maybe three, two, one.
    Thank you, Mr. Benoit.
    We'll now go to Mr. Uppal, and I understand you'll be sharing your time with Mrs. McLeod.
    Mr. Uppal.
    My question is for the Hazardous Materials Information Review Commission.
    How does the commission make sure that all stakeholders are consulted, as well as the provinces and territories?
    Who would like to answer that? Ms. Watts?
    Thank you for the question. Actually we have a very interesting governance structure at the Hazardous Materials Information Review Commission. We have a council of governors, an 18-member, multi-jurisdictional, tripartite group, and those 18 members represent every single province and territory across Canada, as well as stakeholders such as organized labour, chemical suppliers, and employers.
    Our ability to engage with stakeholders is significantly enhanced by having this oversight body, and in fact our council is the body that makes the strategic policy recommendations to the Minister of Health, allowing our agency to remain independent.
    It's a very interesting construct, and it was birthed from the original system that we were created from, and that is the workplace hazardous materials information system. That is a hazard communications system--federal, provincial, and territorial--that is all about making sure that workers have the information they need to work with hazardous materials in the workplace, making sure they have accurate and complete information.
    When we look at how we come into that, we are in fact the trade secret mechanism, so people come to us when they want to be exempted from the requirement to disclose all of their information.
    WHMIS is all about tripartite consultation with stakeholders. It was created as one of the only, I think, consensus-based projects, and it's something that I think government got right in terms of creating the system where they have provinces that do their part of the work, in a complementary fashion, the feds do their part of the work in terms of supplier requirements, and then the commission is a cornerstone that does the provincial work, the territorial work, and the federal work in terms of trade secret inspection.
    For all those reasons, our level of stakeholder engagement is pretty intense. In fact, we just met with our council a couple of weeks ago and again tried to make sure there's that interactiveness that makes sure we're grounded. The reason we were created was to be an agency that would serve and protect stakeholders. So I find that having this council has been a very interesting experience, but also one that keeps us grounded as to why we are here; it keeps us relevant.
     I'm going to follow up with another question.
    Mr. Uppal, go ahead. You do have time.
    Sure. My next question is, what is the commission's role in protecting the health and safety of workers who use products that have a trade secret?
     Thank you for the question.
     As I started to say a little bit earlier, we are part of this provincial-federal-territorial hazard communications system. Where a manufacturer does not want to disclose a trade secret ingredient, they're required by law to come to the commission, where we do two important things, one of which will address your answer.
    First, we adjudicate whether or not these are legitimate claims for trade secrecy. In other words, is there an economic justification that speaks to why this is confidential and why it can't be disclosed?
    The other part of our mandate goes to the health and safety information. It's that part of the mandate that is what we call “in the public good”, where we are looking at the materials safety data sheets. These are sheets of information that are required to accompany a product in a workplace. They list all of the ingredients being used in that product along with the hazard measures, the toxicological properties of those particular ingredients, and of course, most importantly, first aid measures in terms of how to protect yourself if there is an accident.
    Our job is to look at all of those materials safety data sheets that accompany products that come to the commission in claims for trade secrecy. When we do that, given that we are a quasi-judicial agency, every MSDS that comes to us is 100% compliant when it leaves, when it goes back to the claimant.


    Thank you so much, Ms. Watts.
    We now go to Monsieur Dufour, please, for five minutes.


    Thank you very much.
    I would like to return to the discussion on the Assisted Human Reproduction Agency of Canada. I believe that the goal of this organization is noble; however, this goal falls within provincial jurisdiction, and this poses a problem, in my opinion. In fact, this issue is currently before the courts.
    You seem to already have an idea as to the ruling that will be handed down. I'm going to ask you a question that you will say is hypothetical. If the court does not decide in your favour, how would you justify the $12 million that will be spent?


    Dr. Wilson, go ahead.
    Thank you, Madam Chair.
    Thank you for the question, Monsieur Dufour.
    We obviously await the decision of the Supreme Court in this area. Once the decision has been made, if the decision is not in favour of the challenge provisions of the act, that's something where the Government of Canada--internally, Health Canada--would obviously meet, discuss, and determine how to go forward from there. If you recall, under the challenge that has been launched, neither the prohibitions in the act nor the establishment of an agency were part of that challenge.
    With your permission, sir, I would like to go back and talk about the $12.4 million. The initial budget of $12.4 million involved moneys that were carried forward before the agency was formally established. In our first six weeks of operation we actually spent $134,000. In our first year we spent $5.3 million. So we are not spending our full $12 million. Our expenses will increase as the regulatory program is fully implemented and as we staff up.


    Approximately one month ago, the agency organized an international conference on reproductive tourism. When will you be able to disclose the cost of this international conference?


     Thank you again for the question.
    We did host an international meeting. It was not a conference; it was an invitational forum for regulatory agencies, professional bodies, and patient organizations from 16 countries and 10 international organizations. It was focused on an issue that we're all aware of: cross-border reproductive care when patients travel to other countries to have care. The one thing we all share in common as countries is the concern about the quality and safety of care that people receive when travelling to other countries.
    You are correct. We did host this meeting. It was planned by an international steering committee. AHRC was the host of the meeting. The final expenses, I think, will be available within the next two months. We obviously have to wait to tally them all up.


    Monsieur Dufour.


    Along the same lines, two contracts were awarded to the company, Maga Policy Consultants Ltd. I'd like to know the details of those two contracts. What was the value of the contract awarded to that company? Why was that company given the contracts?


    Thank you, sir, for the question.
    Obviously at Assisted Human Reproduction Canada we follow all Treasury Board and other Government of Canada guidelines. These contracts were awarded through a competitive tendering process. If you would like, we would be pleased to supply you with what the contract covered and the exact amounts. I don't have the exact amounts at my fingertips here.
    Thank you so much.
    Now we'll go to Mrs. McLeod.
    My questions will be directed to the Canadian Institutes of Health Research.
    First I'd like to compliment you on the many great works, which I have found very valuable over my time. I have used much of your work.
    In that light, ongoing continued good work is very important. In Budget 2008, our government created the Vanier scholarship program to support and attract from abroad the best doctoral students. It created the foreign study stipends to support the ability of Canadian scholarship recipients to pursue exceptional research opportunities outside Canada for a defined period before returning to complete their degree in Canada. The goal of these programs is to support excellence in the next generation of researchers. It would be great to know what progress has been made in implementing these commitments from Budget 2008.
    We have launched the first competition from the budget awarded in 2008-09. I'm pleased to say that in this first round there were 800 applicants, of which 70 will be chosen. They're in the process of being chosen. Those 70 applicants will be forwarded to the board of the Vanier scholarship program, which will be provided with their rankings.
    The Vanier scholarship's board will be responsible for making the final adjudication of 55 for CIHR. There will be 166, because the other two granting councils—NSERC, the Natural Sciences and Engineering Research Council, as well as the Social Sciences and Humanities Research Council—will also be recommending 70 applicants, with 55 adjudicated by the board for each of these two other councils.
    Obviously, this is a very important and very prestigious program. It's in its first year, and we've already seen quite an interest from the research community, from the student community, in applying for the program.
    As well, we've had applications from foreign students. It's the initial year of the program, and at this point in time we haven't had as many foreign applications as we would have liked—although we did get a significant number of applications. But it's in the first year, and we still have to do more to make the program known outside of Canada.
    With regard to the foreign study stipends, here again it's a program that will permit graduate students from Canada who are actually participating in collaborative research with those outside of Canada to have a chance to go abroad and to do part of their training in that environment. This is very important, because it gives invaluable experience to students to go outside of the country to see a different way of doing research, to be trained in that environment, and to bring back to Canada that experience. So this is also ongoing.
    Actually, we will be getting the results within the next few weeks. These will be released within two weeks, I guess. In the case of the Vanier program, the results will be released in either late April or the beginning of May.


    Thank you.
    If I have time for another quick question—
    You have one minute, actually.
    Well, it's not a quick question, but it is complicated. I'll try to make it quick.
     Certainly, the ability of research to inform how we deliver health care services, and specifically as it relates to the aboriginal population, is a big topic for 20 seconds. Do you have a 20-second comment on aboriginal health and what we're doing to fill the gaps in our knowledge and promote innovative research for aboriginal people?
    In 30 seconds, I think the most important thing I would say is that one of the institutes constituting the CIHR is the Institute of Aboriginal Peoples' Health. Obviously, we view it as extremely important, as there's an entire institute dedicated to it.
    Thank you very much, Mr. Chartrand.
    We're now going to go to Dr. Bennett and Ms. Murray.
    I understand, Ms. Murray, you're going to be sharing your time together. Who would like to start?
    Ms. Murray.
    Thank you.
    I have another question for Dr. Roberge about the granting agency. When you are making the upcoming cuts to the granting council over the three-year period, I'd be interested in the potential cost in jobs. I have a riding with UBC in it, and there are a lot of people who are involved with the Life Sciences Institute and with other research activities at UBC.
    Have jobs figured in the criteria for the cuts that are being made, so that at a time when we're trying to make more jobs, we're not reducing ones with some of the really talented people whom we need to stay here in Canada?
     The main focus is on our mandate, obviously, and we'll be looking for ways of implementing those reductions in a way that minimizes the impact, in terms of our reach for our mandate. So we'll be looking at it through that lens. Obviously, we invest in people heavily. It's one of our three main business lines, in effect. So that is a consideration. We'll look at the impact of any reductions in our programs on the research community and on our capacity to translate knowledge that's been created into action.
    Given the decision by the government south of the border to use major increases in research funding as a jobs creation program during this time of stimulus, and the apparent opposite direction of the Conservative government, have the research councils banded together to put a presentation forward about the benefits, in terms of economic stimulus, of increasing rather than reducing funding for these councils and for research?
    As part of the pre-budget consultations, all departments and agencies were consulted. I really can't say much more than that, I'm afraid. It's part of the consultations.
    Did you have job figures tied to your funding requests and concerns?
    In our presentations we did look at what stimulus package the health research community could offer to Canadians.
    Thank you.
    We'll go on. Ms. Duncan.
    You're going to be sharing the time. Go ahead, please.
    Thank you.
    I'll ask a question regarding generics and how that's coming along with the Patented Medicine Prices Review Board.


    Thank you, Madam.
    The issue of generics is one that has come before us relatively recently, and as I said earlier, we are governed by the Patent Act. You might think that generic products don't have patents. That would be the popular perception out there, that they don't have patents, when in fact a large number of them do have patents. They are mostly manufacturing and processing patents; nevertheless, they are patents and therefore come under the aegis of the Patent Act, and that's where we are.
    This is a relatively new phenomenon. Of all the generics, only a relatively small number hold these patents, at least those that we can determine, and so far we've not had any.... We're having consultations with the Canadian Generic Pharmaceutical Association and we have had a meeting recently, one month ago or so. At the conclusion they were going to present us with a bullet form of what they felt the bottom line was for their industry, and we've not yet received it. But we are dialoguing with them.
    I'd like to ask about biologics, as well as how might the increase in funding affect companies and compassionate drugs.
    How much our increase in funding would affect...?
     I'm struggling with...if you have 74 new drugs come on board and there are three investigations, what is the average cost of an investigation?
    I can't tell you what the average cost of an investigation is, but we got cut off before when you asked me what the price of a hearing was. The price of a hearing is about $500,000 or $600,000. Some are relatively short, some are relatively long, some are very complicated, and various expert witnesses have to be brought from all over. If that's the cost to us, it must be the same cost to the industry, possibly more.
    Thank you, Mr. Benoit.
    We will now go to Ms. Hughes.
    My question will be with regard to the Hazardous Materials Information Review Commission, and it's going to be addressed to Mary Hill or Sharon Watts.
    Basically, the commission only gets to review a small number of hazard sheets per year, and we know that there are about 20,000 hazard sheets in Canada, so that means there's probably about 250 to 300 that get reviewed a year. When called on to review these data sheets, what we've noticed is that there have been a lot of errors and inaccuracies found by the commission, and it's been actually quite high, 8.5 to 9 errors per sheet, and some of these deal with toxic effects, and there other issues, of course.
    The commission has a limited mandate and limited resources. We're just wondering, to address what appears to be a considerable amount of disinformation in an area where sharing accurate information can save health and lives, is there more that you could be doing? Or have you brought the problems to the government's attention? What is it doing in response and what role are you playing?
     Go ahead, Ms. Watts.
    Thank you for the question.
     In fact, this question is very timely, because we spoke of this at our council of governors meeting just a couple of weeks ago.
     You're right. The level of non-compliance in terms of the accuracy of material safety data sheets is high. It's at 95%. It's been at 95% for quite some time. Of those eight or nine violations per claim that you referred to, about 60% of those are what we consider to be significant in terms of toxic properties not being stated at all or being inaccurately stated, or hazardous ingredients not being stated or being inaccurately stated. This is very important for workers.
     You're right when you say that we have a very limited mandate. Two things, I think, have helped to give this more awareness and also to extend the reach of the work we do. One is when we do work with our claimants. Most of our claimants are the big guys, the big multinationals that come to us. When we find an error, such as issues with their material safety data sheets, it's not always with the trade secret ingredients. In fact, it's most likely in the ingredients that are already disclosed but are inaccurately disclosed.
    Part of the issue they have is that the ingredient and its disclosure requirements then have to be changed for all of the other MSDSs they have for those ingredients, corporate liability being what it is. We call that our domino compliance effect. We haven't been able to calculate it mathematically, but we know it exists.
    The second issue is that we've become a bit of a centre of expertise for MSDS evaluations, so we reached out to our provincial and territorial counterparts at this past meeting and said, “What can we do to share this information with you?” They're going out and looking at 90% of what's out there while we're looking at a small per cent, but it's likely that these issues are coming up with other companies, or with the same company for different products.
    That's what we're doing right now. We're working on an information-sharing regime that will allow us to provide information to them for compliance and enforcement purposes, information that we've already gleaned, albeit just from the trade secret MSDSs.


    Thank you.
    I have another question. It's with regard to the Canadian Institutes of Health Research. In Budget 2009 we saw the funding reduced from $998 million to $932 million for 2009-10.
     On January 14, the Minister of Health announced an increase of $31 million to the drug safety and effectiveness network, so apparently it's the only part of the national pharmaceutical strategy that has interested the Conservatives enough for them to finance it, although it's not mentioned specifically in the budget.
    It was indicated that the network would be administered through CIHR, yet its budget has already been reduced. We're just wondering about that. Will the $32 million for the drug safety and effectiveness network come out of the already cut CIHR funding?
    That question is for James and Pierre.
    Thank you for the question. There is in fact funding for the drug safety and effectiveness network for CIHR. We have negotiated an MOU with Health Canada, which is the recipient of these funds in the first instance. They will be transferring the funds to us via future supplementary estimates.
    So these are additional dollars.
    Yes. It's not reflected currently in our reference levels, but will be in subsequent supplementary estimates.
    Thank you, Mr. Roberge.
    Mrs. Davidson.
    Madam Chair, I would like to thank the people here today who are answering our many, many questions.
    My question is going to go back to Mr. Chartrand, please. Mrs. McLeod had a question regarding CIHR and aboriginal programs and so on. I think our understanding is that there are significant gaps between aboriginal people and the rest of the Canadian population when it comes to life expectancy, the rates of diabetes and other diseases, and hearing, sight, and speech issues.
     Maybe we'll give you a little bit more time now, since you only had about 20 seconds to address some of that. Could you tell me about some of the innovative research that you may be looking at to help aboriginal people?
     As I started to say, we have put a lot of emphasis on research on aboriginal health by creating an institute that is dedicated to it. One of the first tasks that institute had was to create an environment of research that would address the numerous issues you've mentioned. One of the problems or situations was that even though a lot of research had been done with the aboriginal population, it had not necessarily benefited them. There was a certain unwillingness to participate. We had to engage the community in the research enterprise. To do that, the institute created a number of centres to start with to be able to mobilize the researcher and bring the researcher and the community together to identify problems that they wanted to address and also to assure them that they would benefit from that research.
    Also, by creating these centres, they started to build the capacity to train people, aboriginal and non-aboriginal individuals, in research addressing issues important to the aboriginal population. It has now evolved so that these different centres, which are all across Canada, are part of a network. Today we are able to start to address very important questions for the population that transcend health--not only questions of health specifically, but also socio-economic factors play a very important role.
    There are very specific programs with the aboriginal community on suicide prevention, acute substance abuse, and the problems of obesity and diabetes, which are much greater in the aboriginal population. Also, to help us better come to grips with this, we have entered into tripartite cooperation with other countries that face similar problems, such as Australia and New Zealand. This has also created momentum and visibility for the research to help attract researchers for these problems.
    The last thing, which is also a very important realization, is the fact that we now have a specific ethics guide for doing research with the aboriginal community to address their specific concerns, which differ from the concerns of non-aboriginal people.


    Thank you.
    Reading the supplementary estimates, it looks to me as though CIHR is going to benefit from a transfer of money from different areas. I think you alluded to one when you were speaking to Ms. Hughes' questions regarding the transfers of money from Health Canada, the National Research Council, and other areas.
    What's the rationale behind transferring it to CIHR?
    Who would like to answer that?
    The rationale would be that the transfers are for CIHR to conduct research in specific areas such as hepatitis C. I don't remember all of them.
    Would those dollars be set up for specific projects, and would those projects then be the same projects that would be performed, but by CIHR rather than by the other institutions?
    That is correct.
    Thank you very much.
    Dr. Carrie.
    Thank you, Madam Chair.
    I'll be splitting my time with my colleague.
    I want to talk to the gentleman from the Canadian Institutes of Health Research.
     One of my greatest interests is health and wellness and prevention. I was wondering what you're doing to educate Canadians on taking a greater role in their own health and wellness. Also, I was wondering if you could comment on the role of technology. Is there anything you're looking for in that regard?
     Certainly it is part of the mandate of CIHR to not only create knowledge but to translate that knowledge. Actually, it turns out that this latter part of the mandate is possibly the most challenging. Even though clearly, in some instances, we have generated the evidence through research, the uptake of that knowledge is not what one would want it to be.
    In recent years, CIHR has put a lot of emphasis on knowledge translation. It has become very clear that in order to have an impact there, we need to involve the stakeholders from the beginning, and at all levels. When it's going to impact a specific community, we need to have these people at the table, to have them be part of the research process. They have a buy-in, if you will, to the project.
    The same applies for changing practices. We need to have practitioners at the table to also be part of the process. In health services, we need to have the proper provincial jurisdictions at the table.
    There are two programs we've instituted that are helping us very much in attaining these goals. One is basically what I've just described, which is to have, in partnership with the stakeholders, a joint effort to identify specific research problems that they want to be addressed in priority, and for us to go and do the research. Another aspect has been what we call “evidence on tap”, which refers to the fact that a lot of times the evidence already exists; it's just not being used. Again, we sit down with stakeholders and identify with them the information that would help them to change either policy or practice. Because it comes from them, we are getting much more of a buy-in, again, in those situations.


    Madam Chair, I'd like to follow up on some questions with regard to the CIHR.
    I am certainly a huge supporter of health research. One of the positive aspects of this year's budget, I think, is that there continues to be a money flow and increases for health research. But I want to ask, how does this compare with other jurisdictions that are facing economic challenges? Is Canada unique in continuing to push toward increases, or has that been standard?
    As well, how was it during the last economic slowdown, in the early 1990s? What was the approach of the government then toward health research?
    Certainly, over at least the last decade, there has been quite significant investment in Canada in health research and in the creation of different programs that were extremely important to not only attract to Canada but also retain researchers.
    A major program was the Canada Foundation for Innovation. There was a need for important investment in infrastructures, which are increasingly expensive but also increasingly needed for us to be able to maintain research at an international level. That certainly has been a very important program. The other very important one was the Canada research chairs program. It has enabled us to attract to Canada, and to retain, the best and the brightest minds.
    CIHR is striving to ensure that we direct the resources to these individuals who have been recruited or retained as being, as I say, the best and the brightest, who already have, in most cases, competitive environments of research through the CFI. This is the challenge we have, to ensure that we have the right balance of support.
    Thank you very much, Mr. Chartrand.
    The time is up for the second round.
    We have five minutes left, and there's been a request from Mr. Malo and Ms. Wasylycia-Leis for two and a half more minutes each. Is it the will of the committee to allow this to happen?
    Some hon. members: Agreed.
    The Chair: Okay, thank you.
    Monsieur Malo, two and a half minutes--and I will stick to it.


    Thank you very much.
    Mr. Benoit, you said that it is important for you to amend your guidelines, that consultations were underway, and that new guidelines will be issued by June.
    Given the low number of incidents of non-compliance, why change the guidelines? In what direction do you want the new guidelines to go?
    In a perfect world, by changing our guidelines, and by updating them, we will no longer have to hold any hearings, or deal with any cases of non-compliance. That's our objective; but it may be rather utopian.
    One hundred per cent?
    I am setting out this utopian goal with a smile on my face. There will always be non-compliance, but we hope that there will be far less. The guidelines have not changed since 1994.
    What will they will look like?
    Pardon me?
    To your mind, what will the new guidelines look like? You are telling me that they have to be changed and upgraded, but how is this going to be done exactly? How are they going to be amended?


    We want to resolve one of the problems that is often raised by pharmaceutical companies, particularly during hearings, when we are addressing a contravention. When companies improve their drugs so that they have a better effect, companies should be able to get a better price. Yet, the current guidelines do not allow us to accede to their request.
    Earlier, you stated that you were going to look at the agreements concluded by the provinces with respect to discounts. Don't you have the impression that you are interfering in negotiations the provinces, including Quebec, have with manufacturers? You are saying that all of this falls within your mandate. Did I understand correctly?
    The case is currently before the Federal Court of Appeal. In fact, a hearing on this matter is scheduled for June.
    We regulate net prices. The discounts given to provinces reduce the average price of transactions. We believe that it is within our mandate to go over these discounts.


     Thank you, Mr. Benoit.
    Ms. Wasylycia-Leis, two minutes.
    Oh, right; you know that's impossible.
    I'll address my question to Elinor, because I haven't really had a chance yet to ask about the whole area of reproductive technologies. This issue has been around for 16 years. I can remember the 1993 royal commission, and I was here when, from 1997 on, we dealt with one bill after another. Finally we had extensive hearings, and then we thought it was done. That was in 2004. And here we are, caught up as a result of a court case.
    Much has changed in this period, and I'm wondering if our legislation is still relevant. What have we missed the boat on in terms of not legislating and regulating in this area? What kinds of problems do you see in the future, even if we get the regulations back on track and to this committee and approved?
    Thank you very much for the question.
    In this area, I think the science will always be ahead of us. It's very rapidly evolving, both science and technology, not to mention the attendant issues that go along with that evolving science in this very complex field.
    The act is an excellent act in terms of its comprehensiveness. We have one of the most comprehensive acts in the world. I would certainly hope, as Health Canada is working on the regulations for that act, that they keep up, obviously, with the changing technology. Certainly mechanisms will be put in place, once the regulations are in place, to continually review those regulations.
    As one method of looking at this, we have established a science advisory panel of multidisciplinary experts in the field who have two purposes: one, to advise the board, who will be issuing the licences, on issues of technology change; and two, to look long term. We know that the research that's in the lab today will be in the regulations three and four years out.
    So that's how we're hoping to deal with that issue.
     Could I just ask one--
    No. Our time is up. Thank you so much.
    I want to thank the panel for coming here today.
    What we're going to do now is suspend the committee for just one minute, with our heartfelt thanks to our presenters, and then go in camera for our business.
    Thank you.
    [Proceedings continue in camera]
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