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RECOMMENDATIONS
The Committee has undertaken an extensive review of Bill C-91, as required bys.14(1) of the Act. Members would like to thank the over 140 witnesses who participated in these hearings and the many Canadians who made themselves available to help us better understand the issue before us.It will come as no surprise to hear that we found this policy area to be one of the most contentious and difficult ones facing the Canadian government. As outlined in the report, public policy has emerged in a particularly Canadian fashion, which makes it unique in the industrial world. Consequently, our recommendations are grounded in the belief that we must address the wide range of problems that came to light during our hearings.
In the broadest sense, the Committee concluded that the issues are both health- related and industrial in nature. It is not possible to deal only with one aspect. Canadians are extremely proud of their health care system and will fight to preserve the five fundamental principles of the Canada Health Act. Effective drug policy is an essential component of that system. Thus, we need an efficient, productive, profitable and innovative pharmaceutical industry to support the objectives of the Canada Health Act.
While we would like to think that health policy and pharmaceutical policies are naturally harmonious, such is not the case. The reality is that some policy objectives are in conflict with each other. However, it is absolutely essential that everyone recognizes that to change one component is to set in motion a new balance, because so many issues are interrelated. Governments must be aware of the consequences of these changes in order to minimize disruption and optimize the benefits to both industry and consumers.
Some of the recommendations deal directly with the concerns raised by witnesses that we need a more public policy-oriented regime dealing with pharmaceutical products. These issues include costs, delivery systems, litigation, public awareness and research. The rest of our recommendations deal with the structure of the industry itself. Since this industry is characterized by both international and domestic conditions, we offer some principles and guidelines that might make for a less acrimonious business environment.
We would like to reiterate that we appreciate that this report comes at a contentious moment in the development of health and pharmaceutical policy. There are several sophisticated participants active in these fields who are well-informed and highly articulate. For example, both provincial and federal governments are concerned about drug prices while all three levels are interested in the location and expansion of research facilities. There are dozens of interest groups actively advocating policy changes on every issue in front of the Committee. And, of course, the major pharmaceutical and generic firms have expressed their opinions on Canadian public policy.
The Committee heard testimony that manufacturers of generic drugs should be granted an exemption to export to countries where the relevant patent has expired. The Committee has not found sufficient evidence to suggest that this would be within the context of our international obligations. Indeed, to grant such an exemption would be unprecedented internationally. The Committee cautions the government, however, that anecdotal evidence suggests that generic manufacturers have been forced to locate outside of Canada to produce products for that country's domestic market.
The task facing Canada at this time is to rebuild effective partnerships so that there are fewer points of conflict and more convergence. It is in everyone's best interest to have a most cost-efficient system, just as it is important that we are in the forefront in the research and development of health products. The work of government is to structure health and pharmaceutical policies so that each partner, which has so much to contribute, begins to play a positive role on behalf of Canadians. We trust that this report will be seen as a step in that direction.
Recommendation 1
Because pharmaceutical products are medically necessary, the Committee believes steps should be taken to investigate the feasibility of a national pharmacare program. While the overwhelming majority of Canadians are presently covered by some form of public or private insurance, we must recognize the needs of those who are not. The Committee has heard the testimony of dozens of witnesses who cited the rising costs of pharmaceutical products and insisted that the Committee taken action to follow the recommendations of the National Forum on Health.
The Members of the Bloc Québécois wish to make known their agreement with the many groups that criticized cuts to transfer payments in the area of heath care. These cuts have forced the provinces to cut their services drastically. The cuts by the federal government are deplorable, especially since the Liberal government is currently trying to inject money into health care with the primary objective of ensuring greater "political" visibility for the money it spends in this sector. The Bloc Québécois believes, on the other hand, that it would be better to simply increase health care transfers and leave it up to the provinces to decide their priorities. Finally, the Bloc Québécois affirms that, in the event a national pharmacare program is set up, the federal government will have to transfer equivalent tax points to the provinces, like Quebec, that already have their own plan. The government should look at the Canada Pension Plan, in which Quebec has its own system with the Régie des rentes.
Recommendation 2 - PMPRB
Canadians must be sure that the price of all pharmaceutical products is appropriate. The Committee agrees with testimony suggesting that the mandate of the Patented Medicines Price Review Board (PMPRB) be reviewed and strengthened. The Committee believes that is imperative that Canadians have trust in the role and methodology of this agency. To provide Parliament with information on performance and efficiency, the Committee recommends that the Office of the Auditor General perform an audit of the PMPRB.
In addition, to better inform the public about the pricing of pharmaceutical products in Canada, the Committee recommends that the government take the necessary steps to allow greater access to non-proprietary information at the PMPRB.
Furthermore, the Committee recommends expanding the powers of the Review Board to enable it to look into fair and reasonable access by companies holding patents in the case of unlicensed pharmaceuticals for individuals suffering from degenerative disorders.
Recommendation 3 - 20-Year Patent Period
The Committee believes that Canada should remain committed to our international trade obligations. The Committee accepts the 20-year patent period.
Recommendation 4 - Regulatory Reform
The Committee has heard from many witnesses regarding the Notice of Compliance (NOC) regulations. We believe that these regulations are the heart of the debate and we have attempted to address the contention regarding them. In a specific round-table, the Committee heard testimony from legal counsel from both the generics and the brand name industries. Options were discussed and the merits of each model were debated. The Committee heard testimony from both sides suggesting that the system, in its present form, is problematic and has resulted in excessive litigation.
The Committee recognizes the high cost of research and development and the long period of clinical testing and approval. The Committee is also cognizant of the desire to ensure that generic non-infringing products enter the marketplace as soon as all relevant patents have expired.
The Committee appreciates the legal obligations that the government is subject to by the Regulatory Policy and the Statutory Instruments Act. This process is to ensure that the Regulatory Policy (including maximizing stakeholder input) is effective and to ensure that there is appropriate ministerial accountability. The full process for Governor-in-Council regulations contains the following steps: the regulatory package is submitted to the Regulations Section of Justice for legal review; to the Treasury Board Secretariat for review of the Regulatory Impact Analysis Statement (RIAS); and to the Privy Council for a general policy review. The Special Committee of Council (SCC) examines the proposal and gives approval to pre-publish the regulations and the RIAS in the Canada Gazette Part I. Once pre-published, the public has at least 30 days to comment. If substantial comments are received, the regulatory department must consider them and respond appropriately. If these comments lead to substantial changes, the process will begin anew. If not, the regulatory package is submitted to the SCC for final approval and, if approved, the Clerk of the Privy Council registers the regulations under the Statutory Orders and Regulations (SOR) designation. The regulations generally become effective on the date of registration and the approved regulations are published in the Canada Gazette Part II. Finally, the regulations are submitted to the Standing Committee for the Scrutiny of Regulations for review. This full process typically takes at least one year. The same process applies to repeal of, or amendments to, regulations. As a final note, the SCC can promulgate regulations when Parliament is not sitting.
With the complexities of these issues, the Committee recommends that the government re-visit the regulatory regime associated with Bill C-91, given the concerns that have been raised by the stakeholders.
The Bloc Québécois proposes two options.
Under the first option, two changes could be made to the existing link regulations.
A. Clarification of the list accompanying patents
B. The establishment of parallel time frames for the processes of licensing and challenging the notice of compliance in court to ensure the entry of a generic product is not unduly delayed
The second option is drawn from the American model, that is a system in which usual court procedures apply (injunction and civil damages), damages in the amount of three times the value of the damages caused. This constitutes a major disincentive to infringement. Furthermore, the provisions on quick production and access to information on patented products are more restricted and different.
Regardless of the option, the aim is to ensure that protection accorded under the Patent Act is provided in reality and that the specific nature of the pharmaceutical industry is known. The Bloc Québécois would also like to point out that any amendments must be enshrined in law.
Recommendation 5 - Research and Development
After Bill C-91 came into force, the Pharmaceutical Manufacturers Association of Canada (PMAC) made a number of commitments with respect to its members' research and development (R&D) performance. These commitments were to be met collectively by the members of the PMAC. Among the commitments was the $200 million Medical Research Council-PMAC Health Program, to enhance support for biomedical research and training universities and related institutions across Canada over five years (1993-1998).
To fill the gap left by the termination of the MRC-PMAC Health Program in October 1998, and to strengthen the pharmaceutical industry's commitment to basic research in Canada, the Committee recommends that negotiations be conducted to institute a program of similar design. It is our belief that there is a need to increase the amount of basic research conducted in Canada.
The Committee recommends that the industry, both generic and brand-name, be given the option of either voluntarily participating in a similar program, in conjunction with the MRC, or paying a levy of 1% of sales on the manufacturers' price of patented, generic and non-patented drugs. The fund would be administered by the MRC through its normal peer review procedures. The fund would support collaboration in health research broadly defined, pharmaceutical research needs that are not being currently met, and projects that strengthen the research base that a self-sustaining biopharmaceutical industry needs.
Recommendation 6
To facilitate the public debate on the pricing, usage and costs of drugs, as well as on pharmacare, the Committee recommends that the PMPRB consult with consumers, health care professionals, experts and the provinces to assess its current statistical reporting, and find out what other information it could provide to the public. The board should work in conjunction with industry to develop appropriate outcome models to analyze the impact of drug pricing on Canada's health care system.
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