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37th PARLIAMENT, 3rd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Thursday, February 26, 2004

0930

The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.))

Mr. Jean-François Leprince (President, Aventis Pharma, Canada's Research-Based Pharmaceutical Companies)

0935

Mr. Terry McCool (Vice-President, Corporate Affairs, Eli Lilly Canada Inc., Canada's Research-Based Pharmaceutical Companies)

0940

Mr. Jean-François Leprince

The Chair

Mr. Jim Keon (President, Canadian Generic Pharmaceutical Association)

The Chair

Mr. Jim Keon

0945

0950

The Chair

Mrs. Rachel Kiddell-Monroe (Coordinator (Canada) Access to Essential Medicines Campaign, Doctors Without Borders)

Dr. Virginia Gularte (MSF Guatemala, Doctors Without Borders)

0955

Mrs. Rachel Kiddell-Monroe

1000

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

1005

Mr. Grant McNally (Dewdney—Alouette, CPC)

Mr. Jean-François Leprince

Mr. Grant McNally

Mr. Jean-François Leprince

Mr. Grant McNally

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

1010

Hon. Joe Fontana (London North Centre, Lib.)

Mr. Jean-François Leprince

Hon. Joe Fontana

Mr. Jim Keon

1015

Mrs. Rachel Kiddell-Monroe

Hon. Joe Fontana

The Chair

Mr. Terry McCool

The Chair

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ)

1020

Mr. Jim Keon

Mr. Paul Crête

Mr. Jim Keon

Mr. Paul Crête

Mr. Jean-François Leprince

1025

The Chair

Mr. Paul Crête

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

Hon. Gurbax Malhi (Bramalea—Gore—Malton—Springdale, Lib.)

Mr. Terry McCool

The Chair

Mr. Jim Keon

1030

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

Mr. Terry McCool

The Chair

Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC)

The Chair

Mrs. Cheryl Gallant

Mr. Terry McCool

Mrs. Cheryl Gallant

Mr. Terry McCool

Mrs. Cheryl Gallant

Mr. Terry McCool

Mrs. Cheryl Gallant

Mr. Terry McCool

The Chair

Mr. Jim Keon

Mrs. Cheryl Gallant

Mr. Jim Keon

Mrs. Cheryl Gallant

1035

Mr. Jim Keon

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.)

Mr. Terry McCool

Hon. Lyle Vanclief

Mr. Terry McCool

Hon. Lyle Vanclief

1040

Mr. Terry McCool

Mr. Jim Keon

Mrs. Rachel Kiddell-Monroe

The Chair

Hon. Lyle Vanclief

The Chair

Ms. Alexa McDonough (Halifax, NDP)

1045

Mr. Jean-François Leprince

Dr. Virginia Gularte

Mrs. Rachel Kiddell-Monroe

1050

The Chair

Hon. Joe Fontana

Mrs. Rachel Kiddell-Monroe

1055

The Chair

Mr. Grant McNally

Mr. Jean-François Leprince

The Chair

Mr. Jim Keon

Mr. David Windross (Vice-President, Government and Professional Affairs, Novopharm Limited, Canadian Generic Pharmaceutical Association)

The Chair

Mr. David Windross

The Chair

Mr. Paul Crête

Mr. Jean-François Leprince

1100

Mr. Jim Keon

Mrs. Rachel Kiddell-Monroe

The Chair

Ms. Alexa McDonough

The Chair

Mr. Jim Keon

Mr. Terry McCool

The Chair

Mrs. Rachel Kiddell-Monroe

The Chair

Mr. Mark Fried (Communications and Advocacy Coordinator, Oxfam Canada)

1115

The Chair

Mr. Richard Elliott (Director, Policy and Legal Research, Canadian HIV/AIDS Legal Network)

1120

The Chair

Mr. Richard Elliott

1125

The Chair

Mr. Michael O'Connor (Executive Director, Interagency Coalition on AIDS and Development)

1130

The Chair

Mrs. Michelle Munro (Policy and Programs Advisor, HIV/AIDS and Health, CARE Canada)

1135

The Chair

Mr. James Rajotte (Edmonton Southwest, CPC)

1140

Mr. Michael O'Connor

Mr. James Rajotte

The Chair

Mr. Richard Elliott

Mr. James Rajotte

Mrs. Michelle Munro

1145

The Chair

Mr. James Rajotte

The Chair

Mr. Richard Elliott

The Chair

Hon. Joe Fontana

Mr. Richard Elliott

1150

Hon. Joe Fontana

The Chair

Mr. Mark Fried

The Chair

Mr. Richard Elliott

1155

The Chair

Mr. Paul Crête

Mr. Michael O'Connor

Mr. Paul Crête

Mr. Michael O'Connor

Mr. Paul Crête

1200

The Chair

Mr. Mark Fried

Mrs. Michelle Munro

Mr. Mark Fried

Mr. Paul Crête

The Chair

Mr. Paul Crête

The Chair

Mrs. Michelle Munro

The Chair

Mr. Paul Crête

The Chair

Mrs. Michelle Munro

The Chair

Ms. Paddy Torsney (Burlington, Lib.)

Mr. Richard Elliott

Ms. Paddy Torsney

Mr. Richard Elliott

1205

Ms. Paddy Torsney

The Chair

Mr. Richard Elliott

Ms. Paddy Torsney

Mr. Richard Elliott

The Chair

Mr. Mark Fried

Ms. Paddy Torsney

Mrs. Michelle Munro

Ms. Paddy Torsney

The Chair

Mrs. Michelle Munro

1210

The Chair

Ms. Alexa McDonough

The Chair

Mr. Richard Elliott

1215

The Chair

Ms. Alexa McDonough

The Chair

Mr. Mark Fried

The Chair

Hon. Gurbax Malhi

Mrs. Michelle Munro

Hon. Gurbax Malhi

The Chair

Mr. Richard Elliott

Hon. Gurbax Malhi

1220

Mr. Richard Elliott

The Chair

Mr. Mark Fried

The Chair

Mr. James Rajotte

Mrs. Michelle Munro

Mr. James Rajotte

The Chair

Mr. Richard Elliott

Mr. James Rajotte

The Chair

Mrs. Michelle Munro

Mr. James Rajotte

1225

The Chair

Mr. Mark Fried

The Chair

Mrs. Michelle Munro

The Chair

Mr. Richard Elliott

The Chair

Hon. Lyle Vanclief

1230

The Chair

Mr. Richard Elliott

The Chair

Mr. Mark Fried

The Chair

Mr. Paul Crête

Mr. Richard Elliott

The Chair

Mrs. Michelle Munro

The Chair

CANADA

Standing Committee on Industry, Science and Technology

NUMBER 004

3rd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, February 26, 2004

[Recorded by Electronic Apparatus]

¿ (0930)

[English]

The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): I'd like to welcome you to this February 26 meeting of the Standing Committee on Industry, Science and Technology as we continue our study of Bill C-9, a very important initiative in support of the provision of drugs to countries where there is a great need.

I want to be sure that all of our witnesses from Canada's Research-Based Pharmaceutical Companies, the Canadian Generic Pharmaceutical Association, and Doctors Without Borders are at the table.

Thank you very much.

I'm going to invite you to speak in the order that you are listed on the witness list, which is, if I could say, the brand community, the generic community next, and then Doctors Without Borders third. I'll ask you to limit your remarks to ten minutes, give or take a half minute or so. It will take a half hour for the three groups to make presentations. That will then give members around the table adequate time to ask questions. We have an hour and a half with you.

Mr. Leprince, are you going to speak on behalf of your group? Please proceed.

Mr. Jean-François Leprince (President, Aventis Pharma, Canada's Research-Based Pharmaceutical Companies): Thank you, Mr. Chairman.

Good morning, ladies and gentlemen.

[Translation]

We would like to begin by acknowledging the great effort that your committee is putting into resolving the issues and challenges posed by this bill, and we want to reaffirm our commitment to achieving the basic objective that brings us together around this table this morning: the efficient and timely distribution of affordable medication to countries and patients who need it.

[English]

The research-based pharmaceutical community has proactively offered its continued support to officials being tasked with developing this crucial piece of legislation. We brought to the table not only our vast experience in delivering medicines, but also in delivering care to the developing world.

In Africa alone, help is delivered in every country by members of our industry, as you can see from the map we have included in appendix B of our submission. I have personally seen first-hand the plight of patients in Africa. For over a decade, I had responsibility for African work on programs to deliver medicines to the African continent.

[Translation]

I can therefore testify from personal experience to the genuine suffering that disease inflicts on millions of Africans everyday. The role that your committee will play over the next few weeks is vital. You will be called on to define the mechanisms needed to ensure the distribution of medicine, while enabling patients around the world to benefit from new therapeutic advances.

¿ (0935)

[English]

We believe that there is an opportunity for the world pharmaceutical industry, generic and brand name alike, to set aside their traditional rivalries. Both industries have a unique opportunity to be part of the solution and to focus on patient needs. We believe we must focus our efforts on finding solutions.

There are numerous examples of past initiatives between the research-based pharmaceutical companies and NGOs such as Médecins Sans Frontières and generic drug manufacturers to supply medicines in the developing world.

[Translation]

We understand the concerns of NOGs and the generic pharmaceutical industry. We have even met with Stephen Lewis, a Canadian known, among other things, for his dedication to this cause. We have listened, and today we are taking action. So we are pleased to present you with an alternative that we feel addresses the concerns raised over the past few weeks concerning the right of first refusal. We will also offer you some recommendations that will make implementation of this bill even more effective.

[English]

I will now ask Terry McCool to present our proposed amendments.

Mr. Terry McCool (Vice-President, Corporate Affairs, Eli Lilly Canada Inc., Canada's Research-Based Pharmaceutical Companies): Thank you, Jean-François.

Good morning, everyone.

Our modifications deal with five important themes. The first three address the need for a more certain and stable system and they are administrative, including changes to ensure that the system is predictable and does not create any untoward confusion or delay. You have remember the intent of the system is humanitarian and non-commercial. We would expect transparency, especially with product shipments, so that they can be tracked to ensure the delivery of product, to immediately flag diversion as soon as it happens, and to address reimportation. This licence for export is for product that cannot be resold back here in Canada.

The final themes, we believe, are of critical importance: anti-diversion, that is the potential for illegal diversion of product to countries other than those intended and the importance of minimizing such opportunity; developing a clear process; and the need for the generic manufacturer to attempt to negotiate a voluntary licence with the patentee before the generic applies for a compulsory licence.

Unfortunately, some medicines sent to developing countries are illegally diverted for resale in developed countries, thereby never reaching the patients. Proactive tracking of exported medicines and effective anti-diversion measures must be put in place to diminish this type of activity. We have proposed a number of solutions in our submission to help curb this activity, including proactive tracking of exported medicines and other effective anti-diversion measures such as special packaging or special colouring and shape of the products, as specified by the WTO decision; ensuring criminal penalties if someone is caught knowingly diverting a product; and putting in place, through regulations, an export certificate program and ensuring pre-export inspections so that shipments can be verified before they leave and can be tracked once they leave Canada.

With our long history in the developing world, Rx and D members want to continue to have an opportunity to participate in programs that are providing affordable medicines to patients in need. We also want to ensure the programs we have in place are not affected by this program.

While there have been many discussions over the right of first refusal, it is not our intention to dissuade any stakeholders from participating with us in this endeavour. The need for help in these countries is much too great; therefore, the innovative pharmaceutical industry is offering an alternative to ensure that both sides of the industry have an equal opportunity to supply those in need versus what is presently contemplated by the bill.

The option for equal opportunity to supply can be done by moving up the notification in the process and moving the ability to negotiate a voluntary licence, as required by TRIPS, to an earlier part of the process. This proposal is further explained in our submission on page 16.

In short, this option will ensure there are minimal, if any, overhead costs incurred that create disincentives for generic companies to participate in this process. It will ensure the negotiations between the generic and the patentee for a voluntary licence can happen much earlier in the process--in fact, before the generic begins negotiations with the importing country.

Given that the WTO decision does not mandate an open bidding process for every contract, we believe that the “equal opportunities to supply” option is a good alternative to the right of first refusal. It allows for contracts to be finalized directly between an importing country and a generic company without the patentee ever being aware that its patent was in question or having an opportunity to supply. Therefore, the proposed alternative will ensure both parties can participate by having an equal opportunity to supply.

On this issue we simply ask, given the WTO has not yet developed its final process for this initiative, that Canada ensure, while it leads the way, that there is appropriate oversight in this proposed program.

Thank you.

¿ (0940)

Mr. Jean-François Leprince: While we will continue implementing international aid programs, we also believe that our role in helping the developing world is finding cures to such terrible diseases as HIV/AIDS. We are proud of companies like GlaxoSmithKline and Merck & Co., who at present each have HIV/AIDS vaccines at human clinical trial phases and are hopeful they will succeed. Our goal is to continue research for the next generation of drugs to treat diseases affecting patients around the world.

In closing, I want to say that offering access to affordable medicines is but one element in providing relief to the developing world. We must address the issues of access to physicians, proper diagnosis, and creation of a sustainable infrastructure.

We thank you for this opportunity to present to the committee and we welcome your questions.

The Chair: Thank you, Monsieur Leprince. I can assure you that you and your organization, and all organizations with amendments, will have their suggestions looked at very, very carefully.

To the Generic Pharmaceutical Association, please. Mr. Keon, are you speaking?

Mr. Jim Keon (President, Canadian Generic Pharmaceutical Association): Yes.

The Chair: Thank you, sir.

Mr. Jim Keon: Thank you, Mr. Chair.

My name is Jim Keon. I'm the president of the Canadian Generic Pharmaceutical Association. With me today is David Windross, the vice-president of government and professional affairs with Novopharm. We also have Ed Hore, our legal counsel for the association, with us today.

[Translation]

Canada is home to one of the largest centres of generic drug research, development and manufacturing in the world. Canadian generic drug companies export about 20 per cent of their overall production to more than 120 countries.

Our member companies donate millions of dollars' worth of generic drugs annually to the developing world. In most cases, these drugs are donated to non-governmental organizations who administer the drugs directly to people in the developing world who need them.

For example, through Mercy International, Apotex donated $733,000 worth of generic medicine for use in Afghanistan in December 2003 and $340,000 in medicine to Sudan in October 2003. Earlier this month, Apotex donated $250,000 in medicines to earthquake victims in Bam, Iran.

Novopharm, which is represented here today by David Windross, donates generic drugs through its Canadian Medicine Aid Program or CANMAP. I'm sure David would be pleased to answer any questions members have about this program.

[English]

Let me begin my comments on the bill by saying that the Canadian Generic Pharmaceutical Association is strongly supportive of the government's desire to make Canadian generic pharmaceuticals available for export to developing countries in times of health crisis. The CGPA and its member companies have been encouraging the government to take meaningful action to help developing nations gain access to affordable medicines since the Doha declaration of November 2001.

However, the legislation as currently worded is not as effective as it can and should be. Improvements are needed to Bill C-9 to allow the flow of Canadian-made generic pharmaceuticals to people in the developing world who desperately need them. The legislation requires direct action by generic companies in order for it to work as effectively as possible.

Bill C-9 is based on the premise that generic companies will produce generic versions of patented medicines for export to developing countries. To understand whether the bill will be successful, we need to understand that the development and production of generic pharmaceuticals is also a long and expensive process. It takes generic drug companies years of work and millions of dollars to develop processes to synthesize chemicals; to develop formulations; to develop test methods and stability data to ensure quality; to test for therapeutic equivalence in volunteers; and to obtain regulatory approval from Health Canada. Companies cannot justify making these substantial investments without the ability to recoup the costs. To do so would be to make bad business decisions.

Canada's generic drug industry believes that the goal of providing affordable generic medicines to poorer countries in need is important and achievable. CGPA is here today to identify concerns with Bill C-9 and to suggest improvements the committee can implement to make the legislation more effective.

To begin with a comment that has already been made, one of the greatest flaws we see in the current bill is the so-called right of first refusal for brand-name drug makers. Under the current draft, the brand companies are given 30 days to take over any contract negotiated by a generic company.

The right of first refusal erodes the incentive for generic drug makers to enter into the lengthy development process, or to seek out and set up deals for less developed countries. The generic company cannot remove productive resources from other activities and invest time and money in developing medicines protected by patents in Canada, if it has to hand negotiated contracts over to a third party—the brand-name drug companies.

It is our view that the brand-name drug companies already have, and will continue to have, a de facto right of first refusal, as they are the patent holders of the products covered under this legislation. They can make and sell, or donate, the medicines at any time to anyone they wish. This legislation in no way affects that right.

However, the purpose of the Doha initiative, which this legislation is intended to implement, is to increase the number of manufacturers around the world of the medicines needed on the international scene. More manufacturers mean more supplies and lower prices. If there weren't a need for more manufacturers and more suppliers, and if there were enough medicines on the world market at reduced prices for the developing world, there would have been no need for the November 2001 Doha declaration, no need for the August 30, 2003 WTO decision on access to medicines, and no need for Bill C-9.

So let's be clear, the intent of this initiative is increase the likelihood we're going to have more manufacturers and greater supply, at better prices, of these needed medicines. Because of that, we urge the committee to eliminate this right of first refusal, which will act as a disincentive.

Another concern with Bill C-9 is who can buy the medicines. We mentioned earlier that a number of our companies are very active in donating and delivering medicines to developing countries. The legislation as written appears only to allow a government of the developing country, or an agent of that government, to enter into a contract with a Canadian generic pharmaceutical manufacturer. Non-governmental organizations, including those delivering health care on the ground in developing countries, do not consider themselves agents of government and may therefore not be permitted to enter into contracts with generic companies.

¿ (0945)

There is no reason for this restriction. We would urge the committee to amend the legislation to ensure that NGOs can get medicines to the people who need them.

A more general problem for our companies is that current Canadian patent law extends domestic patent protection to all markets in developing countries even if they don't have patents. This unfairly denies persons in countries without patents the ability to access Canadian goods. It also unfairly prevents Canadian manufacturers from competing on an equal basis with manufacturers in other countries in which there is no patent. The inappropriateness of such extraterritorial application of Canadian law is explicitly recognized in subsection 37(1) of the Food and Drugs Act.

Adding a similar section to the Canadian Patent Act would assist the Government of Canada in achieving its goal of delivering access to affordable medicines to developing countries. It would not, in our opinion, violate Canada's international trade obligations. Therefore, to ensure that Canadian patents do not apply to goods manufactured for export, we also recommend to the committee that it add an export provision to the Patent Act similar to the provisions found in the Food and Drugs Act.

We have other suggestions on the bill, which are outlined in our brief. I won't cover them in my comments. But I do have one last comment, Mr. Chair, before closing.

We appreciate that Bill C-9 is international in scope. It's a very important, fundamental bill, and it needs to be examined as a stand-alone item. As I said, we support the bill going forward. However, we are before the industry committee, and I would like to remind you that there are serious domestic pharmaceutical issues that must be addressed at the earliest possible opportunity to ensure the long-term health and survival of the Canadian generic industry.

For the benefit of new members, pharmaceutical patent issues were studied by this committee last year. We would urge the committee to continue its study of those issues, including the NOC regulations and the practice of evergreening, at the earliest possible date.

In conclusion, on Bill C-9, the CGPA strongly believes Canada is doing the right thing in taking steps to provide low-cost generic medicines to developing countries. The CGPA and its member companies simply want to ensure that the steps taken will lead to substantive results. We believe that you, as members of this committee, have the power to make this bill effective.

Thank you for the opportunity, and we would be pleased to answer your questions.

¿ (0950)

The Chair: Thank you, Mr. Keon.

Mrs. Rachel Kiddell-Monroe, on behalf of Doctors Without Borders, please proceed.

Mrs. Rachel Kiddell-Monroe (Coordinator (Canada) Access to Essential Medicines Campaign, Doctors Without Borders): Thank you very much.

Good morning, everybody. I'm coordinator for the access to essential medicines campaign of Médecins sans frontières. I myself have worked as head of mission in Africa, Asia, and Central America for the past ten years, and have recently returned to Canada.

My colleague and I have come here today to speak to you about our concerns about Bill C-9. We're here because we believe this bill is a real opportunity to provide desperately needed medicines to people in developing countries.

I'd just like to start by setting the record clear that at no point has MSF ever supported or agreed with Bill C-9, or with what was known as Bill C-56 when it was tabled before Parliament in November of last year. I think there's been some misunderstanding about that, and I just want to be clear that we've never approved it in any form.

In the world today, one in three people do not have access to essential medicines. In parts of Africa and Asia, that figure rises to one in two people. The objective of Bill C-9 is to improve access to medicines by allowing the export of generic versions of patented pharmaceuticals to the developing world. It builds on an agreement made at and after the Doha declaration on TRIPS and public health in 2001, which stated, and I quote:

...the TRIPS agreement does not and should not prevent members from taking measures to protect public health. ...and in particular to promote access to medicines for all.

However, the bill as it's currently drafted will not achieve this objective. There are some fundamental flaws that mean we'll be unable to meet the life-and-death needs of patients.

A Guatemalan colleague, a medical doctor, has come along to speak to you about some cases of people she is working with in Guatemala.

I introduce my colleague.

Dr. Virginia Gularte (MSF Guatemala, Doctors Without Borders): Buenos dias.

My name is Virginia Gularte, and I am a medical doctor. I come from Guatemala, a little country located in Central America that has been badly affected by 36 years of civil war.

I belong to the less than 1% of people who have a university education. As well, the 40% of our population that is illiterate is mainly indigenous. My country can spend only $38 per person per year on health.

I work in Hospital Roosevelt, a national public hospital, in an infectious diseases clinic--an MSF project--that takes care of people living with HIV/AIDS. Every day I see people, my patients, die for lack of access to medicine. I want to tell you about some of them.

Luis, who was my patient before MSF came to the hospital, had AIDS. At the time, there were no antiretrovirals available to treat patients with HIV/AIDS in my country. He was 25, married to Sandra, and they had two little girls. He worked as a taxi driver.

When he started to get sick, he consulted a physician in his town. He did not have much improvement. When he travelled 300 kilometres to the capital and to the hospital in which I work, he was a very optimistic man. He wanted to go back to his family and his town.

He was diagnosed with histoplasmosis, a kind of fungus, and cytomegalovirus. They are both opportunistic infections associated with HIV/AIDS. We had medicine for the fungus but not for the cytomegalovirus and not for HIV. We could not buy ARV because it was too expensive. It would have cost us $10,000 U.S. for one year of treatment.

He never did go back home. He died, because he did not have any treatment. He would have had to work six months in order to save enough money to buy one month's worth of treatment.

On the other hand, I want to talk about Christina. She is 25, a widow, indigenous, a mother of four children, and she has AIDS. She lived in a little town that was destroyed at the time of the civil war. She ran away to the mountains, and later she was a refugee in Mexico.

At this time, she knew Carlos, her husband, and they had three children. When she was pregnant with the fourth, they came back to Guatemala. Carlos was very ill at that time, and died a short time later. Then, Christina, very afraid of dying and leaving her children alone, travelled to the capital city and came to the hospital, very ill with meningitis and six months pregnant.

She speaks very little Spanish, but she is very brave. With ARV treatment she has improved, and she has a baby boy eight months old, free of infection and in good shape. She is now working in agriculture and earns $3.15 a day.

She would never have survived without treatment, but to buy one month's treatment, she would have to have saved eight months of her salary. Now she has hope for her future and her children's future.

There is a happy ending to this second story because MSF imported good-quality generic medicine at reasonable prices. With these prices, we can treat more people and save more lives.

Members of the committee, I am not a lawyer, a politician, or an economist; I am just a medical doctor who sees very poor, very ill people every day. Without access to treatments, my patients will die. This is a reality. I have the hope that the Canadian bill, Bill C-9, can be reviewed to allow access to important medicines to treat my patients.

Thank you very much for listening to me.

¿ (0955)

Mrs. Rachel Kiddell-Monroe: I just want to finish that. Dr. Gularte has been talking about her patients and illustrated those real barriers they face to get affordable, life-saving treatment for their condition.

I just want to take a quick example of Guatemala trying to use Bill C-9 in order to obtain medicines. Would Guatemala be able to do so? The very simple answer is no. There are three different reasons why.

First, fixed-dose combination ARVs do not appear on the list of essential medicines, schedule 1 of the bill. Second, Médecins sans frontières, as an NGO, cannot procure medicines under the legislation because it is neither a government nor an agent of government. And third, the right to refusal we regard as a killer provision in the legislation, which means, as the other representative said, the generic companies probably would not use this legislation anyway.

On the first, I'd just like to go into it in a little bit more detail. MSF wants to import fixed-dose combination drugs, the so-called three-in-one ARVs, to Guatemala, and the first flaw happens: we cannot import those because they are not on schedule 1. Yet fixed-dose combinations are widely recognized as being a key element in efforts to scale up AIDS treatment in developing countries. They're recommended by the World Health Organization treatment guidelines, and several generic fixed-dose combinations have been prequalified by the World Health Organization. Fixed-dose combinations enable treatment to be simplified, standardized, and therefore more successful, which means that people living with HIV/AIDS can access treatment more easily and reduce the risk of resistance.

So our proposal for that is simply to remove the schedule. Neither TRIPS nor the Doha declaration saw any list of medicines, and in fact developing countries fought very hard that there was no such list. It was a big point of discussion during those negotiations.

Further, just for the sake of argument, let's say that we were able to import the drugs that were on the list. Then we hit another flaw. The second flaw is that MSF cannot clear the drugs. MSF is an independent humanitarian organization. We could never be an agent of government. The very nature of our mandate--to provide humanitarian assistance to countries--is possible because of our independence from government. So we could never, and will never, become an agent of government, because then we could not serve the people who have needs.

MSF is an extremely important procurer of medicines worldwide. We spend many millions of dollars each year taking drugs to some of the worst conflict areas in the world.

Guatemala is a country--if it had the political will to deal with the HIV/AIDS problem--which could import drugs. Do they have the political will? That's a whole other question. So our solution to that is to allow non-governmental organizations to procure medicines under the legislation.

If, for the sake of our case, we say MSF manages to overcome these two hurdles--it is recognized as a procurement agency, and the generic company could produce a fixed-dose combination--the generic company negotiates with MSF on quality, dosage, testing, etc. The patent holder or originator companies refuse to agree to a voluntary licence, so the compulsory licence application is filed. The bill puts up this third and final crushing barrier to getting the drugs. It introduces another opportunity for the patent holder to take over the contract negotiated by the generics company. We believe that this will take away the last incentive, in an already very cumbersome procedure, for generic producers to enter into production for export. The law effectively allows the contract to be scooped, as a right, by another company.

In practice, as has already been said many times, Canadian generics will not be able to use this provision.

The right of refusal is not required in the August 30 decision of the TRIPS council, nor can it be found in the Doha declaration on TRIPS and public health. So we would ask that paragraphs 21.04(6)(a) and (7)(a) from the bill be removed.

Finally, this doesn't apply to Guatemala, but there is a limit on the countries that qualify to import. If it was, for example, Iraq that wanted to import essential medicines, they would not be able to because Iraq is not on schedules 3 and 4 of the bill because it is neither a least-developed country nor a member of the WTO. So we would also like those two schedules to be removed from the bill.

I see the lights flashing. I will finish.

À (1000)

The Chair: They're not for you.

Mrs. Rachel Kiddell-Monroe: Not for me? Okay.

There's a final note that I want to raise in this committee. After January 1, 2005, the source for affordable generic versions of essential medicines will dry up. The only reason that we now have access to $140 a year triple therapy is because countries like India do not grant product patents yet. This soon will no longer be the case. Unless producing countries make regular and widespread use of compulsory licensing, including for exports, drug prices will continue to increase.

This is an issue of major concern for MSF. We would like to ask the Canadian government to discuss this grave problem and bring this agenda item to the WHO, the WTO, and any other appropriate forum.

As you've heard from my colleague, patients are not able to access life-saving treatments because many medicines for diseases afflicting people in developing countries, like Guatemala, are beyond their reach, largely because of their exceedingly high cost.

The cost of ARVs over the past few years has fallen from $10,000 per year, per patient, and now we can get them at $140 per year. This is due to competition in the market. If there's a monopoly, the prices will not come down. Our experience has proved that.

Canada has claimed a leadership role to address this fatal imbalance. If Bill C-9 is passed with any of the four flaws described above, Canada will not have succeeded. It will have let down Canadians who believe that poor people should be able to afford treatment when they are sick. It will have let down patients of developing countries, who are hoping beyond hope that Canada would provide a chance for them to live, despite everything. What's more, it will have provided a disastrous precedent for other countries.

Thank you for your attention, and sorry that I went on too long.

The Chair: No. The others were a couple of minute short, so we gave it to you.

Thank you.

Colleagues, we're going to start with Mr. McNally. I'm going to keep the timing of questions pretty tight so everybody can get in, and possibly there will even be a chance for some on a second round.

Mr. McNally, please.

À (1005)

Mr. Grant McNally (Dewdney—Alouette, CPC): Thank you, Mr. Chair.

Thank you for your presentations this morning. I know this is a very important issue.

I would like to start off by asking Mr. McCool and Mr. Leprince about what the pharmaceuticals are doing already to provide drugs to people in need in countries this bill will apply to. There is a perception that the pharmaceutical companies are doing very little at this point. Their generic colleagues outlined a few things. Could you tell us some of the specifics? I know you alluded to it briefly, but could you maybe elaborate on that for us as to what's already happening?

Mr. Jean-François Leprince: In the brief that we have submitted to the committee, you have a map with different colours. It covers the whole African continent. You will see with the reference that in almost each and every country of Africa, there is at least one program that is undertaken by pharmaceutical companies.

To be more specific, I have here a series of numbers. I don't like to throw numbers on the floor; this is only a reflection of what we are doing.

Abbott committed $100 million to global core-care initiatives. Aventis is a partner with WHO on sleeping sickness.

Interestingly enough, this program is administered by Médecins sans frontière. Am I correct?

This is in partnership with Bristol-Myers Squibb. GlaxoSmithKline provided 10 million tablets of HIV/AIDS medicines and in 2002 committed $1.5 million against malaria.

We seem to focus on AIDS and HIV, which I think is the right approach, but there are a large number of pandemics in Africa that we should also take into account.

Bristol-Myers Squibb provided $115 million for sustainable HIV/AIDS health and psychological projects. Eli Lilly committed $70 million. Merck & Co. provided $50 million towards African comprehensive HIV/AIDS programs. This is only an extract of that list.

We are on the ground. We are doing our work. I would like the committee to be aware of the fact that the pharmaceutical industry is taking full responsibility for that. But there are a number of conditions that have to be met, and one of those conditions is not necessarily the supply of the drugs. The supply of the drug is a necessary condition, but not a sufficient condition.

You have to at least get, in the local country, a reasonable, working, health care system so that you can guarantee infrastructures, you can guarantee the availability of physicians and health care professionals, and you can guarantee follow-up of the patients and, above all, patients' compliance.

Mr. Grant McNally: Thank you.

Are you also directly involved in helping set up infrastructure in countries as well in that regard?

Mr. Jean-François Leprince: Most of the money I was alluding to was in reference to infrastructure support, and that does not include the supply of the drugs. Those are usually supplied free of charge within those programs.

Mr. Grant McNally: That, to me, sounds like a significant contribution already.

The Chair: Could you let Mrs. Kiddell-Monroe jump in on your question?

Mrs. Rachel Kiddell-Monroe: I just wanted to address this infrastructure point. I think it's very true that we do need to have good infrastructure in order to provide medicine, and it is very challenging, but I think this is not something that needs to be traded off against access to essential medicines. That's my point. This is something that needs to be dealt with as well.

In MSF we face those issues in the field; it is an issue, but we can overcome it. I just wouldn't like that to be used as a reason we shouldn't be able to change things. This issue is about providing access to low-cost medicines for people in developing countries, and just because an infrastructure is not there is not a reason to say we shouldn't provide low-priced drugs. The two things are not mutually exclusive; both have to be worked on.

The Chair: Thank you, Grant.

Mr. Fontana.

À (1010)

Hon. Joe Fontana (London North Centre, Lib.): Thank you, Mr. Chairman, and thank you to our first witnesses.

We have an opportunity in this country to make history together, being one of the first countries in the world that is in fact trying to deal with this issue. Let me first applaud each and every one of you for the work you're already doing. I think the information that's been provided to us already by your testimony proves that in fact Canadian pharmaceutical companies, brand-name and generic drug companies, and even NGOs are on the ground helping the people of the world.

I do have just a couple of questions of clarification from each and every one of you. I should say that I also heard a very enlightening statement that perhaps we're going to set traditional rivalries aside so we can work towards getting a bill that is workable and that will be a model for the rest of the world, and I applaud all of you for wanting to work together to get the right bill with the right solution. I think that's a great starting point.

Mr. Leprince, you just indicated to my colleague Grant that certain medicines are now being supplied by the pharmaceutical companies to the rest of the world. I'm going to ask whether or not--and that is a fairly generous thing the brand-name drug companies are doing--once we come together and enter into this relationship, it will mean that medicines that are now available free of charge to the most needy of the world are going to be taken away by virtue of a commercial agreement and a bill. I hope not; I think that would be defeating the purpose. Why should those people pay for something that now is being given? I'm just wondering whether or not the commitment of continued support by the brand-name drug companies would in fact continue.

I have other questions to ask if I could.

Mr. Jean-François Leprince: Mr. Fontana, thank you for this question.

On the first matter, what I would like to say is that your concern is fully legitimate. I can assure you that all the programs I was describing to you are long-lasting programs, because most of those programs are commitments for at least a three- to five-year horizon. What we see as the merit of this bill today is that it's going to provide complementarity.

I'm sure you have heard about the three-by-five drive, which is three million AIDS patients treated by 2005. It seems to be a very ambitious and lofty goal, and it goes without saying that the kinds of programs I have been describing are not going to be sufficient to address and to successfully meet that goal. We need to find the appropriate mechanism to provide the drugs for such a huge number of patients. This is where I see the role of Bill C-9, because there is excellent complementarity that will enable us to address the kinds of things that are currently badly needed for certain countries and the continent of Africa.

Hon. Joe Fontana: Mr. Keon, I know that the generic drug companies are very much involved in the world in providing those drugs Virginia and Rachel spoke to you about. Obviously the first right of refusal has been raised as a big concern by the NGO community as well as by the generic drug community. I'm just wondering, with respect to what you just heard from Mr. Leprince as an alternative to the first right of refusal, if you could comment--and perhaps Rachel might do the same thing--as to whether or not you believe that this is a compromise we ought to look at as an alternative to the first right of refusal. If both could comment on that, I would appreciate it, and then I have one additional question.

Thank you, Mr. Chair.

Mr. Jim Keon: I haven't actually seen the proposal. I've just heard it briefly described by Mr. Leprince.

We have actually suggested alternatives where the generic company would inform the brand-name company at an early stage of its intention to make the product and could at that point seek a licence. So in that sense I believe it's similar to what I heard, but as I said, I haven't seen it.

The program being set up is intended to be a licensing system. So in the bill currently, there's a cap on royalty to be paid, at 2%. I think it was agreed by our industry that 2%, while it added to the costs of developing the product, was a recognition that these products are under patent and that some royalties should go back to the patent owner.

So again, as long as there is a cap on the royalty payment, then we actually ourselves have recommended that any negotiations be taken and be done at an early stage so that the company, after that point....

What we're suggesting is that the companies need certainty, legal certainty that in fact they can actually develop and sell these products, because remember, here we're talking about, largely, the anti-retroviral drugs, and when we look at the patents in Canada, many of them are going to exist to 2012 or 2016. So you need legal certainty, if you're going to undertake these humanitarian functions, that in fact you're actually going to be able to make and sell the product or donate the product abroad and that you're not going to later find yourself in difficulty.

So we like that idea of a early-stage negotiation, but we believe a cap on the royalty rate is absolutely necessary to ensure that the products are made and are able to be distributed at reasonable prices.

À (1015)

Mrs. Rachel Kiddell-Monroe: I wouldn't like to comment yet on the proposal, because I haven't seen it, but I think our position at MSF is basically this: we don't want there to be a right of refusal in the law, because we believe that's going to stop the competition. What we need is for there to be access to low-price medicines, and from our experience, it's competition in the market that allows the prices of medicines to be brought down to reasonable levels. What we want is that the bill can provide that ability to bring down the prices.

What happens with the right of first refusal and the details of that, what's important is the objective of any clauses inside the bill. The objective of the bill is to provide low-cost medicines. We need competition in the market to do that, and that's what we ask that the bill does.

Hon. Joe Fontana: Thank you.

The Chair: Mr. McCool. This is an important one. We'll go to you, and then we'll go to Paul.

Mr. Terry McCool: I'd like to respond to the previous question and a couple of the answers, if I could.

As to the rate of equal opportunity, the process is intended to work such that if a country posts a request on the intended WTO website that they are in need of an order, both the brand-name and the generic have an opportunity to negotiate with the country based on their terms and conditions. If the generic wins the contract, all they have to do is notify the commissioner of patents, notify us, and negotiate, if possible, a voluntary licence, because that will be the quickest way to get the drugs available. But failing that--which takes 30 days, by the way--they are free to apply for a compulsory licence.

The one comment I do want to make, though, is that we do not believe, as opposed to TRIPS, in a fixed royalty. We believe, for orders going, it should be based on the value of the contract in the importing country. So because these are very low cost, we suspect that in many, many countries, certainly the least developed countries and certainly countries in sub-Sahara Africa, the royalty will probably be close to zero. But we also think in some of the developing countries, certainly the high-income developing countries where the contracts might be more valuable, we would prefer to see a flexible royalty rate but are certainly prepared to have an extremely low royalty rate, if any, in the least developed countries. I think that will not prevent any barriers to the speed at which countries can get access to these medicines.

The Chair: Thank you very much.

Mr. Crête.

[Translation]

Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman. I would like to thank all of our witnesses, in particular Ms. Gularte, who has reminded us of the objective of this program and has used concrete examples to make her point. I know that the current situation has a humanitarian objective, but we are talking about a reality that is very complex to define. As a result, I would like us to take a closer look this morning at the proposal made by the research-based pharmaceutical companies on equal opportunity to supply.

As parliamentarians, we have to decide whether what is being suggested is a potential solution from the point of view of the generic pharmaceutical companies, or Doctors Without Borders. I would like us to examine this issue. I'm sure that Mr. McCool and Mr. Leprince could go over their proposals with us again, if necessary.

I would like to hear in greater depth from Mr. Keon or his colleague about what they think of the proposal made by the representatives of the research-based companies and whether it has potential.

À (1020)

Mr. Jim Keon: As I mentioned, we have not seen the details of our colleagues' recommendation, but we have suggested ourselves that discussions and negotiations should take place with the brand-name company at the start of the process. What is important, to my mind,

[English]

is that there be a cap on the royalty rate.

Mr. McCool mentioned that in many cases the royalty would be very low. We would like to see the legislation remain as it is, with a 2% cap, because you have 30 days to negotiate after you have a contract. If there is no agreement, then presumably the dispute will be settled before the commissioner of patents.

One side will make arguments on the rate and the other side will make arguments on the rate, and this, to us, is not helpful. So we would rather see negotiations, and if possible, that's terrific and a voluntary licence could be given. If not, then in our view there should be an automatic right to apply to the commissioner for the licence.

[Translation]

Mr. Paul Crête: The minister said that she was open to the bill being rewritten in view of the committee's recommendations, and the main problem that has been identified is this right of first refusal. Now we have a proposal for an alternative to that system.

Would you like to see this proposal explored along the lines of what the research-based companies have suggested, or do you feel that there is no merit to it and that we need to find another solution? That is very different, because if you are closing the door completely, we need to take another approach. If you are leaving the door partly open, it might be worthwhile working together with the research-based companies to explore their proposal.

Mr. Jim Keon: The door is open right now. In fact, we have a similar proposal in our own document, on page 4. We suggested that generic drug manufacturers could inform patentees of bids they intend to make. But I think that the difference, which is quite an important one, is that we are suggesting that the 2 per cent equivalent for licences that is in the current legislation be maintained. That is the difference. We feel that it is good to have a licence cap.

Mr. Paul Crête: Mr. McCool or Mr. Leprince, do you have any reaction to that comment?

Mr. Jean-François Leprince: I would like to make a few comments on what Mr. Keon has said. I believe that the objective is not to focus on royalty rates. Why? Because the royalty rate, as Mr. McCool has explained, is part of the TRIPS agreements that come under the World Trade Organization, and I would remind committee members that the Canadian government needs to adhere very closely to the WTO agreements, even more so because of this initiative, where Canada is creating a precedent and has to set an example through exemplary practices.

So I would draw the attention of committee members to the fact that it would be very unfortunate if we ended up with a trade challenge from another country because of provisions dealing with royalty rates. That happened three years ago with the "17-20". We came before this committee to debate that issue. I think that it would be very unfortunate.

I believe that the goal of research-based pharmaceutical companies, with our proposal this morning that we are calling opportunity of equal supply, is to find a solution to the access problem. We want to reduce the waiting time for patients that need these medicines, so that their wait is as short as possible. What we are proposing, therefore, is that the period be reduced to 30 days, that is, when a generic company is informed and intends to provide the medicines, a 30-day period would be allowed for research-based pharmaceutical companies to either negotiate a voluntary licence or provide the medicine itself. So our effort—and this is what we understood to be the concern expressed by earlier witnesses to the committee—is aimed at reducing the time required to make these medicines available.

À (1025)

[English]

The Chair: Thank you.

[Translation]

Mr. Paul Crête: How does Doctors Without Borders react to that?

[English]

The Chair: Do you have a comment on that, Rachel?

[Translation]

Mrs. Rachel Kiddell-Monroe: I am going to repeat a bit of what I have already said. I do not want to go into detail, because I have not yet seen this and I want to reserve judgment on it. But what we really want is for the bill to be able to achieve its objective of providing versions of medicines that are here in Canada at the best price possible, so that people in the countries where the need exists can have access to them. So whatever results from your discussions, that is our priority.

Right now, we wish that this provision did not exist, since the TRIPS agreements and the Doha declaration did not really have such a provision. So we would like it to disappear in order to permit competition that could bring down the price of these drugs.

[English]

The Chair: Thank you, Paul.

Mr. Malhi, please.

Hon. Gurbax Malhi (Bramalea—Gore—Malton—Springdale, Lib.): Thank you, Mr. Chair.

My question is on the right of refusal. It's an indirect way to stop the competition. In one way, brand-name companies that want to start up need a country, and in other ways, they don't want any competition. How do you justify that?

Mr. Terry McCool: I think the interpretation of the bill, as it was first written, was that there was this right of last refusal. That was never the intent. I think everyone is aware the bill was looking for a very speedy passage and was moved very quickly through a process.

We have created an alternative to that. All we're saying is that if you want to increase the supply of medicines to the developing world, you want to have the brand-name companies participating and expanding the current programs they have underway, and you also want the generic companies to be able to participate. All we're asking for is equal opportunity to compete. Obviously we think that the generic companies, with lower costs than sometimes we have, will be able to compete on those bids if they're equally offered.

What we're concerned about, and part of the process we see, is that not every country is required to post on a WTO site because Canada has expanded the list to least-developed countries that are not part of the WTO. Those countries would come directly to Canada.

We want to make sure that there's a process involved, though, that when those contracts come to Canada we're notified, and as the process is moving forward to apply for a voluntary licence, we have an opportunity to compete on that contract as well. That increases the competition and the likelihood that you're going to get more affordable medications in the world.

With the expansion of the global funds that are going to create more infrastructure and more funding, we would hope that more countries can participate in this moving forward.

The Chair: Mr. Keon.

Mr. Jim Keon: I would like to point out to the committee that on page 4 of our brief we actually have recommended that the generic company inform the patent holder of any tendering process it intends to enter into. So our proposal already envisages this. The generic company would be required to inform the brand-name company of the proposal. I would ask the committee to look at that quite seriously.

As I said, I haven't seen the other side's proposal. Our proposal, I think, meets that requirement of informing the brand-name company and allowing them to bid on it.

The brand-name companies own the patent. They can sell the medicine to anyone at any time they want. There's no need to build them into the system. They are inherent in this system. They own these medicines. They have programs already, they've indicated. They are donating them, in some cases, providing them at lower cost. That's terrific and that's wonderful. They will continue to be able to do that.

The intent of the bill, I would repeat, and what the World Trade Organization wants, and what the WHO wants, in its three million being served by 2005, is to increase the number of suppliers in the world, the number of companies that are able to manufacture these products at a good quality, at a good price.

Yes, we welcome and want the brand-name companies to participate. But they already are, so there's nothing more that's required to allow them to participate.

À (1030)

The Chair: Are there any other comments?

Rachel.

Mrs. Rachel Kiddell-Monroe: I want to say, to the honourable member who asked, that another one of our colleague NGOs is going to speak more to this point on right of refusal. I think it's very important for the committee members to remember what was agreed by Canada as a signatory to TRIPS, to the Doha declaration on public health, and also to the August 30 agreement. In none of those was that right of refusal included. I think we have to be very respectful of those international agreements that we've made as a country.

I'd like that to be taken into consideration.

The Chair: Mr. McCool.

Mr. Terry McCool: We're not asking for the right of first refusal. I think our position might be more similar to Jim's position, without seeing exactly the details behind it. We've put a lot of work behind the details and it's attached to the document.

We may be closer in alignment than we initially thought.

The Chair: Thank you, Mr. Malhi.

Mrs. Gallant, then Mr. Vanclief, then Ms. McDonough.

Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC): Thank you, Mr. Chairman.

I can certainly understand why the government wants to rush this bill through. It was interesting the other evening at one of the counsel general's offices that the comparison between Canada's corruption in government was being made to that of third world countries. So we would certainly want to distinguish ourselves from third world countries by putting this through. In fact, the government is so concerned about getting this bill through that they have two Privy Council officers on the government side to make sure it gets through in time.

The Chair: Get to the question.

Mrs. Cheryl Gallant: My first question is to the brand-name companies. I'd like to know how important it is to have defined penalties for diversion and details for a tracking system outlined prior to the passage of the bill.

Mr. Terry McCool: The diversion measures are extremely important. If not done properly it would be the one thing that would prevent access to medicines long term. If you have diversion you're actually diverting it away from patients of need and countries of need. So the stronger the language is and the more protection you have, the more you can ensure and the better tracking you have that the product is actually being delivered and it is being used appropriately on-site. So we feel very strongly about that.

We've asked for a penalty only if a company knowingly knows that diversion is taking place and continues to support it. But the diversion is extremely important.

Mrs. Cheryl Gallant: You feel that it would be important for us to have the regulations and the tracking system outlined prior to the passage of the bill. Is that correct?

Mr. Terry McCool: Yes.

Mrs. Cheryl Gallant: Thank you.

In the bill it says that by adding the name of any patented product, that may be used to address public health problems. I'd like to know whether or not any patented product would include products that have not received Health Canada approval. Do you have a product that has been patented that is not allowed to be used in Canada yet, but perhaps is eligible to be on this schedule?

Mr. Terry McCool: Well, we haven't seen the regulations, but I don't think that's a possibility. At least, it shouldn't be a possibility. That hasn't come up in any of our discussions.

Mrs. Cheryl Gallant: It is left open the way the bill is written for that possibility.

Mr. Terry McCool: I think it depends on the regulations that Health Canada would draft. Until we see the regulations that section is still open.

The Chair: Cheryl, I think Mr. Keon wants to jump in on this.

Mr. Jim Keon: The way the bill is drafted, though, for a generic company to get a licence and export a medicine under this bill, the company has to have had Health Canada approval for its medicine, otherwise it won't be eligible for the compulsory licence.

Mrs. Cheryl Gallant: Is this a disparity, then, that you're pointing out, Mr. Keon?

Mr. Jim Keon: No, it's something that we support. I'm just answering your question whether there would be medicines that aren't approved by Health Canada. There certainly wouldn't be any generic medicines being exported under this system until they're approved by Health Canada.

Mrs. Cheryl Gallant: Okay, so the generic companies would not be able to, by virtue of the laws that govern you, but it's open to the brand-name companies. As Mr. McCool said, it would be very important to have the regulations defined, then, before we pass this bill.

Mr. Keon, in your written submission the concern over the restriction of the medicines that are listed in schedule 1 has been outlined. Are there any medical reasons you are aware of that there would be a clearly defined list? Or is this perhaps some sort of restriction on having the generic companies get a step up in ramping up the manufacturing process for a drug that otherwise they may not, because they don't know whether or not they're going to have a market for it?

À (1035)

Mr. Jim Keon: I think we have pointed out that in the WTO agreement we don't see any restriction on the list of medicines. So we don't think that the schedule is necessary. I believe that our colleagues from Médecins sans frontières pointed out today that the cocktail of drugs that is now used on a regular basis to treat HIV/AIDS is actually not currently on the list.

I think the list does run the possibility of creating some restrictions. For that reason, we don't see the benefit of it. I know that groups like Doctors Without Borders are far better able to comment on the types of drugs that they need and on this point. We certainly support them on their point.

The Chair: Mrs. Gallant, thank you.

We're going to let Rachel answer, and if there's time, we'll come back.

Mrs. Rachel Kiddell-Monroe: I just wanted to speak also to the point about the list. What we've already seen is that the list as currently drafted has many problems in it. There are medicines not included that should be included. One example that we give in our background is Naviripine, which is an essential medicine for preventing vertical transmission, mother to child. This is patented in Canada, but does not appear on the list, and it is one of three medicines that would appear in one of the fixed-dose combination anti-retroviral therapies, which is our first-line treatment in developing countries for people living with AIDS and is also the one that is recommended by the WHO in their treatment guidelines. There are also many fixed-dose combination drugs produced by generic companies that have already been pre-qualified by the WHO. Some of them are the generic ones--one is produced in India. These are ones that can be used and do not appear on the list.

Because the schedule already shows problems with the medicines that are included on the list, it raises the question whether a list is always going to have problems. There's always going to be something missing from it. That's one side of it.

The other side of it is that we believe there shouldn't be a list, because developing countries at the Doha talks on the 30th of August fought very hard for there not to be a list of scheduled diseases, for there not to be a list of medicines. Including this list flies in the face of all the work that was done at these international negotiations, all the discussions saying that we're not to have any lists of this sort, because there doesn't need to be a list. It infringes on the sovereignty of a country in saying what their own public health problems are. If the medicines had not been on the list for SARS, for instance, we wouldn't have been able to produce them, and the same with the anthrax scare. This is something very important.

The Chair: Thank you very much.

Mr. Vanclief.

Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.): Thank you very much, Mr. Chair.

I welcome the presenters here this morning.

I have a couple of points of clarification. I believe it was the opposition party that wanted to put this bill through the House in one day a few months ago. Yes, the government put forward the bill, but now interests have come forward and said the bill could be improved, and it's the government that is leading through this process in the committee, as it should be, in order to make it better.

I'd ask Mr. McCool or Mr. Leprince to clarify another point as well, so that everyone is clear and not of some other opinion. It's my understanding that no one can market a drug in Canada unless it's been approved by Health Canada.

Mr. Terry McCool: That's right.

Hon. Lyle Vanclief: But the impression here a minute ago, led by one of the members, was that it was possible. It's my understanding that no drug can be sold by generic or research-and-development brand companies unless it's approved by Health Canada. Is that correct?

Mr. Terry McCool: It is correct. To qualify my statement on that point, it is possible under the patent laws that you can refer to a product in another country, and we do not want to see that happen unless it's actually approved in Canada.

Hon. Lyle Vanclief: That's right. Thank you.

I commend the brand-name companies and others and Rachel and Dr. Gularte and the generic companies for the tremendous work that is being done. There's no question that our hearts and our intent here are all in the right place. There are millions of people in the world that want us to do what we want to do, and they want us to do it quickly. Quite frankly, it's far more to their benefit than to that of any of us around this table. So we need all that's there.

You've come forward today with three presentations giving a combination of suggestions for improvements. I'm not asking you to do the committee's job. There has been reference, between the brand companies and the generic companies for example, that your recommendations for amendments today may not be that far apart. Most of us have seen them here today for the first time, as too with Rachel's recommendation. Is there a possibility, for the best interest of what we want to do--and as I say, I'm not asking you to do our job--for you people to come forward with a meshing of those recommendations that does what needs to be done, not only to recognize everybody's concerns, but to address the real concern, to get these drugs out to those in the world who need them? I know you've come forward with your own interests here today, and I don't mean any interest is above and beyond the other person's interest or above and beyond the cause, but has that type of approach by all parties been considered? Or is it your choice to just make your recommendations here and have us work on them from here--which we can and will do, we assure you?

À (1040)

Mr. Terry McCool: Certainly from our perspective, we're willing to cooperate with all of the parties who have presented here. We want to make sure that this works, if the intended benefit is to expand access and to get drugs where they're needed. We're hearing today, for the first time, testimony from both the generic industry and Médecins sans frontières. Everybody has some concerns, but I think everybody is trying to make this work; so we would certainly be prepared to do that.

Mr. Jim Keon: I think from the generic perspective, we would be very pleased to work with the committee and to propose amendments to whatever kind of system you want to suggest. It would probably be a good idea for the committee to be involved, since I think that all of our intentions are that this happens quickly; but yes, we are quite happy to make ourselves available and work through these things.

Mrs. Rachel Kiddell-Monroe: I think from the NGO side, there is a coalition of NGOs, the Global Treatment Action Group. Some members of that group are very much better qualified to speak than I am on this issue, and I know that they would be very pleased to help the committee in deciding how these things would be drafted, and in giving advice.

The Chair: Thank you.

Is that okay, Lyle?

Hon. Lyle Vanclief: Yes.

Just as a closing comment, Mr. Chairman, this certainly is what I think the goal of all of us is. Time is of the essence; rushing it isn't going to do the job, but can I say, we need to hurry. I'll repeat, there are millions of people out there who need the opportunity that we've got here, for Canada to lead the way and to bring other countries on to help in what needs to be done as well.

The Chair: Thank you, Mr. Vanclief.

Ms. McDonough, please.

Ms. Alexa McDonough (Halifax, NDP): Thank you, Mr. Chairman.

I think Canadians were absolutely thrilled that the Canadian government stepped up to the plate after the TRIPS agreement and the Doha agreement to say we're going to lead the way on this. I think it would be a most regrettable use of the committee's time if we spend our time fighting over whose heart is in the right place.

What this is about is getting the legislation the way it needs to be, to access those drugs on an affordable basis with an appropriate sense of urgency. For that reason, I think the fact that deeply flawed legislation was introduced was very problematic. There are 5,000 to 6,000 people a day dying of HIV/AIDS, which means that the 30-day delay that's already transpired has left a half a million people dying. One of the regrettable things that I think needs to be said for the record is to note the herculean effort that the Global Treatment Action Group and all of its member NGOs, with Médecins sans frontières right at the front, have had to expend. They have expended enormous amounts of time, energy, and scarce resources to fight or to change the flawed legislation, to get on with the job that was supposed to be getting done.

I was very pleased to hear the brand-name pharmaceutical industry spokesman acknowledge that there is also a desperate need to put more resources into developing the health infrastructure that will be there to support the very important work being done on the ground now, with the benefit of access to drugs that supposedly brings us here today.

I would just be interested to know from the brand-name spokesman whether that means that you are therefore also lobbying the government to increase its commitment to overseas development assistance, which Canada has basically cut in half over the last decade, and whether you've been lobbying the government to triple the commitment to the global fund, so that the health infrastructure could be there to get the job done.

What is very distressing is to hear the amount of lobbying going on to try to persuade the government not to proceed with the legislation as it needs to be, using the excuse that the health infrastructure isn't there anyway, so why bother. I wonder if I could ask for your response on this, and to ask Médecins sans frontières to comment further, because I think it's very important for the point to be made that this isn't a trade-off.

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Mr. Jean-François Leprince: Ms. McDonough, I'm going to share with you my personal experience.

I was in charge of Africa between 1981 and 1989. I noticed at the time that the nature of the health problems was very significant, very crucial, because that was the time of the appearance of AIDS. What I believe has changed between the time I was in charge of Africa and now is that through intense lobbying of the pharmaceutical industry and some other active stakeholders, an awareness has developed by the governments of the developed countries of the availability of funds. There is much more availability of funds.

We know that what we are discussing now, which is the availability of drugs to those countries, is necessary but not sufficient. You need to have reasonably efficiently working health care systems. In those countries, one of the ways to achieve this is to fund the systems. I think the major difference today is there are many more private or government funds available.

However, the issue on the table is how to make the best possible use of the available resources that are allocated with those funds. I think this is the major challenge of governments and private organizations, or private funding organizations. Take, for instance, the Bill Gates Foundation, which is donating a lot of money. This is the major challenge to be addressed, and this is where the NGOs have a critical role to play. They are here, with their experience, to provide the kind of guarantee that the resources will be used in the most efficient manner.

Dr. Virginia Gularte (Interpretation): From the experience in Guatemala we start from the infrastructure that the Ministry of Health has. We're able to cover 400 patients, and also cover the vertical transmission program in the different departments on which the regional hospitals depend. This is proof that we can use the pre-existing infrastructure to administer and control the use of antiretrovirals.

Mrs. Rachel Kiddell-Monroe: I think the point is there shouldn't be a trade-off between infrastructure and access to medicines. Yes, infrastructure needs to be dealt with. There's a commission on intellectual property rights that the U.K. sponsored in September 2000, and they talk exactly about this point. They make a very clear recommendation that both sides need to be pushed. One cannot be done at the expense of the other one; we need to be able to have both.

In terms of government funding to be able to improve the infrastructure, this is a question of priorities. We're often talking about countries that are in failed-state situations, countries with desperate debt, and countries that have other priorities over and above health.

We're also talking about diseases that are not always very popular--people are not politically keen to deal with them. HIV/AIDS has a lot of stigma attached to it, and there are a lot of discrimination issues. It's not like having the flu. There are also other diseases, like Chagas disease, sleeping sickness, and tuberculosis. There's a whole range of diseases that need to be treated that are not always on the priority list of a country in the developing world because they have other priorities, and sometimes political issues.

I think we have to remember that. These are two separate issues that need to be dealt with.

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The Chair: Thank you, Alexa.

We only have a few minutes left. We're going to try to squeeze in three very short interventions.

Next is Mr. Fontana, Mr. McNally, and Mr. Crête for three minutes each.

Hon. Joe Fontana: Thank you, Mr. Chairman.

Muchas gracias, Virgina.

In fact my question is to Rachel, if I could.

There will be no trade-offs. Getting the medicines to the countries is absolutely key, and the infrastructure, I believe, is a concern, but I think it's workable with all three parties working together. You raised some questions, and your stories were touching, Virginia, as to making sure we get the right medicines to the right people.

As you know, as the bill is drafted it has lists of certain medicines and we're amending them to add others. There is a list of countries, 19 countries over and above the WTO list, so that least-developed countries can be included. We've designed the bill in such a way that it's flexible--and I look forward to your comments on this question--because we can add to the medicine list and to the country list.

But I think the most important question you raise is that the bill is also structured so that NGOs can be agents to procure the drugs from either the brands or the generics, and I'm just wondering if you can comment on this. If every NGO in Guatemala, say, or in any other country, started to procure separately from the brands and generics, how would you ensure you would get the best price, as opposed to there being a government entity that works with NGOs to procure the total amount of drugs that are required for that country?

Wouldn't that be a better approach than having a bunch of NGOs that are going to be involved in administering, in the human infrastructure, to deliver the drugs--having one source so the best price could be had by a procurement strategy, rather than having some NGOs procure separately?

Mrs. Rachel Kiddell-Monroe: I'll start with the third question first.

I think, just in the way that we don't limit the types of governments or the types of agents of government that can procure medicines, the same argument can apply to the NGOs. I think the practical reality is that you won't get 100 Guatemalan NGOs suddenly trying to procure medicines in Canada. I think the people or the organizations that have the infrastructure to be able to import medicines into a country, which is no easy task, are the big agencies that are providing the first-line assistance, like CARE Canada, World Vision, etc., including Médecins sans frontières.

So I think the reality is going to be different.

I think if you stop an organization like MSF from being able to benefit from this act or require it to become an agent of government, we're going to have a problem on the issue of independence of humanitarian action. If we become an agent of government, how will we be perceived by governments in countries in which we're working which are extremely sensitive: if they see us working as an agent of a government to do our work, that will affect our humanitarian mandate.

The foundations of our mandate are independence from any political, religious, and other denomination. We have to maintain that. We've been maintaining that for over 30 years; it's crucial.

On the medical list, yes, there is a provision that allows medicines to be brought in later. We feel that's just another delay that can waste time when medicines are urgently needed in a crisis. We would rather there was no list, to respect the negotiations that were done. There are actually 27 countries that are missing because of schedules 3 and 4, which include countries like Vietnam, East Timor, Iraq, Iran, Azerbaijan, etc. Why should these countries be excluded? They have extreme needs. We would like those schedules removed.

Again, there was no list like that on the TRIPS.

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The Chair: Thank you, Rachel.

Very good.

Grant, and then Paul.

Mr. Grant McNally: Thank you, Mr. Chair.

I know we're running out of time and we have way more questions than we can get to in our brief period here. I guess one of the things that is a big problem in making sure this happens is that infrastructure point you've just referred to. We can have the supply of drugs--and lots has been done already, we've heard--but when we're dealing with many different governments and third-world countries where there are different structures, that is often the most difficult part: how to get the drugs into the hands of the people who need them most. I know my colleague referred to that earlier.

Is there any partnering going on--and I'm sure we'll hear from other NGOs--on how to most effectively work together? You're on the ground, and others are on the ground--is there some kind of coordination going on in that regard?

Mr. Jean-François Leprince: I think there are very clear examples of good cooperation between the pharmaceutical industry, the WHO, and NGOs, in particular Médecins sans frontières. I was alluding to the example of sleeping sickness treatment in Africa, where both Bristol-Myers Squibb and Aventis are donating the drugs free of charge. But this is, I would say, only the visible part of the iceberg, because there is as well the commitment from both companies to donate something like...on this program I think it is a $25 million commitment over five years. And in agreement with WHO, Médecins sans frontières will be the ones to administer the program.

So this is a classic example of how cooperation should work. I can give you other examples if you want.

The Chair: Thank you.

Mr. Keon.

Mr. Jim Keon: I'm going to let Mr. Windross, who is the director of the CanMAP program, discuss that point.

Mr. David Windross (Vice-President, Government and Professional Affairs, Novopharm Limited, Canadian Generic Pharmaceutical Association): Just in my feedback over the years of working with CanMAP--

The Chair: And CanMAP is...?

Mr. David Windross: The Canadian Medicine Aid Program, which was started in the mid-1980s by Mr. Dan, who is the founder of Novopharm.

I guess what is very important here to realize and understand and perhaps accept is that the people who are on the ground working with people in these countries are the important ones. They are the ones with the relationship. They are the ones who are committed to what they're doing, and I guess it comes down to some sort of validation in terms of who these organizations and people are who are doing this.

Certainly today, as we do donations to various countries around the world of product that is available in Canada, licensed for sale in Canada--and we do donations to many countries--we're working with these organizations who come to us and request various medications for various reasons as they go into countries. I guess you have to have that confidence level, that these are the people who are there, as was indicated earlier. These are the people who are on the ground, working with patients, working with doctors and hospitals in these countries. I think as we try to build this legislation to cover everything from the point of making it in Canada to its arriving on the ground to its administration to a patient, I'm not quite sure that in terms of the spirit of the legislation, it's really all that possible.

The issue comes down to a network. I'm a pharmacist by profession, and health care is very network oriented. Doctors, nurses, and pharmacists all work together for the needs of the patient. Now we're looking outside of Canada, in another country, so how do we do that?

The Chair: Thank you, Mr. Windross.

Paul, very briefly.

[Translation]

Mr. Paul Crête: Thank you, Mr. Chair.

I would like to know whether you think that, if the bill is passed in a form that is satisfactory to you, with the current infrastructure support efforts, we will finally end up with positive results, or whether you believe that an additional major effort is really needed.

Mr. Jean-François Leprince: Mr. Crête, I will repeat what I said earlier. I believe that the objective of this bill, which I hope will soon be brought into law, is to be able to address the needs that are currently not being met because they are growing. As you will recall, we had the “3 million by 2005” initiative, which was aimed at treating 3 million AIDS patients in Africa by 2005. Such an ambitious program as that obviously means that not just the pharmaceutical industry but also the generic drug industry have to work as partners toward that objective, as well as a large number of non-governmental organizations. After all, not only do the medicines have to be provided, but also a tremendous amount of infrastructure, resources and means have to be brought into play if that objective is to be met.

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Mr. Jim Keon: As we have said, we feel that it is very important for this legislation to be implemented. We support the bill and we want to work with the committee to make some changes to it so that medicines and drugs needed for developing countries can be developed in Canada.

Mrs. Rachel Kiddell-Monroe: I just want to say that this bill has a very limited objective, which is to provide access to medicines. I think that we need investment in health infrastructure. I would like to see more funding, more tools for these initiatives. It is very important for health infrastructure to be improved in these countries. This bill is really targeted at improving access to medicines, but I think that we also need more funding.

[English]

The Chair: Thank you.

We have two minutes. I'm going to give it to Alexa in a spirit of cooperation.

Ms. Alexa McDonough: Thank you, Mr. Chair.

I'd like to turn my two minutes over to the representatives of the three organizations to address this question. When the legislation was introduced with the stated purpose to provide the most affordable drugs to people who need them in developing countries, the response by many people was that what we got instead was legislation that was carefully crafted to respond to the dictates of the brand-name pharmaceutical companies. I'd like to ask the three representatives to comment on what would be needed in the way of changes to alter not just that perception but that fact.

The Chair: Make your comments brief, please.

Mr. Jim Keon: From the generic side, we have indicated in our brief several changes we would like to see. We were pleased that the minister came to the committee and indicated she was open to hearing from the committee on changes. We believe that if those changes are made, the bill will be much more likely to result in medicines being made and exported from Canada.

Mr. Terry McCool: We have submitted some amendments. We think that, in a spirit of good faith, we have created an option that makes the bill more workable for everyone. We're prepared, in a spirit of cooperation, to work with people to make sure it does go through. We are certain that it will not be a success if diversion is not addressed very strongly in this bill.

The Chair: You have 30 seconds, Rachel.

Mrs. Rachel Kiddell-Monroe: There are four flaws in the bill. Allow NGOs to use it. Get rid of the right of first refusal. Get rid of schedules 1, 3, and 4. Those are our recommendations. This is an international precedent. The world is looking at Canada. It is the first country that is going to implement the results of the August 30 agreement. This is a chance for Canada to do the right thing.

The Chair: Thank you very much.

We started five minutes late, and we are five minutes late finishing.

I thank members for their excellent questions.

We invite our witnesses to leave the table, and we thank them for their participation.

We will take two minutes to allow the witnesses for the second half of this morning's session to come to the table. Those are the Canadian HIV/AIDS Legal Network, Interagency Coalition on AIDS and Development, and CARE Canada.

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The Chair: This is the final call to our colleagues and our witnesses.

At the table we have the Canadian HIV/Aids Legal Network. We have Mark Fried with Oxfam Canada. We have the Interagency Coalition on AIDS and Development, Michael O'Connor.

Having suspended the meeting for a couple of minutes to change our witness list, we're going to continue hearing witnesses. We are going to start in the order in which they are on your agenda.

We ask that you keep your remarks to five minutes, give or take a couple. There are four groups to be given adequate time. If you don't cover something, you'll have a chance to cover it in the question and answer period.

Mr. Fried of Oxfam, we would ask you to start, please.

Mr. Mark Fried (Communications and Advocacy Coordinator, Oxfam Canada): Thank you very much. I appreciate the opportunity to present to the committee.

First let me explain why Oxfam is concerned about this. As was mentioned this morning, there are about 14 million people every year who die of diseases that can be treated, and the great majority of these are poor people in developing countries. The high cost of medicine, we know, is not the only factor in this massive mortality, but it is one factor that we can do something about, and we hope the committee will do something about it in the next couple of days.

Oxfam has not prepared a written submission today, although I will be getting one to you in the coming days. Oxfam does fully support the brief that was presented to you by the Canadian HIV/AIDS Legal Network, in drafting which we took part. We are very concerned about the five aspects in the legislation that are highlighted there, and we urge the committee to consider the amendments that are suggested.

The central issue for us is that affordable medicine will only be there when there is competition in the marketplace. We've been working on this issue since the World Trade Organization extended intellectual property rules globally in 1996. At the time the WTO acknowledged that TRIPS rules would make access to medicines more problematic in developing countries, because they limit competition and keep prices high. A public health safeguard was written into the TRIPS agreement that ought to have provided the flexibility for countries to manufacture or import affordable generic drugs. However, due to effective lobbying by the brand name pharmaceutical companies and bullying tactics by certain large countries, no country was able to make use of that safeguard, and it was five years of campaigning and negotiations before the Doha declaration affirmed that indeed, the safeguard exists and the flexibility exists, but it was another two years before the August 30 agreement that this bill is intended to implement was passed last year. I should note that it is still not operational. Hopefully, it will be when Canada passes this bill.

Oxfam's research and that of other non-governmental organizations show clearly that prices of medicines fall dramatically when generic companies are allowed to compete. Canada's legislation to implement the August 30 agreement is essential, because it will help bring competition back to the marketplace. In those countries that have not yet had to comply with the TRIPS agreement competition from generic firms brought the prices of AIDS drugs steadily down from U.S. $10,000 per patient per year to today, when it is less than $300 per patient per year. Where the TRIPS agreement has been fully adhered to and there is no generic competition, these drugs remain unaffordable for the majority.

I should note that the substantial donations that were mentioned this morning of medicines are important, but they are no solution. Health ministers from poor countries frequently have to grovel before powerful companies to beg for donations. It is not a sustainable way to run a health program. It is not sustainable when developing countries have to depend on the whims of companies as to when they decide to give and what they decide to give. We need to have a sustainable source of medicines that they can purchase in the marketplace, and that will come through generic competition.

I would like to use the rest of my minutes to talk about the countries that are not deemed eligible in this draft legislation. Those are the ones that are neither members of the World Trade Organization nor least developed countries. There are 28 countries that are not eligible. They range from medium-income countries like Algeria, Lebanon, and Bosnia to poor countries like Vietnam, Iraq, and East Timor. All of them have serious public health problems. Should the AIDS victims Oxfam works with in Vietnam or East Timor be left to die because Canada has refused to sell medicines at an affordable price? What are we to tell these people and their families, that Canada said they were not as important as the others?

That's the moral imperative, but beyond the moral imperative there is another experience that I'd like to point out to you, the experience of Cambodia last year. This shows that if these countries are not allowed access to this legislation now, it is very unlikely that they will ever have access to it. Their exclusion makes joining the World Trade Organization a prerequisite to secure affordable medicines.

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Cambodia joined the World Trade Organization last year. Despite being a least-developed country and one of the poorest in the world, it was required, as per negotiations with the powerful members of the World Trade Organization, to immediately halt use of generic versions of patented medicines as a pre-condition for entering the World Trade Organization.

The World Trade Organization's rules give the least-developed countries until the year 2016 to fully implement the TRIPS agreement. However, Cambodia was obliged to forgo that in order to gain entrance to the World Trade Organization, despite being one of the poorest countries in the world.

Should Bill C-9 exclude non-WTO members? We can be certain that these countries will never be able to take advantage of the Canadian generic medicines even if they join the World Trade Organization.

We should note that health problems everywhere can quickly become our own health problems. SARS was not easily treatable, but our experience with it, as with drug-resistant TB, shows that there's risk to all of us if countries are not able to take care of their own citizens, which is why we urge you to include all countries, including non-WTO members, as potential importers of generic medicines. This could be accomplished by amending proposed paragraph 21.03(1)(c) and proposed subsection 21.04(3), as indicated on page 32 and 33 of the submission from the Canadian HIV/AIDS Legal Network.

In conclusion, we applaud Canada's desire to lead the world on implementing the World Trade Organization's August 30 decision, but you as politicians know better than anyone that leading is more than going first. We urge Canada to go beyond the minimal implementation of the letter of that agreement and to courageously extend the benefits of the WTO decision to as many needy people as possible in all countries. Make all countries eligible under the law.

There are serious flaws with Bill C-9 that we hope the committee will remedy so that the effort does not come to naught. I thank you for the opportunity and look forward to answering your questions.

The Chair: Thank you, Mr. Fried.

We have Richard Elliott, for the Canadian HIV/AIDS Legal Network.

Mr. Richard Elliott (Director, Policy and Legal Research, Canadian HIV/AIDS Legal Network): Thank you, Mr. Chair, and thank you to the committee for the opportunity to present to you today.

We are one of several national organizations that are partners with the federal government in the Canadian strategy on HIV/AIDS, and we focus exclusively on legal and policy issues related to HIV/AIDS. We have special consultative status as an NGO with the Economic and Social Council of the United Nations, and we have internationally recognized expertise in both international human rights law and the WTO law of intellectual property that is at issue in Bill C-9.

Let me note some background to my remarks about the process that has led us to this day here. For over two years, the HIV/AIDS Legal Network and numerous other non-governmental organizations have been calling on the Canadian government to undertake an initiative such as Bill C-9 so as to use the flexibility that is still allowed under the WTO rules on patents to actually make generic medicines more available to developing countries. We were fortunate enough to have Mr. Stephen Lewis, the UN's special envoy on HIV/AIDS in Africa, join us in that effort quite recently, and we're pleased to see that the government has finally responded to that call.

It's important to note at this point an inaccurate impression that may have been left with some committee members. It was suggested at the committee's last meeting on Tuesday by representatives of the government, and it is suggested in a clause-by-clause analysis that has been submitted to you by the government, that the right of refusal in Bill C-9 reflects in some sense a compromise that had been accepted by all stakeholders who were consulted last year—we were among those stakeholders—and that it is only recently that some NGOs have declared their opposition to it. It would seem, from many accounts I have heard first-hand, that this has also been suggested to others within government.

This is inaccurate and misleading. Let me state for the record very clearly that we have never accepted the right of refusal, which first appeared to the Canadian public when Bill C-56, the precursor to Bill C-9, was tabled on November 6 of last year, the day before the last session of Parliament ended. Any suggestion that we agreed to such a thing is false. Indeed, the very morning the bill was introduced we issued a statement clearly stating our opposition to the right of refusal as a fatal flaw in the bill. It is so fundamental a flaw that although, as I say, we spent two years trying to get to this point, and we are very conscious of the terrible toll of death that happens every day we delay, we were in touch with all parties in the House of Commons that day to urge them not to pass the bill in its flawed form, but instead to send it to this committee so that this issue can get a proper airing.

That is how strongly we feel about this bill. We have worked very hard to get here, but this is such a fundamental problem that the bill cannot pass with this flaw in it. It must be fixed. I direct you to the brief we have provided to you, because we give you some very concrete proposals for how that can be done while still respecting our obligations under the law of the WTO.

Let me note two items that we have provided to you today. The first is a kit which all members of the committee should have received that has a number of useful and relevant documents, including all of the relevant WTO documents that are at issue with Bill C-9. A copy of that kit has also been provided to all of your colleagues in the House of Commons. The second is an extensive submission, a brief that you have received this morning from the HIV/AIDS Legal Network. It provides you with an enormous wealth of detail, I hope, that you will find useful in your deliberations in the coming days.

Let me highlight three things that are in the brief and then turn to our concerns with the bill. The brief first explains to you the WTO agreements and decisions that are at issue here, and which are the basis for Bill C-9. It notes that the WTO decision from last August 30 that was unanimously adopted by all WTO members was reached only after almost two years of very divisive and rancorous global debate. During that process, as you have heard, some countries attempted to weaken and narrow the scope of that decision, with some even suggesting that developing countries should only be able to access cheaper generic medicines for specific diseases—and if your disease was not on the approved list, then you could just die—or saying that you could only get cheaper generic medicines if your country was facing an emergency. Those efforts were quite soundly rejected by civil society groups and by developing countries, as both morally repugnant and as foolish public health policy.

Second, the brief highlights that Canada has international binding human rights obligations. These are binding as a matter of law just as much as any WTO agreement is. The brief also draws to your attention the numerous promises that Canada has repeatedly made on the world stage to progressively support the realization of the human right to health, including through promoting access to medicines.

This bill that is before you is fundamentally a bill about realizing people's human right to health. It is therefore critical that you understand those obligations that Canada has under international law that are quite relevant.

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Third, the brief draws to your attention Canada's own recent history of using compulsory licences to increase Canadians' access to more affordable medicines. This bill, of course, deals with compulsory licensing solely for the purpose of export; it does not affect the Canadian market. But the point is that Canada is actually the developed country that has had the most extensive experience of using compulsory licensing in the pharmaceutical sector.

Note that our law had actually established a royalty rate of 4% in the case of compulsory licences on pharmaceuticals, and this is to supply the relatively wealthy or Canadian market. I think we should keep that in mind when we're talking about what the appropriate royalty rates ought to be for poorer countries. Our brief speaks to that issue specifically, and I'll touch on it in a moment.

Finally, as I said, our brief gives you detailed submissions for amendments to Bill C-9, section by section. In appendix 1 of the brief, you will find that we have provided you with draft language for numerous proposed sections showing where provisions should be deleted, where provisions should be amended, where a new text should added.

Let me turn to the concerns we have with Bill C-9.

The Chair: Would you summarize it quickly, Mr. Elliott?

Mr. Richard Elliott: Let me focus specifically on the right of refusal, because I think it's important to understand.

It was suggested to you on Tuesday that the right of refusal as it appears in Bill C-9 is required by the WTO's TRIPS agreement, and in particular by paragraph (b) of article 31 of that agreement.

This is not accurate. Let me explain to you why this right to scoop contracts that generic companies have negotiated actually goes beyond the requirements of the WTO agreement. You've heard why it's a bad provision because it will kill competition. Let me also explain to you why it's unnecessary under WTO law.

It is true that TRIPS article 31, pragraph (b), is not waived by the WTO decision of August 30. But what that article says is that before a compulsory licence may be issued there must first be efforts made to obtain a voluntary licence from the patent holder on reasonable commercial terms—in other words, by the payment of a reasonable royalty. If those efforts are unsuccessful “within a reasonable period of time”—this is again the language of the agreement—then a compulsory licence may be issued by the appropriate authority.

One way or the other, however, at the end of the day the generic producer is able to get a licence, whether one voluntarily given by the patent holder in exchange for a reasonable royalty or one that is a compulsory licence issued by the appropriate authority, in this case the commissioner of patents. That is what TRIPS requires be provided for in Bill C-9.

What Bill C-9 does is give an extra right of refusal. The right of refusal is already the right to refuse to issue a voluntary licence and take your chances with the commissioner of patents and the royalty he or she will provide. Bill C-9 gives an additional—a second—right of refusal, allowing a patent holder to take the contract itself. You've heard why that will kill competition and make this bill unworkable.

We have a number of other concerns about the bill, and I'd be happy to speak to those in the questions that follow.

Thank you.

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The Chair: Thank you, Mr. Elliott, and indeed you will have that opportunity.

We'll hear Michael O'Connor, on behalf of the Interagency Coalition on AIDS and Development.

Mr. Michael O'Connor (Executive Director, Interagency Coalition on AIDS and Development): Thank you very much, Mr. Chair, for the opportunity to address the committee on the proposed amendments to the Patent Act. ICAD, as an organization that's been involved in HIV/AIDS and development since 1989, appreciates the opportunity to join with our colleagues to address some of the concerns we have with the legislation. I'll be as quick as I can.

I think Canadians can truly be justified in being proud of the fact that we are the first industrialized country to take steps to amend the legislation to take advantage of the August 30 decision. While we are convinced that the new patent legislation is a very important step, it is essential that certain changes be made in order to avoid setting back substantial progress that has been made over the past few years in the movements for access to medicines and the right to health.

As mentioned, there were long and laborious negotiations at the WTO that led to both the Doha declaration and the August 30 decision. Along the way many battles were fought, and many compromises were made by Canada and all the rest of the countries involved. But throughout the process, one of the principles that was always maintained, and eventually agreed to by all the members, was that the agreement covered all medicines and not just those for the three killer diseases.

In the legislation as proposed, by including a schedule of pharmaceutical products, no matter how the list is put together, or how easily it can be amended, Canada will be backsliding on the commitment we made at the WTO last August. There's nothing in the August 30 decision that requires Canada's legislation to set up a limited list of drugs. Doing so will serve no purpose, except to narrow the scope of this initiative and restrict its usefulness. As a matter of principle, Canada should signal its commitment to our southern partners in the WTO and remove this schedule entirely. Countries should have the sovereign right to access whatever drug or medical device they determine is needed to address the health concerns of their population, rather than having this dictated to them by a “made in Canada” list.

How can we predict what is needed to address an unforeseen epidemic in another part of the world? The list presented in this legislation already proves the point: it not only admits several very important drugs used for treatment of HIV/AIDS, it also admits drugs used for treatment of multi-drug-resistant TB.

In a nutshell, the world is watching and counting on Canada to do the right thing by making important changes to the bill so that it stays true to the WTO decision and sets the highest standard for the rest of the world to follow.

Before I finish, I wanted to take this opportunity to reply to some of the questions that came up in Tuesday's hearing and today. A number of members of the committee asked questions about infrastructure and basically about what else is being done to make sure that the medicines reach those in need.

The patent legislation is a very important step. However, it's not sufficient, as has been mentioned, in itself to have cheap drugs if the health infrastructures are in disrepair after decades of structural adjustment programs promoted by the International Monetary Fund. Additional financial resources are needed to support bold new initiatives such as the WHO three-by-five initiative, which will see three million people, if the funds are available, on treatment in developing countries by 2005. The WHO will provide technical support for the rollout of our ARV treatments around the world, in much the same way that they spearheaded campaigns to improve treatments for TB and malaria.

Canada has not yet made any commitment for new resources to this very important initiative by the WHO. Canada provided leadership in the creation of the global fund to fight AIDS, TB, and malaria. As a new, innovative, public-private partnership, this financing instrument is designed to dramatically increase resources available to fight these diseases and make efficient use of resources through coordinating national responses.

Canada's contribution of $25 million U.S. per year is well below our share of the global cost of fighting these three diseases, and in fact is less than the Gates Foundation's contribution. Most other G-8 countries have already increased their support; Canada, so far, has not. The House of Commons standing committee last year recommended that the government triple its contribution, as Alexa McDonough has mentioned. This recommendation has not been taken up. Adequate funding to the global fund is essential to ensure that the WHO three-by-five meets its target.

Á (1130)

As mentioned, the increase in development assistance of 8% per year is absolutely a good step. However, over the next six years, by the end of the decade we still will be contributing less to development assistance than we did during the Mulroney years, and certainly a long way from our 0.7% target, which we as a country committed ourselves to over 30 years ago.

While Canada's plan to amend our patent legislation to allow export of cheap generic medicines to resource-poor countries is laudable, it must be complemented by other initiatives--increased funding to CIDA, and to those other initiatives I mentioned.

There is urgent action needed on both fronts, and the urgent action is needed as soon as possible.

Thank you.

The Chair: Thank you, Mr. O'Connor.

Finally, Michelle Munro of CARE Canada.

Mrs. Michelle Munro (Policy and Programs Advisor, HIV/AIDS and Health, CARE Canada): Thank you.

Thank you very much to the chair and to the committee for providing CARE Canada with the opportunity to represent the views and concerns of our organization and other organizations like us that provide humanitarian and development assistance, but most importantly, the people with whom we have the privilege of working in the developing countries that Bill C-9 is supposed to be helping.

The spirit of Canada's quick response to the WTO general council decision of August 30, 2003, I think reflects that of most Canadians, and it is that all people should enjoy the rights to health, but also the right to the benefits of advances in science and technology. Canada has a real opportunity to provide a means for people who live in countries that lack our infrastructure--where diseases that should no longer result in early death still do, and where life-saving drugs are not available at a reasonable cost--to gain access to those medicines.

However, as my colleagues have said, the legislation as it stands will not make the difference that it could. Paragraph 21.04(2)(f) states that the Canadian generic manufacturer must file the terms of its contract with the government of the country where it hopes to provide the essential medicines, or with the agent of that government, with the commissioner for patents here in Canada.

The countries that lack pharmaceutical manufacturing capacity are the ones where this bill is supposed to be making a difference. And the countries where I and my colleagues work, the countries where MSF works, are not easy places to work in. Governments are sometimes absent in certain parts of the country. Sometimes they're not capable of taking measures to reach the most vulnerable with essential services. And at times, the most vulnerable are also disenfranchised. So that's our role, to work with those people. That's the situation for UN agencies and humanitarian assistance NGOs, which can and do provide essential services. Wherever possible we do that by working with governments, very often in partnership, by deciding that we're going to work in one part of the country and they're going to work in another part of that country. Sometimes it's a little different. However, the bill, as it stands, would preclude us from playing that role even when an NGO has obtained the necessary licence from a court or another government authority to do that.

This is what it can look like. We haven't talked enough about how it looks when we really plan it. In Zambia in 2001, CARE Canada began a TB project in a very remote part of the country. These were districts that the government hadn't really been able to reach at all and the health infrastructure was falling apart. It was a two-day drive from the closest district town, let alone the closest provincial town, let alone the closest capital town where there was a referral hospital in that country. The roads were very difficult.

Very few of the people who started on TB treatment ever completed it, because they'd start on the drugs, the drugs wouldn't be there next time, and they'd have to go back for their test after two months to see if their sputum was clear, but there was no one to take their test. If they could take the test, they couldn't get it to a lab.

So what did we do? When we began the project we made a plan for providing everything, and I mean everything: the medicines, the training, the lab equipment, the transport, the lot. We worked with communities, we worked with health workers, we worked with their supervisors. There were clinics that had no medicine, and some of those health workers had no salaries, so they weren't very motivated to do what they did.

The proportion of patients who have stopped taking their medicines--we're talking about compliance, what our colleagues from the pharma companies were talking about earlier--either because they had run out, or they had no one to help them to deal with side effects, has fallen from over 50% to 1% in two years. The proportion of people who have been treated successfully has risen from 29% to 71%. I just got the data in yesterday, actually. The government has seized on this and is now providing the drugs. There's nothing that builds on success like success.

Had we not begun with that full package, we might not be where we are now. Agents like ours work with governments whenever and wherever possible, but we also see reaching the most vulnerable as our mandate.

As part of that, we are, as with the TB project in Zambia, sometimes able to reach places that the overstretched government systems cannot reach. In other places, where political favouritism and interference is an issue, the potential for direct provision with Canadian generics by organizations such as ours, by UN organizations, is even more essential.

I know that there are concerns being expressed today, and were previously on Tuesday, about the infrastructural or technical capacity to monitor and administer life-saving medicine. Now these challenges--and that's what they are, they're challenges--are things that we need to overcome, and they can be overcome.

Á (1135)

Let's go back to the TB project. What did we do? We've worked out some innovations. When we need to get a specimen to the lab, rather than have the patient go to the lab, the specimen goes to the lab, because we've provided motorcycles. We've put in solar panels.

We trained other people in more remote areas, people who had been trained in the past, but who had forgotten their training. We've provided retraining and illuminated microscopes, bipolar microscopes. They are able to run those tests closer so people actually go back. If they see that they're starting to get better, the drugs can be adjusted appropriately. The health workers are trained. Because they're trained and because the supervisors are trained, they're more motivated.

The impetus for this to happen was the full package that included the medicine. Making affordable generic medicines available can be the impetus for overcoming the challenges.

As an NGO who works with people living with and dying from diseases for which we have the knowledge and the means to prevent such deaths, I strongly urge the committee to recommend that the final legislation open doors to increase access to life-saving medicines. One way to achieve this, as well as the issues outlined by my colleagues today, is to amend the legislation proposed by Bill C-9 in such a way that it would make it explicit that non-governmental and humanitarian relief organizations could directly contract with Canadian producers for lower-cost pharmaceutical products.

Thank you very much.

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

We'll start with Mr. Rajotte.

Mr. James Rajotte (Edmonton Southwest, CPC): Thank you, Mr. Chairman.

Thank you very much for coming in today. I appreciated all of your presentations.

I want to start off with a short question to Mr. O'Connor. I appreciate the fact that you've read through the testimony and have provided an answer. We were quite surprised that the government did not have a figure in terms of the overall comprehensive plan to ensure that these medicines actually get to the people who need them.

I wanted you to then clarify resources. You've mentioned certain percentages. How many resources in a total number are we looking at over the next five years that the government, as a whole, has to put in to ensure that we do succeed in terms of getting medicines to people who need them?

Á (1140)

Mr. Michael O'Connor: That's a very difficult question to answer. I think the minister of CIDA in fact is making a statement this afternoon about what CIDA is doing with respect to addressing the needs of delivering medicines. She'd be better qualified to give you the details.

I can talk about our bigger commitments. In fact, the recommendation for the world community is that we share the responsibility for addressing these diseases, particularly HIV, TB, and malaria, through the global fund.

It would mean that Canada will put in about 2% of the cost of the global fund every year. In the current budget year, that would mean putting in about $75 million Canadian, and we're putting in $25 million U.S. That contribution would be matched, or other countries would be contributing similar amounts, and at least the global fund response to AIDS, TB, and malaria will be adequately funded.

They're interrelated. The treatment action that's being set up by WHO obviously requires setting up an infrastructure and doing the training that's needed in order to deliver the drugs, but the actual resources that are needed at the country level need to come through institutions like the global fund.

We would always argue that you need to have a development assistance program, which includes health education and everything else. The millennium development goals call for about $10 billion per year as a target for development assistance, particularly in health. Current contributions worldwide are less than half of that.

I can get back to you with more specific numbers at a later date.

Mr. James Rajotte: Thank you.

The Chair: Mr. Elliott, you wanted to jump in too?

Mr. Richard Elliott: Yes. If I could add, I would stress a point that was made earlier today, that the issue of building up the necessary infrastructure of course needs to be addressed in tandem with addressing the cost of the medicines.

One of the ways in which it's related, I think, is a way that most Canadians would appreciate. If we can actually put in place a system that will let us use the available dollars to purchase cheaper generic medicines, the available dollars, low as they are and inadequate as they are, will go that much further. You will free up more resources to buy more medicines to treat more people.

You will free up resources to actually help build the infrastructure where it is currently lacking. It's important to understand that the infrastructure is not always lacking. We can't simply say, and over-generalize about the developing world, that infrastructure is always lacking. If you're in downtown Johannesburg, for example, there are hospitals and doctors that can be equivalent of the hospitals and doctors that we see here in Canada.

What is often the case is that it is the price of the medicine. You simply don't have the money to buy the drugs that will keep you alive. If you could, the other things are in place. In other places, such as have been described by my colleague, that may not be the case, and we have additional challenges.

Mr. James Rajotte: Thank you.

The second item I want to touch on is the diversion issue, which is following along the lines of ensuring that the medicines get to the people who need them. From my understanding of the bill, we have fairly good provisions in place once we export the drugs. Pushing aside the debate about whether or not it should be NGOs, suppose Botswana had an agreement with a generic or a brand-name company to import drugs. I'm still unclear as to exactly what provisions there would have to be to ensure that once the medicines reached Botswana, a monitoring system would be in place against theft, misuse, and abuse and a full system in place to get the medicines to the people. Would you have any helpful suggestions as to how we can do that? I don't see what benefit Canadian laws would be at that point.

There was a case in west Africa that involved the theft and resale of a large portion of medicines. That is obviously not what we want with this bill. Do you have any suggestions for us as to how we can monitor the situation and ensure that medicines actually get to the people who need them?

Mrs. Michelle Munro: It's a real concern. It makes us nervous about providing the drugs. But at the same time, providing these, as Richard said, isn't the only bit of our package of development assistance to countries, nor is it the only bit of our package of assistance as part of a global community. At the same time as we're providing medicines, we're also providing support to health systems. Canada is part of sector-wide approach supports and other supports to help countries with those kinds of logistics. How do you count in the drugs? How do you check the stock? How do you have a first in, first out system? How do you distribute the drugs? How do you monitor what's going to which district and which health centre? In the project I'm working on, one of the things we've worked out is exactly how to do that. You train everybody along the way. It can be done. That's why we need to have both things happening. That's why we need to have medicines that are cost-effective enough so that we can also provide the technical assistance to provide people with that training on logistics management, which is what it's about.

Á (1145)

The Chair: Please be brief, James.

Mr. James Rajotte: Suppose someone does steal a shipment. How does that person get prosecuted? How does the international community or Canada deal with that?

The Chair: Mr. Elliott.

Mr. Richard Elliott: The first thing I would say is that there are some things that Canadian law will never be able to address. So it would be inappropriate to expect Bill C-9 to be able to solve all of those concerns and ensure a completely watertight system. The world is what it is. There are going to be occasional instances when the product gets diverted, and, believe you me, that is as much of concern to us as it is to you.

Obviously, the whole point of this is to get cheaper medicines to people who will die without them. There are provisions in Bill C-9, which are quite appropriately there, that require efforts here at the Canadian end of things to try to prevent that from happening, such as the marking of individual tablets, the posting of the exact quantities that are to be shipped, the intended destination country, etc. Those are all reasonable measures to take, and we have no problem with those being in the bill. At a certain point, though, we have to accept that those drugs go, hopefully, to reputable NGOs and governments. We cannot 100% guarantee that's going to be the case.

The measures we need to take are border control measures. There are obligations on countries to take proper measures to try to prevent the re-exportation of this. The Canadian generics that would be supplying have a huge incentive to do what they can to prevent that from happening because they risk losing the compulsory licence if this happens with their knowledge. So there is only so far the law can go in addressing all of the world's problems, and we shouldn't let our inability to solve every single problem along the way prevent us from doing something that's going to benefit millions and millions of people in the ordinary course.

The Chair: Thank you, Mr. Elliott.

Mr. Fontana, please.

Hon. Joe Fontana: Thank you, Mr. Chairman.

There are two issues I want to follow up on with Mr. Fried and Mr. Elliott. The first one is the first right of refusal, and the second one is the list of countries.

With regard to the first right of refusal, I know that today the brand-name companies put forward an alternative to the first right of refusal. There's no doubt that this first right of refusal is of concern. Some of the committee members have already addressed that. Concerning the alternative that has been put forward, which calls on a voluntary system in the first instance between the generic and the patent holder for the purpose of a voluntary licence, and failing that, a compulsory licence that would be issued by the commissioner of patents, do you find that the proposal as put forward by the brand-name company or something else this committee could look at would be more in keeping with the WTO decision, as you have told us, and more in keeping with the bill? Do we do absolutely nothing, or do we build in those safeguards?

I'll let you answer that one first, and then I want to ask you about the list of countries.

Mr. Richard Elliott: Let me speak to your question about the right of refusal.

I obviously have not seen the details of the proposal that's been put forward by the industry, so I can't comment on that yet. Let me be clear, though, that we do not have an objection to properly implementing what is required under the TRIPS agreement. We hope you will consider all of the proposals that you receive from all of the presenters, and of course I'm sure you will. The proposal that we have put forward would basically do the following.

The generic company that has negotiated a contract with a developing country purchaser to supply a particular medicine notifies, here the Canadian generic producer, the company that holds the patent here in Canada that it is requesting a licence to produce the product so that it can follow through on the contract. That's already required in the bill. That's fine.

The patent holder then would have 30 days, again, the figure already provided in the bill, to decide whether it's going to grant a voluntary licence to the generic company in exchange for a 2% royalty. It is open to Canada as a WTO member to decide that in these circumstances it is a reasonable commercial term that a 2% royalty be given in exchange for the voluntary licence.

If the brand-name company, the company that holds the patent, exercises its right to refuse to issue a voluntary licence--and that is the right of refusal that TRIPS requires, nothing else--then it is up to the commissioner of patents to decide whether he or she will issue a compulsory licence.

What we propose, actually, in order to be more TRIPS compliant than what the government has proposed in Bill C-9, is that you actually let the commissioner vary the royalty. It's not a fixed 2% if the commissioner issues the licence. It could range up to 4%, keeping in mind that's what we used to use for the Canadian market, and it ought to be, in any case, lower for poorer countries.

We would set out criteria in the bill, and we've given you some criteria in our proposal that the commissioner of patents should apply in making that decision. We've also provided a provision whereby the patent holder could request that the royalty be varied if they think it should be higher.

Á (1150)

Hon. Joe Fontana: You're not making a linkage between the royalty and the right of first refusal. Perhaps it should be called something a little more positive, like the “opportunity of first response”.

You seem to be linking the royalty. I would agree with some that it made the point. Even the generic companies that would like zero and the brand companies essentially said that there are some countries that shouldn't pay any royalty, that it should be zero.

Perhaps this committee might look at whether or not there was a fixed variable royalty fee, depending on the ability of the country to be able to afford that drug. Perhaps that might be the approach that we look at.

We'll take a look at your proposal as an alternative to the first right of refusal. I don't think that's far off what the brand-name company said or even what the generic company said they could work with, provided, though, there was an open and transparent system in the front end in terms of the website, the requirements that the WTO members would want to put.

On the list of countries, because I know that both Mark and you had talked a little about the list of countries, you know that the WTO decision of August 30 prescribed x number of countries and it did make a provision for least-developed countries and so on.

If you look at Canada's approach--and again, we are the first and we appreciate your comments--we've gone beyond even what the WTO decision of August 30 was, in the sense that we have put in place in the three schedules least-developed countries such as Singapore, Turkey, Hungary, and others. We have put other non-WTO countries on the list.

As you know, there are some WTO members who said that they wouldn't want to use this system at all. We're trying to make sure this is not a commercial exercise, that it is a humanitarian exercise in terms of determining what that list of countries should be.

There is flexibility built into this system, hopefully, with a special committee that could say very quickly whether or not a country should be added.

Canada has gone beyond what the WTO said on August 30 by including some 18 or 19 other countries. I understand that there are some countries that probably should be on the list. I'm wondering if you're suggesting that the approach would be that all countries of the world would be on a list, or no list at all would be the approach.

The Chair: Thanks, Joe.

Are there any takers on that?

Okay, Mr. Fried.

Mr. Mark Fried: The least-developed countries are on the list. That indeed is something that Canada has done beyond what the August 30 decision requires. We applaud the government for including that.

There are a number of other countries that are very poor but are not the poorest, such as Vietnam, such as East Timor, such as Iraq. There are very poor countries that have really serious public health needs that should be on the list.

It's also true, as I mentioned before, that countries may have to give up that right to access Canadian medicines as a condition for entering WTO. If there's not some provision in the law here, it may not happen down the road if they join the WTO, either.

I would encourage the committee to examine this. It's the countries that have their own industry and that can produce their own medicines--I'm not going to be requesting Canadian generic medicines, anyway--and there are very few on that list that are.

The Chair: Briefly, Mr. Elliott, if you could.

Mr. Richard Elliott: It's been suggested before that the reason only WTO member developing countries are listed is that this is a WTO agreement. It is true that it is a WTO decision from August 30. What those countries were deciding was to relax the strict patent rules that are found in a WTO treaty. So what does that mean for Canada? What it means is that it creates greater flexibility for a WTO member like Canada to issue compulsory licences to export generic products. But the fact that it's a WTO decision doesn't mean that Canada is precluded from exporting generic drugs produced under a compulsory licence to countries that do not belong to the WTO. There is nothing in those WTO texts that requires that kind of limitation, and indeed, when it comes to the least developed countries, they have gone beyond it.

So why not include other developing countries that are not the poorest? In appendix 2 of our brief we've actually identified those countries and given you some data about where they rank on the human development index, per capita GDP, levels of poverty, levels of various diseases, to show that it makes no sense, from a public health perspective, to exclude some of those countries.

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The Chair: Thank you, Mr. Elliott.

Mr. Crête.

[Translation]

Mr. Paul Crête: Thank you, Mr. Chairman.

Mr. O'Connor, you emphasized the need to put funding into infrastructure and support. Would you go so far as to call for a program, in addition to passage of this bill, that might include the funding already allocated by CIDA, but with substantially more money? Would you like that put into a specific program that we could watch evolve over the coming years?

[English]

Mr. Michael O'Connor: The name of our organization is the Interagency Coalition on AIDS and Development. Our belief is that you are addressing a problem with HIV within the context of development. Your suggestion of a specific program is worth looking at, but in a general sense, we would support programs that are aimed at the whole Gestalt, if I can use that. You're trying to address health education, and that's only going to be addressed if Canada makes its fair contribution. There are lots of countries that are at 0.7%, and Canada should be one of them. We're moving, but we're not moving far enough or fast enough.

The specific programs I mentioned that are addressing AIDS, TB, and malaria are emergency responses. When there was an earthquake in Iran, we responded by providing assistance on an emergency basis. The global fund and the WHO three by five are emergency responses. So we do need to have new resources, emergency responses outside what we're doing in development through CIDA. This is an emergency, with so many people dying. They require and deserve emergency response, and as I mentioned before, the standing committee's already made the recommendation that the global fund have its support from Canada tripled.

[Translation]

Mr. Paul Crête: Would you go so far as to say that just passing the bill without putting up any extra funding would be basically a wasted effort?

[English]

Mr. Michael O'Connor: Well, yes. That's a loaded question, and I think I'd rather say the bill is an urgent matter that needs to be addressed and voted on as quickly as possible. The other concerns I mentioned about increasing resources for emergency response and development assistance also need to be addressed. I think they go hand-in-hand.

[Translation]

Mr. Paul Crête: My question is mainly to Ms. Munro, I believe. I want to ask you about the whole issue of contracts directly linked to NGOs.

How can we ensure that the priorities of the countries concerned are met, and how can we avoid creating a certain type of paternalism? In Canada, we would not like it if people came in and started spending money, in all good faith, without consulting our government. Would the same thing not happen in the countries of the South? We need to avoid making value judgments in advance and using them to decide which countries have governments that we can rely on and which ones do not.

How do you see things developing in that respect? Would it not be better to maintain a joint approach with these countries, while establishing conditions that would provide support for them, for example? That could also be another way of ensuring effective support.

Â (1200)

[English]

The Chair: Any comments, Ms. Munro or Mr. Fried?

Mr. Mark Fried: I'd be happy to comment. Michelle, do you want to go first?

Mrs. Michelle Munro: You go ahead.

Mr. Mark Fried: Indeed, Oxfam and all NGOs coordinate our operations with public health facilities in countries, with government, and with the United Nations agencies so that we're not repeating or doing contradictory work to a national health plan. Not all countries have national health plans and not all countries have effective national health infrastructure. That's where NGOs play a very key role.

We would suggest that it's important for Canada to work with both government and non-government, and this goes back to the question Mr. Rajotte asked about how to ensure that medicines reach the needy. Canada has moved, in its assistance program, towards working more exclusively with government rather than with non-governmental organizations, in the hopes that improving government infrastructure will improve the accountability and therefore make sure that government is able to get the services to those who need them.

We have found that's important, but it's also important.... The one guarantee that medicines or education or whatever it may be reach the people who need them is if the people are organized and able to keep watch on their own governments and to be effective in demanding the services from those governments. That's where non-governmental organizations come into play, especially non-governmental organizations in the country at large.

[Translation]

Mr. Paul Crête: I would like to add a brief comment.

[English]

The Chair: Mrs. Munro, did you want to comment?

[Translation]

Mr. Paul Crête: That is fine.

[English]

The Chair: Did Mrs. Munro want to comment?

Mrs. Michelle Munro: Yes.

First, I agree with Mark, but wherever possible we work with governments and often we complement governments. For example, I was speaking about working in places where the governments are not able to reach. We work in partnership with governments very much about deciding where we're going to go and where they're going to go and where perhaps another agency is going to work to complement their efforts. Sometimes it's going to expedite things a lot if we set a up a pilot: this is how you procure drugs; this is how you do the logistics. Those are the lessons that can actually lead to strengthening a national program.

We work with governments to do that all the time. We would never go in and ride roughshod over a government and blind-side them. We always work very closely with governments wherever we possibly can. I think that's standard for NGOs everywhere.

The Chair: Thank you.

Very short, Paul.

[Translation]

Mr. Paul Crête: Does that mean that if you were allowed to deal directly with these countries for these medicines, you would have to get their blessing each time, even though you were providing a service—in order to avoid being involved in sectors a particular country did not consider to be a priority?

[English]

The Chair: Thank you, Paul.

Mrs. Michelle Munro: That would always be our intent. That would always be our first choice. There are times, in issues of humanitarian assistance, when you have people who are disenfranchised, that you may do something else. An example would be a refugee situation. An example would be a disenfranchised population. I just came back from Southeast Asia, and an example is mobile and migrant people who are not registered in a country and have no access to services. So NGOs provide the services. So we agree with both countries, but it's a slightly uneven area. They're disenfranchised people, and that's where NGOs and other agencies can sometimes have the biggest benefit.

The Chair: Thank you, Ms. Munro. A good question.

Paddy Torsney and then Alexa.

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

I've been listening very intently to your presentations, and I think I need to clarify a couple of things to be sure that I actually have heard them correctly.

Mr. Elliott, I kind of got the impression during your presentation that you would prefer that this bill not pass, that if it isn't amended in the ways you want right now or we don't include all the list of countries that you want right now, you don't want the bill. Am I mistaken?

Mr. Richard Elliott: What I said was that when this bill was tabled in November, we said--

Ms. Paddy Torsney: Just deal with the bill is as it is. What do you want?

Mr. Richard Elliott: It's the same as it was tabled in November. We said in November the bill should not pass with these flaws in it, in particular, the right of refusal. It should come to this committee so this committee has a chance to hear about ways in which it can be improved. I think you've heard from everyone who appeared before you that there's agreement that it can be improved, and there are proposals on the table for how to do that, including, in particular, the right of refusal.

So I'm trusting that the committee will do that. We'll see at the end of the day what comes out of the process. We hope that the bill will be fixed.

Â (1205)

Ms. Paddy Torsney: And assuming that we fix the issues related to the contracting and who is supplying the drugs and what the process is, you've also outlined a number of problems with the lists of both drugs. Other groups have mentioned a list of drugs and a list of countries. Is it worth it to the agencies that care about these issues to pass this bill, even if it has some flaws or it's not perfect?

My take, having done some work internationally and having been aware of some of these issues, is this is an incredible.... Maybe it's only a first step, but this is going to create a change internationally that's imperative if we're going to start delivering low-cost, high-quality drugs to people--and aid. It's not just drugs, because it's really about the systems in place and that there needs to be some flexibility. To lose this bill because someone is saying don't pass it, it's not good enough, would be a travesty.

The Chair: Mr. Elliott.

Mr. Richard Elliott: May I respond to that?

I won't pretend to speak for other NGOs or other commentators on this, but what we said was that if the bill passes with the right of refusal as it currently appears in the bill, it's meaningless. In fact, it's more than meaningless--it's worse than meaningless. The reason it's worse than meaningless is that, as you quite rightly point out, Canada is setting a precedent here. The precedent Canada will set, having gone on the international stage and congratulated itself for taking this bold step--which congratulations it deserves--will become a global embarrassment. Canada will have shown a model to the world of how exactly not to implement the WTO decision of August 30, because it includes this right of refusal as currently appears in the bill. That is not required by the August 30 text. It is not required by the original TRIPS agreement, and it goes contrary to the Doha declaration.

So in essence you will do a disservice to the global community if you pass the bill with the right of refusal in it as it currently appears, and that's why all of these proposals have come forward.

Ms. Paddy Torsney: I asked you more about the list of the countries than--

Mr. Richard Elliott: Well, you asked me about both.

The Chair: Paddy, could Mr. Fried jump in?

Mr. Mark Fried: If I could, I'll just add to that.

As soon as the news came out last fall that this bill was put forward and information about it came forward when it went into the House, I was contacted by our colleagues around the world, who were asking, what is this that Canada has put forward? Why is the right of first refusal there? Why is there a list of medicines?

These are things that were not in the WTO decision. We've fought around the world to keep lists out of this decision so it's not restricted as to what could be considered.

They asked, can you do something about it? They urged us to do something about it because they felt this would be a damaging precedent as they indeed turned to their own governments, who will undoubtedly be looking to Canada's example to craft their own legislation. These are countries that have sophisticated generic drug industries and that may wish to implement the August 30 decision as well.

Ms. Paddy Torsney: Mrs. Munro, with regard to the drugs you're providing and the example you gave, are those patented medicines or are they generic medicines?

Mrs. Michelle Munro: In the TB project, first, we're not providing them any more because when we began the project and made the plan to provide them and then had some success, the government took over. So that's a huge success.

Some of the drugs are patented and some are not, but most TB drugs are now off-patent because nobody has done any TB R and D because it's not a very high-profile kind of medicine.

Ms. Paddy Torsney: In terms of the list of potential places where Canadian NGOs are interested in operating and the conditions they're trying to address.... I guess I listen to the concerns about, again, the list of drugs and the list of countries, and I'm thinking, wow, can we really solve all of the problems?

Can we really meet the incredible demand through the Canadian brand-name or generic industry? Can't we start down this path and solve some of the issues, start supplying some of the drugs, knowing that they're going to be good-quality drugs and that this will be a huge step forward? Or is it imperative to take care of all of the drugs, all of the countries, and all of the problems?

I support a number of Canadian NGOs. I'm not really sure you can operate everywhere.

The Chair: Thank you, Paddy. That's good.

Mrs. Munro.

Mrs. Michelle Munro: First, we can't operate everywhere, but second, we need to have the flexibility to respond where the needs and vulnerability are greatest when it's happening. It's very difficult to develop a list of countries or a list of drugs that's going to anticipate that, and that's our biggest concern.

The drugs as they are, as my colleagues have alluded to.... WHO's three-by-five initiative has done a revision on the drugs it needs to scale up. Some of those drugs, the first-line drugs, the drugs we would use first, the most cost-effective ones that are most likely to be able to treat most adolescents and adults living with HIV, are not on the list. They aren't on the WHO essential drug list because that was established a while ago.

It's very, very difficult for any kind of legislation to keep up with those movements. We're trying to address vulnerability where it's greatest; we need the flexibility to do that. So by not providing a list, by trusting--and I know trust is hard work in this--and by working with us to develop something that is in the spirit of the Doha agreement and in the spirit of the 30th of August amendment to that agreement, I think we'll have much stronger legislation, which will actually be in the spirit of what Canada offered to do.

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The Chair: Thank you, Ms. Munro; very good.

Ms. McDonough, please.

Ms. Alexa McDonough: I just want to thank the representative, Mr. O'Connor, from Interagency Coalition on AIDS and Development, for mentioning that the Minister for International Cooperation, the CIDA minister, is, as we meet here, speaking about this piece of legislation.

I guess I have a sort of sick feeling of déjà vu, because some of us sat in this room in another parliamentary committee last spring, where a brilliant presentation--I think matched by the presentation here--outlining the reasons for Canada not participating in the national missile defence was being shared with parliamentarians, while in another room under the same roof, the Minister of Defence was announcing that Canada was moving ahead to negotiate participation.

I mention that because it seems to me that one of the problems we have is that the coordination just doesn't seem to be there between the international development side and the industry side on access to pharmaceuticals, where they're desperately needed to save tens of millions of lives.

I have a couple of brief questions. The NGOs--and yourselves among them--were very clear when this legislation was introduced in November that it was deeply flawed, would be worse than doing nothing, and would set a very bad precedent for the world. Now three months have elapsed, and I'm sure Canadians would like to know--I'd like to know--whether there has been further detailed ongoing collaboration between the government and the NGOs around fixing it, around introducing amendments. I think we were all extremely disappointed when this same legislation was reintroduced without changes.

Secondly, I wonder if it's not an unreasonable request to have the benefit of your written analysis, following today's meeting, of the proposals that have now been made by the two representatives for the big pharmaceutical companies and the generic drug industry. How far do you think the changes they have proposed would go in fixing the flawed legislation, and what else needs to be done to fix it?

It is a complicated thing. Understandably, it's not reasonable for you to respond with any degree of finality or detail to proposals that have just been sort of put under the noses of all of us in the last hour and a half.

The Chair: Mr. Elliott.

Mr. Richard Elliott: We would certainly be happy to provide written comments to the committee on the proposals that have come from other stakeholders. We certainly plan to do so.

It is complicated on one level, but very simple on another level. The WHO, in a statement it made to members of the World Trade Organization while all of these negotiations were happening, said there was a basic principle there. They said that people who live in countries that don't have the capacity to make cheaper generic drugs themselves should be able to benefit to the same extent, and with no additional procedural hurdles, as people who live in countries where there is the capacity to make generic drugs. They should be able to use compulsory licensing as effectively as a country like Canada. So it's really very simple on that level. The details get complicated, and that's where the devil is, right? So we'll be happy to provide you with comments on that.

In response to your first question, there has been one subsequent meeting that I'm aware of--there may have been others--where a number of non-governmental organizations met with representatives of the various government departments. But no progress was made in those discussions, I think it's fair to say, in terms of movements of position on the flaws in the bill.

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The Chair: Alexa, you still have a bit of time left.

Ms. Alexa McDonough: It may not be possible to elaborate in detail, but if you're going to be making further written submissions it would be useful to understand what interests are served by the limitations imposed on countries that shall have access to medications that shall be included, and on who shall be permitted or recognized as procurement agents for purposes of enhanced access to the drugs.

There needs to be some understanding by the rest of us as to the benefits of those. Who benefits, and what are the benefits of those three restrictions that were simply not contained or even contemplated in the TRIPS and Doha agreements?

The Chair: Thank you, Alexa.

Are there any takers for that?

Mr. Fried.

Mr. Mark Fried: I'm not sure if this answers the question, but certainly one of the concerns we all have is that whatever law is passed, it will effectively get the medicines to people quickly.

One of the intents of the legislation, as I understand it is written, is to avoid legal challenges, because there may be stakeholders who would challenge legally the implementation of this legislation when contracts come up. In writing the legislation, the attempt made was to preclude those legal challenges. We hope it will preclude legal challenges, so that the medicines can get to the people who need them as quickly as possible.

The Chair: Thank you very much.

Mr. Gurbax, and then James.

Hon. Gurbax Malhi: Thank you, Mr. Chair.

Sometimes the NGOs do not have much more reliable resources than government, so do you think the NGOs can settle better without the presence of the government?

Mrs. Michelle Munro: That's a very good question. Thank you for bringing it up.

First, I think the bill was designed—and I think the spirit of the bill has to remain—that it's governments who should be deciding they need to invoke compulsory licensing, and they need to make a decision. They need to decide what the health issues are for their country, and what needs to be addressed. So we would not presume to begin to do this without government intervention saying that. It is then that we would work in partnership with government to make sure that the people who are most vulnerable receive the medicines.

Hon. Gurbax Malhi: Thank you.

If the countries who are not members of the WTO are to be included, how can they contribute more efficiently and there be no abuse?

The Chair: Mr. Elliott.

Mr. Richard Elliott: Let me try to speak to that, if I could.

The WTO decision of August 30 that is the basis for Bill C-9 already requires that countries take measures to prevent diversion. One would assume that those countries who do not belong to the WTO also have an interest in taking measures to prevent diversion. After all, if they are the ones who are trying to get the cheaper medicines to treat the people in their country, then most of the time we will see that there will be a good-faith effort to make sure that happens.

It's also important to understand that we already have a situation in the world where some drugs are available generically. Obviously, they are off patent or are being produced by producers in countries where there have not yet been patents on pharmaceuticals. Those drugs are available on the world market to various countries, often more cheaply than brand-name drugs. There is already a market incentive there for diversion from one place to another, to try to resell and recoup a profit off of that, and occasionally it happens.

This bill cannot solve that, nor should it attempt to. And the fact that the bill can't solve that is really not a reason for Canada not to proceed with good legislation that can get generic medicines made here in Canada to people. And Canada actually is fortunate, in that we have a reputable industry that can produce these medicines; we have Canadian or international NGOs who have long, distinguished track records as very reputable organizations, and who deliver medicines effectively to people.

While there may be a concern about possible diversion, I think we need to be careful not to overstate the concern and let it become an excuse not to act.

Hon. Gurbax Malhi: If the right of first refusal is still in the bill, can the generic companies and NGOs go along with that?

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Mr. Richard Elliott: I think the generic companies have already said no, but you should maybe double-check with them.

For the other NGOs, again I won't claim to speak for them.

For the Canadian HIV/AIDS Legal Network, as I said before, we have said that the bill should not proceed with the right of first refusal, as it currently appears in it; it is such a fundamental flaw, it really will make the bill largely just window-dressing, so that it won't actually accomplish very much.

The Chair: Okay.

Thank you, Mr. Malhi.

Did you have a final comment, Mr. Fried?

Mr. Mark Fried: If I could just add, I also think there has to be a way to deal with the question of the list of medicines. If it goes forward as it currently stands, it will also be an extremely poor precedent globally. Oxfam will be very unlikely to support the legislation if it goes forward as it stands.

The Chair: Thank you, Mr. Fried.

I think we're going to wind up with Mr. Rajotte and Mr. Vanclief, and with a short one from Mr. Crête.

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

I want to ask the other three witnesses to comment briefly on Mr. Elliott's specific recommendation with regard to how he would amend the right of refusal, which is basically that the brand-name company refuses to give a voluntary licence in exchange for a royalty, and the generic company would then apply to the commissioner of patents, and it would be up to the commissioner of patents to decide. Is that, or something like that, acceptable to all the witnesses here?

Mrs. Michelle Munro: Yes, that would be acceptable to us as part of it, because it would expedite the process. What we don't want is a long and difficult process that will end up with the countries where people need the medicines most, and the NGOs who would like to supply them, and more importantly, the countries that would like to supply them, not being able to ever get there because the generics have to go through such a long process and they're investing lots and being refused in the end. So that would be fine.

Mr. James Rajotte: The second question I have involves the NGOs.

In your presentation, Mr. Elliott, you talk about enabling NGOs to obtain generic medicines, and then I think, in response to a question, you talk about reputable NGOs.

This is for all: Would you open it up to any NGO?

Doctors Without Borders has an excellent reputation, but I don't know every NGO out there. So would you limit it to certain NGOs that have these excellent reputations, or would you have it wide open?

The Chair: Are there any takers?

Mr. Elliott.

Mr. Richard Elliott: I would hate to see the committee create yet another restrictive list in the bill. I think a Canadian generic producer that is approached by an NGO that wants to negotiate for a drug at a cheaper price obviously has an interest in making sure that it is dealing with a reputable NGO, because if they aren't, that could very well come back to haunt the Canadian generic producer and their licence could get taken away.

So I don't think it's really that much of a concern. And again, if we're going to start creating lists, are we going to say that CARE, World Vision, and MSF are the NGOs that can buy from Canadian generics, but a German NGO that is delivering treatment in Botswana isn't able to, or a French NGO? Why would we go down that road, frankly?

Mr. James Rajotte: I have a supplementary question.

The Chair: Mrs. Munro wants to comment.

Mrs. Michelle Munro: I just want to say that to go through the process of negotiating with the generics, and generics negotiating with us as an NGO, is a long and expensive process. I think any NGO that is going to do it would have to begin with enough capacity and enough resources to be able to do it, and through that process, as Richard said, that would come forward.

Mr. James Rajotte: Can I just raise an issue with you? I think we all have the same goal here.

My colleague from the NDP mentioned this earlier--that is, sort of blaming the brand-names here. The reality is, if we look at schedule 1, these are the brand-names that are creating these life-saving or life-extending drugs. My wish, and I think, Ms. Munro, you said this, is about sharing the benefits of advances in science and technology. But we want to ensure that we continue to have the advances in science and technology. If we just do away with all these schedules and open it up to anyone, and the monitoring beyond, once it leaves Canada's borders we as a nation really don't have much in place to monitor that.

I think we do have to keep in mind the fact that it is the patented drug companies that are creating these drugs in the first place. My concern, and what I don't want to see, is if we just provide patented drugs at cost to almost any nation and open up these schedules, the brand-name companies say “You know what? There's nothing in it for us to develop these drugs. We're not going to do it any more. We're simply going to focus on other drugs from which we can actually make a living.”

Let's not throw the baby out with the bathwater here. I think we have a consensus developing here that we can find, but I would just caution us throwing out all these schedules and all these lists. The fact is, we can add medicines and countries to lists in a fairly simple process. So I'd just like to get your reaction to that.

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The Chair: Thank you, James.

Mr. Fried, Ms. Munro, and then Mr. Elliott, but brief comments, please.

Mr. Mark Fried: Very briefly, it's true that the companies actually have stopped doing research on many of the diseases that afflict poor people, because there's no profit it in for them. It's also true that they get a very minimal amount of their profits, practically negligible profits, from the poor countries that we're talking about; 1% of the global pharmaceutical profits come from the whole continent of Africa. There isn't money in this for them, which is why the drugs aren't being provided. I think this is why the measure is coming about.

As to the lists we're talking about, the major industrialized countries, where 90% of the profit comes from and where all the money for research comes from, are not on this list. They're not going to be eligible to buy Canadian generic drugs. It's poor countries, low-income countries, that have a desperate need.

The Chair: Mrs. Munro.

Mrs. Michelle Munro: First, R and D is very important, as we have said. There are lots of initiatives to promote R and D for the kinds of diseases Mark is talking about.

I think we need to go back to the August 30 amendment and what the whole Doha thing is meant to address. It's meant to address health emergencies. You don't invoke compulsory licensing for sore toes or for simple pneumonia. You invoke compulsory licensing for health emergencies, and then that is the context in which this is done.

We need to step back and look at why we're doing it. That is the situation in which this would happen. That is the situation in which a country would decide that it needed to do this, and the situation in which we would also make those kinds of requests. As I said, it would be a country making the decision, first and foremost.

The Chair: Mr. Elliott, very briefly.

Mr. Richard Elliott: If I could refer you to page 34 in the brief that we've submitted, it does provide some detail that speaks to the concern about research and development. As has been noted, the rich countries of the world have formally opted out of using the WTO decision of August 30, so there isn't a concern.

The Chair: Thank you.

Mr. Vanclief and, finally, Mr. Crête--briefly, both of you, if you can.

Hon. Lyle Vanclief: Thank you very much, Mr. Chairman.

Again, thank you, everyone, for making your presentations here today.

We need to put all of this in perspective. We all know what the goal is here. You probably heard my comments to some of the presenters earlier. I think we are all on the same page on that. I don't think there is any question that all of the presenters have made the point clear. The committee recognizes this and will recognize the concern over the first right of refusal. We know that needs to be fixed so that we can have easier access for everyone.

As far as the lists are concerned, the bill goes further now than the WTO suggested. We are prepared to do that. This whole thing was hard-fought at the WTO. Canada was a leader there, and I know we're all proud of that, as Canadians. The list of drugs that is there is a list that has been suggested—maybe that's not the right word—by the WHO, World Health Organization. We certainly are prepared to add to that, with the suggestions of the WHO.

My final point is that this has been hard-fought. We need to do the best job we can. Let's get on and get at it. Then we will be able to justify further changes if we see that they need to be made, whether it's other countries added, other drugs added to the list, or whatever the case might happen to be. It will be a dickens of a lot more than we're doing now. Let's do that.

My final remark is that I would ask you to comment on why—and I'm not supporting either generic or patent drug companies or brand-name companies—you continue to say that it is important to get generic drugs to the people who need them. Is the point not that we get the lowest-cost drugs to the people, whether they're brand name or generic? Why do you keep saying generic drugs?

Every one of you has used that more than once in your presentations here today. It's contrary to what I thought we were all about, and that is, to get the low-cost drugs to them.

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The Chair: Thank you, Lyle.

Mr. Elliott, then Mr. Fried.

Mr. Richard Elliott: You're absolutely right. The ultimate objective is to get drugs at the cheapest price to people. The reason we are pointing to this is because it's basic economics. If you introduce competition into the marketplace, the price will fall.

Indeed, the experience with antiretroviral drugs has been that it was only when some Indian generic manufacturers made global offers that were one tenth of what the brand-name prices were for ARVs that we saw a sustained, long-lasting, effective, serious drop in the price of antiretroviral drugs.

If I could also add, with respect to the list of drugs, the WHO has not approved or suggested that list. It comes from a WHO model list that was designed for entirely different purposes. In fact, the WHO's own statements actually suggest—well, they say quite outright—that the WTO decision of August 30 covers all medicines. They don't say it covers only the medicines that are on their model list.

The Chair: Thank you, Mr. Elliott.

Mr. Fried, and then we'll go to Paul.

Go ahead on this subject.

Mr. Mark Fried: He has covered it.

The Chair: Okay.

Very briefly, Paul, because we have to give up the room for another meeting.

[Translation]

Mr. Paul Crête: Mr. Elliott, I would like you to tell me whether adding countries or changing the list of medications, as you are calling for, could contravene the August 30 ruling or the WTO's general rules. Along those lines as well, are we certain that there would be no negative impact and that a WTO member will not be able to say that we are doing something that violates the WTO rules?

[English]

Mr. Richard Elliott: What we are proposing is not contrary to the WTO rules. The WTO rules relax the restriction on Canada issuing compulsory licences to allow the export of generic drugs. The WTO rules do not say it can only be to other WTO members. With respect to the list of drugs, there is no prescribed list of drugs in any of the WTO texts. And as I've just mentioned to your colleague, the WHO has taken the position that the WTO decision covers all medicines. So I don't think there is any concern about our proposals risking any sort of WTO challenge.

The Chair: Excellent.

Michelle, did you want to jump in?

Mrs. Michelle Munro: Yes. I'd like to correct something. It isn't a public health emergency, but it's a public health issue that what a country has decided has significance to public health.

The Chair: I want to thank our witnesses in this session and the previous session. We will continue on March 9 after the one-week recess. The meeting will be at 11:15, not at 11, because of Mr. Kofi Annan's speech from 10 to 11.

Thank you all, and have a good day.

We're adjourned.