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EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 18, 1997

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[English]

The Chairman (Mr. David Walker (Winnipeg North Centre, Lib.)): Pursuant to Standing Order 108(2), a review of section 14 of the Patent Act Amendment 1992 (Chapter 2, Statutes of Canada, 1993), the committee resumes its work by hearing witnesses from the province of Newfoundland.

We have with us today two witnesses: Ms Elaine Price, president of the Newfoundland and Labrador Federation of Labour, and Don Holloway, president of the National Pensioners and Senior Citizens Federation.

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I welcome both of you. The format is for you to make a five-minute presentation of your major ideas. After you finish your two presentations we'll turn it over to committee members to ask you questions. I'll ask Ms Price to start.

Ms Elaine Price (President, Newfoundland and Labrador Federation of Labour): Thank you, Mr. Chairman.

Bill C-91 is an issue that affects all Canadians from all walks of life, as consumers, as workers, as health care providers, and as users of our health care system. The recommendation that your committee makes and the legislation flowing from these recommendations will impact on all aspects of Canadian society, influencing what happens to our medicare system and public drug plan, as well as jobs in the Canadian-based generic drug industry and the overall quality of life in this country.

Through compulsory licensing, a thriving generic drug industry has developed in this country from which Canadians have derived great benefit. In addition to the employment and economic spin-offs created by this industry, generic competition helped reduce the cost of drugs and paved the way for the introduction of provincial drug plans across our country.

Now the benefits gained by Canadian consumers and industry through compulsory licensing are being eroded by Bill C-91, or the drug Patent Act, which favours foreign-owned multinational drug companies and protects their outrageous profits.

Since 1993, Canadians have been paying a hefty price for Bill C-91. The cost of prescription drugs has skyrocketed, jeopardizing our health care services and provincial health insurance plans. Access to medicine for the elderly and the poor has been reduced, and job loss has occurred both in the pharmaceutical industry and in the health care sector. The multinational drug companies, on the other hand, have enjoyed pre-tax profit margins on equity of 29.6%, which remains nearly 300% above the industrial average between 1988 and 1995. Meanwhile, Canada's trade deficit in pharmaceuticals has more than doubled since patent protection was introduced in 1987, making us little more than a shipping depot for the international pharmaceutical industry.

According to the Canadian Drug Manufacturers Association, Canadians are at present saving $750 million a year by purchasing generics. Since patent protected brand-name drugs cost Canadians an average of 50% to 60% more than their generic equivalent, the Canadian Health Coalition predicts that by the turn of the century the 20-year patent protection afforded to multinationals by Bill C-91 will cause spending on health care to increase by billions of dollars.

The number of new generic products will begin decreasing at an alarming rate in the coming years as generic alternatives will not be allowed on the market until after patent expiration. Without generic competition, only costly brand-name drugs will be available and the cost of medicine in this country will escalate.

It's absurd that we have federal legislation in place that ensures higher spending on provincial drug programs and health care services at the same time that federal transfer payments to the provinces for health care are being reduced.

When Bill C-91 was passed, extending drug patent protection for 20 years, the Pharmaceutical Manufacturers Association of Canada made a commitment to create up to 2,000 new jobs in the research-based pharmaceutical industry in Canada. While some new jobs have been created in sales and promotion, many other jobs have been lost through corporate restructuring. In fact, a Stats Canada survey of employment payroll and hours reveals that when generic firms are excluded, pharmaceutical employment decreased by 2,050 jobs between 1990 and 1995. When the job losses that have also occurred at the provincial level in the health care sector because of the lay-offs caused by the rising cost of drugs are taken into consideration, Canadians are indeed paying a hefty price for Bill C-91.

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The pharmaceutical industry also promised to invest in research and development in this country. However, a review of its record in the research and development area will reveal the same dismal results.

On the other hand, Canadian-based generic companies represented by the Canadian Drug Manufacturers Association, which are in actual fact being penalized by Bill C-91, created 2,118 new jobs between 1990 to 1995, an increase of 140% since 1990. These Canadian generic companies have invested 13% of their sales in research and development in this country since 1993, in comparison to the 11% spent by the multinational drug companies.

While multinationals have been flooding the Canadian market with expensive drugs produced by their subsidiaries in other companies and causing balance of payment problems for Canada, these generic companies have been manufacturing their products here and exporting to over 100 countries, despite the restrictions placed on them with Bill C-91.

It is both ironic and highly questionable that our federal government has legislation in effect that virtually eliminates competition in the drug industry in this country and provides multinationals with a monopoly on the cost of drugs, while at the same time Canadian workers are being told they must be competitive in order to survive in a global economy.

In fact, we would go as far as to suggest that Bill C-91 is an anti-Canadian piece of legislation that protects the outrageous profits of multinational drug companies to the detriment of Canadian consumers, Canadian industry and trade, and Canadian social policy.

I would also point out that a similar view was also expressed by Liberal Senator, Royce Frith on the final day of the debate on the drug bill when he was quoted in the Toronto Star as saying:

In a February 15, 1993, article in The Globe and Mail, the president of Canada's largest generic manufacturer said:

What is even more disturbing is that these foreign-owned multinationals are not satisfied with the protection currently provided under the existing patent legislation. In a Toronto Star article only two weeks after the bill had received royal assent, the pharmaceutical industry was talking about the need to eliminate provincial drug programs, calling them restrictive trade practices. It had already started its lobby to dismantle our provincial drug program.

This parliamentary review committee provides government with an opportunity to examine this evidence and assess the negative impact of the drug patent legislation on Canadian jobs and industry, as well as the threat to our medicare system and public drug plans. It also provides government with the opportunity to correct a wrong imposed on the people of this country by the previous Tory government.

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In the interest of maintaining our medicare system and public drug plan, as well as protecting jobs in Canadian companies, the Newfoundland and Labrador Federation of Labour urges the Standing Committee on Industry to reject the corporate lobby by large foreign-owned multinational drug companies and substitute the existing drug patent legislation with a more progressive and proactive pharmaceutical policy designed to protect the social and economic interests of Canadians.

The implementation of a national drug program, as proposed in this year's alternative federal budget, would achieve such a goal.

The Newfoundland and Labrador Federation of Labour endorses this proposal, and we point out that the cost for a national drug plan could be offset by the $4 billion to $7 billion in savings that would be achieved by returning to a four-year period of patent protection for pharmaceutical companies, as recommended in the 1984 Eastman commission report.

As members of the Standing Committee on Industry, you have an important choice to make. You can recommend the continuation of the 20-year patent protection for multinational drug companies, or you can recommend that government end this monopoly to control drug prices and protect Canada's health system and public drug plan, along with Canadian jobs in Canadian companies. The choice you make will impact on the future direction of Canadian economic and social policy, as well as the overall quality of life in this country for generations to come. We sincerely hope you make the right decision for Canadians.

The Chairman: Thank you very much, Ms Price.

I'll now turn to Mr. Holloway from the National Pensioners and Senior Citizens Federation. Welcome, Mr. Holloway.

Mr. Don Holloway (President, National Pensioners and Senior Citizens Federation): Thank you for the opportunity to address you today. We wish we could have gone to Ottawa to see you in person, but this is very good.

First of all, the National Pensioners and Senior Citizens Federation is opposed to Bill C-91. We believe it should be rescinded. In our opinion, it is the most anti-consumer legislation on Canada's books today. It gives a licence to curb the Canadian drug market at a time in our history when governments are crippled by financial deficits and shortfalls and when industry is crippled through lay-offs and downsizing.

The people of this country are cash poor while large stores of money are held in a few hands, like banks, insurance companies, oil companies, and international drug companies. Record profits are being reached by the very people who cry for more and who insist that our government pass laws that ensure enormous profits to them at a time when Canadian citizens are hard-pressed to be able to afford to purchase necessary medicine.

In our opinion, patented drugs have been given a most favoured monopoly position by government through the ill-advised, ill-conceived legislation of Bill C-91. This bill destroys the ability of the Canadian people to purchase generic drugs within a reasonable timeframe at lower prices by prohibiting generic drug manufacturers from procuring licences to manufacture patent drugs within a reasonable timeframe...of its introduction by the patent holder.

Why does our government tell the public that NAFTA, TRIPS, the WTO, and GATT will not allow such licensing while examples of how such licensing can be rightly allowed are continually being presented to government by organizations that have studied this matter? The National Pensioners and Senior Citizens Federation, an over-50-year-old organization with 550,000 members, is hard hit by this nasty Bill C-91 and is looking forward to the current review to put an end to the gouging of Canadians who require medications at as reasonable a price as can be had.

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Daily, the affordability of many necessary medications is being put out of the reach of that little old lady whose only income is the old age pension and the guaranteed income supplement. Which one of us has the nerve to tell her as she leaves part of her doctor-ordered prescription behind at the drugstore in order that she can put food on her table that, as she is only 68 years of age, all she has to do is wait until she reaches the age of 90 years and then drugs will be cheaper? That's because by then the government will allow the same drug to be sold cheaper, at only 35% to 40% of the current cost, as the generic drug manufacturers will then be able to manufacture.

The National Pensioners and Senior Citizens Federation strongly supports the Canadian Health Coalition's findings, through John Dillon, senior policy analyst of the Ecumenical Coalition for Economic Justice, where his study, on page 9, ``On Feeding Sharks: Patent Protection, Compulsory Licensing, and International Trade Law'' of March 4, 1997, quotes:

Option A, the limited exception clause, is in article 30 of the TRIPS text and its parallel, article 1709.6 of NAFTA.

Option B, the other-use clause, is in TRIPS article 31 and its parallel, article 1709.10.

Option C is to renegotiate TRIPS and NAFTA. Many NAFTA provisions are likely to be reopened for discussion when other countries such as Chile apply for membership. NAFTA article 2202 allows any member to propose amendments at any time.

Words like ``reasonable commercial terms'', ``reasonable period of time'', ``adequate remuneration'' - all these words within these regulations open the gate.

The National Pensioners and Senior Citizens Federation supports the brief to the House of Commons Standing Committee on Industry submitted by the Canadian Health Coalition in association with the Medical Reform Group, on March 4, 1997, where they state, on page 6:

Also, in the same brief, on page 4:

Any measure we take that is universal to all Canadians cannot run afoul of any international trade agreement.

For instance, in Newfoundland, senior citizens do not pay for drugs. They are issued at no charge if you have a drug card issued by the province. Bulk purchasing could do the same thing for all.

In closing, please don't tell Canadians that the multinational drug manufacturers have lived up to their promises of great R and D exploits in return for vast patent protection, and also their promise to create jobs and wealth for Canadians. In fact, they have laid off over 2,700 jobs since 1982. The National Pensioners and Senior Citizens Federation has the opinion that there is no quid pro quo in any partnership with these international medical patent holders. Please see the attached bullets, which we respectfully submit for your earnest consideration.

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We regret that we have been given only five minutes. I'm sure we could use a little than that to address you. However, we believe you get the point that Canadians are unhappy with Bill C-91, and anti-consumer law. We have a list of 57 of the most prominent Canadian people's organizations representing millions who do not support Bill C-91. Please refer to the attached.

Please make drug patent legislation a piece of legislation for the benefit of the people of Canada, not a law that benefits only the patent holders. As the prices of patented drugs are higher than those of generics, we do not agree that the blame for rising drug costs should be placed on the cost of generics. We believe the rising drug costs are responsible in large measure for patented drugs coming on the market above appropriate price levels and as such do not have to increase in price yearly, thereby giving the illusion that they remain below the cost-of-living index rise and appear to be below the annual inflation rate. Should generic drugs rise in price, they still remain lower priced than their patented relatives and still contribute a real savings to Canadians over the patented drug costs.

What does it profit Canadians not to allow early licensing of patented drugs to generic drug companies? Yes, there might be some inappropriate prescribing of drugs, but a person cannot go against his doctor's orders. He would do so only at his peril. Yet there is increased drug use. More and better medicines are helping to keep Canada healthy. Also, seniors consume most drugs per capita, and every day more and more people are living to become senior citizens due to good drugs, thank God.

We have no quarrel with the notion that the Patented Medicine Prices Review Board be given powers to regulate prices of generics and non-patent drugs. Anyone who says we can't walk away from NAFTA and the WTO and that we have to live within whatever has been done has not studied the possibilities of working inside those organizations' rules to alleviate Canadian problems with long-term patent protection. Ten years was enough; we do not agree with 20. The real world is a place where Canadians have to buy food and must defer some of their drugs, to their detriment, due to the unaffordable prices. Generic drugs are cheaper and therefore more affordable than patented drugs.

That's the presentation I would like to make to you; otherwise I'll be going too much into the smaller details, which I will be faxing to you.

But there's one thing I would like to say. There are many associations in Canada that are opposed to Bill C-91 as it stands and believe modifications should be made. These associations include: l'Association québécoise pour la défense des droits des retraitées et pré-retraitées; Alberta Council on Aging; Alberta Federation of Union Retirees; Alberta Friends of Medicare; Alliance of Seniors for the Protection of Canada's Social Programs; Council of Citizen's Organization of British Columbia; B.C. Old Age Pensioners' Organization; B.C. Federation of Retired Union Members; Brandon and District Labour Council; British Columbia Nurses' Union; Consumers' Association of Canada; Consumers Council of Canada; Consumers' Association of Canada (Ontario); Consumers' Association of Canada (Quebec) Inc.; Consumers' Association of Canada (British Columbia); Consumers' Association of Canada (Nova Scotia); Consumers' Association of Canada (Manitoba); Consumers' Association of Canada (Newfoundland); Consumers' Association of Canada (Alberta); Canadian Auto Workers - CAW Canada; Canadian Federation of Students; Canadian Health Coalition; Canadian Labour Congress; Canadian Pensioners Concerned Incorporated; Canadian Union of Public Employees; Cape Breton Regional Health Care Committee; Chatham and District Labour Council; Cho!ces Manitoba; Coalition des aînées et aînés du Québec; Community Health Services (Saskatchewan) Association; Congress of Union Retirees of Canada; Fort McMurray and District Labour Council; Manitoba Nurses Union; Manitoba Medicare Alert Coalition; New Brunswick Senior Citizens' Federation; New Brunswick Health Coalition; Nova Scotia Government Employees Union; Nova Scotia Canadian Health Coalition; National Pensioners and Senior Citizens Federation, which we represent; National Federation of Nurses' Unions; National Anti-Poverty Organization; New Brunswick Nurses' Union; New Brunswick Health Coalition; Newfoundland Public Service Pensioners' Association; Newfoundland and Labrador Federation of Labour, which is represented here today; Northumberland Labour Council; etc. -

The Chairman: Mr. Holloway, is this the same list you have attached to your presentation?

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Mr. Holloway: Yes.

The Chairman: Okay. Thank you very much.

Mr. Holloway: You will receive it by fax, but your line was busy and they didn't get it all through.

The Chairman: Now we have it all, sir. Thank you very much.

It has been a very useful first half hour together hearing your two presentations. We now have an opportunity to have a few questions from our members here.

The first member is Monsieur Brien.

[Translation]

Mr. Pierre Brien (Témiscamingue, BQ): I have a question for Ms Price.

In your presentation, you mentioned that the brand name industry did not meet its commitments with respect to job creation and research and development. The Patented Medicine Prices Review Board told us that these commitments, as far as research and development were concerned, had in fact been met. I would like you to clarify your statement further.

I now have a question for Mr. Holloway. The minister appeared before us and said that we couldn't go back to a mandatory licensing system. You contradicted this statement by supporting the statements made by other people. Why would the minister have told the members of this committee that we couldn't go back to a system of mandatory licensing?

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The Chairman: Ms Price, would you like to respond first?

Ms Price: Yes, I would. When you start talking critically, it sometimes gets a little bit confusing. I would start off by pointing out that, first of all, the multinational drug companies only invest 11% of their sales in research and development in this country. This is far below the 18% international average.

The other point I will make is that 40% of the dollars invested by multinationals in research is in actual fact subsidized by the Canadian public through tax breaks.

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It's also interesting to note that 75% of the research and development performed by multinationals is actually required by law to get new drugs through the regulatory approval process. The low level of basic research over and above mandatory research can be seen by the fact that less than 1% of new products are patented by Canadian inventors.

In addition to that, we have to look at what would be considered breakthroughs in order get the true picture of what happens with research. Between 1991 and 1995, only 8% of the products introduced by the industry were for what we would call breakthrough medication or substantial improvements over existing therapies. The rest were for line extensions of existing products or new drugs that offered moderate or no improvement over existing therapies.

In fact, the Patented Medicine Prices Review Board tells us that only three new products were classified as breakthrough drugs in 1994. Only two of the 81 new patented drugs introduced in 1995 could be classified as breakthrough drugs.

So they did mislead the people of this country when they talked about the research and development that was going to occur. There is not a lot of new research happening.

In addition to this, if you look at the stats for the jobs created, you will find most of the job loss in the pharmaceutical industry has actually been in the research and development area.

As I said in my presentation, some jobs have been created, but those jobs have been in sales and promotions, not research and development. We've lost tremendous jobs in those areas because the multinational drug companies are restructuring and moving their offices to other areas. Puerto Rico is one example that comes to mind.

I hope this answers your question in terms of why I would say those things.

The Chairman: Thank you very much.

Mr. Holloway.

Mr. Holloway: I just have a two-part question.

First, I would like to support the Canadian Labour Congress here. Jobs lost in manufacturing plant closures include: SKB, 150; and Wyeth, 100. These are rounded off to make them easy to understand. We also have: Syntex, 150; McNeil, 100; Upjohn, 120; Beecham, 90; Ciba, 100; RPR, 100; Rorer, 100; Cyanimide/Lebelle, 100; Sterling, 150; Burroughs, 100; Ortho, 80; Hoechst, 70; Squibb, 150; RPS 70; Warner-Lambert, 80.

The Chairman: Mr. Holloway, we have this in front of us.

Mr. Holloway: I'll answer the second part of the question then.

Mr. Dingwall appeared before your committee on March 4, and he was quoted in the Globe and Mail on March 5 as follows -

The Chairman: Mr. Holloway, again we have this in front of us.

Mr. Holloway: Oh, you have this. Then there is the answer, because Mr. Dingwall said here he has not to the best of his knowledge received any legal opinion on the opinion of Mr. Dillon. He just hasn't looked into it.

This is why we say that other sources have been pointed out to government. They have not followed up on these regarding how they might work within these trade agreements -

The Chairman: Thank you, Mr. Holloway. I'm going to go to Mr. Mayfield now.

I'd just like to say that Mr. Dillon presented his ideas just 24 hours before. To be fair toMr. Dingwall, 24 hours isn't a long time to respond to a legal opinion.

Mr. Mayfield.

Mr. Philip Mayfield (Cariboo - Chilcotin, Ref.): Thank you very much, Mr. Chairman.

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After listening to your brief, I wonder if you're aware of the reports that we have heard of new developments in research since Bill C-91 has come into effect. Do you support new pharmaceutical research in Canada?

Second, what do you believe is an appropriate period of patent protection for patent drugs after they're approved for public use?

Third, in your opinion, are generic drugs appropriately priced in Canada?

And fourth, should they be brought under the review of the Patented Medicine Prices Review Board?

Those are the four questions I have for you.

Mr. Holloway: Thank you.

Yes, for the last questions. Ten years is our answer for the question before that. And what was the first one?

A voice: Do we support pharmaceutical research?

Mr. Holloway: The last great thing done in Canada was the finding of insulin by Dr. Banting and Dr. Best. Since then, there have been no great breakthroughs that we are aware of. There might have been some minor ones, but most R and D is done in the United States and in France. These are the major countries, and we certainly benefit. But for us to go into a major development as was promised...I don't think that has borne fruit. Many drugs have been revamped and put back on the market with some types of improvements, or have come in again with different packaging, re-entering the market at higher prices. In our opinion, that is not what we call real research and development.

Even if you improve a drug's effectiveness 20%, 30%, or 40%, that is not real research and development that would allow people to bring drugs in at higher costs to the consumers.

We certainly believe that the generic drug companies can produce drugs at 35% to 40% of the cost of multinational drugs that are patented. That's why we support them. They're cheaper and easier for Canadians to afford. Canadians have no money. It's very difficult to buy drugs today. Food is cheaper, and that's why many seniors buy the food and let the drugs go. When a person goes to the drugstore, there are generally four or five items on his prescription, and when the drugs are handed out, the cost might be $80, let's say, and the person might say, ``That's a little bit too expensive. I'll take some of these next month. Just knock off the first two or three, and I'll buy those later.''

In the real world, that's actually happening. Drugs are very highly priced, particularly the patented drugs. That's why we're all in favour of the generic drugs.

Ms Price: I'd like to make a comment.

You asked if we supported new pharmaceutical research. Of course we do. As Mr. Holloway said, not a lot of new pharmaceutical research is occurring in Canada. And if you look at the statistics in terms of the drugs that are coming on the market, that statement will be supported. I agree that if there is a lot of new development, it is certainly not happening in this country.

We differ in terms of the patent protection. The labour federation's position is that it should be four years. That was also what the Eastman Commission recommended, in 1984, I believe.

That doesn't mean the multinationals don't get compensated for their research and development initiatives. Prior to 1993, the generic drug companies were permitted to produce patented products, but they in turn paid royalties to the patent holders to compensate for that. I think that's a really valid point.

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

Monsieur Patry.

Mr. Bernard Patry (Pierrefonds - Dollard, Lib.): Thank you very much, Mr. Chairman. I have a few questions for Mrs. Price.

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I have a few questions for Ms Price. First of all, Ms Price, do you agree with the concept of intellectual property? That's a very short question. If yes, in your opinion what should be the number of years that the intellectual property should apply?

Ms Price: Since we're talking about drugs, yes, I do agree with the concept of intellectual property. But with regard to the drug patent legislation, which is what we're talking about now, I've already stated that the Federation of Labour recommends that drug patent legislation apply for four years. In answer to your question, then, that means that intellectual property in terms of formulas for prescription drugs would be four years.

Mr. Holloway: I might add to that by -

Mr. Bernard Patry: No, my questions are for Ms Price.

The Chairman: Mr. Holloway, Mr. Patry is going to pursue a couple of questions, and then we'll give you a chance to jump in, if you don't mind.

Mr. Holloway: Okay.

Mr. Bernard Patry: Ms Price, you mentioned that before Bill C-91, there was compulsory licensing. Can you tell me for how many years intellectual property was granted under the system of compulsory licensing? Do you know what the difference is in regard to intellectual property between compulsory licensing and Bill C-91?

Ms Price: I have only a vague understanding of the history of drug licensing legislation in this country. It's my understanding that compulsory licensing has in actual fact been in effect since 1923. However, Canadian firms didn't take advantage of it because we lacked the manufacturing capacity, and the drug patent legislation prevented the copying of drugs that were manufactured outside of Canada. So few generic companies were able to take advantage of the 1923 legislation.

That did change in 1969 when Canada was faced with the highest drug prices in the world. The legislation was changed to ease the restrictions on compulsory licensing, and companies were permitted to import the necessary ingredients and to produce generic products for sale at prices below those of the brand-name companies. I'm not sure for what period the patent was in effect, but compulsory licensing did permit the generic industry in this country to produce those drugs and in turn compensate the patent holders by paying royalties.

I would also point out that from 1969 onward a really thriving Canadian generic drug industry developed in this country. Not only were jobs created, but Canadian consumers also enjoyed tremendous savings in the cost of drugs. A conservative estimate has been that these savings have ranged anywhere from $200 million to $420 million annually.

To get back to your question as to how long intellectual property rights should be protected, I think it's a question of balance. As an elected representative of the people of this country, I would suggest that the balance should be in favour of the people who elected the government in this country, not multinational drug companies.

Mr. Bernard Patry: Thank you very much, Ms Price, but you didn't answer my question.

I'll go on to the next one. You mentioned twice in your brief that the brand company is making outrageous profits, and your colleague mentioned that the profit of the brand company is above a properly priced level. Our witnesses from PMAC, the brand company, told us that it cost between $450 million and $500 million from the beginning of the deposit of the molecule to the beginning of the sale of a new product, and this doesn't take into consideration the fact that not even one in one hundred molecules effectively goes to a new drug.

The witnesses from CDMA, the generic company, told us that the price to put a copied drug on the market is roughly $750,000, less than $1 million, for a 100% success on their copy. If you consider that the generic company goes on the market at a cost of 75% of the brand-name company, and that the copy is 100% effective, do you not think it is outrageous for the generic company to come on the market at 75% of the drug cost?

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Ms Price: The point I want to make is that we're not talking about what the actual profits were. Yes, these figures are impressive when you're talking about developing new drugs, but let's put this in perspective. The pharmaceuticals, the multinational drug companies, have enjoyed profits that have been nearly 300% above the industrial average between 1988 and 1995. So while it might cost a lot to develop these drugs, it's certainly not impacting on the profit margin. As a matter of fact, the pharmaceutical industry was one of the few industries that came through the recession without being negatively impacted.

The Chairman: Ms Price, could I just ask you -

Mr. Holloway: It's available to you -

The Chairman: I'm sorry, Mr. Holloway, but I just want to ask for a clarification.

Your comment on profits was a very interesting one, Ms Price. Can you just tell me where that information came from? We'd like to be able to follow up on some of these things.

Ms Price: Mr. Holloway and I are sharing the same information, so he is going to answer that question.

Mr. Holloway: It's available to you in The Financial Post of January 29. The item is entitled ``Drug makers post stellar gains''. It says:

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

Ms Price: I'd also recommend that the committee look at A Prescription for Plunder, which is a resource book on the pharmaceutical industry in Canada. It was prepared by the Canadian Health Coalition.

The Chairman: Yes, they appeared in front of us.

Ms Price: On page 10 of that book, that stat is referenced. In actual fact, it came from an article by the Canadian Centre for Policy Alternatives.

The Chairman: Thank you very much.

Mr. Patry.

Mr. Bernard Patry: I just have one last question, along with a comment on the last point.

The profits of the brand-name companies are going up mainly because they are selling more and not just because the prices of the new drugs are getting higher and higher all the time.

My question is for Mrs. Price. It seems that you calculated the success of the number of patents based on the number of new drugs. Do you not agree that if one of the brand companies came out with a new cure for AIDS, for example, or if it just came out with one new drug or one new breakthrough, this would be sufficient to keep C-91 as it is right now because that would be a major breakthrough for the benefit of Canadians?

Ms Price: Definitely not. We have to look at the impact of Bill C-91 on people all across this country. The bottom line is that it's impacting on our health care system. As a matter of fact, our medicare system is threatened by the escalating cost of drugs. It's impacting on our public drug programs, and seniors and the poor are having their access to medicine restricted. In addition, drug costs are causing private insurance plans - particularly those that have been negotiated by workers and their employers - to skyrocket. Then, when you combine the negative impact on our social policy with the job loss that's occurring in the Canadian generic manufacturing firms, that one drug just doesn't balance it out.

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This is about more than profit. This is about people's lives. This is about our medicare system and this is about the kind of Canada that we want to live in. The bottom line is that the Tories sold this country down the tubes in 1993.

Your government, or this committee, has an opportunity to do something about it. The question is, are you going to recommend in favour of the people in this country, or are you going to recommend in favour of the multinationals? That's the bottom line.

The Chairman: Thank you very much. I think those are pretty well all the questions the committee has. I very much appreciate your coming in to your meeting place in Newfoundland and presenting your ideas.

I've met some of you before, as we've gone across the country on different issues, and very much appreciate the way you've taken time to put your ideas forward. If there's anything else you want to add to our deliberations in April, please feel free to write the committee or contact one of the members.

Thank you, Ms Price. Thank you, Mr. Holloway. Goodbye for now.

Ms Price: Thank you. The Federation of Labour will forward their brief as well. I just brought a working copy with me this morning and that's something that would be suitable to put on the fax. We'll get it in the mail or on the fax today.

The Chairman: That's not a problem. We have a very good research team here.

The committee will suspend its hearings while we connect with New Brunswick. Even though we're scheduled for 9:15 a.m., just as soon as the technicians are ready and the witnesses are ready, we'll start. I imagine it will be some time between 10 a.m. and 10:15 a.m.

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The Chairman: We'll formally resume our hearings now.

I'd like to welcome Mr. Ian Donovan, who's representing the Miramichi District Labour Council. What we do, sir, is we try to have you summarize your position, if you can, in about five minutes. Many of the labour groups are giving us the same message, which is quite appropriate, and the committee has received copies of the briefs, so we'd like you to just spend a few minutes summarizing the major points as to where you are coming from. There are several members of Parliament here who would like to ask you some questions, so we will then have a very good conversation.

Round tables work best when you try to treat them like television in that you're just speaking to each other and you're giving us some idea as to where you're coming from. Assume that the members will read your brief and that the researchers here will make sure we understand what you're saying and what your perspective is. But the purpose of the round table is to make it a more lively discussion.

When Mr. Boyce comes into the room, just indicate to him to sit down beside you, and he can join in as soon as he gets settled.

We're on schedule now so we're going to begin. Thank you very much, Mr. Donovan, and I invite you to open up this round table with a few words.

Mr. Ian Donovan (Secretary, Miramichi District Labour Council): Thank you. The members of the Miramichi District Labour Council would like to take this opportunity to thank the committee for allowing us to appear before you. We feel that this is a very important issue that has to be dealt with. The drug Patent Act has had very detrimental effects on our members. We represent approximately 3,000 to 3,500 members in the Miramichi area of New Brunswick, all unionized.

One regret that we have with the teleconferencing is that we feel it takes away from the personal, one-to-one contact that is very beneficial and would be more appropriate. However, after much discussion we felt that the drug Patent Act review has to be dealt with and that if we missed this opportunity, it would be harder on our members, so that's why we are here.

The Chairman: Thank you.

Mr. Donovan: They kind of changed the format. We had a presentation to present. I will just summarize it. It shouldn't take that long. What we had as a position was that every Canadian who has had the misfortune of using any type of patent prescription drug has been hit very hard, and they know very well about the rising cost associated with these drugs.

Since the Mulroney government gave the drug companies monopoly patent protection in 1992, costs have risen substantially. If you're lucky, as most of our members are, you have some sort of drug plan with your employer, and in most cases the cost is minimal or negligible. One concern we had was that without this drug plan, you're paying a large amount. In our area the price of drugs seems to reflect the union wages. They're very expensive, and without that type of coverage you're out in left field.

Another point we had mentioned and discussed quite heavily was that in 1992 when it was brought in, there was great opposition from the Liberal government. Now it seems that the Liberals are supporting it. We have real concern over that and just what the problems are.

The patent protection represents a public subsidy for the multinational drug companies. That's our position. The expenses already overburden the health care system. In New Brunswick we're no stranger to health care cuts. We've closed several hospitals. Health care cuts are very relevant in this area. It's something that we feel is adding to that burden, and we need some change.

.0920

When the Patent Act was put in, some promises or commitments were made by the drug companies. One commitment was to stabilize prices for new drugs. That hasn't happened. Prices of drugs have gone up substantially. There's no levelling out in sight.

Another promise that was made was job growth. We've gone through the report here and we have different cases where...the numbers are not there. Any expansion appears to have been in the generic drug industry. Where prescription drugs are the main type, the industry has dropped off.

Another promise or commitment was major breakthroughs in research and development of breakthrough drugs. From the numbers that we've been presented with in the reports that we've read, this is not happening.

Prices for prescriptions containing new patented medication rose at a rate of 13.4% since 1988 compared to 7.6% for non-patent drugs. Both have gone up, but prices for patented medications seem to go up at a higher rate.

With respect to jobs, according to our figures the brand-name pharmaceutical industry lost 2,055 jobs from 1990 to 1995. This does not say much for the commitment for job growth. Any jobs that are produced are at the multinational level. With the NAFTA and GATT agreements, we've seen how multinational companies are pulling out and moving to countries with lower taxes and less regulations for employees. We see it all the time.

In 1995 only two of the 81 new patented drugs were breakthrough drugs. That's roughly 8%. So much for being a major player. In 1993 they promised to spend over $200 million in the next five years, and by May 1996, they so far had spent only $60 million of the proposed $100 million. We feel that's falling far short.

The other thing we're presenting in our brief is what can be done. You say you have received briefs from different organizations. The position we've taken that is closest to our belief is the Canadian Health Coalition's five-point plan to establish a national drug insurance program. Examples are B.C. and Ontario. They have different programs in place that are steps toward a drug insurance plan that helps to regulate the price of drugs. Another point is to make sure generic drugs reach the market quickly, thus allowing a level playing field. It helps to control drug prices and reduce the cost of prescription drugs.

There needs to be a commitment for sufficient public resources to monitor quality and effectiveness of private research. Royalties for compulsory licences paid to patent holders would be tied to amounts spent on research. If they're going to spend the money on research, fine. Hold them to it.

The drug approval process needs to be made safe and publicly accountable. With all the reduction of patent regulations and stuff, we feel there still has to be an emphasis on making sure the drug industry is safe. If a doctor is going to prescribe a generic drug over a brand-name drug, he still must ensure that the patient's health comes first.

Another point is to control drug prices for both generics and brand names. We mentioned earlier that the prices of both generic drugs and brand-name drugs have increased. This needs to be addressed because the cost of drugs is going through the roof and it's hitting our members very hard.

That's the end of our brief, and in summary, I guess that's more or less what we had to present. I thank the committee for allowing us to appear. I wish it could have been in more personalized circumstances, but we still appreciate this opportunity.

The Chairman: Mr. Donovan, we really appreciate the way your trade union council has accommodated us. About 150 people applied to be witnesses, and it costs the committee about $100,000 to go each way across the country. There is a consideration...we try to use the best way to communicate with people and not be rude to them and at the same time extend ourselves. We appreciate how new technology affects the way people communicate, but as I say, you're taken very seriously, and don't think otherwise for a second.

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Does anybody from the opposition have a question?

Monsieur Brien.

[Translation]

Mr. Pierre Brien: Good morning. You have talked a great deal about the health issues. Everyone is aware of this problem. Have you also analyzed the entire economic impact, the impact on the number of jobs? Seventeen thousand people work in the brand-name pharmaceutical industry. The biotechnology sector is in a period of growth and relies on patent protection as well. We're talking about 4,000 jobs in this sector, which is the equivalent of what one finds in the generic drug sector. We're talking about a new industry. Did you take this into consideration so that we could come up with an approach that strikes the balance between intellectual property and the cost of the health system?

[English]

Mr. Donovan: I'm not sure I understand your question, but as far as the job losses and stuff, there has been some job creation. The facts and figures we have lead us to believe that the jobs are in promotion and sales, more so than in research. There needs to be an important part of this put on research and development of new drugs. As far as the job losses, our position is still that the multinationals...in the last several years, we've seen multinational corporations move to Mexico and to the U.S., wherever the tax systems are different and the employee regulations are different. When we deal with multinational companies, as most of the brand-name companies are, they seem to move that way. There's no security in these jobs. Yes, that is our goal: to have solid jobs in Canada that pay well.

[Translation]

Mr. Pierre Brien: I will try to be more clear. There are 17,000 jobs in Canada that are linked to the brand name drug industry, the industry that does research and development, therefore there are four times as many people in this sector as there are in the generic drug sector. There is also the biotechnology sector which is growing steadily and which also depends on patent protection as it carries out a great deal of research.

By changing the current situation, by offering less protection for intellectual property, are you are not worried that there will be greater job loss and that this will have quite a negative impact on Canada's overall economy?

[English]

The Chairman: Mr. Donovan.

Mr. Donovan: Not necessarily. As for the money spent on research when we're dealing with a multinational corporation - when we talk about brand-name corporations, we're talking about multinational corporations - any change to the drug Patent Act in Canada amounts to 2%, I believe, of the national sales of that stuff. With respect to the research and development done by large companies for prescription drugs, I don't believe 2% is done to help the Canadians. The impact of a change in Canada would not drastically affect the way they do business.

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

Mr. Mayfield.

Mr. Philip Mayfield: Thank you, Mr. Chairman.

Thank you very much. I'd like to continue my questions perhaps from where my colleague left off.

Much of the information you bring to us this morning seems to be at odds with other information we have received. For example, you suggest that the number of jobs, particularly research jobs, has decreased. We have heard that not only have the major pharmaceutical companies met their targets, they have exceeded them, both financially and in terms of job commitments. In addition to that, there have been new areas of research, particularly in the biotech area. These people have said fairly plainly that this increase is a result of C-91 and that if C-91 is withdrawn or the effects reduced, they would have no alternative but to take their research to other parts of the world, away from Canada. I'm wondering, from a philosophical point of view, do you support pharmaceutical research in Canada?

.0930

Mr. Donovan: Yes, very much so.

As far as the position of the brand-name drug producers, that they will move out of state, we had the same argument when they were arguing NAFTA. It is very beneficial. The drug patent means many dollars for the multinational corporations. To lay the threat there that they will move to Mexico or to Puerto Rico is a worthwhile gamble. It's costing them nothing; whether they do the research here or they do it in Mexico is irrelevant.

The jobs should be here. I don't believe that when they threaten to move to Mexico the threat is really there. The jobs are still going to be done here. Our long-term goal is to have good paying jobs here, but as long as corporations can move, for whatever reason.... Other factors are involved in where they relocate: the amount of subsidy that a government's willing to give; the amount of tax incentives; the employee regulations in those areas. They're all factors in the decision as to where they're going to move. The drug patent alone is not a controller of them moving. There are any number of reasons why they could move.

It still means a lot of dollars for them to have that patent, and we believe that's why they are fighting so hard to hold onto it.

Mr. Philip Mayfield: I remember that the increases in jobs and research money have come after Bill C-91, and it seems to me, from my point of view, that you're taking rather a large gamble in making that assumption. We have diseases - for example, the VRE, the vancomycin-resistant enterococco - that are dependent upon research. We have AIDS research that has come so far and is dependent upon heavy investments of money and time by highly qualified people. I have some difficulty understanding your position in that regard.

The next question I'd like to ask you is what you and the people you represent consider to be an appropriate period of time for patent protection for a company, after the drug has been approved for the marketplace for public use.

The Chairman: Go ahead, Mr. Donovan.

Mr. Donovan: I'll repeat again our position. The alternative that we have presented comes from the Canadian Health Coalition. What they suggest is a period of four years of exclusive patent rights for brand-name drugs. Beyond that, it opens up to licensing and it goes from there.

Also, the gentleman from the seniors group is with us now.

The Chairman: Let Mr. Mayfield conclude his questioning on this round and then we'll ask Mr. Boyce to say a few words.

Mr. Philip Mayfield: I'm wondering if you're making the same distinction that I'm trying to make. You say patent protection and I'm trying to distinguish between the total period of patent protection and that period of protection when the drug is in the marketplace.

If it takes eight or ten years to develop the drug to the point where it is marketable, where it's approved for marketability, that would mean, from what I understand you're saying, that even before it's on the market, the period of protection would come to an end. Is that correct?

Mr. Donovan: No. Once the drug comes on the market, we believe four years is sufficient for patent protection.

.0935

Mr. Philip Mayfield: The next question I'd like to ask is with regard to generic drugs. In your opinion, are generic drug prices appropriately priced today?

Mr. Donovan: No, not quite. Our position is that they are cheaper than the brand-name drugs. However, they are far from being reasonably priced for people in our region. One part of the recommendation of the five points was control of all prescription drugs, whether they be generic or brand-name drugs. They have all gone up. For the generics, I believe the figure was a 7% increase over the years. It's still an increase and it's still an increase that we cannot afford.

Mr. Philip Mayfield: That's another area where we have some difference of opinion. We have heard that while the costs may have risen, the prices of drugs since Bill C-91 have actually been reduced.

Considering that the generics are able to get their drugs on the market for 1% or less of the cost of developing a new drug by the patent drug companies, how would you go about controlling generic drug prices?

Mr. Donovan: That's a good question. As I say, if the question is directed at how we compensate the brand-name drugs, the briefs you've had before you talked about compensation to the brand names, to whatever extent, whatever rates, to compensate them for the research.

Control would have to be done by a regulatory organization of some sort, not based on what the corporations believe are their associated costs, their projected costs, and their long-term costs. The cost should be associated directly with what's put into research and development and marketing. Those should be the only costs associated with it. Nothing else.

Mr. Philip Mayfield: The question was how you would go about controlling generic prices.

Mr. Donovan: Other than control by government regulation, I'm not sure how.

Mr. Philip Mayfield: Thank you very much.

Thank you, Mr. Chairman.

The Chairman: Thank you very much.

With the indulgence of the government side, I'm going to ask the second witness to speak, and then I'll start with whoever you want to start with.

Mr. Boyce, welcome. I believe you're the executive director of the New Brunswick Senior Citizens Federation.

Our format is to have you speak for a few minutes. We don't have your brief, but we will have your brief. You can assume that our researchers will go through it in more detail, so what we'd like you to do is to present an overview and then we can go to questions.

Mr. Steven Boyce (Executive Director, New Brunswick Senior Citizens Federation Inc.): Very good. I will attempt to time my comments within the period allotted. Feel free to cut me off. I'll try to keep it as brief as I can.

I want to thank you for the opportunity to speak to you. I must admit I'm a little new to videoconferencing and would have much preferred to be able to go to Ottawa to see you in person. I guess I would have preferred also that your committee decided to travel the country, because I believe there are many people who would have liked to voice their concern to your committee. However, on behalf of our 27,000 members here -

The Chairman: Mr. Boyce, on that point, I don't want to let the record show differently. Anybody who asked the committee to make a presentation has been invited, and every person across the country has had an opportunity if they've asked us.

Mr. Boyce: I am not questioning, sir, your invitations. I appreciate the invitation you've given us. I guess what I'm saying is that there are still a lot of people out there. For example, from our organization and the people, the network, we have, given the time period we've had to prepare ourselves.... I won't get into a lengthy explanation, but let's put it this way. I think that with regard to this issue, we've heard in our organization both sides of the argument. We've had much information provided to us by CDMA, as well as its research information, documentation, and so on. We've also heard from industries that are members of the Pharmaceutical Manufacturers' Association of Canada, which are, of course, in favour of Bill C-91's current patent protection. In fact, if they had their way, they would probably request extended patent protection from you.

.0940

We are also trying to understand, as an organization, the relationship between this patent bill, Bill C-91, and our obligations to the international trade agreements and such.

To a lot of people who are paying taxes, especially seniors whom we represent, it is very difficult to try to rationalize that Bill C-91 actually does good overall to the country when we know that here in New Brunswick, Bill C-91 is, in part, the reason why our prescription drug program costs us so much, why it runs a deficit year after year, and why more moneys have to go into that program. Some drugs are actually not even making it on the formula at this time in New Brunswick because our government representatives, who are responsible for that part of the program, deem that those drugs are too costly for us to afford.

All of you - all of the members of Parliament and all of the politicians in the world - say that here in Canada we don't have a two-tiered health care system or we're not heading in that direction, but I would have to say that is not an accurate statement. We do have a two-tiered health care system as we speak.

The drugs in question are two drugs that are related to prostate problems. Merck Frosst has invented one of these drugs that could eliminate, by its estimate, countless dollars of unnecessary surgery. That's just one example. Merck Frosst employees and people who can afford to buy that drug will get it, and the rest of us, or people who are on the drug program for this government in New Brunswick, will not have access to that drug and will have to be put on long waiting lists for surgery and go through excruciating pain having that surgery.

That's just an example, folks. We're not asking you to necessarily cause havoc in the international trade agreements and such. But we also understand that the pharmaceutical industries, the brand-name companies, have gone from one country to the other and, to a certain extent - and I'll use the term loosely - are blackmailing Canadians in the sense that if we don't give them this patent protection, they won't invest money in our country for research and development. I've talked to people in the industry and they admit it is keeping the price of drugs higher than what they might normally be.

Taxpayers are being faced with cuts to health care programs day after day. Each province is now being burdened with these health care cuts, in light of the federal government's decision to reduce transfer payments and give carte blanche to the provinces to do what they like with the money as far as spreading it around - for social programs, education, health care. We're facing cuts day after day, and we're being told by our provincial and federal governments that there isn't enough money, they're running deficits, and so on.

On the other hand, we know for a fact that Bill C-91 is keeping the price of drugs at a high level. We know for a fact, if you listen to numerous experts and people who are supposed to be on the fence and not partisan for the generic or brand-name companies, that the research and development moneys that were promised are not necessarily there. We know for a fact that in New Brunswick there is nil. The only people who are employed in New Brunswick by these companies are sales people or, excuse me, educators. They're the ones who are sent out to educate our doctors and our professionals about these drugs. These companies would probably need salespeople anyway. I don't see that Bill C-91 really gives us an overwhelming advantage. Certainly, these companies are making enormous profits as it is. It's a question you will have to ask yourselves sooner or later, and whether it's done on a national or an international level I hope people will get together sooner or later.

.0945

I'll close by saying you should read the book by Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. I'm sure some of you are familiar with him. He is an economist and says that if the large corporations, whether they be in the pharmaceutical industry or not, do not start caring about the communities from which they are taking out financial and natural resources, and if they don't start putting more back into those communities, we're going to end up with a society that none of us want to have down the road. Crime and unemployment and the rest of it will follow. We're creating more and more poor people in this country. More and more people are going bankrupt. You've heard it before, and it's going in that direction. This isn't just rhetoric, it's a fact. The rich are getting richer and the poor are getting poorer.

I don't think Bill C-91 is good for us at this time. You have to do something about that.

Thank you.

The Chairman: Thank you, Mr. Boyce.

I'll turn now to Mr. Volpe.

Mr. Joseph Volpe (Eglinton - Lawrence, Lib.): Thank you very much, Mr. Chairman and gentlemen.

I think it's a little bit unfair, because I want to take up where we left off, so I hope you don't feel slighted if it appears that I am hopping over what you've just said, although you've introduced a couple of philosophical questions that we might address.

There are two issues that have been raised today, notwithstanding the fact that some of the data and other information seem to be a reaffirmation and reconfirmation of some of the issues we have heard to date. One of them is the question of controlling prices. My colleague has had to absent himself momentarily, but he was looking for a way to control the prices of three types of pharmaceuticals on the market: patent, non-patent, and generic. Your colleague said a few minutes ago, in response, that the only way he knew of controlling this product, or any product in a market, was through regulation.

That's the first time we've heard somebody come forward and say he or she wants more government regulation of prices, other than those who have appeared before the committee and have said that the role of the PMPRB needs to be expanded to cover off-patent products and generics. The only other indication we've had is that the competition might drive prices down. In fact, I think somebody from the Fraser Institute felt that the best way to control prices was to allow for free competition.

I haven't heard anybody from either the patent or non-patent industry mention that. Curiously, I haven't heard either one of you say it, nor have I heard anybody else this morning say it. So I'm wondering whether everybody has bought into the other issue that's before us today, which was raised by my colleague Mr. Brien, from the Bloc, who has a particular view on this.

He asked whether we should accept the concept of intellectual property and how much it was worth. If intellectual property rights are something we have to put up on the same pedestal as religious belief, how long should we give someone the right to maintain a monopoly on the property that's produced? Is it four years, as I think somebody just before you indicated? Is it 20 years, as it is under the Patent Act? Or is it 25 years, as is being requested by some people who have appeared before the committee?

I'm going to use as much of my 10 minutes as possible, Mr. Chair, to see if I can raise some of the issues that have been developed by some of our colleagues on the other side of the table. I say that because, if I quote him correctly, Mr. Donovan made an accusation - and I'm leading up to that accusation, so maybe he can be prepared - that patents and patent periods represent a subsidy to the companies that enjoy those patents. I'd like him to elaborate on that point, but while he gets his mind around that issue, I want to put committee members back onto the question of intellectual property, because it has to be associated with that patent.

.0950

Bill C-91 gave everyone a promise that there would in fact be greater protection of intellectual property. In return, there was a quid pro quo - which Mr. Donovan denies - that we would have greater research jobs and a greater variety of products. Additionally, while the costs would be higher - that's implicit in any monopoly practice - there would be a moderation of costs through the PMPRB monitoring. This committee has already heard some evidence in that regard. Mr. Donovan doesn't think there are any research jobs. Some of my colleagues opposite don't think anybody other than industry is able to provide investment and research.

Because he has obviously done his homework, I'm going to ask Mr. Donovan how many of the research jobs claimed by all parties in this debate are a result of private capital being attracted to a product. How much of it, for example, comes from the Canadian Medical Discoveries Fund, which provides -

The Chairman: You have three minutes left.

Mr. Joseph Volpe: Good, I'm going to use up two.

The Chairman: So you don't want an answer from him?

Mr. Joseph Volpe: I'm going to ask a question that he can answer in a minute

It provides $149 million, and the Medical Research Council, another federal government institution, provides another $240 million. I would like you, Mr. Donovan, to tell us how many of those research jobs are dependent on that $389 million that come from taxpayers' dollars and how many such jobs come from the private sector. Since you have a particular fascination for private sector development, maybe you can tell us.

The Chairman: Do you have any comment, Mr. Donovan? That was a very pointed question.

Mr. Donovan: The three questions are very interesting.

First, there are other alternatives. I didn't want to say that regulations are the only alternative. The most right-away, most sudden, change you're going to see is with regulations.

B.C. has other alternatives. Under their pharmacare program, when doctors are making their recommendations of what to prescribe, B.C. has made it optional; it's at the doctor's discretion. If they're unaware of the costs associated with the other drugs - I'm sure they are to some extent - the actual figures are given to the doctors in B.C. It gives them an option to consider.

Another part put in under the B.C. program.... Sorry, I believe it's actually Ontario that has this. There's a limit to what the prescriptions are, and anything above that limit comes out of the doctor's funds. Instead of always writing prescriptions, there's an onus on the doctors to look at what they're doing. Ontario has put the onus on employees, taking the patient's care into consideration.

You asked about the subsidies to the companies and how we appeared to see that. If you want to give me the exclusive right to produce a product in this country, if you're going to place no control over what I'm going to charge for something that people have to have, and if there is a regulation blocking anyone else from coming onto the free market to produce and to force me to set my prices at what people can afford and what's fair, then it's the same as a subsidy. We see it no differently.

On your third question, you lost me. I forget what it was.

Mr. Joseph Volpe: Private sector funds.

Mr. Donovan: You're talking about the threat to move the research out. There are very good schools of education and research around this country, and our position is exactly this. Where research work is done is not as important. If the best doctors to research a drug are those at the University of New Brunswick, that's where companies should go. Right now, this is not the case. The pharmaceutical companies are blackmailing government by asking what it is that government can offer them, and we're sitting back and taking that blackmail. We're offering more to these people instead of putting the efforts where.... If the best research university is McGill, then that's where they should be going. We don't feel the threat to move to Mexico is totally relevant. Companies have to go where the best research is, even if it happens to be in a certain area.

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The Chairman: Mr. Volpe, you have a question.

Mr. Donovan: I don't know whether that answers your question or not, but -

The Chairman: Your answer was as good as the question.

Some hon. members: Oh, oh!

Mr. Joseph Volpe: I want to compliment you, Mr. Donovan. The chair obviously thinks you're brilliant, as well as being a good brother in the union.

Do you want me to continue? I obviously didn't exhaust my ten minutes.

The Chairman: Why don't you take another five minutes and that will be it. If he has a question, I'll then go to Mr. Mayfield, and that will pretty well be the summary.

Mr. Joseph Volpe: The next question has to do with the marketing practices. Your allusion was that they constitute a fundamental factor in the growth of costs. You're representing a labour union, so I imagine you're probably involved in some of the negotiations with companies on drug plans.

One of my colleagues here is a doctor. The industry and others, including you, have accused him of being the main cause of rising drug costs because he and his colleagues in that profession have a habit of over-prescribing, badly prescribing, under-prescribing, and just generally not doing their jobs. In your negotiations, are you and the employers of your members addressing some of the practices by the medical profession, along with the marketing practices of the drug companies - whether the drugs are generic or patent - that urge doctors and pharmacies to provide a particular product that may not necessarily be consistent with the interest that you have, that being to ensure that the prices charged to your members or deducted at the negotiating table are the least possible? Can you give us an insight into what happens in some of those negotiations? What kind of impact do you have on what kinds of drugs are going to be up for reimbursement as far as your members are concerned and as far as your employers are concerned?

Mr. Donovan: Yes, I have been involved in negotiating drug plans. Our first concern is with the health and safety of our members, and drugs are a part of that.

We feel the price of drugs and our negotiations do go very closely together. If the price of drugs is a big-ticket item, then it's a big issue on the table and the companies are going to fight it. With most companies in this country, profit is the bottom line. Regardless of whether they're going to pay into wages or into benefits, these things are still costs to the company.

With the price of drugs covered less and less in the last several years, this is a big issue with the members, and it's a bigger part of negotiations. We have to actively pursue getting a good, productive drug plan for our members and one that we feel will cover them. With the costs going up and up, it's not surprising that the companies are more and more opposed to giving us a drug plan to cover all issues. If the prices can go down on the drugs, we won't have such a problem getting drug coverage.

Right now, the biggest issue on which companies are fighting us is the cost associated with drugs. Prescription drugs are a big part of an industry. I can't give you figures on what the average employee would use in the run of a year, but I know that average prescriptions in our area run from $35 to $105 a prescription. We have a drug plan; we have drug coverage, so we pay $1. We're very fortunate, but most people in our area don't have such coverage. We have a large, union-based population, and the prices at the pharmacies in our area reflect the union wages. If you're not making union wages, or if you don't have drug coverage, you're going to pay the $105 for a prescription. Most people can't afford that.

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Mr. Joseph Volpe: Do your unions make it a practice to go to the patent companies or to the generics and try to negotiate a price that they introduce into the market, or do you exclude them from your considerations completely and just go directly to your employers?

Mr. Donovan: We go directly to the employers. That's who we have our contracts with. Our contract with our employers is that we want a certain package for our members. They have to go to a carrier to provide that coverage, but our dealings are directly with our employers.

The Chairman: Mr. Donovan, just on that point, before I turn to see if Mr. Boyce has any final comments, what percentage of the unionized labour force in your area would be covered by a drug plan of some sort? Would you say that's a standard part of everybody's negotiated contracts now?

Mr. Donovan: Yes. In our area there are approximately 12 to 15 different unions. As far as I know, all of the contracts have prescription drug coverage for the members. Some differ as to what the user pays and what is covered, but to my knowledge all the contracts in our area have drug coverage for the cost of drugs in our area.

The Chairman: Does it extend to their families and into retirement years, too?

Mr. Donovan: No. As far as I am aware, most of our drug coverage ends if there is early retirement involved. Coverage is there until age 65. After age 65 there is no coverage. That's another point we have. Once our members retire their income is less, and they're paying outrageous prices for their drugs. It's something that has to be negotiated and worked on. But at present the cost is there, and it's something that's real scary for anyone who is retiring. I would not want to be retiring in the next 15 years. It's very scary.

The Chairman: Thank you very much.

Mr. Mayfield, did you have another question?

Mr. Philip Mayfield: I would like to ask another question, if I may, please.

The Chairman: Yes, please.

Mr. Joseph Volpe: You weren't here, so I asked your questions for you.

Mr. Philip Mayfield: Thank you.

I don't think you mentioned it, but I know that other labour representatives have mentioned the fact that some of the drug manufacturers change the dosage or something else about a pill and reintroduce it as a different drug. That seems to me to introduce a question about the patent protection itself, and I'm wondering if you have concerns about that. My understanding is that a patent is a new idea and offers protection, and I'm wondering if you feel there is some deficiency in this.

Mr. Donovan: Very much so. There are diseases on the market such as AIDS and cancer, and for a company to have a monopoly on a cure for these diseases is ridiculous. The only reason we see that the patents are there is to give them the exclusive right to market and to sell that product until they feel they've recouped enough money to pay for all their work. If that's leading to keeping research drugs off the market, it's very relevant. It's up to the discretion of the pharmaceutical company as to when to release it, when to do this, and when to do the whole bit, whereas an open market would definitely force them, when something is discovered, to make it available to the people, where it needs to be.

Mr. Philip Mayfield: What I'm thinking about.... Is it called greening, Mr. Chairman?

The Chairman: Evergreening.

Mr. Philip Mayfield: Evergreening, yes. It's the whole issue of evergreening that I'm asking you to comment on.

The Chairman: Mr. Donovan may not be familiar with the term.

Mr. Donovan: I'm not aware of it, but my colleague will comment on that one.

Mr. Boyce: Obviously, you've hit the nail on the head there. Bill C-91 gives a so-called period of patent protection, but as you know, through the evergreening process multi-patents, patents on processes, slight variations to the drug, reintroduction of the same drug a couple of years before the patent expires so they can get a head start, a jump on the generic industry - these are all industry tactics. I think you are aware of those and recognize them.

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Let me go back a little bit. We're talking about an industry here. Most industry people don't like legislation, unless of course it's to their advantage. No one likes legislation. No one likes to be limited. Legislation prevents people from having freedom. But you're talking about an industry here that is quite different from any other industry. This should be considered differently.

This is not the pharmaceutical industry, the pulp and paper industry, or the tourism industry. This is an industry where you are talking about people's lives. You're talking about a product that people need, in some cases, just to make it through the day in order to live and see another day. You have an opportunity here to do something with regard to industry legislation right now that is making it too expensive for some people to afford the care that is available and is already there. As my colleague mentioned, and some of us are questioning, what will be the purpose of finding a cure for cancer or AIDS if the cost of the drug will be too much for anyone to afford or will bankrupt some people or provinces that try to buy the darn thing?

If the industry had sincere wishes to help the people they are producing these drugs for, you would see a lot more partnerships and a lot more companies setting down their barriers of competition and getting together to work together in research to try to find a cure for these serious problems. You're allowing business people to basically determine the future of people's lives. There's something that just isn't right about that.

I would suggest not only that you consider rescinding Bill C-91 or putting the situation back into the pre-Bill C-91 state, as the Canadian Drug Manufacturers Association would like, but that you also look at ways...because we recognize that CDMA is in it for money too; they're in it for profit as well. So we believe there should be some enforcement of some type to control the cost of drugs.

Maybe the way to control drugs is just to encourage more competition, if that's the only way you can bring prices down. Bill C-91, I guess, with all of the evergreening added to it, is giving some companies more than 20 years' advantage on patent protection.

You people know, you've heard all the answers, I'm sure. My knowledge is limited, based on the amount of time I can dedicate to this issue. You people have talked to people from all over the country, I'm sure, and you're still going to. You know what the answers are and you have an opportunity to do something about it. I just hope you will view this as quite different from any other industry and that you'll set aside your political stripes and work on this one as a team and do the best thing for people whose lives are at stake and whose lives are being affected because of our government constantly saying there isn't enough money.

That's all I'd like to add to that. Thanks.

The Chairman: Thank you very much. The committee thanks both you and Mr. Donovan for taking the time to come into Moncton. It is very much appreciated, particularly Mr. Donovan, who left his brief to talk to us directly and to explain how the drug prices affect negotiations.

I think we're all very sensitive to these issues, and you bring a particular perspective to bear. We don't always fully understand how a price change works its way through the system, and there you are back at the negotiating table working with a company trying to control costs. It gives us a better understanding of the issues we're dealing with.

We very much appreciate the experience you've brought us as executive director of the District Labour Council.

Again, to you, Mr. Boyce, we appreciate you bringing in the views of the New Brunswick Senior Citizens Federation. Parallel views are expressed to us in other parts of the country and these will all be taken very seriously.

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Thank you again for coming in. If there is additional input you wish to present to us, please send us a note and it will be taken into account before we come to our conclusions. Thank you and goodbye.

Mr. Donovan: Goodbye.

The Chairman: We'll suspend our hearings until 10:45 a.m., so we'll have a 30-minute break. If you can be here at 10:40 a.m., we'll start right on time.

Thank you very much.

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The Chairman: I'm going to call the meeting to order now. The committee resumes its consideration of Standing Order 108(2), a review of section 14 of the Patent Act amendment 1992.

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I'd like to welcome the participants from Nova Scotia to this round table. We have witnesses here from several organizations in the province. We very much appreciate your willingness to meet for this teleconference. The committee has a long list of witnesses and we're ensuring in the most efficient way that everyone who has asked to see us will meet with us and have an opportunity to talk with us.

In the round table I would like each of the participants to spend about five minutes outlining his or her main position. We will have - if we don't have them now - your written briefs and we will review them. We'd like you to take a few minutes to tell us what your perspective is and then leave us lots of time for members' questions and a more detailed discussion so that you will have a better understanding of what the members are thinking and so we will get a better understanding of what you're thinking.

I'm going to start with Ms Joanne Mutton, vice-president of the Nova Scotia Federation of Labour.

Welcome, Ms Mutton.

Ms Joanne Mutton (Vice-President at Large, Nova Scotia Federation of Labour): I'd like to just talk about the effects we feel are going to be harmful to people like the working poor and seniors, groups that can least afford what Bill C-91 is going to do to them.

As we look at that bill we think about how it's going to affect ordinary Nova Scotians. Can they afford the cost of drugs because of the protection act that's been put in place?

When I look at it, I think of some people I've seen in this province maybe having to go to the outpatients' department to have a prescription filled and not being able to get that prescription filled. I have to wonder where we're going with the health care system in Nova Scotia. I think the pharmaceutical companies have to be held accountable to the public. In order to get that done, I think, it's going to have to be done through regulations that may be put into place by the Government of Canada. If the government doesn't do that, I think you will again have the scenario of the rich getting richer and the poor getting poorer. We've seen that time and time again with different bills being put into place.

I'm going to stop at that point and let somebody else put together their presentation.

The Chairman: Thank you very much. That's a good overview of where you're coming from. We'll ask you lots of questions.

Is David Peters from the Nova Scotia Government Employees Union there?

Mr. David Peters (President, Nova Scotia Government Employees Union): Yes, I'm here.

The Chairman: All right, away you go.

Mr. Peters: Thank you, Mr. Chairman. On behalf of our members, the 17,000 public sector workers who we represent, including approximately 8,000 health care professionals, we're pleased to be here this morning. We welcome the opportunity to remind the government of its pre-election commitments concerning health care.

This review, we believe, should mean that health care needs and concerns will receive as much consideration by the committee as do economic or industry issues. We would argue that the health of Canadians should be the major factor guiding your review, because surely the most important criterion should be what can be done to ensure Canadians' access to universal and comprehensive health care.

One of the major causes of reductions in health care has been the federal funding cutbacks, first to the established programs' financing arrangements, and more recently with the Canada health and social transfer, which has been in place since April 1 of last year. This new funding arrangement is removing almost $7 billion in federal cash contributions for health, education, community services, and so on over the next two fiscal years. This is very much a concern. For Nova Scotia it means$328 million in cuts, and for a government that is already starved financially, this is going to mean further cuts in health care. Less than 20% of total spending on insured hospital and physician services is what the federal contributions now mean, when it used to be at about a 50% level back in the 1960s and 1970s.

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These cutbacks have also had an impact on insured prescription drug services, which we are concerned about today. In this province such services have been primarily for seniors over the age of 65 and for social assistance recipients. This is very much a concern, because those who can least afford to co-pay or to cost share drug costs are the ones who are being hurt the most. In fact, in our province there are co-payments of 20% on prescription drugs to a maximum of $200. We know of examples where people are not getting their prescriptions filled. They have to wait until their cheque comes in and so on. Prescription drugs are meant to be taken today, not in ten days' time or in two weeks' time. And that is very concerning.

The new public-private insurance scheme has effectively shifted half the cost of the program onto the backs of seniors. Another approach that's being used is the delisting of some drugs. In our province 10 of the 15 anti-inflammatory arthritic drugs were taken out of the plan in February. Also, a $3 co-payment is required by people receiving social assistance, and that's at a time when they're receiving $125 less for a shelter allowance. Other so-called special needs have been eliminated or greatly reduced as well.

The prescription drug needs of children suffering from chronic diseases and of people facing catastrophic drug costs are not being addressed or not being addressed adequately. We have reports from our members who work as pharmacy technicians in health care facilities that there are periodic shortages of needed drug products. Even some private insurers in this region are reporting difficulties in maintaining comprehensive drug coverage for their members.

Some of the needed directions that we see are necessary are, firstly, that drugs must be considered as medically necessary to medicare, as are physician and hospital services. These drugs are an essential public good in the health care field.

Secondly, public financing is essential for promoting universal access and for controlling costs. Drugs must become part of publicly funded health care.

Thirdly, in order to move forward with these two key concepts, we need a national drug insurance plan or strategy, as has been recommended by the Canadian Health Coalition and also in the alternate federal budget. The current patchwork of provincial plans across the country is simply insufficient to properly operate a publicly funded prescription drug program. Some key steps can be taken to move towards that goal. We need better information systems and to broaden the people to be covered to include people facing catastrophic drug costs.

Fourthly, we should re-establish the compulsory licensing of brand-name products. That was in place before Bill C-91, but we don't see it as being in existence at this time.

Some of the problems that will be mentioned here today pale beside the estimated billions of extra dollars created by the 20-year patent protection, which is made possible through Bill C-91. We would support the Canadian Health Coalition's call for compulsory licences after four years of exclusive patent protection. We feel that is more than adequate for any pharmaceutical company to recover their research and development costs.

We are not accepting the government's position that international trade agreements prevent the reinstatement of compulsory licensing. There are legal options to pursue if the government is committed to making drugs a medically necessary service. Those legal actions are already in the trade agreements.

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We need an open, extensive, and adequately funded drug approval process to allow the health protection branch to operate a safer and rigorous review process for all new drug products. We see no need for continuing with a confidential notice of compliance in a national drug plan.

Last, there is need for an expanded mandate for the present Patented Medicines Prices Review Board to be able to monitor and control the prices of all drugs, including generic drugs, and to be able to fully report and assess their impacts on provincial drug plans and a possible national drug plan.

To conclude, in 1964 the then Royal Commission on Health Services outlined a new bold direction for health care. This was back in 1964, and I quote:

We must reassert proper public control and accountability over the pharmaceutical industry.

I look forward to responding to any questions you may have. Thank you.

The Chairman: Thank you very much, Mr. Peters, for outlining your recommendations. That gives something for the committee to focus on.

I'm going to turn now to Heather Henderson from the Nova Scotia Nurses' Union. Welcome. We look forward to you addressing us.

Ms Heather Henderson (President, Nova Scotia Nurses' Union): Thank you. My name is Heather Henderson. I'm a registered nurse and I work as a nurse in an acute care facility. As well, I am the president of the Nova Scotia Nurses' Union.

Our provincial union represents almost 4,000 registered nurses, licensed practical nurses, graduate nurses and grads. The members of the Nova Scotia Nurses' Union provide nursing care in a variety of settings. Our members work in acute care facilities, in large hospitals, regional hospitals, community hospitals, in long-term care facilities throughout the province, in community nursing through the VON and also the Red Cross.

Our union welcomes the opportunity to address the Standing Committee on Industry with respect to the review of the Patent Act Amendment 1992, Bill C-91.

What I want to say to you is that we believe it is imperative that this review be truly that, with an honest and comprehensive review of Bill C-91, keeping in mind that the heart of this issue is the effect that Bill C-91 has had and will continue to have if no changes are made.

The members of the Nova Scotia Nurses' Union, as nurses and as caregivers, are in an ideal place to see firsthand the need for fairness in cost of pharmaceuticals, thus making it possible for all Canadians, even if they're disadvantaged due to situations like unemployment, financial hardship, family problems, gender or age, to access necessary medications when they are ill.

It is very interesting to point out that when the current federal government was in opposition in 1992, before the passage of controversial changes to the Patent Act under Bill C-91, its members were quick to point out the flaws in the legislation.

Our own Nova Scotia MP, Mary Clancy, called this bill pernicious, and I'm going to quote Mary: ``Why is it pernicious? Because of the amount of money it is going to cost ordinary Canadians.''

Our Cape Breton MP, now Minister of Health, David Dingwall, said:

We're very concerned with what's happening to our health care system. Bill C-91 takes hundreds of millions of dollars out of the health care system at a time when in every province across Canada health services are being cut. The price of prescription drugs is increasing by 12% a year. This is mainly due to Bill C-91, a law that has delayed the introduction of cheaper generic drugs.

The National Forum on Health recently released its report. In the report it stated that Canadians still want to support medicare and that the five principles of the Canada Health Act must be preserved. The National Forum on Health has recommended the expansion of medicare to include drugs as well as home care and primary care funding.

The Nova Scotia Nurses' Union supports the five-point plan recommended by the Canadian Health Coalition for a national strategy for medication. I'm just going to review those points with you.

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They are:

1. To establish a national universal drug insurance plan, replace the current patchwork of plans, and implement a program for rational drug use.

2. We support the fact that compulsory licensing should be reinstated. This will ensure that generic drugs reach the market more quickly.

3. Private research must be appropriately monitored for quality effectiveness. Public resources must be committed in sufficient amounts to do this. Royalties for compulsory licences paid to patent holders will be tied to the amount spent on research.

4. The drug approval process needs to be safe and publicly accountable.

5. Prices for all medications, including generics, must be controlled. Drug prices should reflect the true cost of research and development and not based on what drug companies think the market will be.

As nurses, we provide health care and care to our patients. Our patients should have the same right to access quality health care and to be able to use medications when necessary to assist them. What we're seeing is that many of our patients are not able to afford the more costly prescribed brand-name drugs. Sometimes the patient decides not to fill the prescription. Sometimes they make do with less than the full prescription. Perhaps they've received a sample. The point is that they need to complete that course of medication.

Consequently, those people then end up getting sicker and increase the cost to the health care system. We urge you, as representatives of the government, to examine Bill C-91 and to make the necessary amendments. The Liberal Party of Canada must provide critical leadership at a time when it seems to us, as nurses, that our Canadian health care system seems to be fragmenting.

We, as nurses providing health care to many Canadians, expect the politicians who lead this country to listen to our concerns, to be accountable, and to make the needed changes.

We don't want a health care system of American-style managed care. This corporate model of health care is being promoted by all kinds of groups, by multinational drug companies, by strategic alliances of medical associations, by for-profit health insurance, biotech and health data management corporations. That style of health care is not an import that we need or want. We believe it would end medicare and health care that Canadians have known, that Canadians expect, and that Canadians demand.

Thank you very much for this opportunity to make this presentation on behalf of the Nova Scotia Nurses' Union.

The Chairman: Thank you very much for your presentation.

[Inaudible - Editor]

Ms Fiona Chin-Yee (Health Action Coalition of Nova Scotia): I didn't hear you, but are you ready?

The Chairman: Yes. Go ahead.

Ms Chin-Yee: Thank you.

The Health Action Coalition of Nova Scotia is a member of the Canadian Health Coalition. I know you have received their brief and a presentation from the Canadian Health Coalition.

The Health Action Coalition of Nova Scotia is made up of groups that represent community members - labour, seniors, people who work with those who are disadvantaged both from a first nations perspective and from those who live below the poverty line. We are associated with a number of other coalitions. That's where we come from.

I agree with what has been said today so far, and I'm sure you've heard this across the country, that the risk to the health care system is due to the exorbitant and ever-growing prices of pharmaceuticals.

I have three points I would like to go over with you. One is that, from our perspective, we're very worried about the understanding of the difference between micro-management and macro-management of the health care system. I think a lot of initiatives that are happening within health reform come from south of the border and are from a micro-perspective, increasing some form of efficiency, but from a macro-perspective they are causing great hardship. We need to be able to look at this from the whole effect of what's happening to the health care system. It's interesting that we are actually presenting to a committee from the Department of Industry as opposed to a committee from the Department of Health.

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We'd like to again bring to your notice the National Forum's recommendation for a national pharmacare program, a single-payer system for pharmaceuticals for all Canadians, to be included under the Canada Health Act. That is a form of macro-management. We have to be able to maintain those decisions, that we can in fact create decisions that will affect the whole of the health care program.

I would like to make sure you understand there is actually a difference. Within a micro-managed system, when there is overspending on pharmaceuticals that are not covered through a single-payer system and are covered through multi-payers, whether they're insurance companies, or user-pay, or individual out-of-pocket expenses, the consumer, the patient, the citizen of Canada is constantly having to absorb those spillover costs. I think that has to be recognized. There's only one set of citizens in this country, only one set of dollars, and if it comes out of our taxes or out of our pocket, we really need to look at that from a whole perspective.

The second thing I find a lot of confusion over is the whole issue of the trade deals and how they affect what positions we can or cannot make. I think you have the report from Barry Appleton, looking at what are the trade obligations through NAFTA and the World Trade Organization as regards the pharmaceutical industry. We really need to look very hard at that, because if there are obligations, then we need to look at what kind of trade deals we do get involved in so that we can make independent decisions about our health care system. If those trade agreements do not affect how we make decisions in our health and social spending, then we really need to know that.

The third issue I'd like us to raise is the whole issue around research into drugs and the legislation that covers the amount of money that must be spent by drug companies into research. One of the worries I and other members of the Health Action Coalition have is that some of the research into drugs goes into copycat drugs, other drugs that have already been marketed.

We need to look at how do we encourage research into drugs that benefit those of low-income, especially, for example, a vaccine for AIDS. One reason that is not being looked at is that those who would benefit from a vaccine for AIDS are mostly in the third world and probably could not afford to pay market-bearing prices that would be generated from say, North America, for example. But how do we ensure that kind of research is done and then is accessible to people who need it?

To restate briefly, part of what you're looking at now in the regulations of the drug patent protection law is the introductory prices of new drugs. I think you really need to look at the regulations around the introductory prices through the patent protection review committee - I think that's what you call it. I think it's really essential that those regulations be rewritten immediately.

I think in the regulations around the compliance act, the extra 30 months that is possible for the drugs to remain as patent protected needs to be reviewed immediately.

The other thing I think we really need to look at is the whole issue of colour, shape, and size and that those extra patents that can be put on that can in fact increase the 30 months on the 20 years, and so on.

I believe a lot of the work on those three pieces can be done through your review of regulations. I would encourage you to do that.

Thank you. Those are my remarks.

The Chairman: Thank you. On the point about the issue being discussed by the industry committee, I'd like to say that's because the Patent Act falls under the Department of Industry, but the committee structure was changed to accommodate the fact that this is also a health issue. So we have the parliamentary secretary to the Minister of Health with us, and Dr. Pat Sweeney, who is a physician interested in health issues. I know the opposition parties share their work, too, with people who are very interested in health care. Your concern is very much our concern, and we want to make sure you understand we have members here who look at it from a health perspective.

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Now, from the Cape Breton Regional Health Care Committee, I would like to welcomeBrian Slaney.

Mr. Brian Slaney (Representative, Cape Breton Regional Health Care Committee): Thank you, Mr. Chairman. On behalf of the Cape Breton Regional Health Care Committee, I want to thank you for giving us this opportunity to address you.

I will give you a basic overview of our committee first and lead into what our concerns are on Bill C-91.

The Cape Breton Regional Health Care Committee was formed by a group of people in the early 1990s when it became quite clear there were plans to cut the services in the health care system. It was instrumental in maintaining health services through public support.

This committee remains intact today and is steadily growing. It is made up of people of both sexes from all political denominations and religions, etc. Two of our 21 regional municipal councillors are also on our committee.

We have followed this government's plight and have had mass rallies to put pressure on the government to stop the cuts and return to the recommendations that were put forward by the blueprint committee on health care reform.

Our philosophy is quite simple. People have a right to know about and have input into any plan for major changes in their health care system. People have a responsibility to learn about their health care system and provide input. People who are informed about their health care system and are listened to when they provide recommendations will assume more responsibility in proper use of the system.

In the last three to four years there have been enormous cuts to the health care system, which have led to poor quality health care and doctor shortages. People are hurting, namely the poor, the unemployed, the seniors, and the sick. These cuts were made in the name of deficit reduction. Deficit reduction is not health care reform.

It is quite clear that brand-name drugs have been steadily increasing since 1987, and it is also quite clear that the cost of drugs is the only area in the health care system where costs are not under control. If the government insists on using deficit reduction as a reason for health cuts, then why is it not looking at the cheaper generic brands? Hospitals are not the main reason for rising health care costs, although brand-name drugs are.

Health minister Dingwall is looking for provincial support and cooperation in reviewing non-patent drug prices to ensure those products are not unduly driving up the cost of health care. That's fine. I concur with my colleague Heather that he campaigned on the implementation of generic brands.

Dr. Judy Erola also says they have undertaken campaigns to help physicians prescribe the most effective medicines and to inform consumers on how to take them. She says that not taking drugs properly costs between $7 billion and $9 billion per year. She targets the seniors who, in Nova Scotia, pay a premium of $215 per year for drugs. Again, that's fine. It's great to educate people on how and when to take drugs, but there should be more emphasis on ensuring that the best possible drugs are prescribed at the lowest cost.

In conclusion, Mr. Chairman, I want to reiterate that Cape Breton now has the highest rate of unemployment at 27.1%. Realistically, it's in excess of 40%. People in Cape Breton are hurting all around and they basically cannot afford the high cost of drugs as it stands today.

With that, I'd like to conclude my presentation. Thank you very much.

The Chairman: Thank you very much for bringing that message from Cape Breton. It's very important to know what the costs are for an average family.

Our last witness is Mr. Chisholm, NDP leader of the House of Assembly of Nova Scotia.

Mr. Robert Chisholm (Leader, Nova Scotia New Democratic Party): Thank you,Mr. Chairman and members of the committee.

It's a pleasure to be here today. It would be nice to be able to see and talk with all of the members face to face, but we're glad this technology gives an opportunity - and I mean that sincerely - to express our views and have some dialogue with you, Mr. Chairman, and members of your committee.

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The Nova Scotia New Democratic Party caucus has long been concerned about drug patent law. Over the years we have been involved with seniors groups, concerned scientists, and others to raise awareness of the negative impact, on sick people and on our health care system, of the changes to drug patent legislation that have been dictated by the multinational drug companies.

We spoke out in opposition to Bill C-22 when it was introduced by the Mulroney government in 1986. We did the same when the issues resurfaced in a more virulent form in 1992 as Bill C-91. Our opposition on those occasions was based on the belief that giving greater monopoly protection to the patent owner drug firms will increase drug costs to Nova Scotia taxpayers and consumers. We further argued that the hoped-for benefits, in terms of greater pharmaceutical research activity in Nova Scotia, will not offset the negative impact of the increased costs.

Moreover, we have not been persuaded by the argument that the drug patent law changes were needed to protect intellectual property. Discoveries in the pharmaceutical industry have occurred in universities, hospitals, and other non-commercial settings. It's not right to limit the intellectual property rights to the drug companies. But neither is it socially beneficial to turn university scientists into patent entrepreneurs.

We can now say, along with most other Canadians, and certainly most of the people here today, we told you so. In the past five years prescription drug costs have soared. Although their profits have remained high, drug companies have not spent the R and D money they promised, they have not produced the breakthrough drugs they said they would, and they have failed to create the scientific research jobs we expected. In fact, rising drug prices have led governments to cut the health care sector in other areas, leading to job losses for nurses, home care workers, and others in the health care workplace. Bill C-22 and Bill C-91 have contributed to job loss, not job creation.

The issue is one of balance. Compulsory licensing was extended in 1969 because drug prices in this country were too high. Policy makers recognized then that there was a need to balance consumer protection in the public interest with the rights of the drug patent owners. The Mulroney government's drug patent legislation clearly tipped the balance in favour of the drug companies, and it's time to change the balance so the integrity of our health care system has precedence over drug company profits.

When the Nova Scotia NDP caucus voiced its opposition to Bill C-22 and Bill C-91, we were almost drowned out by our fellow opposition members in the Liberal Party, both federally and provincially. In fact, the MP for Dartmouth was particularly outspoken against Bill C-91. The Prime Minister, while leader of the opposition, promised to get rid of the Mulroney patent legislation. I hope Liberal members of the industry committee will keep that history in mind as they carry out their review.

In this end of the country, people are acutely aware of a couple of Liberal pre-election promises that didn't pan out. They concerned the GST and the CBC. I hope the drug patent legislation will not join this list.

Committee members have an opportunity to set in motion some major improvements to Canada's health care system. As a national forum on health care reminded us a few weeks ago, we need to expand medicare to include a universal drug insurance plan. To ensure that it is affordable, we need to reduce the monopoly power of the multinational drug companies by making it possible for generic drugs to reach the market more quickly, and as the health minister has said, we need to control prices for all drugs, including generics. These are all matters that I urge you to keep in mind as you continue your deliberations on Bill C-91.

As I conclude, Mr. Chairman, I have one final point. While this is an industry committee, I know that all members are aware of how important their decision is with respect to Bill C-91 and the kind of real and direct impact it will have on the ability of the provinces to restore and maintain the integrity of medicare and expand it to include national home care and pharmacare programs in accordance with the recommendations of the national forum.

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On behalf of myself and the NDP in Nova Scotia, I again want to thank you for this opportunity. I look forward to any questions.

The Chairman: Thank you again, Mr. Chisholm and the others, for making it easy for the committee in terms of the way in which you did your presentations. I'm now going to turn to Monsieur Brien from the Bloc.

[Translation]

Mr. Pierre Brien: I would like to thank all of you. I noticed that there were several common threads which ran through your presentations, that you all pointed out that it was difficult for the provinces, particularly yours, to deal with the cutbacks in transfer payments, which amounted to nearly $300 million in your case, and that this has put a lot of pressure on the health system.

This being said, Mr. Chisholm referred to the fact that the industry had not met the research and development commitments it had made when Bill C-91 was passed. I would like to know what is the basis for his comments, because the Patented Medicine Prices Review Board affirmed just the opposite. Mr. Chisholm.

[English]

Mr. Chisholm: Thank you for the question, although I apologize that I don't know exactly who it was directed from.

I believe there were a number of promises, a number of commitments, made by both the Mulroney government and those multinational pharmaceutical companies that were pushing for this further protection. Those commitments have not in fact been revealed. I think the Canadian Health Coalition has made a fairly complete examination of those points, and the paper that was affixed to the national forum - volume 2, by Bob Evans - also gets to the heart of the problem of the control that the multinational pharmaceuticals have of the pharmaceutical industry in this country, and to the heart of the failure to deliver on a number of these promises.

Here in Nova Scotia, for example, the province tells us that it is trying to cope with the devolution of control and the reduction in transfer payments, which continue to cut and slash at all facets of the health care system. The effect is not only felt in the area of jobs, but also in that of the level of services available to Nova Scotians. We believe the cost of drugs is an area that is not under control, and we do not accept that something that is driving the cost of the health care system to such an extent should be left without very significant controls. A number of very specific recommendations have been made by the Health Coalition, and we support those recommendations.

We believe it's important that we reassert control over our health care system so that we can in fact carry out the recommendations of the national forum to have a national, single-payer pharmaceutical program or pharmacare program, and so that we also have the resources to extend the national program for home care.

[Translation]

The Chairman: Mr. Brien.

Mr. Pierre Brien: My next question is general in nature and is addressed to all of you. Those who will feel the most comfortable in answering the question may do so.

To a large extent, your statements are based on the fact that generic drugs cost less than drugs that have just been discovered. Have you considered the fact that many of these new discoveries often replace treatment which previously would have required surgery?

On the whole, the arrival of brand name drugs can lower the cost of the health system. When we are not in a monopoly situation, these drugs can even be offered at a competitive price. This can represent savings for the health system. This is what we refer to as pharmacoeconomics.

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Did you take this into account or did you simply deal with the cost of generic drugs compared to the cost of brand name drugs?

[English]

The Chairman: Does anyone in particular want to start with that?

Ms Chin-Yee: I'd like to respond. I think there are two quite separate issues at stake here. First, if the health care system can use generic drugs, and if it can do so more quickly, it will be better for the overall system. That's from a macro-management perspective.

The patent protection law in place before Bill C-91 did give protection to the pharmaceutical companies in order that they could recapture any of the costs that had gone into research and development, and it allowed them to make a profit. What has happened, though, is that the extension of the patent protection allows them to make exorbitant profits.

There has been no indication that a percentage of those exorbitant profits has gone back into the creation of innovative drugs. On average, right across North America, innovative, breakthrough drug research accounts for approximately 8% of the research and development money. It's a very small percentage of money, whereas 75% of research and development money actually goes to bringing those drugs through the government's required regulatory process. If you're looking at it from that kind of monetary perspective, that isn't breakthrough or innovative research.

There is also another thing that we need to look at. If we give drug companies - or any company - a very long period of patent protection and an ability to make as much profit as possible, what we do is encourage them to create copycat drugs, drugs that are very similar to each other or that have a similar effect as therapies for certain illnesses - whether it's a gastro illness, arthritis, high blood pressure or whatever - as opposed to encouraging them to look for breakthrough therapies for some of the illnesses that are very hard to manage. Those could be, for example, in the area of mental health or in the areas that I gave in my presentation, that of looking at research into an AIDS vaccine. When we look at the kinds of people who would utilize drugs in the case of AIDS, most of the AIDS victims are in the third world. In the case of the drugs that would be beneficial for mental health, we're looking at people who are poor, people who cannot afford to buy them.

No one is suggesting that drug companies shouldn't make a profit, that drug companies shouldn't recapture costs. But we are trying to encourage you to develop a system that would provide an incentive for drug companies to really look at some of the innovative, breakthrough therapies that you suggested will make a big difference to our health care system. The current legislation does exactly the opposite.

The Chairman: Thank you.

I'm now going to turn to Mr. Mayfield.

Mr. Philip Mayfield: Thank you very much.

I'd like to explore some of the comments you just made, if I may.

Continuing on with prices, it seems to me that we have been told that patent drug prices have actually declined since 1992, rather than what you suggest. I think Mr. Chisholm said prices have soared. There is some suggestion that costs have increased. In distinguishing costs from prices, however, the prices of the drugs to consumers have actually declined. There's also the suggestion that the system of competition has worked better than price controls and that if we go back to controls we might expect to have higher prices as well.

Have you given some consideration to that data that has been brought to us here?

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Ms Chin-Yee: I think what we need to consider is whether or not we're looking at it from a purely Canadian perspective or from an international perspective. If we look at the comparison across the OECD, which is made up of 23 countries as well as Canada, then we can see that Canada does not rank well. In terms of the cost to the individual of pharmaceutical prescription drugs, I think we rank with Italy. We don't rate very well in that way. So I think we have to look very carefully at what we are comparing ourselves to.

It is a fact that if you look at any of the budgets of the departments of health across the country, you will see that it is the rise in the rate of payment for pharmaceuticals, both from the public and the private purse, that is the one piece in the health system that is rising exponentially. I think you'll see that right across the country.

If we're looking at the price of one drug versus the price of another drug, then we're getting into the whole issue of looking at this from a micro-management perspective instead of a macro. I think when people confuse the two we are in really big trouble, because we risk ruining the perfectly good system of medicare that we have and that we can in fact make better. So I think you should be careful of what you ask for and that you should look at what kinds of answers you're getting back.

Mr. Chisholm: I think the evidence that has been provided by the Canadian Health Coalition and others in terms of prices as well as costs is instructive.

We recently had a presentation from our Department of Health here in Nova Scotia to our public accounts committee on the question of the pharmacare program. They're having a very difficult time keeping costs under control. One of the factors is the increased use of new and more expensive drugs, which are coming on the market. While they are certainly trying to control the use of these new and more expensive drugs with new formularies, they're finding that's one of the big cost drivers that's affecting their pharmacare program here in the province of Nova Scotia.

Mr. Philip Mayfield: Another matter of concern I have with regard to prices is related to the demand to decrease the patent protection period. It seems to me that if a company has spent three-quarters of a billion dollars to develop a drug and they have four years on the marketplace instead of ten, they might be inclined to consider drastically increasing the price of that drug over that four-year period. Now, I know when new drugs came on the market for the treatment of AIDS, there was a hue and cry that the drugs were not affordable by those who needed them. It concerns me that by calling for a shortened period - at least as short as you are demanding - we run the risk of not lower prices but of in fact extremely high prices. Do you have any comment on that?

Mr. Chisholm: I want to just say, if I may, one thing, and that has to do with my concern over the fact that this is an industry committee that is dealing with this whole issue. I didn't catch the name of the person who asked the question, but the concern here is that we get enough return for these drug companies. What we're talking about is how in fact we can control the costs of pharmaceuticals in this country so that we can improve the delivery of health care to all Canadians. It's as if there's a conflict here in terms of what the starting point is and the basis for the questions that causes me some considerable concern.

I've gone through some of the presentations from the 1960s and the 1970s, and this argument that the drug companies aren't making enough money and have to be able to demand higher prices in order that they'll conduct research simply has not panned out. As Fiona said, we simply do not rank well with other OECD countries in terms of the amount of money put into pharmaceutical research.

Does anybody else wish to speak?

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Mr. Peters: I'd just like to add something there. I respect the question, because it must be part of the consideration, but let's not fool ourselves. All of us, as Canadians, are paying for a lot of research and development through tax laws that allow huge write-offs. In fact, the amount spent by a pharmaceutical may be a very small actual cost to the company itself after considering these write-offs. Let's not, I ask the person who asked the question, be co-opted by this propaganda from the pharmaceuticals.

We all remember, back when Bill C-91 was first passed, all the promises that literally thousand of jobs were going to be created, mainly in the province of Quebec. They have not materialized. In fact, there has been a reduction in jobs in the pharmaceutical industry in Canada. This is because of many of the largest corporations merging and buying out the smaller companies, thus eliminating jobs in Canada.

While your question is fair, let's look in a very balanced way at what is really happening in Canada.

Mr. Slaney: I have another point, if I may.

Monopolies are what we're talking about here. I was brought up to believe monopolies were unconstitutional or illegal in Canada. This is another issue that I believe is pertinent to this issue.

The Chairman: We'll have one more question from Mr. Mayfield.

Mr. Philip Mayfield: Thank you very much.

There was another comment made about the 30-month injunction being added to the 20 years. I've heard this statement before, and it has concerned me, because it seems to fly in the face of the Patent Act itself and of 20-year protection.

The research I have done indicates there may be a 30-month injunction, but this injunction would come to an end after 20 years.

Have you done research on this? Sometimes things are said and they're passed on from person to person without really getting down to the facts. Have you dug into the facts on this and done your research?

Ms Chin-Yee: In fact, I personally have not done this research. This research has been conducted with Robert Evans, a health economist who wrote the background paper for the Canadian health forum. Other health economists have in fact done that piece of work.

One group with this as a major concern is the Canadian Drug Manufacturers Association, which represents generic drug companies. It appears from what I have read that the 30 months is added on, because what happens in a regulatory process is that at the point when an application from the generic company to copy the drug is put forward, if the original pharmaceutical company has a problem with this they can put a hold on it. This hold is on for a number of months. It continues and then there is a hearing. All together, it adds up to an extra 30 months.

This is part of a jurisdictional process that comes out of both this legislation and past legislation. In fact, the 30 months does exist. We won't really see the effects of it until the beginning of the next century. We have had this legislation in place for six years. There were drugs developed before the legislation that the generics are now bringing on stream.

In another couple of years, probably by 1999 through to 2005, there will be less and less ability for the generics to copy drugs, simply because the legislation starts kicking in. There was a lag time, and this lag time is now being eaten up. I think we will really see the effect of the 30 months closer to the end of this century and the beginning of the next one.

Again, we have to be very careful about what we're counting and what we are looking at.

The Chairman: Thank you to Mr. Mayfield and to the witness.

I will now turn to Mr. Bodnar.

Mr. Morris Bodnar (Saskatoon - Dundurn, Lib.): Thank you, Mr. Chairman.

It's been interesting hearing all your presentations. At this point, I'll just refer to some of the comments Mr. Chisholm has made.

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I appreciate your interest in this matter from your political position. It's nice to see that you have an interest since your federal counterparts in the NDP appear to have no interest in this particular issue and never appear before this committee or on this committee in dealing with Bill C-91.

You have referred to matters such as prescription drug costs soaring. I appreciate your comment. I'm not saying that I agree with you on that, and I don't say I disagree either, because you've referred to prescription drugs, rather than distinguishing between generic and patent since both of them are prescription drugs.

If there is a problem with these particular drugs and the costs going up, and going up too high...and I can indicate to you, Mr. Chisholm, that this comment about the cost of drugs being way too high has been made to me by your NDP counterparts in Saskatchewan. My suggestion to them was that if the costs are that high, why do they not set up their own generic farm, a crown corporation at the University of Saskatchewan, and manufacture their own drugs, make these ``exorbitant'' profits, and reinvest them into education at the university? Have you ever lobbied your provincial government in Nova Scotia to do anything comparable?

The Chairman: Mr. Chisholm.

Mr. Chisholm: Listen, I don't even know if that deserves a response. Let me say first of all that the federal NDP is certainly clearly on the record, and whether they decided or didn't decide to appear before the industry committee on this matter...not only am I here to make this point on behalf of the NDP in Nova Scotia, so are these people who are represented at this table, and they represent thousands if not hundreds of thousands of Nova Scotians, including New Democrats associated with the federal party.

What do you want me to say? With respect to the problem of the costs going up, we're dealing with a piece of legislation here that is unconscionable, given what's happened with health care in this country. I believe your committee and you, as the parliamentary assistant to the Minister of Health, should be coming out squarely behind the Canadian Health Coalition and others who are trying to put a stop to what is basically this licence for multinational pharmaceuticals to print money.

In the spirit of trying to protect the integrity of the health care system in this country you and your minister should be the first ones to come out in opposition to this legislation and to make sure that these changes go through.

Taking a second, and only a second, for your question about Saskatchewan or anybody else setting up a similar company, I think that just flies in the face of what the issue is here. The issue is that we have a bad bill. We have a bill that needs to be changed. We need to get some control over what is basically a state of usury here and get control over health care and expand it to best benefit all Canadians.

Mr. Morris Bodnar: Mr. Chisholm, it's always interesting to hear you make these comments with respect to drugs, and you say that suggestion of a crown corporation or whatever begs the question. What I'm simply saying is that I'd like a solution. I can hear criticism of the system and I can hear you saying we should get rid of Bill C-91, but there is still no solution.

You can talk about monopolies in the patent drug industry and refer to them as multinational corporations and monopolies, but you've never referred to the monopolies in the generic drug industry. I would like to find a solution that helps the public, rather than just being involved in rhetoric in the criticism of the system without coming up with a solution.

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That's what I'm looking for, a solution on how to deal with this, because dealing with Bill C-91 and even making changes to Bill C-91 doesn't necessarily rectify the problem and get lower prices for the consumer.

Let me give you an example, and the example is very simple with drugs. If a drug is going up in price but the manufacturer is not getting a higher price, where is the price rising? Is it at the dispensing stage, or where is it going up? Just because a drug price is going up doesn't mean the manufacturer is getting the money.

That is one question, and I can tell you from my experience that the dispensing fees run in the range of 25%.

So I am looking for solutions. I can hear what you're saying, but you're not giving me a solution. You're simply giving me - with all due respect, Mr. Chisholm - political rhetoric.

Mr. Chisholm: Let me take a little bit of a stab at that.

We're here to deal with Bill C-91. If I thought I was coming here to present a brief that would go to the Minister of Health in terms of how to deal with overall problems in the health care sector, I would probably turn him on to the National Forum on Health's report for starters.

That having been said, what about things like what the British Columbia government has done in terms of the whole process of reference-based pricing? That's something that has been incited by the Canadian Health Coalition as an option, a strategy, that has done something to deal with this issue.

What about the federal government investing money in the National Research Council, for example, to have them dedicate their energies and considerable skills toward the development of new drugs for the future and to deal with some of the issues?

With all respect, I think there are solutions. The first step in finding the solution is to make the changes to Bill C-91 that have been recommended by the Canadian Health Coalition.

Mr. Morris Bodnar: Let me suggest another possible -

The Chairman: Mr. Bodnar, I'm sorry -

Mr. Morris Bodnar: May I ask one last question?

The Chairman: I'll give you time, but some other people want to intervene.

Was there someone else who wanted to say something on this one?

Mr. Peters: Yes. I want to say that I didn't come here today to beat up the pharmaceutical industry. They are important to the manufacture of drugs. But we seem to be losing sight of.... I mean, I appreciate the questions, but where is the concern for the users of the drugs, the people who are now being hit with user fees, the seniors and those in low-income groups? We have to focus on that side of the equation as well.

As to the pharmaceutical industry, their average rate of return on equity is three times that of the manufacturing sector in Canada. So there seems to be a little bit of excess in there. They have legal means of extending their patent protection, by taking the generic drug manufacturers to court, and so on and so forth. They seem to have lots of protection, and they also seem, from some of the questions I'm hearing, to have a considerable number of advocates in Ottawa. But where are the advocates for ordinary Canadians?

In my province, where seniors have to pay 20% of prescription drug costs right up front, some of them are delaying getting those drugs and some of them aren't taking them at all. We even have examples of where people are sharing somebody else's drugs, and that's not healthy either.

There has to be a balance here, and the scales of balance at this time seem to be tipped in favour of some of the large pharmaceutical companies, who make their profits in Canada - some of them are American-owned - and the profits go out of Canada. Those are dollars that we need to recirculate in Canada.

They have not fulfilled their commitment to create jobs in research and development. Clearly, they haven't. The statistics show that. Where is our concern for that? Where is the last speaker's concern for that? I hear him asking questions that, to me, seem tainted toward protecting the drug manufacturers. While we have to do that in balance, we also need a balance for Canadians as well.

The Chairman: Thank you very much. It's a point well taken.

Fiona, did you want a final comment on this? Then there's a final question for Mr. Bodnar.

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Ms Chin-Yee: I have two small points. Looking at solutions is, I think, exactly what we need to do. But the solution that was suggested was to have individual provinces, which would mean ten provinces and possibly three territories, set up little crown corporations that make their own drugs for their citizens. We have an understanding of what is called core competency. For us in Canada the core competency for the research and development of new drugs exists in basically Mississauga and, I believe, Laval, which is outside of Montreal. So there's no point in suggesting that little companies get developed that could maybe make one drug as opposed to the hundreds we actually need. I think it was a simple solution that doesn't really have much merit.

The second thing is where do we look for solutions. We tend in this country to look for our solutions south of the border. We're not going to find the solutions there. But there are 23 other countries in the OECD. For example, in a paper entitled Crossing the Rubicon?, which was written by Arthur Stewart, a health economist from Queen's University, which I'm sure you have a copy of, he says that the OECD study on health care reforms suggests that cost control is aided by the existence of a single payer.

So if we're looking at major health reforms in order to contain costs for pharmaceuticals, then we need to look at what the national forum has come up with, which is a single payer system for prescription drugs in Canada. Then we can look at creating cost containment mechanisms.

Germany directly controls the reimbursement of pharmaceuticals. In that country, where a lot of the drug manufacturers have their home base, they have no trouble in directly influencing the cost of the pharmaceuticals. In Britain and France they're looking at the whole issue of how prescriptions get written and at education, which we've gone through.

So there are possibly 23 alternatives we can look at. That's where the study should be going. That's where your researchers and clerk should be looking; that is, at what are the successful mechanisms in other western countries. Some of them don't have the paranoia for actually controlling the pharmaceutical industry that we see south of the border. So there are solutions. Looking for solutions is what we need to do, but let's look at some kind of sensible solution.

The Chairman: Thank you.

We will have one final question from Mr. Bodnar.

Mr. Morris Bodnar: Thank you, Mr. Chairman.

With regard to what Mr. Peters said, no, my questions are not biased towards the drug industry. I thought that I was the one who was trying to suggest solutions that would protect the consumers. I'm not saying that you shouldn't say anything here that might slam the drug manufacturers. If it's constructive criticism, that's exactly what we want. We want to make sure that what is available is the best solution possible for the Canadian consumers, because the Canadian consumers end up paying for everything. That includes you and me, I'm sure.

My final question deals with the Patented Medicine Prices Review Board. As you well know, federal jurisdiction extends only as far as patent drugs. Patent drugs are in fact a small part, relatively speaking, of total drug costs to the Canadian public, and a large part of the cost is through generic drugs. Would you agree that the pricing of drugs in the generic industry should be delegated by the provinces to the federal government so that the Patented Medicine Prices Review Board can also oversee the prices of the generic industry?

The Chairman: Does anybody have an opinion?

Ms Chin-Yee: Yes. I'm glad I can agree with you. I think that should happen, that we look at pricing of all the drugs that are necessary for the health of Canadians.

But I think you need to look carefully at the regulations for the Patented Medicine Prices Review Board and to make sure that the comparisons they are making are based on OECD numbers, not on the five countries, I think it is, they currently look at.

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So I think we need to broaden the scope of how they do their comparisons and also to look at it from the whole system's perspective. It will be very interesting to see how they react to the issue of possibly having a national pharmacare program and to see what they think the impact on the system might be. But I think you are right that we need to include not just patent medicines but all the medicine that is necessary.

The Chairman: I'd like to thank the witnesses. We had some very good presentations made to us, and you spoke with passion for what you believe in.

I know this technology is a little strange, but we really are quite determined to hear from all 150 witnesses from across the country who have asked to be heard.

For Mr. Slaney in particular, who has come down from Cape Breton for this, I'm sure that I speak for all members of the committee when I say that we really appreciate you making the trip to Halifax in order to help us out.

Your views are taken quite seriously. You have shown that when challenged, such as you were by Mr. Bodnar, you're willing to fight for what you believe in, and that's very important for us to hear.

That ends our session together. If there's any further word you'd like to contribute, please write us in care of the House of Commons. Before we finish our deliberations we'll take a look at any additional notes you may have. Thank you again.

The committee is adjourned until 3:30 this afternoon in the same room.

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