I thank the house, Mr. Speaker, for allowing me to complete my remarks so that the official speaker for the Conservative party can start his remarks the next time the subject is debated.
I have endeavoured to show that there is ample room for the Canadian drug manufacturers to meet competition from importers as designed by this bill. Apart from the above, the Canadian drug manufacturer, as a patentee of a drug, has three specific advantages over importers of the same drug. First, he will still enjoy a preferred tariff position. Second, he will receive a royalty required to be paid to him by the licensed importer in an amount to be decided upon by the commissioner of patents. Third, he will, as a practical matter, have a period of complete monopoly protection from the time his newly innovated drug is placed on the market, until such drug loses its "new drug status", except in the unlikely event that a competitor also clears the product as a new drug.
The regulations under the Food and Drugs Act require a manufacturer, before any sale of a new drug is permitted, to carry out costly and intensive tests, the results of which must satisfy the food and drug directorate as to the safety and efficacy of the drug. When so satisfied, the directorate issues a notice of compliance which allows the manufacturer to market the drug in quantity, and for that length of time necessary to ensure that no serious side effects of the drug may show up. This period of time is generally not less than five years, and during that time the product remains in new drug status. During this time no other manufacturer can enter the market and sell the same drug until he, too, receives a notice of compliance from the directorate. Experience has shown that a competing manufacturer will not normally seek a compulsory licence during the time a drug is in
Patent Act-Trade Marks Act new drug status, for the expense involved would not make such a procedure worth while.
In addition, quite apart from this expense, a competing manufacturer would doubtless have difficulty in interesting the limited number of doctors available who are qualified to do clinical testing in the job of repeating tests on a product, the results of which already would be basically known. For a period of approximately five years, therefore, the original manufacturer or creator of the drug enjoys full protection and can carry out his promotional program in a manner to gain for him maximum acceptance in the market.
I turn now to that other aspect of the bill which proposes an amendment to the Trade Marks Act. The present law is clear that an importer of a trade marked product into Canada may be sued for infringement by the Canadian owner of that trade mark, if the owner is manufacturing in Canada, whether that owner is a subsidiary of a foreign corporation or not and whether or not the product has been purchased by the importer from the foreign parent. This could apply in cases where an importer purchased drugs from a foreign country in their final dosage forms and which were labelled as trade marked products.
[DOT] (10:00 p.m.)
The proposed amendment deals with this situation. It provides that no infringement can be claimed where drugs bearing the trade mark of and manufactured by a related company in a foreign country are imported into Canada. For example, when a Canadian subsidiary and its foreign parent sell a drug product under the same trade mark in Canada and the foreign country, the Canadian subsidiary could not sue the importer for infringement when the importer purchases that product from the parent corporation for sale in Canada. This amendment will, however, apply in practice only in a limited number of cases where a wide margin of price disparity would have to occur before it would be worth while for the importer to consider the importing of such a drug as a reasonable business venture.
The Canadian drug manufacturers argue that many drugs, although identically trade marked and put on the market by their related companies in other countries, differ in composition, that their strengths may vary, and that inert substances used in the pill or
October 17, 1968
Business of the House
capsule form of the drug may alter its efficacy or even cause harm to the consumer. Again, this is a question of safety, and after the debate on C-190 we amended the old bill C-190 to meet this situation. As I stated before, this is the responsibility of the Department of National Health and Welfare; and I would repeat that my colleague, the minister, will explain how this new amendment works.
May I thank hon. members, Mr. Speaker, for allowing me to go on for a few minutes after ten o'clock, and I apologize to them for this lengthy resume of the principle of this bill and the reasons which lie beneath its introduction. However, the debate under the original bill C-190 was so lengthy and inspired that I considered I would be remiss in my responsibilities to the house were I to make this statement on second reading too abbreviated. My impression has always been that there appears to be needless concern within the drug industry about the effects of the bill. We are merely seeking to make the competitive market work more effectively. I have also had in mind the large number of new honorable members in this parliament, and for their benefit, too, I have elaborated my remarks.
It has now been more than five years since the first recommendations on the high costs of drugs were reported, Mr. Speaker, and even more since it first became clear that drug prices in Canada were among the highest, if not the highest, in the world. I believe firmly that, following all that has been said, and after receiving almost identical recommendations from two commissions and a special committee of this house, we would indeed be failing in our duty as members if we were not to take this action in the public interest, with a minimum of delay.