Wednesday, March 5, 1997-- com: Industry (47)

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, March 5, 1997

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[English]

The Chairman: Pursuant to Standing Order 108(2), a review of section 14 of the Patent Act amendment, 1992, (Chapter 2, Statutes of Canada, 1993), I call this committee to order again to hear the witnesses from the Industrial Biotechnology Association of Canada.

Joyce Groote, I believe you're the president and are chairing this meeting, so perhaps you can introduce your fellow witnesses and make an opening statement.

It's your time, but we urge witnesses to be brief in the opening presentations because the members usually have a lot of questions. They want to get into a conversation with you to test their own ideas and I think it's really helpful for you if you hear what they're testing. If you don't like it, you have a chance to rebut or to talk to them privately afterwards to make sure they understand your perspective. I think the committee is working in good spirits together and we would like your help in that respect.

My one word of caution to you, Ms Groote, is that this is televised, so when you introduce a witness or turn something over to a witness, could you just give yourself a quick one-two count to give the camera a chance to catch up to you? It saves them from searching around. There's a little delay, so just help us out a little in that way

I'll turn it over to you. Welcome to the committee.

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Ms Joyce Groote (President, Industrial Biotechnology Association of Canada): Thank you very much, Chairman.

Dr. Michael Winther (President and Chief Executive Officer, Efamol Research): Thank you very much, Dr. Drucker.

Dr. Graham Strachan (President and Chief Executive Officer, Allelix Biopharmaceuticals Inc.; Director, Industrial Biotechnology Association of Canada): Thank you, Mr. Chairman, for the opportunity to appear here this evening. I'm Graham Strachan, president and CEO of Allelix Biopharmaceuticals. As well as the director of IBAC, I'm the chair of the National Biotechnology Advisory Committee reporting to Minister Manley.

Dr. Dan Drucker (Physician and Researcher, University of Toronto): Honourable members, ladies and gentlemen, thank you for the opportunity to address you this evening.

First of all, I'd like to introduce myself. I'm Joyce Groote, the president of the Industrial Biotechnology Association of Canada, IBAC. It's a very lengthy name, so we will refer to it as IBAC.

I'd like to introduce Dr. Daniel Drucker, Dr. Graham Strachan, and Dr. Michael Winther.

We're here because biotechnology is an important, growing industry. We see Bill C-91 as impacting on that industry. It's not only important to the biopharmaceutical industry; it's also important to the biotechnology industry that crosses sectors across Canada.

Canada is in a very unique situation. We have developed biotechnology across many sectors. They include agriculture, environment, and certainly the health care sector.

[Translation]

Mr. Ménard (Hochelaga - Maisonneuve): There's a problem with translation.

[English]

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The Chairman: Excuse us for these interruptions, but we have to make sure everybody participates properly.

Over to you again, Ms Groote.

Ms Groote: Thank you very much.

We really have tried to balance our presentation so we can give you enough information about the biotechnology industry, but we would like to allow enough time for questions as well. So with your indulgence, we'd like to take 30 minutes for our presentation. Nine minutes of it is for a video we'd like to show you, which puts all of our messages and our information tidily together. Is that okay?

The Chairman: Yes.

Ms Groote: We'd also ask that perhaps we could save the questions for after.

The Chairman: Yes.

Ms Groote: Thank you very much.

Perhaps I can explain a little bit about what IBAC is. We're really a technology organization, versus a trade organization. We have 67 members, biotechnology companies and local associations across Canada and in fact across sectors. We have members from the agricultural community and members from the health community.

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Initially we were formed to address many of the challenges facing the industry to commercialize products. Of course those include regulation and policy, communication, science education, human resources, technology transfer - all the things that could potentially pose barriers to developing products in Canada.

I'll give you an idea of where I would like to go. I would like to talk a little bit about the tremendous investment Canada has put into developing this technology. It's intensive in terms of its knowledge base and has required a tremendous amount of commitment to developing that knowledge base in the race for knowledge.

I'd also like to talk a little bit about the underpinnings for investment and put forward our position on Bill C-91 as it affects the biopharmaceutical industry.

Overall I'd like to demonstrate that the impact of this bill is far-reaching for our industry. Certainly it's going to tell the rest of Canada, the rest of the biotechnology industry, and in fact investors outside of our community how we value innovation.

People are talking about the new economy and about brain power as the engine of growth. That's very true for biotechnology, and certainly it's very important for small and medium-sized companies, where intellectual property is very important.

Most of the Canadian companies are recent start-ups. A number of figures have been bandied about, but if you look at the Ernst & Young figures, which actually look at those industries or companies that have a direct involvement in biotechnology, you'll see there are 224. This has grown from less than a dozen back in 1990. This industry is employing about 11,000 people, and up to this point the firms have managed to raise an unprecedented $1.1 billion in investment.

We're seeing at least three products that now have been commercialized in the biopharmaceutical area and many more in the agricultural area. These firms are starting to show a profit. However, the remaining 220 firms - or fewer than that, actually, if you look at the biopharmaceutical area - have a tremendous number of products in the pipeline, but they have put out significant research and development investment costs and they're not seeing any product sales yet.

We have to make sure we have those products available and continue to invest in them, because those are the products that will diagnose, treat, and cure intractable, chronic, and often fatal diseases. This will stop in Canada if patent protection is weakened, because we will be unable to afford the high research and development costs or to attract the necessary investment to continue and stay strong in this technology.

I'd like to give you an overview and show you how short the time line really has been.

Canada has been investing in research for decades. This slide demonstrates some Canadian firsts.

In 1982 human insulin was discovered. In 1983 government established a national biotech strategy to demonstrate its commitment to this technology. IBAC was formed in 1987. The gene for cystic fibrosis was discovered at the University of Toronto in 1989. Chymosin cheese was available in 1990 in Canada; in fact it's now in many of the cheeses we eat. The biotech index on the Toronto Stock Exchange was established in 1993. In 1995 we saw Biochem Pharma develop AIDS and we saw the gene for Alzheimer's discovered. And in 1996 we saw two cancer drugs by QLT and Biomira.

In fact just last week, when I was at my fitness club exercising, I noticed that the gene for obesity was just discovered - not by us, but these genes are coming up all the time. We're hearing about these things all the time in the news.

Really we're asking what does it take to make people want to invest in Canada? We're looking at a number of things.

Canada can boast that we have developed science and innovation, human resources, regulatory approval, research and development tax credits, and intellectual property. Certainly we can boast of the very high standard of living, health care, and education for all.

If we start to look at this list, we can see places where we excel, places where we are weakening, and places where we cannot afford to weaken at all.

If we look at the high standard of living and the research and development tax credits, clearly we excel. Canada is known as one of the best.

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If we look at the development of science and innovation, we have excellence in Canada, but that's decreasing.

Take human resources. We look at scientists. There's a lot of talk about brain drain. Certainly we cannot afford to undermine our confidence any more by looking at intellectual property and the uncertainty of any lack of parity with the rest of the world. This would compound uncertainty with Bill C-91.

Just to talk about regulatory approval, although there's a tremendous amount of commitment by the regulatory agencies to harmonize and be fair, the reality is that it's a very lengthy and costly process, and that's very necessary.

We have provided packages to you. They state the position of IBAC. It's a formal submission to you. It states clearly our position, our four points.

We really feel that by taking these steps, Canada can foster the production of new wealth and high-quality health care. We can have scientific research in Canadian universities. We can have products developed by Canadian companies, tested in Canadian hospitals and clinics, and marketed in Canada, and very importantly, marketed internationally.

Canada can lead the way, or we can allow other countries to take the lead. We really feel that strengthening the patent laws will reflect Canada's economic development and job creation priorities, which are central to leadership. The decision is ours.

With that, I'd like to conclude my remarks. So with that, I guess I'll just turn it over toDan Drucker.

Dr. Dan Drucker (Physician and Researcher, University of Toronto): Honourable members, ladies and gentlemen, thank you for the opportunity to address you this evening.

I am a clinician scientist at the Toronto Hospital, which is part of the University of Toronto. As such, I have two principal responsibilities I try to fulfil in my daily activities.

The clinician part of my clinician scientist job description means that I see patients who have illnesses that are well known to you and that affect your colleagues, friends, and family members. These illnesses are often devastating and cause us, as members of society, tremendous concern.

When our family members and our loved ones are ill, we go to our physicians and hospitals expecting to find there the best physicians with the latest information and breakthroughs in medical technology and biotechnology to treat the illnesses that present themselves.

We are currently in the midst - it's really the beginning - of a revolution in the development of new medicines for the treatment of many devastating illnesses. Canada has a major role to play, both historically and as we go out into the future, in the health care revolution that we now find ourselves in.

As you all know, 75 years ago, Canada discovered insulin and received a Nobel Prize for the work of Banting and Best. Insulin basically changed the face of diabetes from a previously fatal disease to one that could now be treated. It has had tremendous impact all around the world. This discovery is one that Canadians can be justifiably proud of.

Let us leap ahead 75 years to last year, when Biochem Pharma discovered a revolutionary breakthrough, 3TC, for the treatment of HIV. Introduction of this medication around the world has saved tens of thousands of lives and has restored dignity and productivity to patients who were previously faced with a death sentence.

As Canadians, we value our physicians, scientists, and health care system. We know that these physicians and scientists work at leading hospitals and institutions very assiduously trying to translate the latest breakthroughs in basic science research into new treatments for the treatment of diseases that afflict our colleagues and family members.

We need to remember, as Canadians and members of our society, that these breakthroughs do not happen by accident. They do not happen in our hospitals and universities by virtue of the fact that scientists and money just appear for the work. They happen because our government, industry, biotechnology companies, hospitals, and universities work together to foster excellence in basic science research and translate those breakthroughs into new treatments for diseases we are all concerned about.

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I'm simply here to remind you that, as a society, we value tremendously the health of our citizens. We can look forward to new developments and breakthroughs in the treatment of many diseases with which we are all familiar. The development of policies that support intellectual property protection are simply fundamental policies to encourage innovation and development and the successful defeat of diseases with which we are all familiar.

I thank you for your time.

I'd like now to introduce one of our biotechnology company presidents, Dr. Michael Winther.

Dr. Michael Winther (President and Chief Executive Officer, Efamol Research): Thank you very much, Dr. Drucker.

Thank you, Mr. Chairman, for the opportunity to speak this evening. My name is Dr. Michael Winther. I'm director of Efamol Research and Scotia Pharmaceuticals in Nova Scotia and chair of the Nova Scotia Biotech Working Group, which is the biotechnology association in the Maritimes.

By talking about my company, I hope to give you an example of how biotechnology has developed in this part of Canada, which hopefully will be good news for everybody else across the country to hear. You'll also hear our concerns about the protection of intellectual property rights.

Our company was founded in 1978 with three staff. We now have 80 staff in Nova Scotia, and around the world we have more than 400. We have currently attracted in excess of $4 million per year to Nova Scotia as part of our operating costs, and we've invested over $10 million in laboratory facilities in that province.

Our researchers focus on developing new lipid biopharmaceuticals, so we're very much in the biotechnology business. We currently sell nutritional products in more than 40 countries around the world. We have pharmaceutical products, marketed through Scotia Pharmaceuticals division, in14 countries.

We're working on treatments for eczema, mystalgia, dermatology, cancer, and HIV. In doing this, we're having to work with other companies around the world, including many large companies, such as Searle, Pharmitalia, and Serono, so we're familiar with both the large- and the small-company aspects of this business.

Biotech in Nova Scotia and throughout Canada is really poised for tremendous growth. It has been growing dramatically in the past few years. Major biotech companies and new jobs and investments in Nova Scotia are just starting to emerge. It's a very fragile state, and I want to see that grow further.

There are a number of companies in the province of Nova Scotia like ours. Nova Chem, Jellett Biotek, and Octopus Diagnostics are just three of the 40 companies and organizations that are part of our biotechnology association in the province.

We're very excited about the prospects in that area. But for small companies such as ours to be successful, we'll need to work with other companies around the world. To do that, you have to have protection for your ideas. The smaller you are, the more vital that protection is. So we need to really maintain the international standards in patent protection to ensure that we can do this. It's imperative that Canada support the standards and maintain international treaty commitments in the protection of intellectual property.

The particular issue I would like to highlight here would be patent term restoration. This is something that occurs in a number of countries, such as with many of our important trading partners in the U.S., Europe, and Japan. It's one of the issues we really will have to deal with.

This is what happens. Pharmaceuticals take many years to develop. I'm sure you've heard this before. It takes 10 to 12 years for traditional pharmaceuticals. It takes probably even longer for biotechnology products because there are so many new technologies involved. Not only does this mean that the development process is very long and expensive, but the regulatory review process is long as well. After you've spent 10 years developing a product, to have another five years taken in regulatory review is quite painful. It's perhaps terminal for some of the smaller companies that are waiting to start selling product.

We feel that these long regulatory reviews, if they are necessary for the health care process in Canada, require patent term restoration so the companies can actually carry on trying to do the work of innovation in getting the products out. This is the international standard that is emerging. As with other areas of intellectual property, it's part of the price you have to pay for operating in the civilized world. Also, you want to have the same policies as those of your main trading partners.

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Finally, I'd like to underline the potential of the Canadian biotechnology and biopharmaceutical industry. We're predicting - and it's not just us here, but other people who have investigated - a 50% increase in jobs by the year 2000. Investment in 1996 was, as we've heard, $1.1 billion, which brings us to over $8 billion invested in the biotechnology industry.

Several drugs are currently on the market, but more importantly -

[Translation]

Mr. Ménard: I'm sorry but the interpreters have a hard time keeping up with you because you speak too fast. They have to understand and translate what you are saying. I know that you are impassioned people, but even so...

Mr. Winther: We will speak very slowly.

Mr. Ménard: Well, not too slowly because this has been a long day.

[English]

Dr. Winther: I'll try to make the presentation short.

We're expecting to see jobs grow by another 50% in the next three years. Investment is increasing year by year, and we're looking at not just the three or four drugs we've heard about, but hundreds more that are in development.

I can tell you personally that there are developments within our own company in our own province that are in a fragile state, and I know they can be developed if we can keep them supported.

It's really an industry poised for growth. It means new investment, new jobs, and new health care developments for Canadians, and we mustn't forget that, as Dr. Drucker pointed out. If we want to build a knowledge-based economy for our country, it's critical that we establish the proper framework.

I'd now like to pass it on to Graham Strachan for the final part of our speech.

Allelix, my company, is located in Mississauga. We were launched in 1987 and incorporated as a public company in 1991. We currently employ over 190 staff, 55 of whom have PhDs. Just in the last year we've added 30 staff in new high-quality and well-paid positions.

Our business is based on applying cutting-edge biotechnologies to develop new drugs for treating chronic diseases such as osteoporosis, schizophrenia, and migraine. Typically we do this in partnerships with both large and small companies, which provide finance, complementary expertise, access to international markets, and also distribution capabilities.

As you've heard from my colleagues, biotechnology throughout Canada has grown phenomenally in recent years. There are now around 132 dedicated biopharmaceutical companies across the country. That's nearly double the number since 1993, when Bill C-91 was introduced, and I do not think that is mere coincidence.

Without question, Canada's biopharmaceutical companies are becoming an increasingly visible and significant portion of the overall Canadian biopharmaceutical industry, alongside the international brand name companies as well as our generic companies.

Our biopharmaceutical companies play a very important role today in providing a Canadian capability to translate our scientific discoveries from our universities and medical schools into commercial products. Increasingly we're seeing the results in industrial and economic activity and new jobs, as we capitalize on the massive public investment made over many years in university research, which has largely been paid for by the Canadian taxpayer.

A good practical illustration of this technology transfer at work is provided by collaboration that's occurred over the last four or five years between Dr. Drucker, a previous speaker this evening, and my company, Allelix. A couple of years ago Dr. Drucker, in the course of his research activities, discovered that a particular protein - we call it GLP2, glucagon-like peptide2 - is a growth factor that starts up the body's natural processes to actually regrow the lining of a damaged intestine that cannot adequately process nutrients from food.

We are now working with Dr. Drucker to confirm the medical uses of GLP2 to treat a range of intestinal diseases and as an adjunct to chemotherapy and cancer patients. This collaboration alone has already resulted in a total of over 30 new high-technology jobs, 20 within the company and 10 at Dr. Drucker's laboratory within the University of Toronto.

It's this ability to exploit within the country applications for our scientific excellence that has fostered the growth of the new generation of innovative Canadian biopharmaceutical companies such as Biochem Pharma, Biomira, Quadra Logic, Allelix, and many others. I believe all of us Canadians should take pride that our home-grown biopharmaceutical industry is based on innovation and not imitation.

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The robust growth and vitality of the Canadian biopharmaceutical sector are no accident. The critical ingredients for success are in place and many are a direct result of government policy initiatives taken several years ago. We have a very strong life sciences base. We have a pool of well-trained and motivated scientists. Since 1993 we've had a national policy that encourages innovation by providing improved patent protection for pharmaceutical inventions - quite a change from the previous twenty years, when patent protection was swept away. Federal tax policies have been very effective in encouraging risk capital to invest in this sector.

This direct connection between patents and investments means full and effective twenty-year patent protection is absolutely critical for the survival and growth of companies and jobs in this sector. If I can put it a nutshell, patents serve as a primary incentive for investment or risk capital, promoting innovations and facilitating technology transfer from universities.

I would like to focus now on a key issue for the biopharmaceutical industry that IBAC has outlined in its written submission. IBAC would request that the government enact into law the principle of linking regulatory approval for generic copies of patented drugs with clear legal termination, either by court determination or perhaps more simply by expiry of the patent. Linkage regulations are in fact the only mechanism in Canadian law that prevents copies of legally patented biopharmaceuticals from being sold in Canada. Court action through interlocutory injunction is certainly technically possible in this country, but historically our courts have been unwilling to grant such injunctions.

Under these linkage regulations, a generic company can receive Health Canada approval to market a copy of another company's patented drug only if they are able to show in court that the patent is invalid or not infringed. This effectively links the marketing approval for any generic copies to the patent for an innovative drug and prevents generic companies from marketing copies of patented drugs in Canada. These linkage regulations were created as a made-in-Canada solution to a situation created by the Canadian court system's historic reluctance to grant interlocutory injunctions.

The linkage regulations are therefore a crucial mechanism for patent protection for pharmaceutical inventions in Canada. The current linkage regulations are not actually included in the Patent Act, however, and could be suddenly and easily revoked by Order in Council without public or legislative notice or debate. This leaves patent protection for biopharmaceuticals in Canada extremely vulnerable in the eyes and judgment of potential investors and as a result is a deterrent to long-term investment in research and commercialization of that research in Canada.

In closing, I would like to re-emphasize my company's support for the IBAC position. In particular, we support IBAC's call for maintaining the twenty-year patent term for pharmaceutical and indeed all inventions, providing market compensation for the commercialization of drugs through a mechanism of patent term restoration for up to five years. We would advocate embodying into law the current principle of linking regulatory approval for generic copies of patented drugs to clear legal termination of the patent rights. We would schedule future reviews of patent legislation to ensure Canada's patent laws meet international standards and increase Canadian competitiveness.

In my view, the progressive modernization of our patent laws four years ago, as embodied in Bill C-91, was the catalyst for the explosive growth of the biopharmaceutical industry. Strong and effective patent protection for our research and innovations is the very lifeblood of biopharmaceutical companies such as Biochem Pharma and Allelix, and it is imperative if we are to compete internationally that we maintain international standards.

The Chairman: Thank you very much.

Ms Groote: Thank you very much, Graham. I've heard that our video is ready to go. It's nine minutes long. It's fairly succinct. Perhaps we should move to that.

The Chairman: It's show time.

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[Video Presentation]

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Ms Groote: With that, we thank you very much for your patience, and we're more than happy to answer any questions you may have.

The Chairman: Thank you very much, Ms Groote. Our pattern is to go around the table, with each of the parties asking questions for ten minutes. We then break into smaller sections with the rest of the members.

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I will start with Monsieur Brien.

[Translation]

Mr. Brien (Témiscamingue): I would like you to tell us a bit more about your field from an international perspective because it is relatively new and growing. Is the biotechnology industry having the same strong growth throughout the world right now? Is the Canadian biotechnology industry growing faster for some particular reasons?

[English]

Ms Groote: Perhaps I can answer that.

Certainly biotechnology is growing around the world. I think we're still looking at the United States as the undisputed leader, but they're also in a very different situation right now. They're in a mature situation; they have many more companies than we do. But really, because they're in the mature stage, they're looking at consolidating and rationalizing their industry; they're looking at things such as their structure and at new-found alliances; they're looking at how they're going to focus their product types, how they're going to become more efficient - those kinds of questions.

In Canada we're looking at a very different industry. And yes, it's certainly across Canada and it's in all the different sectors, but we're looking at something that has tremendous growth, going from less than a dozen firms in 1990 to 224 now - and those are actually very conservative estimates. Those are based only on industries that are directly involved with biotechnology. If you look at numbers of industries that actually have biotechnology as a part of their business, those numbers double or triple.

In Canada we're also looking at the Canadian package that we talked about at the very beginning. We're talking about an excellent tax credit system for R and D. We're talking about infrastructure that has been developed and about the tremendous commitment we've made in Canada in making sure that technology works and that research and development works. I think we've really developed that capability in Canada.

Just getting back to the growth, if you in fact want to compare us even to the States, we actually have a greater per capita growth rate than the U.S. does. If we look at other trading partners, certainly we are seen as a success story. We certainly have more products on the market in the food area, and if you look at what we have produced in the pharmaceutical area - greater than three products - I think it puts us clearly in a leadership position when you compare us to the EU, Japan, or any other trading partners.

[Translation]

Mr. Brien: What percentage of your activities or of your jobs is directly related to pharmaceuticals as such?

[English]

Ms Groote: In Canada I would say pharmaceuticals comprise about 50% of the biotechnology industry.

[Translation]

Mr. Brien: When you make discoveries, do you make the products yourself or do you contract with other companies to do it? Do you usually do the manufacturing yourself?

[English]

Dr. Strachan: If I may respond to that, the stage at which the industry is at is one of emphasis on research and development. As we have said, this is an industry in which the products take a long time to move from the laboratory to the marketplace. And because we were some years behind the United States in particular in terms of getting this industry launched - and that comes back to the situation about patents and patent protection that existed in this country in the early 1980s, which resulted in a delay in the industry beginning in Canada - we're still very largely behind for the 224 companies in the R and D phase.

Manufacturing is beginning in this country, though. We have one of the largest vaccine manufacturers. Connaught Laboratories in Willowdale sells internationally products that are manufactured from the Willowdale base. And we have other manufacturing beginning in the pharmaceutical arena. As I say, however, the evolution of the industry is still very heavily in research, but manufacturing will come.

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[Translation]

Mr. Brien: I would like to take this issue a bit further because the trend that is developing for patent drugs in the pharmaceutical industry as such could very well be found here. You encourage research by creating a favourable climate and giving tax credits in some provinces. Quebec, for one, has particularly generous tax credits. When you make a discovery, manufacturing is then done elsewhere. You tend to call on companies that are more international. So research is being done where it is most profitable, but once discoveries are made, the manufacturing may be done somewhere else. Is this trend happening also in your industry?

[English]

Dr. Strachan: That really comes back to the environment one has in the country for encouraging manufacture and encouraging the extension beyond the research phase.

Perhaps I can illustrate it by reference to Montreal. One of the main classes of products of biopharmaceuticals is in fact recombinant protein therapeutics. These are proteins made by biologically modified bacteria, yeast, or mammalian cells.

The policies in Quebec, particularly in Montreal, have encouraged to become established there a manufacturer of a range of recombinant protein products at the Biotechnology Research Institute. Bio Intermediair is the company's name. I believe it originated in Holland and is establishing manufacturing capabilities for protein products, quite state-of-the-art, new to Canada, and very much encouraged by the patent laws and the investment criteria in Quebec.

[Translation]

Mr. Brien: As far as the linkage regulations are concerned, there are some stakes. As time goes, things will become clearer. There will be many discussions on the present linkage regulations, in order to replace the interlocutory injunction process that has not been effective, as you explained. Would you prefer a system where it would be easier to obtain injunctions and where, on the other hand, all those present linkage regulations would be done away with?

[English]

Dr. Strachan: The answer to that would be yes, the linkage regulations are complex. A situation where you have extensive litigation - I think there are about 100 cases before the courts - is not a very sensible or healthy situation, but it was a made-in-Canada solution to a particular situation where the courts do not grant interlocutory injunctions.

If you had another system that effectively reached the same end point of preventing infringement of existing products before the courts have had an opportunity to adjudicate on the patents, then I would say, in principle, it should be looked at.

[Translation]

Mr. Brien: I have a supplementary. The problem with injunctions is that you need to prove irreparable damages while in other jurisdictions, the standard of proof is the preponderance of evidence or the balance of probabilities. Thus, it is easier for an injunction to be granted. If our system were similar to that of other jurisdictions and if the law defined special conditions for injunctions in patent drug cases, would such a system be acceptable to you?

[English]

Dr. Strachan: Yes.

Mr. Brien: Okay.

The Chairman: Thank you very much, Mr. Brien.

Mr. Schmidt.

Mr. Schmidt (Okanagan Centre): Thank you, Mr. Chairman.

Could you tell us a little bit more clearly, for my benefit at least, the relationship the biotechnology industry has with the pharmaceuticals? I understand it's a preponderance of your work, but just exactly what is the linkage or the relationship between you and the pharmaceutical industry?

Dr. Strachan: The biopharmaceutical sector is part of the pharmaceutical industry. We use primarily, but not exclusively, biological techniques to produce products. The traditional pharmaceutical industry and the traditional pharmaceutical companies have used chemical techniques to produce pharmaceutical products.

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Mr. Schmidt: So are you an integral part of the pharmaceutical companies?

Dr. Strachan: We're an integral part of the pharmaceutical industry.

Mr. Schmidt: Yes, but that's not my question.

The Chairman: I'm sorry, Mr. Schmidt. Ms Groote just wanted to -

Ms Groote: I can just add to that. Really, we have to look at biotechnology as an enabling tool. It's something that allows us to develop beyond traditional products, and it's something that's being used in all sectors. It comes back to the fact that we're here as a technology association because we all share using this technology, whether it's in the agricultural, the environmental, or the health care area. In fact a lot of companies in this association are being impacted on by biotechnology and what decisions such as Bill C-91 tell that community about how it values biotechnology and what it takes to get there. It's the agricultural community, the environmental community, and the pharmaceutical community. It's all of us.

Mr. Schmidt: To clarify it a little more fully in my mind, then, if Merck, for example, which is in the pharmaceutical business and essentially manufactures drugs using chemical materials... You, however, are using essentially biological... Would you have a role to play with Merck?

Dr. Strachan: One of the characteristics of the biopharmaceutical sector is that there are very strong linkages between the biopharmaceutical companies and pharmaceutical companies of all kinds, both large and small. Strategic alliances and partnerships between companies are very common, because what the biopharmaceutical companies have strength and expertise in is at the research end and the development end of applying biotechnology to the development of drugs. Allelix, for example, my company, has partnerships with four or five major companies, a couple of smaller companies, to give those companies access to the things we do well, which are applying biotechnology to discover and develop drugs, and to give us access to the things these other companies do well, which are development and international marketing.

Mr. Schmidt: The relationship, then, is not one of intellectual property. The connection is one of financial...and expertise in divergent fields.

Dr. Strachan: Intellectual property is quite critical, because it is the only way we can protect our ideas and our concepts, and it enables us to go out and market these ideas and concepts internationally.

Mr. Schmidt: So when you work with one of these, the partnership would be with the respective expertise being applied to the marketing of a particular product. Is that what it would be?

Dr. Strachan: Yes, and typically we earn revenue through royalties based on product sales, and these royalties depend on intellectual property; on patents.

Mr. Schmidt: I appreciate that, and when you would use their patents they would collect a royalty from you. So this would be a symbiotic relationship.

Dr. Strachan: If in fact we do use -

Mr. Schmidt: Yes, if you do.

Dr. Strachan: - their patents. More typically the case is we don't.

Mr. Schmidt: I understand that. The orientation is different.

Dr. Strachan: Yes.

Ms Groote: Perhaps I can just emphasize, though, that the biotechnology industry in Canada is comprised primarily of small and medium-sized companies.

Mr. Schmidt: The other part of this has to do with the nature of the actual growth and development of an idea. Your primary emphasis seems to me to be research that moves to the point where it can become a commercially viable operation. That seems to be your emphasis. You don't do so much innovative research or curiosity-driven research. Rather, you take something like that and test it or develop it to the point where it becomes commercially viable. Is that a correct interpretation?

Dr. Strachan: Yes, there's a large element of that.

Mr. Schmidt: Yes, very much. It seems to me, then, that this provides a very important link between the curiosity-driven research and ultimately the development of a knowledge-based industry in the overall economy. You're an integral part of that development.

Now, is the primary need in your case - because it's largely small businesses that are involved here - knowledge, or people who have knowledge and skill, or is the need primarily to get access to capital to the actual commercial application?

.1955

Dr. Strachan: Can I illustrate?

Dr. Drucker, maybe we could illustrate it by reference to the protein I mentioned in my remarks, GLP2, glucagon-like peptide2, which was in fact a discovery of Dr. Drucker at the University of Toronto. At that stage it was a laboratory discovery. Dr. Drucker had synthesized this molecule, and models indicated it had some application in disease. We had a collaboration with Dr. Drucker and built on his findings, changing the molecule to make it better and easier to administer in the human body.

We developed processes to make the molecule on a scale large enough to permit broader testing. This molecule happens to have a wide range of potential uses in medical treatments. We're still in the process of discovering and developing these. At some point in the future, we will be looking for partnerships with big pharmaceutical companies in order to commercialize this product internationally, through selling it in Japan or Europe or wherever and earning revenue for Canada through royalties.

Dan, would you like to add a comment?

Dr. Drucker: I think the answer to your question with regard to curiosity-driven research or focused research is that very often, as you know from studies of major medical breakthroughs, it's not focused, disease-oriented research that provides the breakthrough. It's serendipitous, curiosity-driven, incidental research that provides the big breakthrough. No matter how we get there, the fundamental tenet of what enables that breakthrough to become commercialized is the protection of intellectual property.

Mr. Schmidt: That leads me to a final question, Mr. Chairman, which has to do with the linkage regulations and the enshrinement in legislation of those regulations as opposed to having them outside of the legislation. I'd like you to explain in more detail exactly how you see this being enshrined in legislation.

Dr. Strachan: I'm not sure that I fully understand the question.

Mr. Schmidt: I'm using your words from the position you have in your paper.

Dr. Strachan: At the moment the linkage regulations are just that. They're in the patent regulations, not in the Patent Act itself, which means they're of a somewhat temporary and impermanent nature.

Mr. Schmidt: Exactly. But that's the point. How do you see that enshrinement happening? This is your third point -

Dr. Strachan: Yes.

Mr. Schmidt: - which says, ``enshrining into law the current principle of linkage regulatory approval''. What is it exactly that you want enshrined? You want the general principle, but what part of the regulation do you want enshrined? Sometimes regulations are pages long.

Dr. Strachan: I understand that. I'm not a lawyer or a parliamentary draftsman. I would be happy to turn that challenge over to them. We have said that we would advocate the principles of linkage, the principles of the linkage regulations, being embodied in the act. And -

Mr. Schmidt: So you want the principle, not the actual regulation. The regulation can still be changed then, if that's what you want. Is it the regulation or the principle that you want enshrined?

Dr. Strachan: I would like the principle enshrined. I think that's what we have said, ``the principles of regulation''.

Mr. Schmidt: No, that's not what it says, but that's okay, it's a good clarification.

The Chairman: Perhaps the witness can think about that and you can come back to it,Mr. Schmidt. It's a very important point.

Mr. Volpe, please.

Mr. Volpe (Eglinton - Lawrence): Thank you, Mr. Chairman.

My compliments to you on a very polished presentation. I think if I were going to invest some money I would have paid attention to this and I would have said, okay, this is designed for me. I suspect you probably do this for all your potential investors. It's a pretty good presentation. Don't apologize for it.

I want to compliment you on bringing us back to our focus, Mr. Strachan. I think maybe I'm quoting you right when I say that what you said is that you do the innovation and you do the research, but you then look for a partner who has expertise in marketing and development so you can hand off your invention and commercialize it. That's really what you do. Am I wrong?

.2000

Dr. Strachan: The strength of the Canadian biopharmaceutical sector today is the innovation end of the equation, because of this stage. We're relatively young, so clearly at this point we're in research. Some of the companies are further down that chain.

Mr. Volpe: So you have to have a marriage with those companies, and I understand that. I don't hold that against anyone, because that's what we want to do. We want to develop things and then we want to get them into the international market. Our patent laws give you that opportunity to look for that kind of marriage partner, don't they?

Dr. Strachan: Yes.

Mr. Volpe: Okay, good. I wanted to make sure I understood that.

The other thing I wanted to ask you is this. You took great pains to make us appreciate that the growth in your industry has really boomed in the last five years.

Dr. Strachan: Since 1993.

Mr. Volpe: Right. One company I didn't notice on your list is Connaught Laboratories. Why aren't they a member of your organization?

Dr. Strachan: They are a member of our organization.

Mr. Volpe: You don't have them down as IBAC members.

Ms Groote: They're actually under Connaught Pasteur Mérieux.

Mr. Volpe: Okay, but you made reference to Connaught, so I thought I'd use the original name. They were in the business before any changes were adopted, and I think they're the biggest member of your organization. Am I right?

Dr. Strachan: Yes, and they are in fact the oldest biopharmaceutical company in Canada, one of the earliest -

Mr. Volpe: So their success predates some of the things you'd like this committee to consider by way of recommendation.

Dr. Strachan: It would be perhaps important to point out to the committee that Connaught was acquired by Pasteur Mérieux from Paris in I think 1992.

Mr. Volpe: Because it was a very successful company.

Dr. Strachan: It certainly has been a successful company, yes.

Mr. Volpe: You've brought me to another question, a question I wrestled with a couple of days ago when the minister sat in your place. I asked him the same question I'm going to ask you. Why the sudden growth? Why did all of this happen in the last five years?

You've answered part of it, but I'd like you to answer it completely, because you skirted around this one. You gave some credit to the fact that an academic, hospital, medical, scientific infrastructure has been built up by Canadian policy and Canadian investment. As I say, you moved away from that.

So you already had the infrastructure, which you didn't have to invest in, and secondly, you had tax policies that induced investments. Those are two very important issues, because if I wanted to put some money into a company, they would certainly be critical for me as a consideration for putting in investment. Is that what you rely on for the growth of some of these companies?

Dr. Strachan: They're very important aspects; there's no question about it. The scientific -

Mr. Volpe: Well, how important are they? Tell me how important they are.

Dr. Strachan: I'm not sure you can really separate them, but you -

Mr. Volpe: But you need to do that.

Dr. Strachan: You have part of the answer. I said in my remarks that I don't believe the substantial growth since 1993 was coincidental.

Mr. Volpe: Okay, well, let's pursue that for a second. The investment market tells me that one of the problems with the stock exchanges in the United States and in Toronto in particular, although this is a worldwide phenomenon, is there's a lot of boomer money coming into the marketplace. And it is a problem; they're very hot right now. That's number one.

Number two, boomers are getting to an age where they've already paid off all of their debts, they have a lot of excess cash, they have lots of money because they have good jobs, and they're chasing investments. One of the investments they've targeted, because they have access to the knowledge-based industries, is the biotech industry. Is that the reason?

Dr. Strachan: I don't think there is a single reason. There are a number of reasons, but patent protection was certainly one of them.

Mr. Volpe: That's the only one you focused on, but I'm wondering whether the other ones -

Dr. Strachan: It wasn't, with respect. I pointed out the well-trained scientific pool, the university research, and the relationship we have, for example, with Dr. Drucker and others across the country. So I didn't -

Mr. Volpe: But they have nothing to do with patent protection. They were there already; that's what you've said, really. I'm just repeating what you said.

Dr. Strachan: Well, if you look back with historical memory, we did have in this country an innovative pharmaceutical industry in the early 1960s. We had companies in Montreal particularly: Charles Frosst, Frank W. Horner, Ayerst, McKenna, and others. They died in 1965, when compulsory licensing was brought in.

.2005

Mr. Volpe: It was 1969. Let's get our dates correct. That came along in 1969.

Now let's continue this discussion a little bit further. I'll tell you why I'm upset.

You lost me when you started to make reference to a particular part of the country and to patent legislation that comes out of a particular provincial jurisdiction when we're dealing with federal jurisdiction and patent legislation that is clearly federal, clearly Canadian.

I find it offensive for someone to make even an incidental reference to a fact that maybe there are certain provincial non-tariff or other inducements that come in to attract companies to the detriment of another section of the country.

I want to get at the actual nub of the matter. Tell me why it is that in the last five years there has been this big explosion of investment flowing into biotech. Please don't tell me - don't offend my intelligence - that it's simply because we had a patent protection extension of 20 years. You've got that. You had that. You continue to have that. Any time a person or company takes your invention and commercializes it, they kick in a development period, plus the patent period for that invention.

So let's go on to answering the question that the minister addressed in a very positive fashion. I'm giving you an opportunity to do the same.

The Chairman: Mr. Volpe, that will be your last question. I'll let the last word go to you, sir.

Dr. Strachan: I don't think there's any single answer to that question. I think the scientific base is very important in the country. I think the human resource management capabilities, scientists working in industry, are very important. I think the financial aspects - investment - are important. I think patents are very important. They're all ingredients. They're all part of the mixture to make the cake. Until 1993, one of the ingredients was missing: patent protection. The other ingredients were there, but they were not flowing into the biotechnology community or industry. They all came together and we baked a wonderful cake.

Dr. Winther: Could I add a comment about the situation in Nova Scotia, which is a little different? All of our growth in Nova Scotia has originated from within the province, so it has not been a question of trying to transfer industry in from other areas.

What I have seen in the time that I have been there is the growth of an enterprise culture. I think part of that is respecting intellectual property, because that's all you have if you only have one or two people and an idea. That's very much the basis for the industry growth out where I am.

There are a lot of companies right now with only three or four people. These are the ones that I hope to see grow. We have been in Nova Scotia since 1981, so we were there before a lot of this patent discussion. But a lot of our growth has occurred in the past few years. It's undoubtedly a factor in the international pharmaceutical world to look at the operating environment in many areas.

But I would wrap this up as part of a culture that respects entrepreneurial values. This is what the venture capitalist looks for, as well as the academics and the industry.

So I agree that you can't pull apart the different components. I'd say it's essential. It's like three legs on a chair: you need them all.

Ms Groote: If I could also add to that, we're really looking at a technology that is very recent. I put on the list a number of firsts. We're still into firsts. This is very new.

We've spent decades getting this research. We put an enormous amount of energy and resources into trying to get the technology to a point where it could even be used to come up with firsts. We're only starting to come up with them now.

The Chairman: Okay, thank you. We'll move on to Mr. Ménard right now.

The committee is expected to unbundle a very difficult package. So when the witnesses just state with certainty at the outset about causality, be very careful of it, because if there's a package, it's different from saying there's one particular factor. That's because all these changes that may be suggested from this committee are worth millions of dollars to the participants. So we have to know the causality very clearly and how it fits into the bundle of packages and in different things out there.

Mr. Ménard.

[Translation]

Mr. Ménard: Mr. Chairman, after those words of wisdom and with a serenity that I hope will be contagious, I will ask three questions.

An Hon. member: [Inaudible]

.2010

Mr. Ménard: Mr. Chairman, if what you call a patent term restoration system - and this brings us back to your assessment of the Canadian licensing scheme as being too slow and having too many shortcomings - took into consideration the time it takes to get a drug licensed to determine the validity period of a drug patent, would you be in favour of it? We could go for a formula similar to the one used in the U.S. I don't know if such a formula exists in Europe, but I know that there is a mechanism in the U.S. to afford protection to the owner of a patent for the time it takes to process the application.

Your goals are very similar to PMAC's. Do your members belong to PMAC also? Show us how your position is different from PMAC's. It's not that it is terribly important for you to be different from PMAC, but if one wanted to understand what is the distinction between both of you, how would you explain it?

Does it mean that you are not monitored by the Patented Medicines Prices Review Board?

Therefore, my three questions are about the patent term restoration, the difference between you and PMAC, and the monitoring by the Review Board.

The Chairman: Thank you.

Mr. Ménard: I will be very brief.

The Chairman: This is quite a radical change and you must be warmly applauded for your efforts.

[English]

To you, Dr. Winther.

Dr. Winther: I'll start by answering the first question about patent term restoration, and I'll just give you a very brief example of a product that we have submitted for approval in Canada. It was one that was researched through the 1980s and was submitted in 1988, with supplementary information going in in 1991. We are still waiting to hear back on that. It's been over six years in the review process, so it is a very lengthy process. You cannot imagine other industries accepting such a timeframe. If you invented a new computer and had to wait five years to sell it, it would not be very worthwhile. We are exactly in that situation. It takes so long to develop, and then you have to wait again. That costs lots of money, and it particularly hurts the small companies, which don't have the cash back-up. So I think patent term restoration is an entirely reasonable part of respecting the intellectual property for this unique class of product.

As far as PMAC is concerned, I'll answer from my own point of view. We are not part of PMAC. We did not consider that we were required to join PMAC at this stage. We don't have pharmaceutical products currently available in Canada, although we do in fourteen other countries. I feel that IBAC is a more appropriate venue for our company to discuss the regulatory issues.

Thirdly, I believe any patented product that is available will be subject to the price review, so I don't see us escaping on that issue.

The Chairman: Ms Groote.

Ms Groote: If I could move on just to describe IBAC, I would say the primary difference between us is that we really are a technology-based organization or association, whereas PMAC is really more of a trade organization. Our organization crosses sectors. We include agricultural and environmental industries as well.

In terms of the membership in IBAC for companies that may also be members of PMAC because they're pharmaceutical companies, I would say that approximately 18% of our membership also has membership in PMAC. The rest of them do not. The rest of them are solely members of IBAC.

I'd also like to return to the whole patent term restoration issue - your first question - if I may.

What we're really looking for is parity with what other countries have. Certainly the European Union, Japan, and the United States all have some form of patent term restoration, some capability to make up the time lost in the regulatory review process. We do not. As we mentioned earlier, we're competing for international investments. How can we do that if we don't have parity with our major trading partners and in fact our competitors for some of these investment funds?

If you take that into account as well, the generic companies also have another advantage in Canada that they do not have in the other countries, and that is early working and stockpiling. So I think the combination means that we have much less time in Canada.

.2015

[Translation]

Mr. Ménard: The Health Minister and his officials have given us a table - I can give you a copy if you want - showing that their whole licensing process has very competitive time frames. It seems that drug licensing takes about 700 days, not including of course the "fast-track" process which is not open to everyone, as you know.

In your opinion, why do we have a time frame of close to six years and what do you suggest we do to improve the licensing process?

[English]

Dr. Winther: I'll start to answer that. It's an excellent question.

[Translation]

Mr. Ménard: Thank you very much.

[English]

Dr. Winther: I wish we had the answer.

Voices: Oh, oh!

[Translation]

Mr. Ménard: I think so.

[English]

Dr. Winther: I think it is very difficult for us in Canada to duplicate the type of regulatory review that occurs in the United States where the Food and Drug Administration is prepared to have a review that is probably 100 times the size. My fear is that we do try to review a product in that same detail, but with a small fraction of the number of individuals, and I don't think that's a very smart way for us to work as a country.

I don't think we need to totally review everything if a product has been reviewed in a number of other countries. That's my personal view and our corporate view, but for sure, we need -

[Translation]

Mr. Ménard: Do you believe in harmonizing the licensing process?

[English]

Dr. Winther: We could do it -

Dr. Strachan: With harmonization.

Dr. Winther: - with harmonization. I totally agree.

The Chairman: Thank you very much.

I'd like all members of the committee to be governed by the fact that there are still about seven committee members who would like to ask questions.

Ms Brown, please.

Ms Brown (Oakville - Milton): Thank you, Mr. Chairman.

I'm not going to feel too restrained seeing as this is my first intervention in four meetings.

Thank you for coming here to give us your presentation. We should all thank you for your work and for the successes of the members of your association, which is only ten years old. We're all impressed by your hard work, by the high-risk work you do, by the length of research, by the patience that is required, and by the fact that you get exciting and very dramatic results.

But I'm not going to be seduced, let us say, by the dramatic results. I am surprised that your position is almost identical to the PMAC position, and therefore I'm beginning to see this not so much as dramatic results and exciting science as...I'm interested in tracking the money. That's what I'm after.

Dr. Drucker is working in a publicly funded institution, is the product of a publicly subsidized education, and has done this wonderful work on GLP2 - we could pick multiple sclerosis or AIDS. I'm going to ask him who was funding that research. Was it funded by the hospitals? If in fact there were several funders, could you tell me what the percentages of the funding were over the years?

Dr. Drucker: You're quite correct in that I have much to be grateful for as a Canadian.

[Translation]

I was born in Montreal,

[English]

but maintenant I live in Toronto. I've had a publicly funded education. I have taken advantage of excellence at international institutions. I've trained at Johns Hopkins and the Massachusetts General Hospital, but I have chosen to return to Canada to carry out my work. I have been supported by the Medical Research Council of Canada, the Canadian Diabetes Association, the National Cancer Institute of Canada and the Juvenile Diabetes Foundation International.

About five or six years ago I developed an interesting observation. Having observed that certain mice we developed had grown tremendously enlarged intestines, I thought there might be a possibility of exploring this to isolate something novel.

At that time, I had no source of funding to pursue this very risky offshoot of my research. It was not covered by the Medical Research Council of Canada grant or by any other funding that I had, so I actively began to seek pharmaceutical support, with the potential promise for any company that if we did find something at the end of the road, there might be an opportunity for that company to enter into a licensing agreement with the publicly funded Toronto General Hospital and the publicly funded University of Toronto to take that product further down the road towards development.

.2020

Ms Brown: Okay, can I stop you there? Did you get that company to back you? If so, what percentage of the pay-off did they buy in, in order to get...?

Dr. Drucker: Right now, the company, Allelix Biopharmaceuticals, has entered into a licensing agreement with the Toronto General Hospital and the University of Toronto such that, following successful commercial development of this product, which we hope will occur, there will be a sizeable percentage of revenues from sales of such products that will accrue directly to the Toronto General Hospital and to the University of Toronto. In fact, the signing of that commercial agreement alone, which obligated Allelix Biopharmaceuticals to invest tens of millions of dollars towards further development of this product, resulted in funding directly sent to the Toronto General Hospital and the University of Toronto.

Ms Brown: Will Allelix keep the majority of the funds, or the minority?

Dr. Drucker: Allelix will keep a percentage of funds, depending on how much Allelix contributes to the commercial development, and depending on how much their commercial partner - which they will almost certainly have to seek - has to contribute. The Toronto General Hospital and the University of Toronto stand to recuperate a sizeable annual funding position, such that I have told my vice-president of research and my dean that they may well have a sizeable return on what has been a very small investment in Dr. Drucker to date. I'm hopeful they will have a major return in the future.

More importantly, I am also hopeful that this discovery will help patients with diseases. There is no treatment for short bowel syndrome. There is no successful treatment for Crohn's disease or ulcerative colitis. If we can develop such a treatment, yes, the financial remuneration will be nice, and yes, our publicly funded institutions will share in what I hope will be a sizeable return. But more importantly, as Canadians, we will have developed a new drug for treatment of patients around the world, and we will have done so in Canada, by ourselves.

Ms Brown: Thank you.

I think you are the intellectual property that we want to value, and you are our best investment. Please don't think I'm eroding that.

I want to follow this over now to the connection with Allelix.

Dr. Strachan, were you ever employed in a traditional pharmaceutical, a chemically-based pharmaceutical company?

Dr. Strachan: Many years ago in Europe, before I came to Canada - thirty years ago.

Ms Brown: So you've made a switch. Is Allelix a publicly traded corporation?

Dr. Strachan: Yes.

Ms Brown: Is there any multinational drug company that owns a significant share of Allelix?

Dr. Strachan: It depends on how you define significant share.

Ms Brown: Say more than 10%.

Dr. Strachan: No.

Ms Brown: Are there several multinationals?

Dr. Strachan: Yes, we have several of what I would call established pharmaceutical company investors. They tend to be small.

Ms Brown: How old is Allelix? When was it founded?

Dr. Strachan: It was founded as Allelix in 1981, and in 1987-88 as Allelix Biopharmaceuticals.

Ms Brown: I see. At the time of the changeover, were there large investments from other drug companies?

Dr. Strachan: No.

Ms Brown: Who were the original investors?

Dr. Strachan: The original investors in Allelix were Canada Development Corporation, which you may remember; John Labatt Ltd., the brewing company; and the Ontario Development Corporation.

The Chairman: Thank you, Ms Brown.

Ms Brown: Thank you.

The Chairman: Mr. Murray.

Mr. Murray (Lanark - Carleton): Thanks very much, Mr. Chairman.

I want to touch on a number of things that have already been discussed earlier, because I think they bear being delved into a little more deeply.

Dr. Winther, I believe you said your company started in 1978.

Dr. Winther: Correct.

Mr. Murray: I'm trying to tie this back to Bill C-91, patent protection, etc. What was growth like between 1978 and 1993, versus 1993 and the present? Were there significant differences once Bill C-91 came into effect?

Dr. Winther: There were a couple of significant events in our company history in the early 1990s, at least from my perspective. I worked for nine years at Wellcome Research Labs in the U.K., so I did also have a period in the traditional pharmaceutical industry. I then worked with our company in the U.K. for three years. In 1992 I relocated to Nova Scotia. So that was quite a significant event from my perspective, and coincident with the change in legislation.

.2025

We had undertaken to establish our labs in Nova Scotia as the principal research and development facility for our company on a worldwide basis. So the commitment is really that the global research and development centre will be, and is, in Nova Scotia. There are a lot of factors when you look at that kind of a decision.

Certainly, I feel the enterprise culture is critical in that. One of the things we found was that it was hard to get venture capital to support some of our initiatives. Even getting the banks to provide bridging loan money could be difficult for a company such as ours in Nova Scotia, where there is not the experience with the pharmaceutical industry.

So we had a lot of learning to do ourselves, and we tried to teach other people about this industry. For us, in Nova Scotia, there were many factors to be considered.

Mr. Murray: Also, we touched earlier on how Canada compares with our major trading partners in the growth of biotechnology companies. I'm still not clear on that. What has been our experience? You mentioned that the U.S. is a more mature -

Dr. Winther: I'll start off on that. Just to continue, Nova Scotia, the Maritimes, the east coast, is starting from a low basis. I think the potential is therefore quite considerable.

Look at the pharmaceutical investment as a percentage per capita. It's lower in that part of the country and higher of course in Ontario and Quebec. We're working very hard to address that imbalance. Companies such as ours are investing millions that have in fact not been included on a lot of the balance sheets up until now because we don't have a product on the market yet. So the growth in that area is underestimated.

Mr. Murray: These are obviously still early days. We're talking about a very few new products that have been developed, as explained earlier. Is Canada in a position whereby we're able to keep our university graduates? Do we have a kind of brain drain elsewhere? Is this one industry in which we tend to be holding our own?

Dr. Winther: Again, I'll just give our personal example of the 80 staff in our company. About half of them are graduates from the local university, Acadia University, in biology and chemistry. Before our company located there, they would have for sure left the province, if not Canada.

We could easily double or triple our company and I would still be able to fill every one of those positions with very able people. My aspiration over the next decade is to be in that situation. For sure, the people are there. We're employing them, rather than seeing them go away, which I think is a terrible loss.

Dr. Strachan: If I could just elaborate on that, Mr. Murray, our experience has been very similar.

Here's one very encouraging thing. I mentioned that we have 56 PhDs in our company. Almost without exception they're Canadians. Quite typically, they're Canadians who left the country. They did a PhD at McGill or Toronto or somewhere else in Canada, and then they went away for a couple of years for a postdoctorate at MIT, Harvard, or wherever. It's typically in the United States, but sometimes it's in Europe.

We've been able to bring them back to Canada, whereas 10, 15, or 20 years ago they would have stayed where they did their postdoctorate, invariably.

Mr. Murray: We've talked a lot about funding and financing tonight. What's happened in terms of federal support for biotechnology R and D? What about, for example, money from granting councils? Has that been cut back over the last few years? Have other companies had to step in?

Dr. Strachan: There's no question. Dr. Drucker may be able to answer or respond from practical experience at the MRC, but it's my observation in just reading the data that, yes, there have been cutbacks.

There have been some encouraging signs in the life sciences, the networks of centres of excellence program, which the government announced the renewal of in the budget. That's been a very successful program in assisting the transfer of technology from universities into industry. So there have been some bright lights, but yes, you're correct in your assumption.

Dr. Winther: I can add a little bit to that, and perhaps Dr. Drucker will add to it.

I noticed that some of the academics around us five years ago were not going out of their way to become involved with industry because they didn't feel it was appropriate for them to do that. That's changed completely. Academics are extremely keen to work with industry now. In fact, in many cases, they're driven to it if they want to maintain a research and development program. Where the federal dollars have come down, they're out there looking for industry to try to make up that deficit so they can maintain a research function, which is vital to the creative drive.

.2030

The Chairman: Thank you very much.

Mr. Murray, if you don't mind, I'm going to have to go on.

Mr. Lastewka and then Mr. Schmidt.

Mr. Lastewka (St. Catharines): Thank you, Mr. Chairman.

I have a number of questions on your reports. The first one is on the review process. We heard earlier this week on the review process, and the remark was made that there have been improvements made on the time element of the review process. Would you agree with that?

Dr. Winther: Not in our experience. We haven't seen that yet, but we haven't that many products running through the system. If you look at all the international comparisons, it remains very slow.

Mr. Lastewka: I am looking at the international comparisons, unless I have the wrong data here. It says, from my data, that we're getting to be comparable with the U.S. or in fact better. The only one where we lag far behind is the U.K., and I wanted to find out why the U.K. is normally one-third the rest of the countries, whether it be Australia, the U.S., or...

Dr. Strachan: The U.K. has a different system of drug approval. They have a crown agency, not a government department, that actually reviews medicines for approval. That may be one explanation.

Mr. Lastewka: So as far as you're concerned, there have been no improvements on drug reviews.

Dr. Strachan: The biopharmaceuticals have limited experience, as I mentioned, because we've only had a limited number of products come to market, but my -

Mr. Lastewka: In your remarks you have that very clearly as one of your key items. I'm sure you would do that because of your experience.

Dr. Strachan: There is still a lengthy review process. My own observation is it is getting better and the time is coming down, but that's based on very limited information. But it's still very lengthy.

Mr. Lastewka: I'll move on to my next question. How competitive is our biotechnology industry in Canada compared to other countries, the U.S. and Europe? You compared the U.S. and Europe. How competitive are we?

Dr. Strachan: In the biopharmaceutical area we're reasonably competitive. We started late, for some of the reasons I mentioned, and that accounts for the fact that we haven't had many products coming through the process to the market, but they're beginning. There are hundreds of products in the pipeline, so we're catching up, but we are playing a catch-up game.

In the agricultural biotechnology field it's quite different. We're probably among the world's leaders.

Dr. Winther: I would also add to that photodynamic therapy. Of course everybody is aware of Quadralogics, QLT. We and another four companies are developing products in this category. Canada definitely has a world leadership position in this technology.

There are so many different technologies possible now that I don't think you can expect to be leaders in all of them. I would certainly hope we could become recognized as leaders in quite a number of them.

Mr. Lastewka: Do we have any strategic advantages?

Dr. Winther: The quality of the individuals, the quality of the centres of excellence, the medical schools - this sort of infrastructure is part of the starting position for establishing the companies. But what I have seen in our province is you need to have the enterprise culture, reach out and include the bankers, the investment analysts, and even to the point of regulatory authorities, to work together.

This is one issue in the U.K. They have a lot more experience working together for new pharmaceutical compounds, and I don't think we have quite that extent of experience here. That makes the process go faster in the U.K. I'm hoping we can work together to develop that mutual enterprise culture for this industry.

The Chairman: Mr. Lastewka, do you have a final question?

Mr. Lastewka: I have two short ones, if I may, Mr. Chairman. Every time I take over your spot, I lose my position in asking questions.

An hon. member: You're not looking after yourself when you're chairman. You're supposed to scratch out the ones ahead of you when you're up there.

Some hon. members: Oh, oh!

Mr. Lastewka: I'm looking at your position paper. You make the remark that Canada has created uncertainty over its patent laws by announcing legislative review in February 1997. This review was announced in 1993.

Dr. Strachan: I think people had perhaps forgotten about it and hoped it...

Mr. Lastewka: Okay. I thought maybe you wanted us as a government to break the law.

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You also had a bullet point - this will be my final question, Mr. Chairman, because I realize the time is short - where you indicated that Canada's ten provinces also require lengthy reviews of all new medications once they have passed the federal regulatory process. Could you please explain that?

Dr. Strachan: In the various provinces there are so-called ``formularies'' that you have to be listed on before you can get reimbursement for your products.

The Chairman: Thank you very much.

Mr. Schmidt.

Mr. Schmidt: Thank you very much, Mr. Chairman.

I'd like to pursue this business of redress in the event that a patent is infringed upon. It ties into this whole regulatory system we have.

At the moment, if somebody wishes to develop a product that is a copy of one you have developed, the onus is on them to prove to you that they are not infringing on your patent.

The way the other patent operation works, if you own the patent and somebody is doing something to copy it, the onus is upon the patent holder to sue the person who you think is infringing. That's a reversal of what exists in the pharmaceutical area in Bill C-91 in the NOC regulations. Would you like to see that system reversed?

Dr. Strachan: No.

Mr. Schmidt: You like it the way it is.

Dr. Strachan: Yes.

Mr. Schmidt: So the onus should be on the person who wants to copy your particular thing to prove to you that he is not infringing on your patent.

Dr. Strachan: In the absence of a system of interlocutory injunction or very rapid hearing of the case, it's -

Mr. Schmidt: Okay. I quite agree.

But if there were an interlocutory system with a lower threshold than exists at the present time - because at the moment I think the threshold is irreparable damages - would you want the system to go the other way?

Dr. Strachan: I think in principle the answer to that would be yes.

Mr. Schmidt: Is that what you mean by enshrining regulation in legislation?

Dr. Strachan: For the principle, yes. That's why I use the word ``principle''.

Mr. Schmidt: No. I really want to clarify this.

Mr. Chairman, I think it is critical to get this clarified because this is quite different. We'll be hearing from the PMA, I believe, and we'll ask them the same kind of question. If this system changes, it would have tremendous implications for the whole judicial system with regard to the application of patent law and with regard to intellectual property, particularly as it applies to the pharmaceutical industry.

The other question I would like to ask, Mr. Chairman, goes in the other direction. It has to do with the PMPRB and the initial establishment of prices. Before that, there is the actual recognition of acceptance that you in fact have a reasonable patent, and that is governed by the health department, not by the industry department where the patent law rests.

Does working with the two departments cause you some difficulty? Essentially, you need approval first from the Department of Health, and then the actual application of the law comes from the Department of Industry.

The Chairman: Dr. Winther, do you want to start?

Dr. Winther: Our industry is young so we haven't had to face a lot of the legal issues over what you do when you're selling a product and somebody else is trying to sell it. I think if we accept the principles that twenty years' patent life is correct, that restoration of loss of patent life for the regulatory time is correct, and that the third part is fine, how do we stop somebody from infringing the law?

I know if our company lost its main product sales because somebody else was selling a cheaper illegal copy, we couldn't wait five years for a court case to be resolved. What we're saying right now is that if there is a system, however awkwardly it works, perhaps it should be made permanent so that it doesn't change.

If it were to change, though, and it could actually guarantee the same level of protection, then I don't think you will find us complaining. I think where we are cautious about the issue is that we have not had to go through this process of defending the hundred or so drugs where there have been these cases. We don't have the benefit of that experience. That's why we're arguing that the principle is important. If we know the system now works, that would be the first suggestion for how to maintain it or other equivalent proposals that might be made.

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We're arguing a number of different issues here, and we're really trying to keep the main issue very clear, which is the respect of intellectual property for pharmaceutical products.

Mr. Schmidt: That's fair enough, and you're demonstrating an open mind on the issue. What you really want is to preserve the ownership and find a system of redress that is as effective as possible and as short-term as possible - effective and efficient. I think that's what you're really asking us.

Dr. Strachan: And for a small biopharmaceutical company, as inexpensive as possible.

Mr. Schmidt: That applies to a large group of people.

Thank you, Mr. Chairman.

The Chairman: Thank you.

We have three members left: Ms Parrish, Mr. MacDonald, and Mr. Discepola. I'd like to thank the opposition parties for facilitating the three people asking questions. I'm sure they'll be equally generous to you sometime in the future.

The list has been closed.

Ms Parrish.

Mrs. Parrish (Mississauga West): Thank you very much.

I'm an interesting character. I'm a baby boomer and I'm getting very interested in medications and osteoporosis the closer I get to senility - and it could be momentarily.

Some hon. members: Oh, oh!

Mrs. Parrish: I assume the collective IQs at that end of the table are enough to overwhelm all of us.

I know that as we were asking questions we all made it sound as though it's very dirty to want to make money at this business and it seems to be very tacky.

An hon. member: No, no, we -

Mrs. Parrish: Hey, I'm entitled to an opinion.

You have biomedical mutual funds. I've seem them listed for RRSPs. People invest in that and they want a nice return on their money. You have some support from public institutions and you have some brilliant minds. Do you get a lot of support from the banking industry? I know that the banks up until this point, especially with small businesses, have liked to mortgage inventory rather than ideas. Have you had a lot of cooperation from the banks?

Dr. Strachan: Yes. Particularly in the last two or three years, the banks have dramatically changed. I can say back in the 1980s it was a waste of time to approach banks for any involvement in this sector or knowledge-based industries in general, but certainly in the last two or three years the banks have been very responsive. Most of them - Royal Bank, CIBC, Bank of Montreal - have in fact set up departments to look after -

Mrs. Parrish: Have you any idea why they've seen the light?

Dr. Strachan: Because they have seen, as I mentioned before, the ingredients for a healthy industry come together: the scientific underpinning, the companies able to develop the scientific ideas, the people, the human resource capabilities, and the intellectual property.

Mrs. Parrish: Exactly. Typically bankers know we're protected, and therefore you're going to get a safe return on your dollar.

Dr. Strachan: Yes.

Mrs. Parrish: You mentioned one thing in your presentation that I'd like you to expand on just a little bit, because I find it fascinating. You talked about the drop-out rate. For every hundred projects you start, possibly one gets through to commercial viability. Could you explain what that costs?

Dr. Strachan: It's very difficult to put a firm number on it, because different projects involve different resources, different times, and other things, but these statistics are available from reputable economists. They range quite broadly. And the projects fail for a number of reasons.

Mrs. Parrish: But is it a 1% rate? Is that what I heard?

Dr. Strachan: Yes, to get to the actual marketplace from the laboratory bench. Most of them fail at the laboratory; they never get out of the lab.

Mrs. Parrish: And if we went back to the good old days of the Connaught Laboratories, when they were fully funded by public funds, and if we took the 228 companies that are currently booming and did that all with grant money rather than nasty old industrial money and bankers' money, what do you think it would cost? Boggle me. I like big numbers.

Ms Groote: Quite frankly it's very difficult to put a number on something like that. You have to look at the amount of investment that's gone just into developing the knowledge. Then you have to look at developing a number of products.

You're talking about going from just the questions, the curiosity, and the basic information to actually applying it to a product. Then you're looking at a multitude of potential products that you might actually want to bring to market or might be able to bring to market.

Mrs. Parrish: Would it be $50 billion a year?

Ms Groote: I have some numbers here on the dollars in biomedical research and development at universities.

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If you look just at the numbers for 1992-93, you're looking at $834 million. That's just in R and D in medical universities alone. In 1993-94, it's $852 million.

I think we can predict that it would be substantially more in 1997. That doesn't even include moneys that have gone into other not-for-profit institutions, government departments, and private -

The Chairman: Thank you.

Mrs. Parrish: Can I just make one request?

The Chairman: Sure.

Mrs. Parrish: I'd like them to speed up on herpes medication for cold sores.

The Chairman: We're here to please you. Everybody has side deals. It's quite fine.

Mr. MacDonald.

Mr. MacDonald (Dartmouth): Thank you, Mr. Chairman.

I'm very pleased to hear about the success of the industry in the province of Nova Scotia. I would say that it's for a couple of reasons. One of them is that it's a wonderful place to live. We're blessed with some of the finest universities and research establishments in Canada, which always helps. As well, there's the fact that the pharmaceutical industry has been targeted as one of the sectors to be grown in the province of Nova Scotia. So these are all very determined and fundamental policy decisions, and I'm glad to see it's successful.

I hate to put the cat among the pigeons here, but I think what the industry is doing... This is rather interesting, as there's a bit of an analogy here. A few years ago, in 1969, when we came in with compulsory licensing, we did that because we were trying to grow an industry in Canada, the generic industry. I'm sure that at that point in time, the patent medicine industry represented in Canada was very concerned about what we were doing. In 1987 there was Bill C-22, which was a review. Changes were made and the balance was done again, in 1992, with Bill C-91.

Now we're seeing a secondary growth in the industry on your side of it. That's very positive, but it points to the fact that we must have balance. What we do by way of regulation must be balanced. It can't be everything you want or everything that PMAC wants or everything that the generic companies want; it has to be balanced. It's only a balanced approach that allows Canadians to enjoy not just jobs and growth, but also the lower prices and better treatments they're looking for.

I've got to talk about this. I'm very concerned about two things.

Number one is this patent term restoration. My memory is just like that of an elephant. I remember full well when we did Bill C-91. The question was asked: was the next step for the pharmaceutical industry internationally to seek patent term extension? That's because there was talk about it at that point in time.

Some people - they sat directly behind you - were here for every one of the hearings. At that point in time, the industry said very clearly that if they got the provisions of Bill C-91, they would satisfied. They would do the research, investment, and all that stuff, and be satisfied.

At that point in time, I pointed out - I'll point it out again - that when a new drug comes onto the market in Canada, it is priced for the return on investment over the period of patent monopoly, because after that point you don't know what competition is going to do to your price.

What we've seen is that they were satisfied, or appeared to be satisfied, with Bill C-91. Some would say they are still satisfied with the 20-year patent protection.

But another thing happened that's very interesting. In 1995 it took about 40 months on average to go through the regulatory approval process. I think, from what I read, that it's down to about 19 months. So because of the streamlining of the approval process, there are effectively just slightly less than two additional years over what the industry said it would be satisfied with back in 1992. So effectively, the period of patent monopoly has increased because of those efficiencies. I think that's fair to say.

I don't have a great problem with patent term restoration in unusual circumstances. Maybe this is one of them. But I fear, and I'm not making the accusation, that because of your close affiliation with the PMAC companies - 80% of the companies in your association are also members of PMAC - some may see this as a sort of thin edge of the wedge. I just put it forward because it's in my mind.

Ms Groote: It's 18%.

Mr. MacDonald: There's a lot of investment by PMAC companies in some of these companies, the IBAC companies.

I fear it's the thin edge of the wedge. If you want to make a case for patent term restoration, I think you have to be very clear, for me at least, because there may be a case to make in your industry that you're not talking about. Are you talking about a general patent term restoration beyond what it is currently, or is it just in those very unusual cases of your innovative products? Which is it?

Ms Groote: We're talking about when there are undue regulatory delays. So it's to make up for those delays.

Mr. MacDonald: What would undue regulatory delays be?

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Dr. Strachan: Something beyond what was seen as an acceptable norm, and it's hard to say what the norm is. Today you mentioned 40 months for a review process. I think you have to be careful about when that review process starts and when it ends. Dr. Winther gave a practical illustration of one of his company's products where it certainly isn't 40 months.

Dr. Winther: It's six years.

Dr. Strachan: It is six years, so you have to look at individual -

Mr. MacDonald: So it's not the position of your association that we should look at general patent term restoration periods or regulations, as has been done in some other jurisdictions. You're talking about unusual circumstances with some of the biopharmaceutical products that have been created in Canada. How should we measure what that patent term restoration should be, and how do we guard against the creeping that can set into the system?

Dr. Strachan: I think that's a very good question. I think there are ways of going about it. You could look at what a median term of approval is internationally and see what it is in Canada.

To address your point, the position of the association is compensation for undue delays, and I think there are mechanisms that could be evolved and worked out that could fix the period.

Dr. Winther: What has to be appreciated is that pharmaceuticals are probably the only class of product in the intellectual property field that has such a lengthy review process.

As I said earlier with regard to computers, you would never be asked to wait five years to sell a computer or to market your new software program. You would do it straightaway.

So there is a very direct link. If it's commonly accepted and these are all international conventions of our western world, why do we have patent rights at all? We have it so you protect the ideas and so you encourage innovation. If it's twenty years for a product when there is effectively no delay, then there is a position - and this may not be an IBAC position, but I'll say it's my position - that any regulatory review should reasonably be added to that period because no other products have to go through that process.

If you say it's only over a year or two, I'll tell you this. If it is up to two years and the review is successful, you won't find the industry complaining. But it's the four-year, five-year, and six-year review periods that do occur. I don't know how the statistics can show improvement if many of the members don't see it. I'm not aware of the latest numbers on that, but in our case these delays do occur sometimes.

I think one could argue the point, but again it's the principle. Other products don't have these delays. We're not saying don't have the delay. We accept the need for the review. But it's not fair to lose all the patent life of your product so late into the patent time anyway.

The Chairman: Very quickly, please, Mr. MacDonald.

Mr. MacDonald: I'll be very brief. This is very important, because whenever you mention restoration of patent term, alarm bells go off with some people who have been around this issue, for the reasons I mentioned.

I would very much appreciate, Mr. Chairman, if the association could perhaps expand on that at a future date and give it to the committee, telling us exactly how they would see this applying to their part of the industry.

The Chairman: A written response to Mr. MacDonald's question would be greatly appreciated.

Dr. Winther: We'll do that.

The Chairman: Thank you, Mr. MacDonald.

Mr. Discepola.

Mr. Discepola (Vaudreuil): Thank you, Mr. Chair.

How long does it take for a biopharmaceutical drug to be approved in Canada?

Dr. Winther: We haven't been through the whole process successfully yet, so I couldn't give you an example of the timeframes for several products. We know from the traditional products that have gone through the route - and we know these will take some additional time - that it is going to take years.

Mr. Discepola: Do you expect it to take more time than the average for -

Dr. Winther: I definitely expect it to take more time. These products utilizing newer technologies require that the regulatory review people become familiar with these new technologies. So since they are a little out of the usual, shall we say, that makes the review process more difficult. I am sure it will be a longer process.

Mr. Discepola: To follow up on Mr. MacDonald's question, rather than getting into trying to blame the approval process, for example, for extra-long delays, and rather than trying to get into the debate about who is delaying what or who is using which kind of tactics to delay what, should we not, as a committee, then be looking at a mandatory period of marketing exclusivity versus a mandatory period of patent protection from the date of patent application, for example?

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So if we as a committee use industry standards from the United States, that market should be given 10, 12, or 13 years of exclusivity. Should we not be looking at that? That way does it not simplify it a lot and make it an awful lot easier, in the sense that if it takes you four years for regulatory approval, that just gets tagged on anyway and you won't have to go through the process of trying to determine which conditions we should give patent term restoration to?

Dr. Winther: What you're looking for at the end of the day is that marketing exclusivity. In other words, you've made the invention; therefore you deserve to reap the rewards.

I would suspect you'd have the same problems in determining the appropriate length of that marketing approval if you were to do it that way rather than the way we're suggesting, which is a little more natural, more organic, to the development process. You have the delays of the early research and the clinical trials even before you get to the regulatory point.

It's possible to do it either way, but I'm very much influenced by where the world trends are going. I feel we really need to be part of that, because the issue that arises is that we have the developing industry in Canada, but when you have a global business - and pharmaceuticals are a global business - if you find one part of the world is getting out of sync, they will start to be cut off.

So we want to be fully competitive, in terms of the basic rules and regulations, with investment in Europe and investment in the U.S. We will then win the day through our other abilities that we're organizing in Canada, but we need the level playing field.

I don't think we can ignore the fact that other countries have gone this way. Perhaps it is a different situation now from what was thought to be the case in the early 1990s, but that is the way things happen. We have to understand the industry may have developed more, so people feel this is appropriate now, though they didn't think it was appropriate four or five years ago.

For us that remains the issue. We should not be so different from our major trading partners.

Mr. Discepola: This is my last point.

I notice in your presentation you refer to the review process of Bill C-91 as causing a tremendous amount of uncertainty, especially when you're trying to get capital. Yet in one of your recommendations you say a future review of Bill C-91 should be legislated.

I hadn't thought we would introduce another review in the legislation of the review. Is that what you're asking? Why would we introduce in this review a further review four years or eight years down the road? Wouldn't that cause additional uncertainty? Or are we unable, in this review, to do a good enough job that we should be able to put the thing to rest for a very long time?

Ms Groote: Perhaps I can answer that.

If we could put these issues to rest, that would be wonderful, but from our understanding, any legislation periodically needs to go through reviews to ensure that in fact it's up to international standards and that Canada will be competitive through maintaining those standards.

Mr. Discepola: What would you recommend then?

Ms Groote: We would recommend a periodic review only to ensure that in fact it meets international standards and increases Canadian competitiveness. We look at maintaining parity.

Mr. Discepola: How often would you recommend we review?

Ms Groote: We're looking for the norm against any other legislation, whatever it is.

Mr. Discepola: Twenty years plus thought and preparation, is that it?

Some hon. members: Oh, oh!

Ms Groote: But really, whatever it takes in other legislation. We're just looking for parity.

Mr. Discepola: Wouldn't that be an additional uncertainty?

Ms Groote: It depends on what you're reviewing. If you're reviewing it just to ensure that in fact it's still relevant, I don't think so. If you're going to open up all the issues over and over again, such as patent term restoration linkage, I think so.

Mr. Discepola: You're specific. You're saying if it meets international standards and only to increase Canadian competitiveness.

Ms Groote: That's correct.

Mr. Discepola: All right. Thank you.

The Chairman: Thank you, sir.

Thank you very much, Ms Groote. Through you, I'd like to thank Dr. Winther, Dr. Drucker, and Dr. Strachan for their time here today to help us through the issues.

I haven't said this to witnesses before, but several questions were raised here directed at you. As soon as you can, through the committee clerk, I'd like you to get your hands on the minutes of the meeting. Mr. Schmidt raised some very important questions, Mr. Volpe and Mr. MacDonald raised questions, and the Bloc raised questions. I'd like you to take a look at those questions and see if you'd like to add anything in writing to your testimony, because you are an industry that is in some respects new, and we want to make sure we're taking account of your interests and we fully understand what advice you're giving us.

Thank you again.

To the committee members and to the witnesses for tomorrow, we're scheduled to start at an unusual time, so I want you to note it. It's 3:15 p.m., not 3:30 p.m., and it will be in this room. The bells will start ringing probably at 5:30 p.m. We're having a major association tomorrow and I would like us to have lots of time for questions, so please start on time, right at 3:15 p.m.

I thank the committee. We're adjourned until tomorrow.

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