MINORITY OPINION REFORM PARTY
To begin, Reform points out the inadequate time given to Committee Members to study the recommendations proposed by the research staff. In addition, the recommendations themselves were deficient in a number of key areas, some of which will be addressed later in this report. These deficiencies include lack of sufficient attention to the broader questions related to research and development, notably a lack of proper recognition of the evolving contribution of the field of biopharmaceuticals. The recommendations lack specific direction with respect to the Notice of Compliance regulations, the practices of early working and stockpiling and the notion of an export exemption for generic drugs. No mention was made of the relationship of changing health care practices as they relate to the rising cost of drugs in our health care system nor the need to study the relationship between the general pharmaceutical industry and the Health Protection Branch. Finally, the recommendations are also silent about the need for Canadians to have access to alternate, non-traditional forms of health care should they so choose.This being said, the Reform Party endorses the report in general terms but would add the following comments with respect to specific areas of concern :
NOTICE OF COMPLIANCE REGULATIONS
Certain aspects of the current regulations accompanying Bill C-91, specifically those regulations more commonly known as the Notice of Compliance Regulations, or NOC, have proven to be the subject of much controversy. In order to judge their effectiveness, however, we must ask ourselves if the regulations pass three basic tests : fairness, adequacy and justice. Reform has found that the NOC regulations pass none of these tests.The NOC regulations don't pass the test of fairness because they exist only for the pharmaceutical industry. All other areas of the Canadian economy must go through the usual court procedure for the granting of injunctive relief and the determination of patent infringement. This creates an uneven playing field. Reform believes that our court system is equal to the task of determining infringement and providing for the necessary relief to either party.
The NOC regulations don't pass the test of adequacy because they have clearly resulted in excess litigation that may not necessarily have occurred had each case been considered on its merits. The current structure of the regulations permits automatic court action should the patentee wish to exercise this option. This has proven true in the vast majority of cases. Adequate legislation would provide for access to court remedies where conditions warrant, not as a mechanism to bar competitors from the marketplace as a matter of course.
Thirdly, the NOC regulations do not pass the test of justice because the burden of proof is shifted. Under the NOC regulations the burden of proof lies on the shoulders of the generic applicant. In all other cases the burden of proof rests with the patentee. Under the NOC regulations, all the patentee must do is allege infringement to obtain the automatic 30 month delay. This is tantamount to being guilty until proven innocent.
For these reasons therefore Reform recommends a comprehensive study of the possible impact of the removal of the NOC regulations. The elimination of the NOC regulations will have other important consequences as well. In particular, the biotechnology/biopharmaceutical field, populated as it is by smaller firms in the main, will see benefits with respect to costs that don't have to be expended in the course of automatically triggered litigation. A greater rater of expansion can be envisioned as a result.
In conjunction with the possible elimination of the NOC regulations, the Reform Party advocates the study of the elimination of the practices of early working and stockpiling in order to balance the playing field between generics and innovative companies.
PMPRB
With respect to the Patented Medicines Prices Review Board (PMPRB), the Reform Party has recommendations in addition to those proposed by the Committee. Firstly, Reform feels that an auditing of the initial price of breakthrough drugs must be carried out by the PMPRB. Taking the median price of the existing shopping basket of international competitors is insufficient given the global nature of the operations of many of the brand-name companies. Reform feels that in order to carry out its mandate, the PMPRB needs greater access to costing information in order to determine that the initial price is not excessive and fair. A broader basket of international competitors is also necessary to give a better view for price comparison purpose.
PHARMACARE
With respect to pharmacare, Reform reiterates its commitment to choice for Canadians in Canada's health care system. The decision of which drug to use should remain a choice between a patient and their health care professional, not the federal government. Reform also urges the federal government to respect provincial jurisdiction with respect to health care and exercise great caution should they choose to pursue such a policy initiative.
RESEARCH AND DEVELOPMENT
With respect to research and development in the pharmaceutical field in Canada, Reform urges the government to seek to extend the mandate of the current MRC/PMAC program or find a suitable similar replacement in order to foster more basic research in Canada. Reform also endorses the voluntary participation of generics and non-patent drug makers with respect to this program. Reform believes the one percent levy as proposed in the recommendations is a viable alternative to this program in order to foster further basic research into the pharmaceutical and biotechnology fields in Canada's universities and research institutions. Reform also encourages PMAC member companies to continue to push their R&D-to-sales ratios to even higher levels, recognizing at the same time the advancement that has already been achieved. The applied research carried out by PMAC member companies and others is an important part of Canada's future economic well-being.
EXPORT EXEMPTION
Reform does not support the pursuit of an export exemption at this time since we feel it would undermine our position with respect to our international trade obligations.
CONCLUSION
The review of Section 14 of the Patent Act has brought to light a number of compelling issues with regard to patents and intellectual property in Canada. The Reform Party appreciates the opportunity to have been able to participate in this review and thanks the witnesses for their time and invaluable contributions.