April 7, 1987

NDP

Cyril Keeper

New Democratic Party

Mr. Cyril Keeper (Winnipeg North Centre):

Mr. Speaker, I welcome the opportunity to enter this debate. I have, of course, spoken on this legislation before but there is now an amendment before us. It is a pleasure to enter this debate, particularly when we hear heckling from Members on the government side who seek to participate in the debate by heckling rather than standing up and speaking.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Barbara Jean McDougall (Minister responsible for the Status of Women; Minister of State (Privatization))

Progressive Conservative

Mrs. McDougall:

Unlike yourself.

Patent Act

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

We want you to tell the truth, that's all. Be honest with the Canadian public.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

Mr. Speaker, I object to the Member across the way implying or stating that I am not telling the truth. If that Member wants to speak on this legislation he should have the courage to stand in his place and do so rather than casting false aspersions at Members on this side of the House.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

If the shoe fits.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

Mr. Speaker, the Member says "if the shoe fits". He does not even have the honesty or courage to withdraw a false and unfounded accusation.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

If the shoe fits.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

The Members over there scoff but we know the reputation of the Government with regard to honesty and frankness.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

I just said "be honest". I did not accuse you of being dishonest. I said "be honest".

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

He plays with words.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

Could we get back to the clause, please.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

Mr. Speaker, I object to a member of the Government accusing me at the beginning of my speech of being dishonest. I think that is unparliamentary. It is typical of the Government which has no sense of fairness and which, through its own actions, has introduced dishonesty into public affairs in the country.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

We struck a nerve over there.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Cyril Keeper

New Democratic Party

Mr. Keeper:

I want to explain this amendment so Canadians will understand why we have moved it.

Since the Government has introduced legislation with regard to generic drugs, it should adopt as part of its policy the compromise drafted by Professor Eastman which has found a broad range of public support and for which there is political consensus in the country, with three major exceptions; they are, the pharmaceutical industry, the American Government and the Conservative Party.

We suggest that if the Government is proceeding with its legislation on patent drugs it should follow the will of the Canadian people rather than forging ahead with its own political agenda and philosophy, right or wrong. We suggest it should follow the democratic approach and the political consensus and adopt a policy that has been accepted by the Canadian public.

The Eastman proposal is a compromise between the legislation that is currently on the books and the legislation that the Government is proposing. The present legislation

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allows generic drugs to be introduced into the market-place so that people can buy drugs at a reasonable price. There is no period of exclusive protection for the patent drug manufacturers in the pharmaceutical industry but they do have some protection because it takes time for a new drug to be approved and the various processes to be undertaken. There is a period in which patent drug manufacturers have some protection. However, there is no time period in law in which they have an exclusive monopoly.

Prior to this present legislation, which has served Canadians well, drug companies were gouging Canadians. The introduction of generic drugs made drug prices more reasonable although still expensive for the average Canadian.

The Government's proposed legislation will provide ten years of legislated exclusivity and promises a monopoly to the pharmaceutical industry for a full ten years. It can charge what it wants for ten years and, given past history of what patent drug companies have done, they will gouge Canadians for those ten years.

Of course, the patent drug companies should make a fair profit. It is common knowledge that the companies set out an agenda for the introduction of a drug, a plan to recover their costs and make a profit within a five-year time frame. Why should they be given a ten-year monopoly?

Professor Eastman has suggested a compromise which recognizes the good aspects of the present legislation and the need for patent drug companies to have some protection for a limited time with the introduction of new drugs. Professor Eastman proposed that this time period be four years, which seems to be a reasonable proposition since most drug companies plan to make a profit on a drug in five years. Canadians could then look forward to receiving drugs at a more reasonable cost in a shorter period of time.

The Government does not wish to follow the political consensus in the country and adopt a proposal that would serve the interests of the consumer and the generic drug companies while recognizing the legitimate interests of patent drug companies. That should be reflected in this legislation.

Mr. Speaker, I just want to say it is high time the Government realized there is a consensus among Canadians.. The public feels that Professor Eastman's proposals are good ones and that the compromise is a practical one and recognizes the interests of the pharmaceutical companies, the generic companies and the Canadian public.

I want to ask the Government why it will not act on this Canadian consensus. Why won't it adopt the compromise formulated by Professor Eastman? Why not reconsider your own ideas? And why are you and the pharmaceutical companies and the U.S. Administration the only groups that will not be a party to this Canadian consensus on a new approach, an approach that protects the Canadian consumer?

April 7, 1987

Mr. Speaker, I think it is time this Government reconsidered its own approach and remembered that it is a democratic Government and that it needs the approval of Canadians for every measure it introduces in the House.

Finally, I simply want to ask this Government why it doesn't follow the Canadian consensus on this matter.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Leonard Donald Hopkins

Liberal

Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):

Mr. Speaker, Bill C-22 is another good example of the Government supporting its big business friends in this country to the detriment of Canadians.

There have been arguments that this legislation is not detrimental, but history has proven that such arguments are wrong. In 1969, when there was protection, drug prices were at their highest in Canada. Long-term protection means there will be a monopoly and some abuse of the system.

In a debate such as this it is very important to examine the various motions separately and discuss the substance of each one. According to the draft ruling, Mr. Speaker, Motions Nos. 3,4,5,11,13 and 15 are grouped for debate. They should not be grouped for debate in this way because they deal with entirely different topics. How can one debate or even vote for motions that are quite different? There is a conflict between these six motions and I think it is totally unfair for the Government to expect people to vote on two separate matters at the same time.

Motions Nos. 3, 13 and 15 deal with the kinds of patents which will now be authorized under the new legislation. On the other hand, Motions Nos. 4, 5 and 11 deal with the period of patent protection accorded to a patentee. Since the two groupings deal with entirely different subject matters, they must be debated as separate groups rather than just being voted on as one total group.

There is another good argument for this as well. Motions Nos. 3, 13 and 15 delete product patents from the legislation. As the law now stands, only processed patents can be granted. Bill C-22 would allow product patents to be granted as well.

Canadian biotechnology firms say this change will effectively put them out of business. I think that is going to be very interesting to the Canadian public at large because when one puts someone out of business one is simply helping to further corner the market. Canadian biotechnology firms are really concerned about this and want to keep the process of genetic engineering patentable. Because these substances naturally occur, they do not believe that the product developed from the use of the process should be patentable.

We can talk about companies like Cangene, as a further example, which extract naturally occurring substances, genes, from healthy individuals and inject them into unhealthy individuals in a manner which really triggers the unhealthy individual to manufacture the substance in his or her own

April 7, 1987

body. These things really should be explained in greater depth and hopefully will be before this debate is over.

Motions Nos. 4, 5 and 11 deal with the recommendations of the Eastman report. These recommendations deal with a four-year period of exclusivity after the granting of a notice of compliance. Here is where I want to talk about the 14 per cent royalty. As you know, Mr. Speaker, the pharmaceutical royalty fund into which all royalties would be paid, would be apportioned according to the amount of research and development performed by each company in Canada. It is rather interesting to note that the Government wants to protect the research and development of big business interests in Canada and the United States, but it is certainly not willing to put its money where its mouth is in research and development in many areas of activity. The Government has proven that by its actions over these months.

Dr. Eastman felt that by increasing royalties, rather than unduly lengthening the period of protection, we would avoid the anti-competitive aspect of exclusivity. Exclusivity in terms of this legislation and the Government's policy, means that the companies which develop the drug should have a 10-year period of exclusivity as opposed to Dr. Eastman's recommendation that there be a four-year period. This will mean that those major companies will have 10 years of exclusivity to protect their product and to set their prices.

We hear that this will be good for Canadians in the long run. I simply go back to the state in which we found ourselves in 1969 when Canada had the highest drug prices in the world and, as a result, some of the protection had to be taken away from the major drug companies.

It does not matter with what good intent the Government wants to talk about the 10-year period, what it is in fact doing is giving its big business friends, whom people are becoming very accustomed to hearing it support, a total monopoly on that product for a period of 10 years? Is it fair to allow a total monopoly on a drug, particularly one which is in great demand for treating cancer, arthritis or any of the major illnesses which affect people in such a painful way? Is it fair to give any major company an exclusivity or monopoly on that drug for a period of 10 years?

We have to seriously ask ourselves at this point what the price of that drug will be? What will be the mark-up, what will be the profit, and is it really going to affect not only the individual who still pays for his or her drugs but provincial health plans and other company plans which include purchase of drugs for their employees?

It is not just the individual who will be hurt. It will hurt the public funds and we know where public funds come from to pay for drug plans. They come from the taxpayers of Canada. The Government has brought in the biggest increase in taxes ever seen in this country in the first three budgets brought down by the Minister of Finance and it has been cutting back on provincial government financing. At the same time it is going to give a 10 year protection for major drug companies,

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going against those health plans which are sponsored provincially and, particularly, those which are still paid for by individuals.

Why is it not fair to go the route of the royalty policy recommended by Dr. Eastman? There are some benefits in that policy for all drug producers, and he recommended a four-year protection period, which would seem very fair under all the circumstances.

The pharmaceutical royalty fund, joined up with the four-year exclusivity or protection clause for major drug developers, in our view, is a very fair system and a very fair way to go. It is much more fair than giving a 10-year monopoly on a drug, so that these companies can charge what they want, which will affect public health funds paid for by the taxpayers of Canada. It lays itself wide open for abuse because these companies can charge top rates for their drugs.

I call upon the Government on behalf of our senior citizens, the middle-income earners who are being taxed higher than ever before, and the lower-income earners, to have some pity and set aside its relationship with its friends for awhile and think of the average people of Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Neil Young

New Democratic Party

Mr. Neil Young (Beaches):

Mr. Speaker, I am pleased to have another opportunity to say a few words on the proposal by the Government to amend the Patent Act, particularly that section of the proposed Bill which deals with providing pharmaceutical companies with 10-years of patent protection.

I think it is worthwhile reminding the House again that what we are talking about here is providing 10 years of patent protection largely to multinational corporations.

There is clear evidence that by giving these corporations this increased patent protection, assuming that the historical pattern continues, we will see more and more of those corporate profits exported to the home base of the multinationals, something which I doubt very much will make much of a contribution to the Canadian economy or, indeed, to research and development in Canada on pharmaceutical products.

In considering this measure, Mr. Speaker, we should review what the Minister, in particular, has advanced as his main argument in favour of 10 years of patent protection.

Initially, the Minister made the argument that 10 years was not a severe or undue period of time for patent protection for these corporations, and in making that assertion he compared what happened in the brand name multinational sector to the experience of the Canadian manufacturers of generic drugs. He argued that because it took generic copiers some 11 years to get a product on to the market from the time they first began entry into the approval process with the Department of National Health and Welfare, giving the brand name manufacturers 10 years' protection would not unduly harm the generic drug manufacturers.

April 7, 1987

Patent Act

In making that argument, the period that the Minister was talking about, in all probability, was the short period following 1969, when patent protection was finally removed from pharmaceutical products. That is when the generic Canadian manufacturers were newly entering this whole field.

While it is quite true that it did take 10 to 12 years to get a copy on the Canadian market in that period, since that time the Canadian companies have become much more sophisticated, with the result that it now takes only four to six years to get a copy on the market.

So, the Minister's argument no longer stands up, Mr. Speaker. It also indicates that the Minister himself has a real lack of knowledge as to what is going on in this country insofar as pharmaceutical products are concerned. It makes one wonder why the Government rushed in with this legislation, in the face of all the reports that have come down over the years arguing against precisely what this Government is doing.

In the 1960s, prior to 1969, there were no fewer than three major studies conducted into the pharmaceutical industry in Canada-and for very good reason. There was a tremendous amount of pressure on governments from consumers across Canada, who were faced with the highest drug prices of any country in the world. Governments, in response to that pressure, set up various studies into the industry.

The Restrictive Trade Practices Commission brought down a report that concluded that the reason Canadian drug prices were the highest in the world was that the multinational companies enjoyed a monopoly on pricing in Canada. The Commission recommended that one of the ways to get around that was to inject competition into the field by removing patent protection for pharmaceutical products.

The Government did not act at that time, probably due to pressure from the multinational companies.

In the middle 1960s, the Hall Commission conducted a further investigation, arriving at exactly the same conclusions. The Government of the time ignored that. However, the pressure continued.

What the Government then did was to establish an all-Party House of Commons committee, under the chairmanship of the then Member of Parliament, Mr. Harley. That committee- and it was an all-Party committee-recommended to the House of Commons exactly what the previous two studies had recommended, that patent protection be removed and that, in its stead, there be some kind of royalty paid to the multinational companies by the Canadian generic drug manufacturers. In 1969, that is exactly what the Government of the day did.

When the Minister argues that somehow or other Canadian generic copiers, the manufacturers in that sector of the Canadian economy, are like scavengers who are stealing the research and development from multinationals, he does not mention that the Canadian copiers are required to pay the multinationals a 4 per cent royalty fee for the use of the product.

One might ask, why 4 per cent. The reason is that all of the commissions that studied this question concluded that, of the total sales revenues the multinational manufacturers received, 4 per cent was spent on research and development. Given that fact, it was felt that a 4 per cent royalty was fair compensation to the multinational companies for the use of their products.

The studies did not end with the commissions established prior to 1969. Following the amendments to the Patent Act in 1969, because of pressures from the multinationals-which never did accept that policy-other commissions and studies were set up. Between 1969 and 1983, we had four studies that I am aware of; and within the Department of Consumer and Corporate Affairs, an internal study was carried out. That study concluded that Canada's policy, as adopted in 1969, was a fair policy, and a good policy for Canadian consumers.

Not satisfied with that, in 1981 or 1982, Professor Harry Eastman was asked to conduct yet another study into the pharmaceutical industry. Mr. Eastman tabled his report in the House of Commons in 1983.

In his report, Mr. Eastman concluded that the policy put into effect in 1969 was a good policy for Canada and for Canadian consumers. He pointed out that in 1983 alone, this policy had saved Canadian consumers some $211 million in drug costs. He went on to point out that if the multinationals believed they had an argument in favour of some patent protection, the period be set at four years. This was his recommendation after listening to all of the evidence and after looking at the arrangements in place in other countries.

In his report, Mr.Eastman pointed out some of the problems that lay within the Department of National Health and Welfare in terms of the approval process, and included recommendations to expedite the process.

But what did the Government do, Mr. Speaker? It ignored the Eastman report. Under normal circumstances, that report would have been referred to a parliamentary committee for further study and recommendation. But that is not what this Government did. Instead, it ignored the report completely and waltzed in here with the Neanderthal proposals that are contained in Bill C-22, which they are now in the process of trying to ram through the House.

Mr. Speaker, I think the Government is making a grave mistake. The majority of Canadians appreciate the legislation that we now have. It is legislation that protects the Canadian consumer, while being good for Canada itself.

In the generic drug manufacturing sector we have a growing industry that is purely Canadian, Canadian-based. The profits from this Canadian industry are flowing back into Canada, creating Canadian jobs. Given all of that, I, for the life of me, cannot understand why this Government, through this legislation, is trying to drive the generic drug manufacturers out of business.

No matter how one looks at this legislation, Mr. Speaker, it makes absolutely no sense.

April 7, 1987

Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine

East): Mr. Speaker, as a Member of Parliament who was in the House in 1969, when the original legislation was passed, I believe what the Government is attempting to do in Bill C-22 is completely wrong. 1 participated in the committee which studied the issue at that time and, as many Hon. Members have stated, it was clear that drug prices in Canada were among the highest in the world. I believe we were being unfairly treated at that time by large multinational drug companies.

There was much evidence to that effect in 1969 and, for that reason, the Liberal Government of the day brought in legislation to provide for compulsory licensing of patents on pharmaceutical products so there would be more competition in the drug business, so that drugs could be delivered to consumers at a cheaper price as a result of competition, and that competition would take place because we lessened the patent protection given to drug companies when they discovered new drugs.

Following the legislation in 1969, as Hon. Members know, there was a considerable lowering of drug prices to Canadians. The prices of drugs which were essential to old people, children, and people with chronic diseases came down considerably. However, following that period of time there have been complaints by large multinational drug companies. They felt that they were not being treated fairly and that they would only conduct research and production in Canada if amendments were made to the Act which would give them greater patent protection on the new drugs they discovered.

The previous Liberal Government took a serious look at the requests and set up the Eastman Commission. The commission spent a lot of time studying the matter and came to the conclusion that certain changes could be made to meet the legitimate concerns of pharmaceutical companies and at the same time protect consumers by giving them low drug prices.

However, what did the Conservative Government do? It did not accept the principal recommendations in the Eastman report. For example, the Eastman Commission recommended that drug companies be given a four-year exclusive protection on drug patents and then be subject to a licensing system, with royalties being paid by those to whom the compulsory licences were granted and the moneys from those royalties being distributed for further research to the companies developing new products. The Eastman Commission recommends four years of protection, and the Government decides to give 10 years of protection. It is out of line. It is beyond what was recommended by the Eastman Commission as being fair play in respect of pharmaceutical companies.

Recently we have received information indicating that pressure was put on the Conservative Government by American negotiators in the free trade negotiations. They wanted the drug Act amended, and this is the way they wanted it amended. It appears that the Government is more concerned with

Patent Act

pleasing the United States than listening to the recommendations in the Eastman report.

Motions Nos. 3, 4, 5, 11, 13, and 15 are before us at report stage. They have been presented by the opposition Parties, in particular the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall) who put up a substantial fight against some of the outrageous provisions in Bill C-22.

At this particular time we are dealing with motions to delete product patents from the legislation. Under the present legislation, compulsory licensing is allowed on process patents but not on product patents. However, the Bill tends to include product patents as well. The purpose of these amendments if they are accepted by the House would be to take product patents out of the Act.

By the way, several Canadian biotechnology firms say that if the change as proposed by the Government goes forward and product patents are included in the legislation, it will effectively put them out of business. I ask government Members to take the pleas of certain Canadian biotechnology firms seriously and to consider seriously the amendments.

As well, Motions Nos. 4, 5, and 11 deal with a matter which I raised a few seconds ago. They would amend the Bill to put into effect Dr. Eastman's recommendation that only a four-year period of exclusivity be given to pharmaceutical companies on their patents, not a ten-year exclusivity.

They would also include the suggestion of Dr. Eastman that there be a 14 per cent royalty and a pharmaceutical royalty fund. Once a compulsory licence was given to a company to produce a generic drug under the provisions of the law and in competition with the company which discovered the drug, the royalty moneys would go into a fund and would be apportioned according to the amount of research and development performed by each company in Canada. The royalty moneys collected would be put to good use, and I think we are on good ground in proposing such an amendment. As I said, it was as a result of extensive study by the Eastman Commission.

The Eastman Commission was set up by the former Liberal Government in recognition that some change had to be made. However, in no way is there any justification for the provisions in the Bill now before the House.

I should point out that 15 per cent of Canadians are not covered in any way by insurance plans for pharmaceutical drugs. This means that four million Canadians do not have insurance plans, such as Blue Cross or whatever, to cover the costs of very expensive drugs which they must purchase when they are sick, especially those with chronic illnesses that can last from two years to five years who must buy drugs week after week. Of the 85 per cent covered, they are not totally covered. We all know this. I have a plan which has a deductible clause of a couple of hundred dollars. When I purchase prescription drugs, I cannot start collecting on my insurance until I have reached a certain amount.

In closing, I ask Hon. Members of the House, particularly members of the Government, to pay more serious attention to

April 7, 1987

Patent Act

these amendments. They are not only the products of members of the Opposition, they were put forward in the Eastman report and were contained in the briefs of many companies which appeared before the parliamentary committee.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

James Ross Fulton

New Democratic Party

Mr. Jim Fulton (Skeena):

Mr. Speaker, I am pleased to have an opportunity to discuss Bill C-22 and in particular Motion No. 4. This amendment is a compromise. The Eastman Commission recommended patent protection for four years as opposed to the Government proposal of ten years. Providing the extra six years, as proposed by the Government, is unfair to consumers and to generic companies which have proven to be a boon to the country in terms of providing low-cost, high quality pharmaceuticals to Canadians who require them.

We have found as this debate has developed that the government proposal is a direct cave-in to multinational drug companies, the U.S. Government and President Reagan. We have learned too that certain lobbyists and others in the United States were aware of some of the contents of the Bill and some of the Government direction prior to Members of this House and the Canadian public being aware.

In Motion 4 we are discussing the work done by Professor Harry Eastman and the Commission of Inquiry on the pharmaceutical industry, which report the Government seems to want to stick back under the carpet instead of dealing with, in the best interests of Canadians.

We have heard time and again from the Minister of Consumer and Corporate Affairs (Mr. Andre) and other members on the government side that unless we go forward with Bill C-22 as it is we will not see the kind of scientific and research work being done in Canada that is being done in other areas of the world.

As Professor Eastman discovered through his commission of inquiry, four years lead time is all that is required for pharmaceutical companies to recover the costs of their research. Why is the Government proposing to give two and a half times that length of patent protection to the pharmaceutical industry after a commission of inquiry demonstrated through statistical analysis, evaluations and discussions with the scientific community, the pharmaceutical industry and with the generic drug producers, that four years was the recommended length of time.

Our Motion 4 is really a compromise. It deals with the work that Professor Eastman undertook and it provides the kind of realistic protection which the drug industry requires.

Professor Eastman's report was published only two years ago in the spring of 1985, but his recommendations and material have dogged this Government throughout the entire debate. It tries to pick and choose, take little bits of the Eastman report and put others aside, in particular the question of the ten years versus four years of patent protection, something which all Members of this House should be moving to support. The Government protects the existing industry.

What about the consumers who stand to pay, not just millions, not just tens of millions but hundreds of millions of dollars in additional costs for pharmaceuticals?

Professor Eastman, although an academic, achieved what the Government has not, namely, a political consensus. Government Members are not participating in this debate in the kind of open way I think they should in discussing the guts of the motion before us, namely, why the Government feels so strongly that there should be 10 years of patent protection. We are relying on the results of the commission of inquiry which indicated that four years protection is absolutely all that is required.

The Government continues to spin its wheels. It is not addressing the fact that this is nothing short of a cave-in to the multinational drug companies, particularly those in the United States which want an extra six years of exclusivity on new chemicals coming on to the market. Professor Eastman produced a workable compromise which has proved acceptable to almost everyone with three notable exceptions; the brand-name pharmaceutical industry, the U.S. Government and the Conservative Party itself.

Why do Conservative Members not explain the necessity of the additional six years? What is the broader agenda? No wonder the Government does not like the Eastman Report, Mr. Speaker. No wonder the Government wound up hiring Professor Eastman for the Drug Prices Review Board in a bid to establish the Government's own consensus on the Bill and, to a certain extent, muzzle Professor Eastman.

Many of us can remember the Government's actions when the Eastman report was tabled. There was no press conference, no glowing endorsation by the Minister. The report was simply handed out the day before the Budget was brought down in the spring of 1985 and dismissed by the then Minister as a "Liberal document".

We all know in this House the difficulties the Liberal Party has had as a result of one of its former Members having become a professional lobbyist for the pharmaceutical industry.

Liberal Members have been giving a ringing endorsation to the proposal now before the House, which is not to have a 10 year period of patent protection but to stick with the four year period. However, the mud which the Government tried to flick at the Eastman report did not stick. That report is a good one which should have commended itself to the Government. It did not because the Government was already up to its ears dealing with the drug lobbyists, the American pharmaceutical industry and the wave of protectionism coming toward Canada.

I think the Prime Minister (Mr. Mulroney) and members of the Cabinet thought that with the 15 per cent countervail on softwood lumber, that if we backed down on fish, potash, shakes and shingles, gave the Americans the green light on the north warning system, allow them to test the Cruise, provide the Strategic Air Command with low-level bomb routes in western and northern Canada, and that if we backed down on

April 7, 1987

drug patenting then we would get some kind of move on this mythical free trade agreement. Even though the President of the United States was here yesterday and gave his endorsation, anyone who follows how legislation moves in the U.S. House of Representatives and the U.S. Senate knows that the protectionist move is in high gear and that the likelihood of Canada coming out on the winning end of any kind of a "free trade agreement" is pretty low.

The secret meetings conducted between the Pharmaceutical Manufacturers Association of Canada, who are representing the multinationals, and the Canadian Drug Manufacturers Association representing the generics is a story that has been told in this House before. The mediator was an old friend of the Prime Minister's, Paul Amos, from the Montreal law firm of Ogilvy, Renault. The meetings failed spectacularly even with the crony system.

Even at that stage, barely six months into the new term of the Mulroney Government, the Conservatives lacked the flexibility to see that Eastman's work was the way out for them, that a consensus would form rapidly around his proposals which would be acceptable to almost everyone including the Liberal Party when it finally dared to take a position on this Bill.

Instead, the Government marched to its own objective of reaching the free trade nirvana by successfully doing in the National Energy Program, the Foreign Investment Review Agency and Section 41.(4) of the Patent Act. The Government had no time to praise Eastman, the Government simply wanted to bury him, which it did by placing him on the review board. When the Government found it could not bury Professor Eastman and his work, many groups across Canada, seniors, the disabled, the Associations of Physicians and Nurses and those involved in chronic long term care, those millions of Canadians who rely on low-cost generics banded together. The elderly, those shut in who are sick and make use of pharmaceuticals for such things as diabetes, a heart condition or anything else, they started to rally around and realize that what the Government was proposing in terms of the prescription in Bill C-22 was not the kind of prescription Canadian consumers want to buy. They do not want to have anything to do with it.

The Government has yet to wake up to the fact that Bill C-22 is not in the interests of the scientific community, which is the rallying cry of the present Minister of Consumer and Corporate Affairs, because in my view just as much would be done in research and development of new pharmaceuticals in Canada with a four-year patent protection as with ten. The additional six years is just a straight giveaway by the Conservative Government to the multinationals. It is straight profiteering, Mr. Speaker. It is not the kind of government leadership that those Canadians who rely by the millions on pharmaceuticals want to see from the Government.

These amendments put a bit of Eastman and his report back into the Bill. It will be interesting to see whether the Government adopts any of them. One of the most difficult for the

Patent Act

Government to get around is what we have before us today in Motion No. 4, the 10 years of patent protection instead of four. I will be looking forward to hearing from government Members expounding and explaining to those Canadians listening today why the additional six years are required when that is nothing more than a straight giveaway to the multinationals. After all this money comes straight out of the pockets of Canadian consumers, many of whom can least afford it.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Marcel Prud'homme (Liberal Party Caucus Chair)

Liberal

Mr. Marcel Prud'homme (Saint-Denis):

Mr. Speaker, several years ago Hon. Members on both sides of the House would rightfully complain about their minor role in the legislation process. More often than not we barely had time to read the bills drafted, as we know, by very senior officials who are paid for doing that. These people did not consult with Members to any great extent, but of course they had the ears of their Ministers who made sure the message would get through to the various caucuses just so such or such piece of legislation would appear on the Order Paper and ultimately become the law of the land.

Over the years there were a number of discussions among Members to bring about a parliamentary reform. This is how our colleague, now Senator Tom Lefebvre, came to produce his report and eventually everything turned out all right. Next we had the famous McGrath Commission whose chairman is now the Newfoundland Lieutenant Governor, as we all know. He was a former Minister and-I think this can be said of a Government Member, even by the Opposition-an eminent and very energetic parliamentarian who thought time had come indeed for Members to play a significant role in the House, in parliamentary committees, and in the legislation process. And so we came to the conclusion that most of the McGrath report recommendations ought to be endorsed.

One of our colleagues the Hon. Member for Cape Breton- East Richmond (Mr. Dingwall) sat on one of those parliamentary committees and never missed any of the proceedings on Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto.

So in keeping with the McGrath spirit Hon. Members thought they would have a leading role to play on the parliamentary committee to which Government Bill c-22 had been referred.

Members of the Official Opposition and their colleagues worked very hard in an attempt to improve this piece of legislation. They may not be right in every single case, but I would be inclined to believe that it is impossible for my colleagues in Opposition, especially those of the Official Opposition, always to be totally and invariably wrong.

After lengthy discussions, they introduced 47 amendments. If memory serves-and my whip would confirm this-Mr. Speaker decided to condense the 47 amendments into 18 debatable groups. We are now debating the second of these 18 groups of motions. By way of explanation for TV viewers watching the proceedings-and for the benefit of the Minister

April 7, 1987

Patent Act

who is giving us her undivided attention-47 amendments have been proposed and, in his wisdom, Mr. Speaker decided that they would be the subject of 18 debates and as many divisions.

Well, it seems the McGrath spirit has all but vanished because the 47 amendments, drafted by Opposition Members as a result of many representations made throughout Canada by consumer protection interest groups that listened closely, reflected, worked for months and now that we have reached the final stage but one, they turn around and say: Well, boys and girls, you have been wasting your time on those forty-seven amendments, because not one of them is going to be passed.

That is really discouraging. It is discouraging for the people sitting here in the House for the first time and who believe- for instance, I see the Hon. Member for Capilano (Mrs. Collins) who is listening attentively and who believes in parliamentary reform. If she works on parliamentary committees, and all of a sudden, she sees an important Bill . . . I'm not saying that all forty-seven amendments should be acceptable to the Government, I am not saying that, but I find it difficult to understand why, in that case, Members should sit on a parliamentary committee and spend weeks and months preparing for that moment when they can at last say what they feel must be said. I am not saying that what they have to say is always the truth and is always acceptable. The Government has responsibilities and the Opposition does as well. However, the fact that all forty-seven amendments are rejected out of hand, with almost no debate, because we have not noticed any debate coming from the Government side, I think that is-

My friend would say that it was a setback for the new parliamentary procedures put forward by our hon. friend, the Lieutenant Governor of Newfoundland, Mr. McGrath. It is sad.

The first amendment was a very simple one calling for a definition for research. We have a very stubborn Minister, and I believe that is acceptable parliamentary language. I could say more. However, the Minister of Consumer and Corporate Affairs (Mr. Andre) is very stubborn. He is also responsible for the post office, making two major catastrophes across Canada. The stubborn Minister does not want to define the word "research". That motion was disposed of by the House so the Chair will probably say that the debate on it has finished, and he would be right.

It is great to say that this will bring money and research into Canada and that there will be $1.4 billion-worth of research done here. I am sure my hon. friend from Quebec City who is listening attentively as she does most of the time would agree. It is all very well to tell Canadians to get excited about the $1.4 billion in research, but we do not even have a definition of research. I think that is not fair.

In his famous report, Dr. Eastman said that we have to be fair. I believe fundamentally that we must be fair to the brand-name companies because, after all, they do invest a lot of money. Therefore, they should be entitled to some protection.

That is probably where we differ from the socialist Party. We believe in fairness. If a company puts its money into a drug, it should be protected to a certain extent. Eastman said that there should be four years of full protection. I ask why the Government is still insisting on having 10 years of full protection. Is it not because very strong lobbyists are telling us to give the drug companies protection forever, but they will accept 10 years? Is it not because of pressure from the United States?

I did not happen to agree with some of the things the President of the United States of America said yesterday in the Chamber but I tried to behave well yesterday, contrary to some who really misbehaved. If one does not agree, one should go outside the House and disagree there. I did not agree with the President and the House is aware of my feelings about Nicaragua and the Contras. However, I do not like it when people misbehave.

I do not like to be told by lobbyists from the United States of America how we in Canada should behave and how we should run our own affairs.

I know my time has run out. I say to the Government that there will be other pieces of legislation on which Members have worked extensively in committee and have faithfully put all their energies into putting forward amendments. I hope the Government will some day realize that all members of Government are not right and all members of the Opposition are not wrong. That is impossible. There are 47 amendments because of a lot of work by my colleagues in both opposition Parties, and they have been totally rejected by a stubborn Minister because they do not happen to come from the majority or because they do not meet the requirements of strong lobbyists in Canada or, what is worse, strong lobbyists in the U.S. This is a sad moment for those who truly believe in parliamentary reform.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Stanley J. Hovdebo

New Democratic Party

Mr. Stan J. Hovdebo (Prince Albert):

Mr. Speaker, I appreciate the opportunity to speak on this motion which makes an effort to apply to this Bill some aspects of the Eastman report. That report leaves no doubt that the 1969 amendment to the Patent Act was a resounding success. The compulsory licensing provision saved Canadian consumers millions of dollars, $211 million in 1983 alone. This without having any discernible impact on profitability, growth or employment in the Canadian pharmaceutical industry as a whole. That industry remains very profitable for the patent holding and generic companies alike. By no stretch of the imagination can the Government claim that the multinational drug companies need higher profits in order to encourage them to do research and development in Canada.

April 7, 1987

The proposed changes to the Patent Act brings Canada closer to what is happening in the U.S. There the drug companies are even more profitable than those in Canada. A recent news report shows that the U.S. parent companies of the firms operating in Canada are embarrassingly cash rich. The Merck company had $1.4 billion in cash. Bristol-Myers had $1.3 billion in cash. Pfizer had $1.4 billion. Eli Lilly had a meagre $850 million in cash on hand. Those companies are looking for places to put that money. I suggest the Government has been duped and the industry is very profitable with billions of dollars in cash on hand, looking for a place to put it. They should be quite willing to put some of it into R and D in Canada without the 10-year restriction imposed by this legislation.

We should recognize that even four years of patent protection really means about seven or eight years before the generic equivalent is on the market. By extending protection for 10 years we are in effect extending it for 14 or 15 years. That is not necessary and it will cost Canadian consumers millions of dollars.

Dr. Eastman also makes it clear that despite what government officials seem to believe, the weakening of compulsory licensing and the granting of rigid patent monopolies to multinationals will not result in Canada becoming a major centre for either basic pharmaceutical research or the manufacturing of the active ingredients of those drugs. The monopoly these companies have had and will have makes it unnecessary to look to Canada as a place for development.

The compulsory licence holder must pay 4 per cent royalty to the patent holder throughout the life of the patent. Eastman suggests in his report that an increase in that royalty to about 10 per cent would be quite adequate and a reasonable alternative to extending the patent life. He suggests compulsory licensing should remain at the centre of Canada's policy towards the pharmaceutical industry.

The Consumers' Association of Canada agrees and suggests that we are only weakening the industry by bringing in further patent protection.

The CAC also suggests that consumers and taxpayers should not have to accept any increases in market exclusivity beyond the four years recommended by Eastman. Extending that exclusivity will cost consumers, provincial treasuries, and ultimately provincial taxpayers, millions of dollars. Eastman proposes that by increasing the royalty and leaving compulsory licensing in place, consumers would continue to save money on drugs. Compulsory licensing is not nearly as expensive as extended exclusivity and that is the direction you should be going in.

What we have in this motion before us is an attempt to retain compulsory licensing and royalties and the retention of exclusivity for a period of four years or perhaps a little longer.

I will complete my remarks after lunch, Mr. Speaker.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

It being 1 p.m., I do now leave the chair until 2 p.m. this day.

At 1 p.m. the House took recess.

Topic:   GOVERNMENT ORDERS
Subtopic:   PATENT ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink

April 7, 1987