HEAL Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 2nd SESSION

Standing Committee on Health

EVIDENCE

CONTENTS

Thursday, October 9, 2003

0905

The Chair (Ms. Bonnie Brown (Oakville, Lib.))

The Chair

Ms. Barb Byers (Executive Vice-President, Canadian Labour Congress)

0910

The Chair

0915

Ms. Barb Byers

The Chair

Mr. Larry Wagg (First Vice-President, Congress of Union Retirees of Canada)

0920

Mr. Larry Wagg

Mr. Ronald Lang (Eastern Ontario Representative, Congress of Union Retirees of Canada)

0925

0930

The Chair

Mr. Stan Marshall (Senior Research Officer, Canadian Union of Public Employees)

0935

0940

The Chair

Mr. James Clancy (National President, National Union of Public and General Employees)

0945

0950

The Chair

Mr. Guy Caron (Health Care Campaigner, Council of Canadians)

0955

The Chair

Mr. James Lunney (Nanaimo—Alberni, Canadian Alliance)

1000

Mr. James Clancy

Mr. James Lunney

1005

Mr. Larry Wagg

Mr. James Lunney

Mr. Ronald Lang

Mr. James Lunney

Mr. Ronald Lang

1010

The Chair

Mr. Ronald Lang

The Chair

Mr. Ronald Lang

The Chair

Mr. Ronald Lang

The Chair

Mr. Réal Ménard (Hochelaga—Maisonneuve, BQ)

1015

Ms. Barb Byers

Ms. Cindy Wiggins (Senior Researcher, Canadian Labour Congress)

Mr. Réal Ménard

Mr. James Clancy

Mr. Réal Ménard

Mr. James Clancy

Mr. Réal Ménard

Mr. James Clancy

Mr. Réal Ménard

1020

Mr. James Clancy

The Chair

Mr. Réal Ménard

Mr. Stan Marshall

Mr. Guy Caron

Mr. Réal Ménard

Mr. Guy Caron

1025

M. Réal Ménard

Mr. Guy Caron

Mr. Réal Ménard

The Chair

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.)

Ms. Barb Byers

1030

Mr. Larry Wagg

The Chair

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.)

Mr. Ronald Lang

Mr. Jeannot Castonguay

Mr. Ronald Lang

Mr. Jeannot Castonguay

1035

Ms. Barb Byers

Mr. Jeannot Castonguay

Ms. Barb Byers

Mr. James Clancy

The Chair

Mr. Jeannot Castonguay

Mr. James Clancy

Mr. Guy Caron

The Chair

Mr. Dick Proctor (Palliser, NDP)

1040

Mr. James Clancy

Mr. Dick Proctor

Mr. Stan Marshall

Mr. Dick Proctor

Ms. Barb Byers

1045

Mr. Dick Proctor

Mr. Ronald Lang

Mr. Dick Proctor

The Chair

Mr. Gilbert Barrette (Témiscamingue, Lib.)

Ms. Barb Byers

1050

Mr. James Clancy

The Chair

Mr. James Lunney

1055

Mr. James Lunney

Ms. Barb Byers

Mr. James Lunney

Ms. Barb Byers

Mr. James Clancy

The Chair

CANADA

Standing Committee on Health

NUMBER 058

2nd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, October 9, 2003

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Ms. Bonnie Brown (Oakville, Lib.)): Good morning, ladies and gentlemen. It's my pleasure to call this meeting to order. This is another in a number of meetings that have already been held on the prescription drug study.

This morning we are fortunate to have with us a set of witnesses from a variety of unions and union retirees, and someone from the Council of Canadians.

We will begin as the agenda suggests, with the National Union of Public and General Employees. This morning we have with us their national president, Mr. James Clancy.

Mr. Clancy, would you like to begin?

A voice: Mr. Clancy is not here.

The Chair: That being the case, we'll move on to the Canadian Labour Congress: the executive vice-president, Barb Byers, and the senior researcher, Cindy Wiggins.

Ms. Byers.

Ms. Barb Byers (Executive Vice-President, Canadian Labour Congress): Thank you.

Good morning. My name is Barbara Byers; I'm the executive vice-president of the Canadian Labour Congress. On behalf of our two and a half million members across this country and their families, we want to thank you for the opportunity to present our views regarding issues related to prescription drugs. As you all know, the CLC is a federation of approximately 70 unions whose members work in virtually all sectors of the Canadian economy, in all occupations, in all parts of Canada.

Prescription drugs have been a central issue in Canadian public policy for a long time. Canadians strongly support access to affordable medicines, but they are concerned as drug costs continue to soar.

Prescription drugs are an important issue for union members. Drug costs have serious implications for the sustainability of the public health care system. At the bargaining table, employers identify prescription drugs as a cost burden. Not all of our members are covered by employer drug benefit plans, and for some the coverage is minimal. Cuts to coverage could mean severe financial hardship.

Prescription drugs do play an important role in the treatment of disease. They save lives; they prevent disease; they diminish suffering. As technology and genetic research advance, they will play an increasing role in the treatment of illness. But not all Canadians are comfortable with the idea of genetic engineering, which is being used to create new drugs. It has never been more critical that Canada develop a national drug policy framework to ensure the quality, the efficacy, and the safety of all prescription drugs.

Prescription drugs in combination with new medical procedures and cost-cutting efforts reduce the length of hospital stays. When patients leave, they assume the burden of their drug costs. Drugs are as much an essential medical service as an operation. They must be integrated into public health insurance as a medically necessary service. Canadians told the Romanow Commission that the core values underpinning medicare were equity, fairness, and solidarity. In the absence of a national drug plan, access to prescription drugs is neither equitable nor fair.

Ninety percent of Canadians have some drug insurance, but only 11% have full coverage; 69% pay co-payments; 10% are underinsured, defined as paying 35% or more of the cost out of their own pocket; 10% are uninsured, meaning they pay more than 4.5% of their gross family income for prescribed drugs.

Socio-economic status is a predictor of drug coverage. According to the Canadian Institute for Health Information, only 58% of Canadians with the lowest incomes report having drug insurance, compared with 87% of those with the highest incomes. The National Forum on Health noted that 75% of Canadians earning more than $60,000 had private insurance, but only 42% of Canadians earning between $20,000 and $40,000 had coverage. A mere 7% of those with incomes of less than $20,000 had insurance.

What we are seeing here is that those who can least afford to pay it must pay the largest share of their income for prescription drugs. It's unfair that the working poor are bearing the brunt of inequitable access to prescription drugs.

The CLC believes that prescription drugs are a public good and an essential service. To address inequality and access to drugs, the federal government should take the lead in establishing a national public drug plan based on the “single payer” model with “first dollar” coverage. This would recognize that prescription drugs are an essential medical service and integrate them into Canada's public health care system. While this would need to be phased in, the CLC believes the initial stages can go beyond insuring against catastrophic drug costs, so that people with lower incomes would be covered.

Total spending on drugs topped $18 billion in 2002. In 1999, Canada had one of the lowest shares of drug expenditures financed by the public sector in 25 OECD countries. Most OECD countries provide universal coverage for prescription drugs, Canada and the United States being the exceptions.

¿ (0910)

Key cost drivers for drugs include new drugs, the substitution of new for older drugs, higher volumes of usage, and reduced access to generic drugs. Just 145 new drugs introduced into the market over the last five years account for 25% of the cost of all prescription drugs. Three new drugs about to come on the market will cost $20,000 per patient per year. This trend forewarns of horrendous cost increases in the future.

About 17 million people have drug coverage under employer-sponsored health plans. These plans are important to working people because they protect against high drug costs not covered by public insurance and contribute a great deal to living standards. Many employers believe their health plans are important in terms of retention, employee job satisfaction, and productivity issues, but they are greatly concerned about growing costs, especially of prescription drugs.

ESI, a benefit management firm, reports that the cost of providing prescription drugs in private plans grew by an astounding 61% between 1998 and 2000. Green Shield Canada, also a health benefits manager, states that claim costs have grown five times faster than the rate of the consumer price index in recent years. Both ESI and Green Shield identified the substitution of costly new drugs for older drugs and a decline in the use of generic drugs as the primary cost drivers for employers.

In 2001, Eckler Partners Limited stated that employers spend between 4% and 6% of payroll on benefits, but that this will rise because the cost of the health care component is expected to double over the next five years. By comparison, in the steel industry in the U.S., health insurance alone represents 18% of employer costs. We must see that the costs here are in fact a competitive advantage that we do not want to lose.

Increasingly, employers are speaking out about the advantage public health care contributes to Canadian business. The three big automakers, Abitibi Consolidated, and Bell Canada joined with the unions representing their workers in making public statements about the importance of public health care to Canadian business. They warned that it would be ill-advised to transfer greater health care costs to employers and workers.

This should be helpful—

The Chair: Excuse me, Ms. Byers; you're well over your time. Could you just quickly summarize, and we'll move on?

¿ (0915)

Ms. Barb Byers: I'll go to the recommendations, then.

We recommend that the federal government initiate discussions with representatives from labour, business, and health care professionals regarding a framework for the establishment and funding of a national pharmacare program.

We recommend that the two recommendations put forward by the Romanow commission be implemented; that is, the creation of a national drug agency and the establishment of a national drug formulary.

We recommend that the federal government immediately eliminate the automatic two-year injunction granted to brand-name pharmaceutical manufacturers near the end of the patent term, which artificially extends the life of the patent.

We recommend that the federal government convene a public advisory process to examine pharmaceutical practices.

One more is that we urge the committee to recommend that the current prohibition against the direct-to-consumer advertising of prescription drugs remain and that they look at ways in which government can undertake public education about prescription drugs.

Thank you.

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

We'll move to the Congress of Union Retirees of Canada. Representing that group we have the first vice-president, Mr. Larry Wagg, and the eastern Ontario representative, Mr. Ronald Lang.

Mr. Wagg.

Mr. Larry Wagg (First Vice-President, Congress of Union Retirees of Canada): We'd be pleased to go second, as I noticed that Brother James Clancy came in just after we started. We could wait, if you agree.

A voice: Go ahead.

¿ (0920)

Mr. Larry Wagg: Okay.

I have with me this morning Ron Lang, who's our eastern representative. Ron did his master's degree at the University of Waterloo and his PhD in international drug costs at the London School of Economics. I'm going to take the first part and he will have his little say after.

The Congress of Union Retirees of Canada is a national, intergenerational voluntary organization. It acts as an advocacy organization to ensure that the concerns of retirees are heard throughout Canada. It was established in October 1993, and comprises 110 affiliated organizations representing 500,000 retired members from unions affiliated to the CLC, such as steel, paper, auto, machinist, CUPE, NUPGE, the Public Service Alliance, nurses, and teachers.

The Congress of Union Retirees of Canada has appeared before the House of Commons Standing Committee on Industry, Science and Technology on the drug Patent Act and its regulations over the past eight years. The record will show that we have consistently brought to the government's attention on those occasions what we view as the misuse of these regulations.

First, we strongly support Canada's publicly funded health care system. And we know that rising costs of drugs is chewing up too much health care money, and it's getting worse. Secondly, retirees tend to take more prescription drugs than other Canadians. We feel it in our pockets, as governments and our retirees' plans deal with rising costs by increasing what we have to pay or limiting the drugs that are covered. We see this happening across the country, most recently in Quebec, where fees for people covered by the government drug plan were increased on July 1.

For some, these increases in user fees may not seem like a big deal, but for someone on a fixed income, with a number of prescriptions to fill, it can be a real problem. From our perspective, we think there are a number of steps the government could take to improve the access to prescription drugs and to get a better handle on costs.

We believe many of the recommendations in chapter 9 of the final report of the Commission on the Future of Health Care in Canada, the Romanow report, make a lot of sense. I would strongly urge the committee to look at these suggestions. Romanow did a lot of work on this, and we should use it.

I want to focus on something that seems a little more relevant right now and that could be done fairly quickly. The Romanow report recommends that we review drug patent laws to stop the practice of evergreening. As you may already know, the patent medicines notice of compliance regulations of the Patent Act provide for an automatic injunction against generic drug makers who are trying to bring their products to market. So basically Health Canada can't give its final approval to a generic drug until all claims of patent infringement are decided in court.

The problem is, when a drug is a big seller, the brand companies list more than one patent so they can get more than one automatic injunction and keep the generic company tied up in court. They switch the strength of the drugs, or the coatings and other things, and they file patents on them. The generic company has to address all these, even if it wants to bring out the older version of the drug. I'm no patent lawyer, but I can't believe that this is how our drug system is supposed to work.

Furthermore, the Mulroney government based these regulations on the automatic injunction under the drug patent law in the U.S. They were having the same problems. The brand companies were using their automatic injunctions to keep the generics off the market for longer than they should. And the state governments' employee plans were paying for the brands when they should have had access to cheaper generics.

The Federal Trade Commission investigated and they filed a report. Even George Bush saw there was something wrong and he did something about it. And here's what he said in October, and I quote:

When a drug patent is about to expire, one method some companies use is to file a brand new patent based on a minor feature, such as the color of the pill bottle or a specific combination of ingredients unrelated to the drug's effectiveness. In this way, the brand-name company buys time through repeated delays called automatic stays that freeze the status quo as the legal complexities are sorted out.

In the meantime, the lower cost generic drug is shut out of the market. These delays have gone on, in some cases, for 37 months or 53 months or 65 months. This is not how Congress intended the law to work.

In August, Bush's changes to stop brands from using automatic injunctions over and over again to stifle competition came into force. Now, you'll not hear me say this on any other topic, but if Bush can do it, why can't we?

We weren't allowed to make a presentation to the industry committee in June, when it held its hearings on the automatic injunction, but we were there and so were many retirees. The committee room was packed.

And here we are now in October, and the industry committee hasn't done anything. We don't know what they're waiting for. This is a regulation, not legislation. Cabinet could change it tomorrow, if they wanted to. If the industry committee isn't going to do anything, then this committee should. Tell the government to fix the drug patent laws.

I also want to touch briefly on one thing. The big drug companies are putting a lot of pressure on government right now to let them advertise their wares. We think this is a big mistake. People are going to see the drugs on TV, and the media go after doctors about them. The problem is in too many cases the doctors are going to give the prescription whether it's the most appropriate treatment or not.

Let's face it, Canadians take a lot of pills. We seem to think a pill will fix everything. Sometimes I wonder how many people are put on cholesterol drugs that I gather they're supposed to take for the rest of their lives when encouraging them to go for a walk would be better.

The drug companies say they're only providing information to the public. That's a lot of bumf. You advertise to sell products. It's just as true for drugs as it is for cars or blue jeans or even, may I suggest, politicians.

Ron.

Mr. Ronald Lang (Eastern Ontario Representative, Congress of Union Retirees of Canada): Madam Chairwoman, my organization has asked me to give a brief thumbnail sketch of the history of patents and the battle over drug patents in Canada. It might prove useful to some of the members of your committee.

This drug patent battle has been going on now for over 50 years, as some of you may or may not know. It started in the United States under Senator Estes Kefauver, who held his subcommittee meetings on anti-trust and monopoly. He started those hearings in 1957, and they concluded in 1967.

The result of his investigations was Bill S.1552, which looked at patent rights, compulsory licensing, trademarks, brand names versus generics, and the industry's promotional practices. His conclusion was that patent rights were to be reduced from seventeen to three years, with the payment of a royalty based on sales of less than 5% to the licensor.

The findings of the Kefauver committee, as you might well understand, were a direct condemnation of the marketing, pricing, manufacturing, and distribution policies of the ethical drug manufacturers in the United States. Needless to say, with the tremendous pressure the drug lobby brought on Bill S.1552, it went down to defeat.

However, in Canada the Kefauver committee meetings were being closely watched by the director of investigation and research of the Combines Investigation Bureau in Canada. His name was Dave Henry. I had the pleasure of meeting him and interviewing him a number of times when I was doing my work. The findings were published in a green book at that time. This report was referred to the Honourable Donald Fleming, then Minister of Justice, who appointed a committee of inquiry under section 42 of the Combines Investigation Act. The green book formed the basis for the inquiry, which reported back to the minister on January 24, 1963.

This report by the Restrictive Trade Practices Commission was concerned with the manufacturing, distribution, and sale of drugs. I would suggest to this committee that it is still the basis and the bible if you want to understand the drug industry in Canada, because its techniques, its marketing, and its distribution have changed very little in 50 years. The same arguments continue ad infinitum. I've heard them for I don't know how long—too long for my ears.

Let me quote you just a couple of key findings of the Restrictive Trade Practices Commission. Because of dominance of U.S. firms, the drug trade in Canada operates under the U.S. patent system. And because no compulsory licensing provisions exist under U.S. patent law, these provisions are largely unused in Canada, because to do so the Canadian subsidiaries “would have to develop, manufacture and market the product...in competition with its own parent company”.

Over 95% of drug patents in Canada are taken out by foreign manufacturing firms. There is no basic research done in Canada. What happens is that the active ingredients are imported into this country from the parent company and are packaged and put into dosage form by the Canadian manufacturing companies, the subsidiary companies of these multinationals.

The commission recommended that patents with respect to drugs be abolished. It said that in the opinion of the commission this is the only effective remedy to reduce the price of drugs. I'm not suggesting such drastic treatment; I'm just reporting what the commission recommendation was.

There are a number of other recommendations, but one is worthy of note here, which again I quote:

There appeared to exist a concerted campaign to characterize the products of certain firms which imported drugs under their generic names as cheap imitations of inferior quality. This has caused doctors and hospitals to hesitate about prescribing and using such products.

¿ (0925)

On November 30, 1962, the Honourable J. Waldo Monteith, who was Minister of Health at that time—he was also my MP, because I lived in Stratford at that time—announced that a special parliamentary committee would be established to make a full-scale investigation into Canada's drug industry.

In 1963 the Liberals came to power, and the committee was reconstituted under the chairmanship of Dr. Harry Harley. The final report of the Harley committee did not meet with the full objectives of the government at that time, but the subsequent Bill C-190 did, and reflected not the recommendations of the Harley committee but the recommendations of the Restrictive Trade Practices Commission.

Bill C-190 died on the order paper and was reintroduced as Bill C-102, which received royal assent on June 22, 1969.

The result of Bill C-102 was to amend the Patent Act to allow compulsory licensing as of right after three years, on the payment of a royalty to a patent holder. This lasted until 1987, when the drug patents were changed to monopoly protection for seventeen years. In 1993 it was extended to twenty years.

During the period from 1969 to 1987, Canada enjoyed the lowest drugs costs in the world. This was achieved without any bureaucracy. There was no medicine prices review board; there were no extra people hired on. It was strictly through competition.

If there's one thing the ethical drug manufacturers do not want, it's competition. To them, that's similar to the black plague. They do not want to compete on drugs or drug pricing; they want a monopoly.

It seems to me if you're going to give them a monopoly, then there ought to be some responsibilities on their part on the question of costs and pricing. You can't have rights without corresponding responsibilities, and I don't think this government, up to this time, has given the responsibility to them that they ought to have.

I understand NAFTA and I understand the WTO. All good and well. But there has to be something this government can do to curtail the rising price in drugs. If you don't and you bring in a national drug plan, what you're doing is giving the ethical drug manufacturers direct access to the public purse. If you don't think they'll bleed that dry, as they did in England back in the fifties and sixties, you're very much mistaken. You're going to have one hell of a problem on your hands.

I'm sorry, Madam Chair; I don't use those words very often, but sometimes I get excited a little bit about this stuff—and it's hard to get excited about drugs, I know.

Anyway, to conclude, Madam Chair, two independent inquiries, one in the U.S and one in Canada, concluded that three years was ample time for drug companies to recoup their costs and make a profit from new drugs. In fact from 1969 until 1987 that's exactly what they did in Canada, and they stayed here; they didn't move. They threatened to move; they threatened to close down their plants; they said we would not have access to the latest drugs. None of this came to pass. Their threats were hollow.

If three years is enough, then it surely begs the question why drug patents are now for 20 years, and indeed why they have to be extended under the evergreening laws. It surely begs the question, Madam Chair.

Thank you very much.

¿ (0930)

The Chair: Thank you, Mr. Lang.

Our next witness is from the Canadian Union of Public Employees: Mr. Stan Marshall, who is the senior research officer.

Mr. Marshall.

Mr. Stan Marshall (Senior Research Officer, Canadian Union of Public Employees): Good morning.

My name is Stan Marshall, and I'm a senior research officer with CUPE. I'd like to thank the Standing Committee on Health for this opportunity to address these important issues around prescription drugs.

CUPE represents approximately 525,000 workers in public sector employment across Canada. One in sixty Canadians is a CUPE member, and a higher percentage of Canadian families have at least one member in the family who's a CUPE member.

This morning I want to make the connection between the increasing costs of prescription drugs and the new reality faced by workers in their workplaces as they attempt to ensure coverage for themselves and their families.

It's well known that drug costs have increased astronomically over the last decade. Others have spoken to this, so I won't. What is less well known and understood is the impact these increases have for ordinary workers, both those who are organized into trade unions and those who are not.

Increased drug costs put a severe strain on the ability of workers to negotiate such benefits. Employers are squeezing workers in an effort to lower total compensation costs, and while employers are undoubtedly paying more in drug costs, they are also downloading an increasing portion of the costs directly to workers.

The implications of this downloading are significant. The further you move away from the principle of comprehensive first dollar coverage for drugs, the more you are introducing forced and often unpalatable choices as to whether to purchase prescription drugs or not.

Many studies show that all too often individuals and families cannot bear the entire burden of this downloading. There are several studies; I'll just cite one. It's actually an American study, from the Kaiser Foundation, of seniors. It found that one quarter of seniors, irrespective of drug coverage, made choices to not fill prescriptions or to skip doses in order to make their prescriptions last longer. That proportion rose to over one third if they had no drug coverage at all.

These choices are driven by economic factors. In this case the population was seniors, but the situation would not be any different if the study were of single parents or families with drug plans that require significant cost-sharing. The Kaiser study found that those with better drug plans were less likely to engage in drug-purchasing behaviour that is detrimental to their health. The consequences of not filling prescriptions or skipping doses are significant, of course, as heart disease, diabetes, and hypertension can worsen, for example.

In the end, the savings realized by downloading to employees are transferred in even greater proportion to health expenditures borne by governments to deal with medical conditions that were poorly treated.

Further, at a societal level, as all governments seek to cut health expenditures, they have unfortunately not tackled the cost-of-drugs issue head on. They're looking to reduce overall health costs through privatization and a contracting out of public sector work that is compensated with better pay and benefits when done in the public sector. The consequence of this is that increasing drug costs have a dangerous indirect impact on the health and well-being of workers as they are shifted to lower-paid, contracted, and marginalized employment with fewer drug benefit plans available to them, and sometimes none at all, when they might have had them in the public sector.

Workers have always known that extended health benefits, including drug and dental plans, are an essential part of the compensation package and have sought to bargain these benefits at bargaining tables around the world. The landscape for drug coverage now includes a wide variety of options. I list some of them. They're not all the best; in fact, I list them from best to worst, but these are what's out there now.

The best plans are 100% employer-sponsored and employer-paid plans with formulas that are jointly determined through negotiation. However, there are a variety of other, inferior plans that do not benefit employees to the same degree. Some plans require employee co-payments or deductibles or a sharing of the cost of paying the premiums. Some provide for flexible benefits, where employees must choose which benefits they want to be covered.

A recent trend is to propose health spending accounts, where employees are provided with a certain amount of money to use for health benefits, and when they've used it up they must shoulder the burden of additional costs themselves. This approach is tantamount to the employer divesting itself totally of any responsibility to provide meaningful coverage. It is done strictly as a cost-saving measure. Where there is no employer-sponsored plan, employees must purchase private insurance and make the premium payments themselves.

¿ (0935)

The worst-case scenario is that there's no employer-sponsored plan and the employee can not make private insurance premium payments and is left without any insurance coverage whatsoever. Interestingly, a number of commentators in the insurance field have made statements that in the future there may be no coverage at all, at least none provided by the employer.

Increased drug costs put a severe strain on the ability of workers to negotiate such benefits. As drug costs increase and as employers seek to decrease their share of the costs, we can expect greater labour relations conflict as bargaining tables deal with the significant, tangible benefit for workers and their families.

There are several areas where we need to look for solutions. Some of the recommendations outlined by Sister Byers from the Canadian Labour Congress as recommendations of the Romanow commission are relevant. A small step would be transfers for catastrophic drug coverage, but bigger steps would be a national drug agency and a national formulary.

However, these changes will not be effective if we don't show the political will to make other changes first. First and foremost, patent legislation must be changed to allow generic drugs earlier access to markets. The current 20-year patent protection has driven overall health care expenditures up and is threatening the health and well-being of Canadians. Brand-name pharmaceutical companies and their shareholders are benefiting disproportionately to the benefit they provide. Indeed, one could argue that the current patent protection is a net loss for Canadians.

It's time to reintroduce compulsory licencing to facilitate change that will reduce drug costs—compulsory licencing where drugs can come to market and royalties be paid such that the patent holder is compensated. Dr. Aidan Hollis makes the link between effective publicly funded health care and compulsory licensing in the Canadian Medical Association Journal in October 2002. Dr. Hollis points out that compulsory licensing shifts the power over price from patent holder to government, but preserves the patent holder's right to make a profit.

Through applying for a court injunction, the 20-year patent protection can be extended by at least two years and probably more, depending on the length of the litigation. This dubious practice must end. It serves no other purpose than to protect profits and market share. The practice of evergreening must also be stopped. Patent applications for slight variations of the same drug with, in many cases, little measurable benefit to the patient serve little purpose other than to protect the market from generic equivalents. The consequence is increased costs for Canadians. These legal loopholes need to be closed.

In 1995 British Columbia began an important experiment to control the cost of drugs. They introduced the reference drug program to cut costs, while still maintaining first dollar coverage for five classes of drugs. It works because it ensures that only the cost of the least expensive drug is covered in cases where more than one drug is proven effective for the condition. By the end of 2003, the RDP will have saved the British Columbia government over $352 million, and several independent evaluations of the program indicate that there are no adverse health outcomes.

Why, then, don't we just adopt this program across the country? I think the answer is that brand-name pharmaceutical companies are so vociferous in their opposition to the RDP. Their profits tumble with the use of lower-cost generics.

The lobbying of the brand-name pharmaceutical companies aside, the example of the RDP in B.C. stands as a model for public policy on formulary management and should be considered in any serious reform or implementation of a national pharmacare program.

Finally, I would like to say that we are encouraged that the government is considering changing legislation to allow for the domestic manufacture of low-cost generic antiretroviral drugs to fight HIV/AIDS in sub-Saharan Africa and other areas of the developing world. We feel strongly that this legislation should also permit Canadians with HIV/AIDS to access generic equivalents.

However, we are well aware that the government has not set specific timelines for the implementation of these patent changes and has not contemplated the specifics of the changes. We urge the government to make these changes expeditiously, so that the more than 38 million people throughout the world who have HIV/AIDS can begin to receive cost-effective treatment. As importantly, this action is needed to ensure that economies devastated by high death tolls are given an opportunity to recover.

The patent legislation should not be a shield behind which brand-name pharmaceutical companies hide in order to make excessive profits at the expense of humanity. Members of this Standing Committee on Health should be using one voice to stop the horrific death toll from HIV/AIDS.

We will be watching your actions as well as the actions of the government on all of these matters, in the HIV/AIDS issue and the patent legislation and other matters.

¿ (0940)

I'd like to thank you for this opportunity. CUPE will be submitting a more detailed brief over the next few weeks.

The Chair: Thank you, Mr. Marshall.

Our next witness is from the National Union of Public and General Employees: Mr. James Clancy, who is the president.

Mr. Clancy.

Mr. James Clancy (National President, National Union of Public and General Employees): Thank you, Madam Chair and members of the committee, for giving me an opportunity to appear before you on behalf of our members—some 337,000 members across the country, women and men and their families.

I've provided the committee with copies of our brief. Today I want to use this short time I have with you to just highlight three areas we mention in the brief. One area is our experience with prescription drugs and collective bargaining. The second area I want to touch upon is our prescription for change in this area. The third area is the one my colleague Stan Marshall just raised. I'll speak to our need, as Canadians, to respond with intelligence and compassion to the full-blown HIV/AIDS crisis and epidemic in Africa and its connection to the work of this committee.

My colleague Barb Byers really went into the first subject, prescription drugs and collective bargaining, in some detail, so I won't say anything—it's contained in our brief—other than this: anybody who thinks trade unions and our members are ready to lose our drug plans or are ready to bargain away everything else to preserve the drug plans has another think coming.

There will be holy hell to pay in the months and years ahead if this committee and others don't come to grips with the rising cost of prescription drugs. There will be labour unrest from coast to coast across the country unless this problem is dealt with. Members will not stand by and watch benefits and salary and wages be sacrificed on the altar of high costs for prescription drugs, when we watch big pharmaceutical companies walking away with billions and billions in profits. It just isn't going to happen, Madam Chair and members of the committee.

The second area I want to touch upon in this limited time—again, it's contained in the brief more fully—is the idea of reform of the drug patent laws. If we're going to get at the cost of high prescription drugs, there are really two fundamental ways to do it. One is a lowering of the patent protection, which Ron Lang spoke about so clearly and eloquently. The other involves the question of the practice of evergreening.

I want to talk about that. Larry Wagg talked about it, but just briefly, this evergreening practice is a real mug's game, isn't it, Madam Chair? What would you describe this as--a shell game? How about a gambit? This notion of extending drug patent protection for 20 years, but then to follow up with this practice of evergreening, is a charade. It is a charade that increasingly Canadians of all walks of life understand. It's a shell game.

Larry Wagg talks about the U.S. President. Finally, the U.S., under Bush, acts and ends this practice of evergreening. Canada, I believe, is one of the last countries in the world to continue this practice of evergreening. It's a charade. It's hypocritical. It really is nonsense and it should be stopped.

Many people are on AstraZeneca's heartburn drug, Losec. Many Canadians are on it. It had annual sales of $430 million, just for that little pill called Losec for heartburn. Generic versions are available in the U.S., but not in Canada. It has $430 million of annual sales, and according to the Patent Register, AstraZeneca has listed ten new patents on Losec since 1999. Larry Wagg talked about changing the colour of the pill and so on and so forth. There have been ten new patents since 1999; the sales keep rolling. And—here's the tragedy of it, Madam Chair—much of it is charged to the public purse, isn't it? There are public plans, and it is charged right back to the public purse.

You could take the one small step of changing that regulation, of abolishing that regulation. This committee could recommend to the government that this one regulation be abolished, as has been done in so many other countries around the world. You would allow people to access drugs more readily and make them more accessible, but you would also save the public purse. It must be done.

¿ (0945)

The last point I want to raise—and it's covered in much more detail in our brief—is this question of AIDS, this pandemic in Africa. Boy, this situation cries out to us, as Canadians, as internationalists. It truly cries out to us and calls on us to act. Again this committee can make the recommendation that this government follow through on the commitment it has made over the last couple of weeks to ensure that low-cost generic drugs, on offer from a for-profit company, a generic manufacturer based in Canada—the company has made the offer; the government has publicly said it will follow through and ensure.... But it hasn't happened yet.

I encourage each and every committee member: let's not stand on the sidelines on this. Let's not let this opportunity go by. This is a really small step we could take, to amend that regulation to ensure that—in this case I think it's Apotex—is able to manufacture that drug and deliver it to women and men and children in Africa, to ensure that we get a handle on this worldwide calamity. It's a small step. This committee could make the recommendation. I encourage you to do so.

We have some other prescriptions for change. They are practical. They make sense. They can be achieved, Madam Chair. They're in our brief. I encourage you to read it.

Thank you very much for your time this morning.

¿ (0950)

The Chair: Thank you, Mr. Clancy.

Our final witness this morning is from the Council of Canadians: Mr. Guy Caron, who is a campaigner for health care within the council.

Mr. Caron.

[Translation]

Mr. Guy Caron (Health Care Campaigner, Council of Canadians): Thank you very much, Madam Chair and committee members.

I'm very pleased to be here to outline the viewpoint of the Council of Canadians, which is the largest citizens organization in Canada, with 100,000 members organized in 70 chapters. I'm the Council's new health campaign director. I've been in this position for about two weeks.

The picture of health has radically changed in the past 30 years. Providing health care in Canada is still perceived as a matter of doctors and hospitals.

However, the fact is that drugs, prescribed or off-the-shelf, are taking an increasing share of health care resources in the country. Manufacturers have contributed to this increase, and some of them are positive and desirable. As Mr. Romanow wrote in his final report, prescription drugs have also replaced the need for some intensive surgeries and have helped to reduce recovery times, often allowing people to recover at home rather than in hospitals. However, drug costs have increased significantly in Canada in the past 20 years, as have drug prices.

One member of the Council of Canadians in the Maritimes recently mentioned to us that his family was spending over $5,000 a year on prescription drugs. These problems are similar to those that plagued Canadians in the middle of the twentieth century, when many people could ill afford a trip to the hospital, especially if a longer stay was likely. It is thus important that access to medicinal drugs be carefully analyzed, and we appreciate the fact that the Standing Committee on Health has made a point of holding public hearings on the topic.

It is often said that the creation of the Patented Medicine Prices Review Board after the adoption of Bill C-22 has contributed to control the prices of prescription drugs in Canada, and, to a certain extent, this is true. The Board's 2001 report showed that the prices of patented medicines increased only 0.8 percent a year between 1988 and 2000.

On the other hand—and this is a statistic that Ms. Byers mentioned—according to Green Shield Canada, the average price of prescriptions for new patented drugs rose by 20.9 percent between 1993 and 1997, while the prices for existing patented drugs rose by 6.6 percent during the same period.

The Final Report of the Commission on the Future of Health Care in Canada reported that an average family of three spends over $1,200 a year on prescription drugs. Clearly there is something missing from the picture offered by the Board's report. The picture conveyed by that report is suspect. You should know that, to arrive at an annual increase of 0.8 percent, the Board itself considered all patented drugs, prescription and over-the-counter. While making available an antihistamine in a gel form rather than in pills may prove useful, it is not a breakthrough innovation. And yet this change is reflected in the Board's statistic.

Another reason for the discrepancy is that many physicians prescribe newer and more expensive drugs rather than older, cheaper brand-name equivalents that are not less effective. Without necessarily casting stones at doctors, it must be understood that they are under enormous pressure from the pharmaceutical industry, which spends fantastic amounts of money to promote its new products, a point I'll return to in a moment.

It will be easier for the committee to understand drug costs for citizens, for the public sector and the components of those costs by examining the pharmaceutical industry itself. Today, for those Canadians who are lucky to be insured, there's a mixture of public and private insurance coverage. While the drastic increase in prescription drug costs has affected insurance plans, it has especially hit uninsured citizens. The estimate most frequently heard is that 10 percent of Canadians are not insured. Their out-of-pocket expenses increased in real terms by 50.2 percent between 1996 and 2001.

Coverage for those who cannot afford the high cost of prescription drugs varies from province to province. But what is certain is that many Canadians cannot afford the drugs they need. Several provincial drug plans have recently had to announce increases in deductibles for seniors, Nova Scotia to $350 a year from $215, and Quebec to $325 from $175. In December 2001, British Columbia announced that it would increase user fees and deductibles for its drug plan. According to Health Canada, in Ontario alone, almost two million people have absolutely no drug coverage whatsoever, and another 700,000 have inadequate coverage.

The various crises that these programs experience are attributable in large part to the increase in prescription drug prices, which has greatly benefited the brand-name pharmaceutical industry. Between 1991 and 2000, the after-tax rate of return on capital invested in that industry hovered between 40 and 45 percent, which is much higher than in any other industry. For example, the rate of return in the banking industry during the same period was 16 percent annually.

In an April 2002 study, the Chaire d'études socio-économiques at UQAM determined that, if that rate of return had been similar to the rate of the banking industry, that is to say 15 or 16 percent, for example, and the impact had been entirely reflected in the prices of prescription drugs, patented medicines, the average price would have been approximately 16.8 to 17 percent below its current level.

Why this kind of increase in costs and profits? The successive passage of Bills C-22, C-91 and S-17 should be mentioned, and it has been mentioned by my colleagues. Those bills reinforced intellectual property rights in Canada so that they now do less to encourage innovation than to protect market exclusivity.

Bill C-91, for example—as with some points already mentioned, I'm going to go quickly over this—not only completely eliminated compulsory licensing, but also opened the door to certain abuses such as evergreening, which enables pharmaceutical companies to make marginal changes in drugs so that they can provide themselves with the grounds to sue generic drug manufacturers.

Another abuse is the notice of allegation, which, to all intents and purposes makes it possible to extend a patent by two years by simply alleging that a generic drug company has infringed a patent.

Third, the multiplication of patents on the manufacturing processes themselves enables a brand-name manufacturer to prevent generic manufacturers from entering the market by forcing them to wait until all process patents have expired, which was not the case prior to Bill C-91.

We would like to take a few moments to tell you how concerned we are by international trade agreements such as TRIPs and the FTAA, as they pertain to intellectual property protection. The preliminary text of the FTAA provides, among other things, that patent holders may enjoy an extension of their operating monopoly if the patent approval process takes more than four years. Currently, the process can take between eight and 10 years in Canada.

The notice of allegation is also included, as well as a weakening of compulsory licensing mechanisms, which however are still provided for by the TRIPs. Under the FTAA, compulsory licensing would not be permitted except in emergencies which remain to be determined.

We unfortunately have very little time to discuss potential solutions to the problems we have raised this morning. I can tell you that the Council of Canadians supports the vast majority of recommendations that have already been made. The Council of Canadians is also an ardent proponent of a national drug insurance program, which could obviously be introduced gradually and require the consent of the provinces. Mr. Romanow clearly stated that such a measure would cost $3 billion, but would permit annual savings of $650 million and that it would provide coverage for all Canadians. That would eliminate all the problems caused by the fact that 10 percent of Canadians are not covered.

We also recommend that the compulsory licensing system be restored in Canada to create downward pressure on prescription drug prices. In the context of international trade negotiations, the federal government should strive to soften intellectual property clauses rather than reinforce those rights, which we feel have created an imbalance which favours commercial exploitation to the detriment of the common good.

Thus it would subsequently be possible for the federal government to legislate so as to eliminate the abuses resulting from passage of Bills C-22 and C-91.

Thank you very much.

¿ (0955)

[English]

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

We'll move to the second part of our meeting now; we'll begin the questioning by members. We'll begin with Mr. Lunney.

Mr. James Lunney (Nanaimo—Alberni, Canadian Alliance): Thank you, Madam Chair.

First, since I'm first up this morning, thank you to all of our witnesses this morning for raising a lot of interesting comments.

The study the health committee is undertaking addresses a number of issues, and I'll just quickly review them. The mandate is to look at rising costs; reviewing and controlling of prices; mechanisms for approving new drugs and introducing them; monitoring of adverse effects; prescribing practices; marketing to and lobbying of prescribers; direct-to-consumer advertising; access, of course; misuse, abuse, and addiction within the general population; and international comparisons. I think you've actually covered a whole range of those issues in your presentations this morning.

I would like first to address a question to Mr. Clancy. In your presentation, Mr. Clancy, you mention, in the section “And countless thousands mourn”, that “We can no longer let the desire to make money defeat our need to be human.”

Before I go to my question, perhaps the clerks might note—and others might be interested—that there's an excellent article in the Saturday “Review” about a week ago in the National Post. In the magazine was a feature cover story called “The Drug Pipeline”. I don't know how many of you saw it, but I would suggest that perhaps the clerk would like to circulate it.

This article addresses a lot of these issues as well, concerning the drug companies' marketing plans, how marketing employees are up and the number of employees for research is actually down, and attitudes by top drug executives who refer to disease as “a marketing opportunity”.

My first comment is actually for Mr. Clancy. I'd like to commend you for taking your interest beyond your own union employees today to address the issue in Africa. Of course, a part of our mandate is to look at international concerns as well. I would just commend you for that.

You mentioned that Apotex—I think it was—is looking at providing a generic alternative. When AIDS antiretroviral drugs came out, they cost originally about $30,000 a patient per year. It's currently costing about $10,000 a year to treat an AIDS patient in Canada. But we understand that Apotex can probably do it for around $500 a year by providing a generic alternative, which is hardly more than a dollar a day.

I wonder if you were aware of the study on AIDS.... There was a big conference in Africa where there were at least two groups of researchers referring to a product called Metrafaids—a traditional African herbal product that they're finding they can treat with at even lower costs and get even better results. But they're frustrated because they can't get any money to accumulate the kinds of research statistics that would convince their colleagues worldwide of how important these alternatives would be. Someone else mentioned the one thing the ethical drug producers hate more than anything is competition.

I wonder if you're aware of this and if you have any comments.

À (1000)

Mr. James Clancy: I wasn't aware of it, to be frank with you. The only comment I have—and this is not in the purview of this committee, but involves the Canadian government's record in regard to HIV in Africa and the establishment of the UN fund—is that we still aren't hitting our marks on this. I appreciate it's not the purview of this committee, but listening recently to Stephen Lewis and others speak, I and others in the labour community are disappointed that, in terms of the UN fund that was established, our record is not meeting the kind of commitment that is commensurate with our GDP and so on.

Mr. James Lunney: Going on to other things, again I appreciate having Mr. Wagg and Mr. Lang here representing retired union employees. You made several recommendations.

You recommended fixing the drug patent laws, and others have mentioned the evergreening and the way it extends the disproportionately high costs. You also spoke very directly. Sometimes, maybe, it takes seniors to speak very directly. I don't know what it is about you. They say the young people have no inhibitions, but maybe it is reflected at the other end of the scale too.

You didn't pull any punches when you talked about the drug companies pushing for direct-to-consumer marketing. I think it ties in with that article we just mentioned, where they're talking about the actual number of employees and the investment in marketing for drug companies—even in Canada, where we're not supposed to have direct-to-consumer marketing, yet you see the ads popping up, with 1-800-numbers for more information, that don't specifically mention a product but mention the disease. It seems that many of the drug companies actually look at their patents for a product as a patent on a disease.

I'm just appreciating your remarks about marketing. You therefore are concerned about direct-to-consumer marketing. Would you care to expand on that?

À (1005)

Mr. Larry Wagg: Thank you. On the marketing issue, of course, we do get the opportunity to see the results of it, particularly here in Ottawa, since recently our cable switched over from Rochester to Detroit. I'm aware there are many more ads that seem to appear there for a variety of drugs. In a way, you would wonder why they want to market it that way, because they then list about ten things that are reasons for people not to be able to take the drug.

Our feeling is that it would be foolish to argue against advertising creating demand. We believe strongly that the demand is there through the normal source—through doctors or through the patient going to clinics and so on. There is not a need for the media to keep expanding it.

One example that comes to mind, if you watch baseball games at all, is you notice Viagra is behind the catcher for at least three innings in any game in North America, it seems.

A voice: “Good morning, good morning”.

Mr. Larry Wagg: The advertising of it also creates a false illusion, because in many cases Viagra or other products do not have the results that are implied by the postman who goes skipping around with the mail. It creates not only a market that isn't necessary but false impressions—that's a better term—of how the drug will help you. We think it's a fool's game.

Mr. James Lunney: I think it was Mr. Lang who mentioned concerns about a national pharmacare program: “If we don't think they won't drain that....” I think you might expand on your words. You made a comment to that effect.

Mr. Ronald Lang: I think I said “plunder”.

Mr. James Lunney: Yes, plunder the fund. We have in a recent health accord put up I think $1 billion for a catastrophic drug fund. I'm aware of at least one story that was written up about a new treatment for chronic fatigue and fibromyalgia. There was a woman taking $100,000 in drugs, I think it was, actually to treat something that is as non-specific and poorly understood and not defined in terms of pathogenesis as chronic fatigue and fibromyalgia. That's a lot of health care dollars. If we open the taps there and without some restraints, I think the public purse and the taxpayer could really have some liability concerns. I appreciate your making those remarks; I think it's wise to be aware of the question.

If there are alternatives.... Here's what somebody again said: the one thing the ethical drug producers hate--I think was the language used--is competition. For example, in Alberta now there's an issue with Empower Plus. It's a vitamin-mineral product that's really helping people with mental illness—bipolar disease. It has been republished in at least four peer review journals, and Alberta put over $500,000 into researching it, because there are tremendous costs associated with this disease. As soon as Health Canada heard about it, they shut down the study at the University of Calgary. That's because of an antiquated clause in the Food and Drugs Act, by the way, that says you can't label or advertise that a vitamin, mineral, or herb will influence the schedule of diseases. By the way, there's a private member's bill addressing this issue.

Just for the record I would ask, if there are low-cost, non-patentable alternatives, do you feel that on behalf of your members the Canadian government should be putting some money into researching them? Does anybody want to bite on that?

Mr. Ronald Lang: I don't have any problem with the government putting funding into these kinds of research projects, and the reason I don't have any problem with that is I think public money should go into that because the pharmaceutical firms themselves are clearly not interested in pursuing that particular course. Perhaps the reason they're not interested in pursuing it is they don't see a big enough profit in that kind of endeavour. So I have no problem with public money going into these kinds of things because you never know what you're going to come up with as an end product. Perhaps it's something the drug industry would wish they had pursued themselves.

Perhaps I might return to one of your points, when I talked about them plundering the public purse. They found in Great Britain...and the phrase the Sainsbury committee used over there says, “Where the doctor prescribes and the public consumes, no one is concerned about the cost”, so the buck comes right back to the government.

Now, if you're going to have a national pharmacare program, and I hope for goodness' sake we do, then you'd better bring in legislation on patents that is going to protect the public purse and make sure you get value for money.

You're forewarned because Great Britain tried that and they plundered the public purse over there back in the fifties and sixties, until the Sainsbury committee and government committees put a halt to it. In fact, it was Enoch Powell, who ICI Industries in Great Britain...Enoch Powell, for goodness' sake, how much more right-wing Tory could you find than Enoch Powell? He circumvented their patent system over there and their own ICI corporation, International Chemical Industries Ltd., and imported drugs from Italy, which had no patent protection, back into Great Britain.

Thank you.

À (1010)

The Chair: Mr. Lang, we don't seem to have anything on paper with your remarks. Did you have a--

Mr. Ronald Lang: Yes, they photocopied it. You didn't have any. I had handwritten notes to remind myself, that's all. I was ad libbing it.

The Chair: All right. So the only submission is Mr. Wagg's?

Mr. Ronald Lang: That's the only formal written submission, yes, Madam Chair.

The Chair: I would really like you to do what I call the short history of patents and pharmaceuticals and send it in to us. It would be helpful because we have a number of members who aren't here today, and I'm sorry they missed that.

Mr. Ronald Lang: Madam Chairwoman, I was an adult student with four kids when I went to university, and my fifth was born over in England when I was studying at the LSE. I've been studying the drug industry since my master's degree in 1968, the comparisons between British and Canadian drug costs and the patent issue itself. But I can do that, yes.

The Chair: Thank you.

Our next questioner is Mr. Ménard.

[Translation]

Mr. Réal Ménard (Hochelaga—Maisonneuve, BQ): I very much appreciate the presentations made by the various speakers. I agree with 90 percent of what was said, but two overstatements were made and I feel I have to react to them.

It's a bit harsh to say that no pharmaceutical company has conducted research leading to the creation of a groundbreaking drug in Canada. Parliamentarians shouldn't be taken for imbeciles. That statement must be qualified. I quite agree on the idea that we should review the Patent Act and tighten up all that. However, anyone who says that no drug has been produced and no research done in Canada is very misinformed. Ultimately it's demagoguery to say something like that, and it's not respectful of the Quebec industry.

I would like to ask three questions.

First I would like you to tell us clearly, Ms. Byers, which three drugs will cost $20,000 or more.

Second, I very much appreciated Mr. Clancy's presentation. I'm going to reread your brief and take a fresh look at it. What do you think? Is it impossible for Canada not to offer intellectual property? We can't act as though the WTO did not exist and as though there were no costs associated with research. So we must not entertain the illusion that we're going to repeal the Patent Act and that there will be no law. I don't think either that we're going to return to the compulsory licensing system; I don't think that's realistic. I was very surprised to learn from the officials that, when an analysis is conducted for the purpose of issuing a notice of allegation and the clinical monographs have been submitted by the manufacturers, the innovative aspect of a drug is not taken into account. No real account is taken of the fact that a new drug is compared to placebos.

Shouldn't the committee try to solve the fundamental problem and ask Health Canada not to issue a notice of allegation for drugs that do not improve the patient's condition? Isn't our duty as parliamentarians to intervene at a fundamental level rather than attack the Patent Act? We can obviously ensure that the period is 20 years and not a day more. I'm a member from Quebec, and I would be prepared to defend the Patent Act, but not a term of 23, 24 or 26 years. It should be limited to 20 years, and if after that period you haven't recovered your investment, that would be too bad. Would you agree on the idea of asking Health Canada to tighten things up and ensure there is a genuine criterion for examiners? You know that outside examiners are sometimes hired on contract by Health Canada to review clinical monographs. Would you agree to the idea of asking them that there be a criterion for assessing the innovative character of a drug under study?

So I would like to hear Mr. Clancy, Ms. Byers, Mr. Caron and all those who want to speak on this question. First I would like to know the names of the three drugs that are going to cost $20,000 or more.

À (1015)

[English]

Ms. Barb Byers: Just to clarify, the three drugs will cost $20,000 per patient per year.

Cindy Wiggins will give you the specifics on those.

Ms. Cindy Wiggins (Senior Researcher, Canadian Labour Congress): I don't have the actual names with me, but one is a cancer drug, one is a new drug for arthritis, and I believe the third one is a drug for respiration. When I go back to the office, I will send you the actual pharmaceutical names that have been attached to these drugs.

[Translation]

Mr. Réal Ménard: All right.

[English]

Mr. James Clancy: I think there are six things we can do. Let me start off with the drug patent protection. I realize we're involved with the WTO and it's an international issue, but surely this government could take the lead in trying to work with other countries to bring the drug patent legislation down to where it's more reasonable.

That involves international obligations, and so on. The second step is a very modest step we could take immediately, which is to stop the practice of evergreening—just end it; just take the regulation and abolish it, remove it, end it. We could do that immediately—this government, now, today, next week.

[Translation]

Mr. Réal Ménard: So you could all live with a Patent Act and the fact that protection is offered if it costs $780 million, for example, to market a new drug. You could live with the fact that there is a Patent Act, but you don't want any extension, something I could agree on even though I'm a Quebecker. I believe it's completely false to say that we grant no property right and that no research was done, as Mr. Lang said, and I believe that's ultimately ridiculous.

[English]

Mr. James Clancy: Subject to the points Ron Lang made about drug patent, let's start. Drug patent is one issue. The modest step is ending the regulation that allows for the practice of evergreening. Then we move to integrating the prescription drugs into the Canada Health Act—the national pharmacare program, if you will. Romanow made a modest suggestion in that regard, a first step, if we could describe it that way. That would be the third thing we could do.

The fourth is a national drug agency to get at some of the questions you are raising, which would include a national formulary. We would get at the very issue you're talking about, if we had a national formulary, wouldn't we?

[Translation]

Mr. Réal Ménard: But that's not possible. If there is a national drug cost or patented medicine agency, why would the federal government establish a national agency when it's the provinces that decide on the drugs that will be reimbursed? We're going to find ourselves in the situation we experienced when the assisted reproduction bill was studied. When they read the bill, the ministers of Health will discover that this is federal government interference.

[English]

Mr. James Clancy: With respect, we have to get at the question of big pharmacare companies—multinational companies—introducing new drugs that are simply not proven to be more effective than existing drugs on the market. This is a fact currently today. This is all being billed back not simply to the consumers but to the public purse as well.

This notion of multinational drug companies introducing new drugs that have no proven benefit over existing drugs and being—

[Translation]

Mr. Réal Ménard: We know that, and Health Canada has to do its job better and issue a better notice of allegation. But I don't understand the link you're establishing between that and a national drug agency. It's Health Canada that approves drugs. What else would a national agency do?

À (1020)

[English]

Mr. James Clancy: If you are now assuring me that under the auspices of Health Canada there is a department that does this, that they can effectively regulate it, that's fine; let's do it. Currently it doesn't exist, though. That is not taking place.

The Chair: Perhaps Mr. Marshall would like to come in on this as well.

Mr. Réal Ménard: And Mr. Caron. He speaks French.

Mr. Stan Marshall: Perhaps I could just put this perspective on it. I understand what you're saying with respect to Health Canada maybe being charged with doing this. The unfortunate thing is it's not only Health Canada that is involved. There is the Department of Foreign Affairs and International Trade with respect to the trade agreements and there is the Department of Industry with respect to the development of industry in Canada. Both of those are susceptible to the pressures of the pharmaceutical companies to ensure that drugs are approved more quickly—I have seen it first-hand, that they are approved more quickly—and there is incredible pressure on Health Canada. They are not independent, whereas a national drug agency would be independent and be able to make that determination with respect to the proven capabilities of whatever drugs are being proposed.

[Translation]

Mr. Guy Caron: Thank you. I would like to return to the question of a national drug agency and the question of a national list as well. That obviously won't be done overnight. It will require negotiations with the provinces because it's not something that can be imposed unilaterally. It must be understood that the provinces have always had the option to refuse, but they have a choice to make: to protect their own list of drugs or seize the opportunity to work with 12 other provinces and territories to increase their purchasing power. A single buyer group for the entire country would obviously have greater purchasing power than 13 separate entities. I'm talking about the national drug list, which is also proposed in the Romanow report. We're not necessarily saying that that's going to be done unilaterally. On the contrary, it will require negotiations with the provinces, but it must be understood that the provinces, including Quebec, could derive something from a national drug list. I'm not necessarily talking about a national drug agency.

I'd also like to come back to the question of compulsory licensing. Mr. Ménard, you mentioned that it would be unrealistic to consider going back to compulsory licensing. In fact, when you look at what the WTO prescribes, you see that it's possible to return to compulsory licensing. It's NAFTA that prohibits it. The TRIPs permit compulsory licensing on certain conditions, and Canada could promote those conditions.

Mr. Réal Ménard: A 20-year licence. We lost in compulsory arbitration. That's why we had Bill S-17. There can't be a patent in Canada...

Mr. Guy Caron: It was a matter of patenting. Compulsory licensing itself concerns the fact that generic companies can produce their generics during the terms of the patent in exchange for royalties paid to the brand-name company, which was the situation that was suggested after passage of Bill C-22. The idea would be to assess the relative weight of the NAFTA clause prohibiting compulsory licensing and the WTO clause which permits it on certain conditions.

We're also talking about the various abuses of the patent processes. We spoke at length about evergreening. I've never been able to find the exact translation of the word evergreening.

À (1025)

M. Réal Ménard: Perpétuation des brevets.

Mr. Guy Caron: Perpétuation des brevets... No, in fact, that's another case.

An hon. member: Le brevetage perpétuel.

Mr. Guy Caron: Le brevetage perpétuel, thank you. We also talked about the notice of allegation.

There's a third point that we did not really consider here, and that's too bad: it's patent multiplication, which enables a company to patent various processes and components of a drug in order to prevent production of a generic product after 20 years. Those patents are required over the life of the brand-name drug. Companies make patent applications, as a result of which the real term of the patent vastly exceeds 20 years, since the generic company must wait until the patent expires. If we're talking about compulsory licensing for a drug, we can almost say there's compulsory licensing for process patents, which would enable generic drugs to be produced after the patent expires.

The essential question for Canada or for the government is thus whether it is ready to use the WTO clauses on the use of compulsory licensing to see how far the WTO agreement can operate against the NAFTA agreement, and eventually provide Canada with a compulsory licensing system that could benefit everyone and create downward pressure on brand-name drug prices.

Mr. Réal Ménard: Thank you.

[English]

The Chair: Merci, Monsieur Ménard.

Mr. Dromisky.

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Thank you very much, Madam Chairperson.

Thank you very much for the excellent presentation this morning. I'm very fortunate; I'm glad I was here today to get all the information you presented. I'm also on the Prime Minister's special committee, the task force studying the problems senior citizens have to cope with on a daily basis. Prescribed drugs is one of the great ones.

I have a series of questions. What we are finding is that most people know very little about the drugs they're taking. Doctors don't have time to counsel them and talk to them about the drugs. Some drugstores have a printout telling you about the drug: what it should be doing and what some adverse effects might be, and maybe even some alternatives or other options you could take or consider taking in the future.

I'm wondering if any of the unions have any strategies that they have implemented or are planning to help their members become better educated about the drugs most commonly used by their members. I'm just wondering if there's any attempt at all within that vast organization you have helping them become better educated and more knowledgeable.

The second question—you don't have to answer just yet—is this. I know the unions presented to the Competition Bureau of Canada. That was done, I think, early in the spring. I'm wondering--oh, was it July? Then you don't have any kind of response from them yet; you probably won't have for a long time.

Dr. Lang, concerning the question about no research being done, I visited a Merck Frosst plant in Montreal. I was given the royal tour and royal treatment by the top officials in the company and was introduced to some people who were doing research there. That's all I'm going to tell you.

Then you mentioned this message about “cheap and inferior generic drugs” being given out by the big pharmaceutical companies. Is there any proof that they are inferior? If not, then why are hospitals and doctors advocating the more expensive ones from the pharmaceutical companies?

Ms. Barb Byers: I'll start.

Right off the top, I don't have specifics about any unions that I'm aware of doing specific education with members on drugs.

When you say at the end, why are doctors prescribing these, it's because people are asking and because they don't know. That's one of the reasons to get back to a national drug formulary and a national pharmacare program.

I come from a province that had a drug plan under the Blakeney government; it worked very well for people. I can honestly tell you that people paid more attention to what they were being prescribed, because if you went to your doctor and the doctor prescribed you something, the first thing most patients said to them was, “Is this on the drug plan?” And if the doctor said, “No, it's a patented drug”, the second question was, “What's my generic alternative?” This was because the choice for the patient was either to go to the pharmacist and pay $25 or $35, or whatever, for a prescription, or I think it was $3.65—it was a while ago—for their dispensing fee. Patients paid more attention because they knew the difference was out of their pocketbooks.

Quite clearly, the province laid out, “Here are the things we cover, and we don't cover these other ones. These are the ones in our formulary and these are the ones in our drug plan.” So I think we probably felt more compelled financially to ask those questions.

Again, if you take a look at the recommendations of the Romanow commission for a national pharmacare program for a formulary, those also, in their own way, do their own education with patients.

But I don't know in terms of people from specific unions if....

A voice: No, because people are too busy.

À (1030)

Mr. Larry Wagg: In the Congress of Union Retirees, we're also in coalition with four or five other groups. You talked about those appearing before the commission; there was the CanadianPensioners Concerned, the National Union of Public and General Employees, the Canadian Federation of Nurses Unions, the Alliance of Seniors to Protect Canada's Social Programs, and the National Pensioners and Senior Citizens Federation. In fact, those have had grants. Some of those organizations, including us at one point, had grants from Health Canada to provide some of those programs to senior members under certain guided prospects.

But if your question infers this, it's too late, I believe. If we're not doing it before we're retired, it's too late. There has to be some other means much earlier in working lives for people to be aware, because Barb has given the good example of why you would ask about the difference.

The other thing you raised was, did those researchers ask you to go and play golf with them too? A lot of the research and so on is being done when they're going to doctors and providing them with information. The latest example was that Biovail was paying x thousands of dollars and saying it was research because they were doing it. So there's also pressure on doctors from the sales end, who are very busy, to up that. I think that does create more...or the prescription drug people wouldn't be doing it if it weren't successful.

The Chair: Mr. Castonguay, then Mr. Proctor, and....

[Translation]

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Thank you, Madam Chair. Thank you very much to our guests. That was very interesting and enriching.

We've met a lot of witnesses over the past few weeks. Some of them told us about problems caused by multimedication, particularly in the elderly, who, in some cases, take 10 or 12 different drugs. A very large number of hospitalizations are attributable to the combined secondary effects of all those drugs. So this definitely results in costs either for drugs or for the health system as a whole.

My thinking leads me to ask you your opinion on the measures the Canadian government should take to increase public awareness on this subject. If I've correctly understood, we're not talking here just about elderly persons. Do you believe we should take concrete action, perhaps even starting in primary school, to make people understand that drugs are not candies, that they provide benefits, but also entail risks? Multimedication goes together with the maintenance of a certain balance.

In one way or another, I would like to hear your comments and to know whether you think measures concerning drug costs could help us improve our situation.

[English]

Mr. Ronald Lang: Are you talking about prescription drugs?

Mr. Jeannot Castonguay: Yes.

Mr. Ronald Lang: We have always depended in this country on the doctor prescribing the drug, telling the patient what the patient needs.

If you're going to get at this question of over-prescribing, and how many of us haven't had prescriptions given to us, and half of the bottle is still sitting there when we're better.... I think you have to work through the Canadian Medical Association and the doctors, to get the message to the doctors, because their over-prescribing is a terrible cost, not only to public plans but also to private plans, which we have too, and then to your own personal purse.

I think you have to work with the medical association on that.

Mr. Jeannot Castonguay: Personally, I am a physician who practised for 26 years, so I understand this angle. But being in practice for that many years, I also know that sometimes the patient won't tell you. They see many doctors and they say, “I better not tell him, because maybe he won't see me any more.”

So is there some role for education at a certain level, to work together toward the same objective?

À (1035)

Ms. Barb Byers: I'd like to take it on from a couple of angles.

Again, this is where a national drug agency would be helpful, because it would also be a bit of an overseer of both physicians and the public.

But if we can take a look at the question you raised about over-medication, the way we've dealt with other similar, related health issues, for example, the way that governments federally and provincially have dealt with the issues of smoking, and how we've taken that on as a society.... You think about what this room might have looked like 20 years ago, or maybe even 10 years ago; it might have been full of a lot of smoke.

Mr. Jeannot Castonguay: Yes, 20 years ago.

Ms. Barb Byers: So I think that's a legitimate question you raised about what people understand about over-medication and combinations of drugs, and those sorts of issues, which are a legitimate concern.

But again, it's a role that a national drug agency could insert itself in publicly as well, if we had such an agency.

Mr. James Clancy: Just to put it into perspective, it's a legitimate concern, but it's not “the” concern.

The fundamental question here is not over-prescribing, but under-prescribing, in the sense that as we look forward, people are not going to have access to drugs because of rising costs. So it's not over-prescribing. I see that as a concern, but the fundamental concern here is really under-prescribing, if I could use that term, because people don't have access to the drugs because of the rising costs.

The Chair: It's not under-prescribing, but it's under-filling of prescriptions.

Mr. Caron wanted to comment on this.

Mr. Jeannot Castonguay: It's not having access, basically.

Mr. James Clancy: Yes, it's lack of accessibility.

[Translation]

Mr. Guy Caron: Looking at that from a prevention standpoint, I could link your question to direct consumer advertising. Pharmaceutical companies are taking action which, with regard to the Food and Drugs Act, is barely acceptable. We talked about Viagra, but we could mention Zyban and other products for which the advertising is designed to comply not with the spirit, but with the letter of the act.

I know that a British study—in fact, I don't remember whether it was British or American, but I could find that information—showed that patients exposed to advertising of a particular drug were nine times more likely than others to demand that their physician prescribe them that drug.

Physicians, for their part, come under pressure from both the pharmaceutical companies, which press them to prescribe the drug, and from patients, who want the drug prescribed for them even if they don't need it. The length of the consultation increases because the physician has to take the time to explain why the drug is contraindicated or is not the best remedy in the circumstances.

Your question is ultimately related to multimedication. Furthermore, if we allow direct advertising aimed at consumers to be increasingly invasive—and I know that the government is under pressure from the pharmaceutical companies to adopt an American-style advertising system—we risk being faced with even more serious problems than multimedication.

[English]

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

Mr. Proctor.

Mr. Dick Proctor (Palliser, NDP): Thank you very much, Madam Chair.

I'm not normally on this committee, but I'm subbing for Svend Robinson today. I'm really pleased to be here.

I don't suppose any of the witnesses here wouldn't have a national pharmacare program as their ideal scenario, but each of you in your own way is saying, “Not this way, as we're going to drain the public treasury”, or that the public purse outweighs that. I think this is a really important point that no Canadian should lose sight of.

I wanted to go to Mr. Clancy first of all. I know you represent provincial government employees and others, but when you're negotiating with those provincial governments and they're putting pressure on you, saying, “Well, the high cost of drugs is forcing us to do things differently”, are you offering advice or recommendations about those employers getting together with their other provincial counterparts to do some bulk buying to try to drive down the costs? And if so, what is the response you're receiving from them?

À (1040)

Mr. James Clancy: You're absolutely right; that's exactly what we're doing, depending on the government in power and their political stripe, quite frankly. We have some governments who are listening and are obviously interested; they're trying to figure this thing out. Then others just give us the back of their hand.

Absolutely, we're doing the public education around these issues that's necessary amongst our membership. The membership is starting to understand it in a way they didn't, or people didn't, even five, six, or seven years ago. This is a hot issue, and people want to know more about it. So we're finding a real great response among the membership.

The response across the table isn't as good, but it's getting there.

Mr. Dick Proctor: Mr. Marshall, during the testimony there were different income brackets that seem to have more difficulty with having a good working health care plan or drug plan.

For CUPE, which represents a wider mix of employees, what categories are most at risk or have the most difficulty either getting a plan or keeping a plan?

Mr. Stan Marshall: It's a little hard to generalize. CUPE, as you know, doesn't have as much centralized or provincial bargaining.

Our situation is such that when the employer is a smaller employer, it's much harder. There are specific sectors where it's much harder. So for those people working in social services, child care centres, and in some other areas of social service, such as group homes and those kinds of places, it's very difficult for them to actually negotiate a plan with their employer. Some of these are very small bargaining units. They may be as small as seven or eight people in some cases, and maybe even smaller. It's very difficult. There really isn't a good strategy to be able to bring them into some sort of drug coverage plans.

With larger employers, such as municipalities and hospitals, people are more likely to have a plan, but if you're working part-time, you're more likely not to have access to a plan. Certainly, part-time and casual employment and smaller employers are going to have much more difficulty. Of course, those are areas of public employment where women dominate, and you get single parents and other visible minorities, etc., who really don't have access. It is an equity issue in those areas.

Mr. Dick Proctor: Thank you.

To Barb Byers, you talked about the provincial drug formulary under the Blakeney government. I think perhaps as a result of Romanow, at least we're now talking about a national formulary, and I think there are people working on that as we speak.

What is your sense of that? Is it viable? Is this just a test? Is it going to work? What's your understanding about a national drug formulary and your view of it?

Ms. Barb Byers: We obviously believe that a national drug formulary is completely viable; we can take it on. We understand that being what they are, governments may want to stage a bit of it, but we are also remembering that as people are staging formularies, it's other people's lives that are in the balance.

I agree with Brother Clancy that it's not a question so much of over-prescription, but that people can't access their prescriptions. So there are people's lives hanging in the balance, people who make daily choices that those of us in this room may not have to make.

As you said earlier, we think we need a national pharmacare program, but it can't be a pharmacare program where we're simply just throwing more money into high-cost drugs, when there are other alternatives for people. That's critical, and it's not different, by the way, from our positions on other health care issues. We don't just want a publicly funded health care system; we want it publicly administered as well, because every dollar that goes to profit is a dollar that doesn't go into somebody's health care.

We think it's perfectly viable.

À (1045)

Mr. Dick Proctor: Good.

To Dr. Lang, it wasn't clear to me from your exchange with Monsieur Ménard, but you indicated that basically no research was done in Canada on drugs where the active ingredients were imported. I think I'm quoting you almost directly on that. Were you speaking in the past tense and/or the present tense? Is that the case now?

Mr. Ronald Lang: I was speaking about both—the past and present.

As I think I mentioned in my presentation, over 95% of patents are owned by foreign-owned companies. The patents are taken out by foreign-owned companies, which means that the basic research.... The nature of research in the drug industry is that it's centralized at the headquarters of the parent in the country of origin. That's where the basic research on new drugs takes place.

The research they do in this country is primarily the research necessary to get their drugs approved by the Health Protection Branch, so they can market in this country. That's where the bulk of the research is done in this country—by far.

Mr. Dick Proctor: Thank you.

The Chair: Thank you, Mr. Proctor.

Mr. Barrette.

[Translation]

Mr. Gilbert Barrette (Témiscamingue, Lib.): Hello. This is my third or fourth meeting; I was recently elected, in June. I very much appreciate the information I received this morning; I had also done some reading on the subject in advance.

As you say in English, a great challenge is in front of us. However, some things bother me quite a bit. Mr. Clancy referred to them as well, as did you on other occasions, if I'm not mistaken. I want to talk about the opposition between effectiveness and cost, between the development of new drugs and their benefits for consumers as well as between drug taking and prevention.

Like my colleague Stan, I sit on the committee examining the situation of the elderly. One day, I was in a pharmacy, and an elderly man told me that he had to choose between requesting his entire prescription or putting food in his refrigerator. Hearing that kind of thing sent shivers down my spine, particularly since I'm sure it was strictly true. We're aware that, from a certain age on, drugs can very often enable people to stay at home longer, to stay out of emergency rooms and to avoid being transported to hospital and the enormous costs that that can entail.

However, there was a time when a certain class of citizens was entitled to free or nearly free drugs because of their income levels. There were abuses; I witnessed some on a number of occasions. People took a lot of drugs and in certain cases obtained them for neighbours since they were free.

When the government announced that there would be a cost of $2 per prescription, there was a great outcry. The new drug insurance plan was then implemented. The plan premium, which was originally $175, has now reached nearly $400, largely as a result of the increase in the cost of new drugs put on the market. What's irritating is that those drugs—and this was confirmed for us—are not always effective.

I understood, perhaps wrongly, that a plan had to apply from the first dollar of prescription cost. My concern, once again, is about the abuses that could lead to. There's already an overabundance of prescriptions. Don't we risk causing excessive drug-taking by abolishing any financial contribution by the consumer? As Ms. Byers mentioned earlier, consumer participation entails an education that may be forced, but there's nevertheless an education. People request more specific information on the drugs they take and on the use of those drugs.

[English]

Ms. Barb Byers: If I could just comment a bit on the first-dollar cost.... You began by talking about people who can't afford the medication they need, and other people have referred to that. Even with the example you raised of people who got prescriptions for relatives or friends, my question would be, how many of those people were on the edge and not included in the formulary, but they desperately needed the prescription and still didn't have the money? So there's that question.

The reason we proposed that there should be coverage from the first dollar is that, otherwise, how do you get those people who are in the most desperate need at the time they require it? There may be other tax considerations that you may want to look at, as people move up the tax brackets, such as how some of it is recovered, which is always a possibility to look at. Otherwise, if you don't do first-dollar right from the beginning, you will have those same people who can't access it at all saying, “Well, it's a very nice plan, but I don't have the money to cover it, and I don't have the money to wait to get a reimbursement, because my income is so low”. So that needs to be done.

I think the other part of it is that I know people are concerned about abuse. I worked for 17 years as a social worker, so I always heard the abuse things around welfare programs, and so on. What we know from every social program out there is that the level of abuse or the advantage that people take of these programs is very, very small in comparison to the absolute need. James referred to that earlier. What happens with the choices people are making?

Just on the choices issue, the other part of it, as we talked about this morning, is that there are people who are in dire straits, but then there are people who make day-to-day choices. When we moved off a formulary in the province that I used to live in, we had the situation where women on marginal incomes said, “I can no longer afford to take the birth control pill—because that's the choice. I could afford the formulary cost, but I can't afford the cost of the pill.” There were then other issues the community ended up having to deal with. Sometimes we talk about the catastrophic...but we must also remember that it's also people in their everyday lives making everyday decisions.

À (1050)

Mr. James Clancy: Just briefly, Madam Chair, so we reject the first-dollar....

If the concern is about consumption, a better way to get at it is to go back to that earlier suggestion people made about direct-to-consumer advertising. Again, a modest step would be for this committee to recommend that Health Canada and the federal government enforce existing restrictions on consumer advertising; they're getting lax on that, and we're seeing the results on our TVs. They're just not enforcing existing regulations. That would be a modest step in terms of consumption.

On the first point you made, in our brief we talked about the 450 new patented drugs between 1996 and 2000—450 new ones. Those aren't our figures, but are from the Patented Medicine Prices Review Board, or Dr. Elgie and his group. So there were 450 new drugs between 1996 and 2000, yet Dr. Elgie and his committee say that only 25 represented a major therapeutic advance.

Hey, I think the answers lie right before us. Going to the first part of your question only, there's something wrong when we're flooded with 450 new drugs, and 25—

A voice: It bugs me.

Mr. James Clancy: It bugs me too, and it costs us a lot, not only as individuals but also as taxpayers. It's a shell game.

The Chair: Thank you, Mr. Barrette.

Mr. Lunney has a very short question—so he said.

Mr. James Lunney: It's again about advertising. In their presentations, a couple of people have talked about the cholesterol-lowering drugs. Of course, we've seen these very, very melodramatic ads, at the worst, on our TVs. You've all probably seen them, the ad of somebody playing frisbee with his kid, and he leaps up and dies of a heart attack, and they've got a tag on his toe next, and the people are mourning at his funeral, with the line, “Have you had your blood cholesterol checked?” It's very, very emotional melodrama at its worst.

Just for the record, members would probably like to know that a non-patentable vitamin product, folic acid, is the best defence against heart attack and stroke. Health Canada knows that, and if anybody doubts it, for the record, I'd be happy to make information available with the logos of Health Canada and the Heart and Stroke Foundation, on it, which they published in The Canadian Journal of Cardiology, which I'm sure all Canadians are reading.

Some hon. members: Oh, oh!

À (1055)

Mr. James Lunney: It's non-patentable, it's low cost, and we now understand the biochemistry behind it.

My question really is, to you people representing the unions, do you think this is information your union members should have access to? Do you think there's something the federal government should be doing to help make information available about low-cost alternatives? Do you think the government should be putting some kind of money into this, or would you support research funds being put into investigating high-benefit, low-cost alternatives to patentable drugs in the public interest? I'll put this to you.

Ms. Barb Byers: The individual unions who are here will obviously be able to speak for their members.

I think this is important, but remember, you can't on the one hand say, “Here are our low-cost alternatives”, and then have patent protection that drives people towards higher-cost drugs, or have advertising that drives them there. So if the government wants to say, “Here, we have to have low-cost alternatives”, then it better be prepared as well to make sure that people get the protection at the other end.

Mr. James Lunney: Low cost doesn't always mean low benefit. In many cases, it's a higher benefit, lower cost.

Ms. Barb Byers: Yes, yes, I understand that.

By the way, everybody here wrote down “folic acid”.

Some hon. members: Oh, oh!

A voice: Which proves your point, that we need some public education.

Mr. James Clancy: In part, this is a legacy, though. If we go back to 1988 through to 1998, with a federal Conservative majority, followed by a federal Liberal majority, we saw successive cuts to advocacy groups and to a whole host of groups.

So do we believe there is a role for government in the dissemination of advocacy information protection? Absolutely, but not, as Barb Byers says, at the expense of making some fundamental changes to the issues we've talked about here this morning.

The Chair: Thank you, Mr. Lunney.

If I can ask this question, to see if I've got what you're saying to us.... While the questions reflected a number of ways to get at the rising costs of drugs, you're saying that a lot of those things are simply tinkering around the edges, that the main thing is our responsibility around the Patent Act, to stop the evergreening, to stop the possibility...to enforce the laws as we have them now—which, by the way, we discovered last week are not being enforced at all on advertising—and to both raise the point that they should be enforced and to make them even tougher.

But is not this whole thing the octopus that is big pharma? I will not call them the ethical pharmaceutical companies. I don't know who said that, and I don't know if they were making a joke, but I don't call them the ethical pharmaceutical companies, whether they're generic or big pharma. I don't call big pharma the research-based pharmaceutical companies, as they advertise themselves, because as you pointed out, they're certainly not research-based in Canada; all of the research is in their home countries. We are the nation of guinea pigs on which they try their new products, because that is 99% of what they claim is research; it's testing their new products on Canadian bodies, sometimes to ill effect.

I'd like to require that 50% of what they claim is research is done in a lab with active ingredients and the other 50% could be clinical research. But first, I'd like to know what the clinical research results are in their home country. If it's a Swiss company, how many Swiss human beings have had to ingest this product before we start forcing it on Canadians? If most of the profit is going to Switzerland, it would seem to me that their people should pay the potential physical price.

Anyway, pardon me for getting on this rant.

You have pointed out correctly that the problem is the division of power on this whole subject matter. I was on the industry committee, in maybe 1996 or so, when we reviewed it and ran into an absolute brick wall on the subject. We really, really tried to bring forward the kind of report that would have pleased you, but we were stonewalled—and, as you know, nothing happened. The same thing probably happened last spring in the industry committee. It was too painful to relive for me to even follow that.

But it's possible that we can raise a certain fuss that will cause some changes, and all of your submissions give us ammunition, so for those, I thank you very much.

Thank you, my colleagues.

Colleagues, I'm just warning you that on the first Wednesday back, October 22, we are going to need a Wednesday afternoon meeting, and again on November 5. So over the next few weeks, we'll have to meet on Wednesdays.

There's a problem in that we haven't studied the supplementary estimates. If I could have your approval, I will call an extra meeting, because you know about all of the fuss we're having about estimates now. I think we have to do it.

This meeting is adjourned.