Mr. Steven Fletcher (Charleswood—St. James—Assiniboia, CPC)

Mr. Chair, I would like to mention that the number of Internet pharmacies in Manitoba has actually gone down. The reason for this is because a large portion of the Internet pharmacies are actually going overseas where there is an even greater price differential between the United States and the EU or Australia and New Zealand, for example. The industry is actually in a decline, it could be argued.

I want to get the member's comments on my concerns. One is the issue of provincial jurisdiction and whether the federal government has the ability to do what it is intending to do.

I think we are all in agreement on the ban of bulk exports. We have had that discussion. I have a question for the member, who is also on the health committee, and who voted to have the health committee study the issue and also ban bulk exports. Why does he think the government is taking so long to do anything on the banning of bulk exports? It has had the opportunity to control the agenda of the health committee to study the issue on an expedited basis and it chose not to do so.

I wonder if the member would comment on both the provincial jurisdiction and why the government has not acted on the direction of the health committee.

Mr. Réal Ménard

Mr. Chair, I will answer my colleague's totally non-partisan question. This is sort of our trademark in committee. We leave partisan issues aside.

First, I believe it is very clear that the provinces are responsible for ensuring that the various codes of ethics and professional practice are upheld.

Second, one point is not clear in my mind. I was reading that article 309 of NAFTA prohibits restrictions on the import and export of drugs, except when a shortage is expected. Could the government simply have introduced a bill to prevent the export of drugs? This is not clear to me.

I think it warrants a little more investigation. We know our time is limited. We cannot take another two or three years to consult and consider. Clearly the states are going to move. As was mentioned earlier, nine bills have been introduced, by Republicans and Democrats alike.

I think, however, that it is worthwhile arguing for a little more room to consult and discover what sort of legislation would be most appropriate. I think the Standing Committee on Health, of which my hon. colleague is a member, has work to do in this regard.

Hon. Don Boudria (Glengarry—Prescott—Russell, Lib.)

Mr. Chair, I am pleased to take part in this evening's debate on Internet pharmacies.

Most hon. members would agree that I have been raising these issues in the House of Commons for a very long time. During the first year after I left cabinet, perhaps even longer ago than that, I was the only member to raise these issues in the House of Commons.

Many things still trouble me. I want to thank the parliamentary secretary and the minister for the plan they presented this evening, which is the first component in creating a drug supply network. This plan was overseen by the Minister of Health. It was a very good idea. We have to ensure the safety of the supply.

The second point is the need for enabling legislation under the Food and Drugs Act that would allow the Government of Canada to prohibit the bulk export of prescription drugs and other essential drugs when the health of Canadians is at stake. The hon. member for Hochelaga mentioned the section under NAFTA that is somewhat related to all this. At least this could be one of the reasons why that section was drafted that way. I intend to discuss this with the minister.

The third point consists in giving more teeth to the current provisions whereby any purchase or sale of prescription drugs should come as a result of consultations held between the patient and the medical practitioner. We must address this issue.

I heard a Conservative member in the House say that it is only those who have an axe to grind who think that the Internet prescription system damages the health care system. I believe I am paraphrasing the way the member put it.

However, Canadian Medical Association's statement on Internet prescribing in 2004 stated that “It is not acceptable for a physician to sign a prescription without properly assessing the patient”, except as indicated above, and there is a whole matrix of how this is to be done, and so on and so forth. This is the position of the Canadian Medical Association, hardly a group with an axe to grind.

Other people are also concerned with this whole business of prescriptions over the Internet in the kind of vacuum that we see now. Let me name a few from a press release that I have which dates back a year ago. I am sure the list is much longer now. It includes: the National Association of Pharmacy Regulatory Authorities; the Canadian Pharmacists Association; the Canadian Medical Association and I just quoted from its report; the Association of Deans of Pharmacy of Canada; the College of Physicians and Surgeons of Manitoba, would you believe, Mr. Speaker; the Manitoba Society of Seniors; Pharmacy Alliance for Canadians; and the Coalition for Manitoba Pharmacy.

Even within those jurisdictions, where these kinds of sales are going on in a very big way, certainly it is not supported by everyone there. The professionals in the health care sector say that this is going too far and that it is wrong. It is not me, not the member for Glengarry--Prescott--Russell. I am not a member of the Canadian Medical Association, much less the College of Physicians and Surgeons of Manitoba, a province 1,000 miles from my constituency.

On top of that there is a whole number of pharmacies themselves, groups of seniors, and a large number of people, consumer groups and others who tell us that we have to be careful with all of this. They include: the Canadian Hepatitis C Network, Canadian Treatment Action Council, Canadian Organization for Rare Disorders, Canadian Arthritis Patient Alliance, Best Medicines Coalition, Manitoba Epilepsy Association, British Columbia Persons With AIDS Society. Those are all consumers of medicine who are worried about this.

One cannot say that every single one of these organizations is wrong. Their concerns are legitimate when we start seeing runs on various products, whether they are caused by bulk sales which arguably of course is worse, or whether they are caused by Internet pharmacies all of a sudden selling thousands of prescriptions in an area where they were not selling any the previous year.

I read one example of 175,000 prescriptions where in the previous year only 10 doses of the same thing were sold. No one can say that increasing the sale of something and removing a product from this country where 10 units were removed last year and 175,000 were removed in a few months of this year, that it does not cause a shortage.

It is ridiculous to pretend that. That is not a bulk shipment at all. This has to do with the Internet pharmacies. Then someone says that the Internet pharmacies, after having seen the damage that they have done, have decided that they are not going to do this any more for a little while. That is hardly a redeeming value. Once one creates a mess and then says that one is not going to participate in the mess that one has created for a little while, to me is not good enough.

This is why I think that part of the program announced to us by the parliamentary secretary this evening is so vital, that is, when he says the government wants to establish a system whereby it will be possible to pinpoint one particular medication and say that is it, it is in the national interest that people not be allowed to send any more of this out of the country, whether it is bulk shipment, Internet pharmacies or anybody else, because it threatens the health of Canadians. That is why we are here.

To me, that is why it is so important. We cannot think of medication as little pills that look like candies, even though they do look like that most of the time. This is a very important component of the Canadian health care system. A member of my family is at home right now with pneumonia. She will be angry with me for raising this, but so be it. The prescription costs $100. I thought that was outrageously expensive, except that after three or four days of taking the medication she is getting better. Then what I thought was that about two hours in the hospital would have consumed twice as much as the $100. Maybe if we think of it that way, the medication, which we all think is too expensive, is not expensive if we compare it to the alternative.

The point I am making is how important all of this is for the well-being of Canadians. Prescription medication in particular is so very vital. I am leaving for South America with the Prime Minister in 48 hours to attend the Summit of the Americas, at least I think I am. I need to have a flu shot and a number of things before I leave. They are all provided to us. Countless other Canadians need medication: preventive, a vaccine, as I am going to get, and for treatment, in the case of others who are ill. We just cannot afford to be out of these products at any time. That is why I encourage the minister, as I have been doing for a long time, to be vigilant on this.

I thank the parliamentary secretary and the minister, too, of course. I listened attentively to the parliamentary secretary's presentation. He simply must continue on that track and be even more vigilant in protecting the health of Canadians.

Mr. Steven Fletcher (Charleswood—St. James—Assiniboia, CPC)

Mr. Chair, I would like to thank the member for his comments and congratulate him on his time in public office. I am looking forward to reading the member's book, which I understand I can pick up at any retail bookstore.

Having said that, let me comment that Health Canada has stated that there is no documented evidence on shortages. I would also like to mention that the member listed many organizations that have concerns about bulk exports. We do too. We all agree on that. Organizations have outlined their concerns, including those he has mentioned. We are all on the same page here. The fact is that the government has not done anything on the issue of bulk exports.

However, I will also note that there is a way of balancing the member's concerns and dealing with what is a legal and legitimate industry. Even the President of the Treasury Board, in a Winnipeg Free Press article earlier this year, is quoted as saying that he “would like to see the folks who provide the service continue to do it”. That is a direct quote.

I think we have to be reasonable. The fact is that patients have an established patient-practitioner relationship in the traditional sense with their U.S. physicians. There are ways to ensure that the ethical issues are addressed as well.

I wonder if the member would comment on the fact that the entire House agrees that bulk exports from Canada should be banned, that in the United States it is the federal government that is responsible for its own jurisdiction, and that as long as price, supply and safety of Canadian drugs are not threatened, this industry should be allowed to maintain itself. It is an opportunity to bring much needed jobs to have not provinces. Could the member comment on those points?

Hon. Don Boudria

Mr. Chair, I do not agree with many of the points the member raised except that he has said he might like to read my book. I agree with that.

More seriously, though, the hon. member says there is no evidence of job shortages. We have had countless press conferences in this building with pharmacists, pharmacist associations, and members of the Canadian Medical Association. I have a letter here from the Canadian Treatment Action Council listing 132 drugs that were not available in one part of the country at one point in time, and so on. Many people inform us or at least allege that these shortages or at least strains on the supply in various regions of the country are going on right now.

The hon. member says that the authority is with the federal government in the U.S. and it is illegal to bulk ship into the United States. He referred to that slightly in this most recent presentation and more extensively a little while ago. I was listening.

What he does not say, though, is that both are forbidden to enter the United States. Internet pharmacies that send cases of stuff to 100 different people or bulk ship 10 cases of stuff to one person are equally forbidden. If the argument is that we should not be sending bulk stuff to the U.S. because it is against U.S. law, I take the hon. member's argument at face value. They are both forbidden. Why would we say that we should listen to U.S. law as it applies to bulk sales but not to the other? I think the argument is the same for both. That is the point I am making here.

I am going to go back to something I heard in the parliamentary secretary's discourse a while ago. If we are having a run on a product, and never mind the U.S. law for a minute, whether that run is caused by someone having shipped cases in bulk to the United States or it is like the other case that I talked about a while ago, with 175,000 prescriptions in one year being shipped individually out of Canada to the U.S., the effect is the same. That was in an area where there was only a handful of them a year ago.

The effect is the same. That is the point I am making. To say that it is only the bulk sale component is not so. In my view, both have to be addressed. That is why I think the government's plan is on the right track. I urge the government, though, to move expeditiously on this issue, not to wait until we have a major crisis and run out of something and then have Canadians getting sick because we do not have the medication in question.

Hon. Robert Thibault (Parliamentary Secretary to the Minister of Health, Lib.)

Mr. Chair, I was happy to hear the words of the member for Glengarry--Prescott--Russell. I must confess that I have not yet had a chance to read his book; I am waiting for the movie and for volume two of his book.

There is a question that I would like to ask. I have listened to the debate and to where people are on that question of balancing economic interests and legitimate business with protection for Canadians. Let us look at the strategy that the minister has put forward. First, we would have a surveillance system of the drug network. This network would indicate exactly what the supply is in Canada and would monitor it. I think everybody would agree that this is a good move.

On the second point, I note that the member is an experienced member of Parliament who has done a lot of work internationally respecting Canada's role in the world and our need for trade and respecting our trade agreements. Under the strategy the minister has put forward, we know that if there is a human safety reason for restricting drug shipments, we can. The network would give us that information and we would have the tools to do that after the legislation is passed.

The true point remains, this last point that is contentious, and it is the question of the ethics of practice. Where we have those principles in Canada, at the Colleges of Pharmacists and those professional organizations, a pharmacist will only fill a prescription that has been written by a doctor licensed to practice in Canada. There is the question of having a relationship. That question remains for some interesting debate on how we balance that with the current operations of Internet pharmacies.

Would the member comment on those points?

Hon. Don Boudria

Mr. Chair, I think the parliamentary secretary is totally correct. My approach to all this has been to focus on the issues that are important. They are not always the same ones that we see in the news.

For instance, about a year ago cameras were going gangbusters because there were two buses in Toronto with senior citizens getting out of the buses and coming from the U.S. to buy prescription drugs. It made for some great camera shots. At the same time, with one Internet pharmacy supplying 2,000 prescriptions a day we would have had to have a train about 20 miles long to accommodate that number of people if they had all come individually. Obviously that does not make much of a camera shot. A computer terminal just does not do it.

At the same time, it is not the busload that is the issue. Nor is it grandma who is in Florida going to see a doctor there because she is there for the winter. We have the doctor there confirming with the doctor in Canada that it is the grandma known by the doctor in Canada, that she is sick with that particular disorder, and that the doctor recognizes her and sees her all the time when she is back home. Then the doctor over there issues a prescription or some such instrument across the border.

That is not the issue. Nobody is trying to solve that so-called problem because it is not one. The real problem is that which affects the security of our drug supply and that is how I believe we have to address the problem.

Mr. Dave Batters (Palliser, CPC)

Mr. Chair, I am here this evening to participate in the debate because it is an issue of great personal importance to me and to my constituents in Palliser, Saskatchewan. It is an issue of importance to all Canadians.

The issue is ultimately about patient access to medications so that Canadians can live longer, happier and healthier lives. It is about the sufferers of illnesses such as heart disease, Alzheimer's and cancer. It is about providing access to medications. It is for that reason that I am here this evening to participate in the debate. I must confess that given the circumstances with what has gone on today in Parliament in having Justice Gomery confirm that millions of dollars were stolen from the public treasury to benefit the Liberal Party of Canada, I do not think it is a coincidence that this debate is happening this evening. It is bumping CPAC off the airwaves where we would focus on some of the corruption that has gone on under the government.

Nonetheless, I thought it was important enough to come here tonight and participate in the debate because it is an important issue in terms of health care. It is also an issue with which I have a bit of a history. Prior to being elected, I was a pharmaceutical representative for Pfizer Canada. I was very proud of the work that I did travelling the southern half of Saskatchewan with the goal of educating physicians specifically on three different medications in the cardiovascular realm. Physicians have to be experts in 300 or more different medications and I only had to know three. I am proud of the work that I did in that realm. It was a good experience to meet the many good physicians that we have in Saskatchewan, especially those physicians I am thinking about tonight in Moose Jaw, in the riding of Palliser and in southwest Regina.

It was an honour to do that for a living for five years and to talk with physicians about mortality and morbidity data, data about drugs that saved lives. I would drive into communities in southern Saskatchewan and rural Saskatchewan. Whenever one drives into a community it seems that invariably one has to drive past the cemetery before getting to the doctor's office. That just seemed to be the pattern. I would remind myself that it was important work that I was doing. It may seem quirky but I used to say to myself, “Let us try and keep this cemetery a little bit emptier for a little bit longer”. That was how I treated that job. It is how my colleagues at Pfizer treated their jobs, and the seriousness of this issue.

It is very important. We seem to all be in agreement in the House about the need to ban bulk exports. We need to see some action. The member for Yellowhead showed some leadership. He put forward the motion calling on the government to end the practice of bulk exports, asking the Minister of International Trade to protect Canadians proactively from bulk exports. Proactive is the key word. We need to be proactive as opposed to being reactive and waiting to see if there is a crisis, waiting to see if there is a shortage for Canadians. We cannot afford to do that. Canadians need access to these medications and we cannot afford to put that supply at risk.

The Minister of Health said at Harvard on November 10 last year that Canada could not become the drugstore to the United States, a country with 10 times our population. I agree with him but again there has been no action. We have heard members opposite say that we need to study and to consult with the stakeholders. That is the Government of Canada. What we need is leaders. This applies to issues across the board. We really need the political will and some leadership on a topic where members voted 280 to 0 on a motion to ban bulk exports. The will of this House is pretty clear.

The government's approach appears to be reactive and not proactive to ensure that the medicines and vaccines destined for Canadians remain in Canada. The only obvious solution is a ban on the bulk export of pharmaceuticals.

Many people have alluded to a study by Dr. Shepherd, who will soon be in Ottawa. His study indicates that if the pending legislation in the United States passes, our drug supply will dry up in 38 days. That is terrifying. It is certainly terrifying for the people of Palliser and to everyone who is watching this debate tonight. That is shocking information. Clearly, we need some leadership from the government to safeguard Canada's drug supply.

There has been added focus on this issue tonight because of the avian flu issue and the drug Tamiflu which may protect Canadians from the avian flu. This starts the debate as to the need to safeguard Canadian medicines that are intended for Canadian patients.

There is certainly increased pressure in the United States to pass resolutions that call on Washington to legalize the bulk imports of drugs. Legislation to legalize imports from Canada has been introduced in the U.S. and it has bipartisan support. Tonight we have stressed the importance of protecting this drug supply and banning bulk exports.

In June of this year the Minister of Health proposed strengthening existing federal regulations under the Food and Drugs Act. The topic was that we are going to discuss it and we are going to study it. What we really need is action from the government.

The truth is that the government has done nothing to protect the Canadian drug supply. The government has not changed any regulations or brought in any legislation, despite the minister's lofty promises. The government needs to act now to protect Canadian medicines and vaccines that are intended for Canadians.

Earlier tonight during questions and comments I talked about the C.D. Howe Institute which said:

If large-scale drug exports were to occur, most likely drug prices would rise in Canada to U.S. retail levels, which would eat into provincial health care budgets and increase drug costs for most Canadians.

Yet the government has done nothing.

This is a worry for me. It is not only the drug supply but the price of drugs. The member for Charleswood--St. James—Assiniboia who is the health critic for the Conservative Party said that the issues we need to concern ourselves with are price, supply and safety. All of these are critical issues.

The Canadian pharmaceutical industry develops, manufactures and distributes medicines based on its forecasting of the needs of Canadian patients. It does not calculate taking care of our neighbours to the south.

There was a comment this evening from a member who had been a member of the NDP until she was forced to sit as an independent about the fact that drug companies should make more drugs and hire more people.

Pharmaceuticals are not like any other manufactured good. Drugs have an active ingredient that is either derived from a biological source or is chemically engineered in laboratories. Some biological sources are scarce and oftentimes the lab work required to make the active ingredient is extensive. This makes it difficult to meet any unforecasted increases in demand. Plants cannot simply be built overnight. The required safety specifications cannot easily be met.

I will finish on the safety issue. One of the products on which I used to educate physicians in Saskatchewan was a drug called Norvasc, a drug for hypertension and angina. There was a case recently in Hamilton of patients being prescribed Norvasc, but when they picked it up from their pharmacy, it turned out that they were getting nothing more than talcum powder pressed into the shape of Norvasc, this pill that I know so well. I was outraged to hear that. Clearly we need to take steps to ensure the safety of our drug supply.

In summary, this is quite a simple debate. There seems to be agreement on all sides of the House. It is unfortunate that at this hour in this important debate there are no members of the NDP or the Bloc Québécois present to hear this, but it is critical that the government take action to protect our drug supply--

Order. The member will recall one of the very important rules is that we do not mention who is present or who is not present. We will move on to questions and comments.

Mr. Steven Fletcher (Charleswood—St. James—Assiniboia, CPC)

Mr. Chair, the member for Palliser raised a lot of concerns. I think he is quite right that the concern is about supply, price and safety. The main threat to those three factors is bulk exports to the United States.

The member also mentioned that at health committee the Conservative member for Yellowhead brought forward a motion to encourage the government to ban bulk exports so there is no threat that bulk exports to any other nation could occur. That motion was passed by the health committee and it was passed by the House 288 to nothing. Yet the minister has done nothing.

Is the member frustrated by the government's inaction? Also, could the member comment on the inaction on the entire health file, be it wait times, dealing with the human resource crisis in the medical field, or even the crisis that the government caused in the first place? Ten years ago the government cut transfer payments by $25 billion and reduced the number of medical graduates. Now we are in a big mess. Could the member expand on his comments to the broader issue of the health care crisis in which we see ourselves today?

Mr. Dave Batters

Mr. Chair, I welcome the opportunity to address my esteemed colleague from Charleswood—St. James—Assiniboia on these subjects.

First, regarding the bulk exports, I think we have agreed in this House tonight that there is unanimity. Thank goodness for the leadership of the member for Yellowhead for bringing this issue forward and forcing the government to act. We are still waiting, but hopefully it will act soon.

The member for Yellowhead, I should mention, is also a member of, as are many of members opposite, the Conservative Party's crystal meth task force looking at issues relating to crystal meth that pose a serious health risk to Canadians. I know he has been pushing the government, as I have, to make changes to the laws to help deal with that threat to Canadians.

Regarding the overall health care questions, the member alluded to the fact that the government under the now Prime Minister, who was then finance minister, chopped $25 billion out of the budget in 1995 which was intended for transfer payments to be used in large part for health care. I remember I was watching with interest 10 years ago as that happened and thought, “Can we even comprehend the magnitude of this disaster and what it will mean down the road?” We are seeing it today, in terms of health care wait list times.

The government talks about the need to address wait times for surgeries, diagnostic tests and just to see a general practitioner, but it is unable to do anything. That is really the difference. It talked about a fix for a generation, but it has not actually done anything. We cannot recover overnight from a slash in spending of $25 billion. That takes years to recover from.

Nowhere in this country are the problems in health care more evident than in my home province of Saskatchewan, where we have the longest wait times in the country. While I am critical of the government opposite, our provincial NDP government has made some really poor choices in terms of health care in Saskatchewan. It is about priorities and where we place our priorities in terms of spending. Is it a priority to recruit physicians? Is it a priority to ensure that we have an adequate amount of nurses and pharmacists to serve the population of Saskatchewan? It has not been a priority for the NDP government in Saskatchewan, that is clear.

A friend of mine was an ophthalmologist in Moose Jaw. He loved Moose Jaw, but he left because of the NDP government. He said that it destroyed health care in the province of Saskatchewan, the province that he loved.

There are big issues that need to be addressed regarding the health care file. The government clearly has an awful lot of work to do on this file. It needs to make health care a priority, not just talk about it but back it up with some action, and we could start by banning bulk exports.

Hon. Larry Bagnell (Parliamentary Secretary to the Minister of Natural Resources, Lib.)

Mr. Chair, I am delighted that the member was a representative for Pfizer because I would like to ask him a question related to the patenting system.

The member for Pickering—Scarborough East and myself have been working at leading an initiative to try and stop the abuse of patents where they get extended and extended, so that the brand name companies can keep the high prices forever and the drug does not get genericized, which costs everyone more for their drugs, especially those on low incomes and seniors who cannot afford it. We showed some leadership. The Bloc voted against us, unfortunately. His party sort of wavered; it was partly for and partly against.

I wonder if he will show some leadership and help us get the patent system fixed, so that we can get things running smoothly and on to generics, so the costs can be lowered for seniors and all Canadians.

Mr. Dave Batters

Mr. Chair, the issue of patents and intellectual property is a very important one to the pharmaceutical industry and to Canadians. Clearly, the issue that is important, and we have covered this tonight, is the access of medications to ensure that Canadians have access to their cholesterol-lowering medications, their blood pressure control medications, and that seniors have access to drugs that lessen the effects of Alzheimer's disease. All this is extremely important.

The member will know that regarding the patent laws and intellectual property laws as they currently exist, it is a bit of a myth to say that the companies are marketing these drugs for 20 years. Currently, the patents are 20 years on these products. Those take effect when the molecule is first discovered and first patented. The member will know that it takes many, many years before that pill is ever available to the public and brought to the shelves of pharmacies. It is often 12 or 13 years, which leaves the pharmaceutical industry X amount of years to recover its investment, and then yes, make a profit. There is no question that these companies are in the business of making money, but more importantly, these companies are in the business of helping people live happier, healthier lives.

When I was with Pfizer, sure we talked about our sales but we talked about far more. We talked about the possibility of being part of a company that could cure cancer, or being in an industry that would find the cure for cancer and diseases like it. I was proud of that work and we need to support that industry. The industry is a big employer in this country. It spends huge resources in terms of research and development for new medications. I personally see the industry as part of the solution in health care and not, as some members do, as part of the problem. That is important to note.

It is also important to note that while I appreciate the member's efforts, there is really another issue that needs to be addressed. If we talk about the affordability of medications, our generic drugs in Canada are more expensive than generic drugs in the United States. It is because of increased competition in the U.S. There is much more competition there than here in Canada. So, I would like to end my remarks by talking about the need to look at generic pharmaceuticals and ensure that Canadians are not being overcharged for those products.

Mr. Michael Savage (Dartmouth—Cole Harbour, Lib.)

Mr. Chair, I am pleased to have the opportunity to speak tonight on this issue. It is an issue that is important to me. When I came to this place last year, I sought out the health committee. It was the committee I really wanted to be on. I am proud that the Parliamentary Secretary to the Minister of Health is a Nova Scotian. It did not necessarily help me get on the health committee, but I fought to do so and am pleased to be on it for specific issues.

The official opposition critic on health will know my passion for the issue of a national wellness program, for example, and there are other issues that are important to me as well, such as caregiving and seniors. The issue we are discussing tonight is an issue that has a big impact on seniors, among other Canadians. It is a pleasure to have a chance to speak late this evening on this important piece of pending legislation.

On June 29 my colleague, the Minister of Health, on behalf of the government, announced the three prong strategy on cross-border drug sales that included proposed legislative and regulatory changes to safeguard the safety and the supply of Canadian drugs. I would like to speak briefly about those proposed changes to emphasize how they respond to concerns about this industry. They respond to the concerns of ordinary Canadians, Canadians from Dartmouth—Cole Harbour and across this country.

The security of our drug supply must be maintained. I think that when Canadians give it thought, they are concerned about the availability of drugs, particularly at times like this when there are concerns raised in the media and other places about specific health concerns like pandemics.

The measures that we are talking about are simply: a drug supply network, legislation under the Food and Drugs Act to restrict the bulk export of prescription drugs, and strengthening the food and drugs regulations to require that drugs be sold based on a prescription issued within an established patient-practitioner relationship.

The first measure to establish a drug supply network to be housed in Health Canada is essential for the federal government in order to have more comprehensive data to identify when or if a prescription drug supply shortage actually exists in this country. Such a shortage could be caused by exports to the United States or many other causes, such as manufacturing problems.

The growing importance of drugs in modern health care and the threat to Canada's drug supply through the potential legalization in the United States of bulk imports makes it necessary for the Government of Canada to have the capacity to introduce appropriate controls. It is essential that we know when shortages of essential health products such as drugs occur, so we can respond in an appropriate manner. Indeed, the health of our economy could be at risk at a time when the world is bracing for an overdue influenza pandemic. We must have all the necessary tools at our disposal in order to respond.

The second measure is export controls. They would only be implemented in response to a shortage or the risk of a shortage of a drug or a class of drugs essential to the health of Canadians that would only be maintained for a specified period or as the risk persists. We will respect our international trade obligations and investors can be assured that any actions under these measures will be reasonable.

The third initiative to strengthen the existing provisions under the food and drugs regulations is required, so that prescription drugs are sold pursuant to a prescription that has been issued within an established patient-practitioner relationship. The necessity for this measure has become clear as technological innovations such as the Internet, electronic prescribing, and telemedicine create new ways of linking patients with health care practitioners. These are important innovations for the health care system, but they also provide certain challenges and this is one of those.

Authorities responsible for regulating the practice of medicine will work to ensure ethical practices that are based on that established patient-practitioner relationship. I think most Canadians believe that this type of practical procedure makes sense. The patient-practitioner relationship is, after all, paramount to most Canadians in their experience.

I would like to take a closer look at the economics of the cross-border drug business with regard to the rise of Internet pharmacies. I acknowledge the inventiveness and the entrepreneurial spirit of our Internet pharmacies. However, we cannot forget that their business is based on an ancient and fundamental business practice known as arbitrage, which, in essence, is the old adage of buy low and sell high.

It is a fundamental tenet of our health policies that drug prices in Canada be affordable. This is increasingly important as pharmaceuticals replace many older forms of medical treatment.

Not so long ago, for example, ulcers were routinely treated with special diets, antacids and in the end, surgery. Then some scientists in Australia made the remarkable and unexpected discovery that ulceration of the stomach or duodenum was the result of an infection of the stomach caused by the bacterium H. pylori. The importance of this discovery is reflected by the receipt of this year's Nobel Laureates in physiology and medicine. Now we routinely treat such infections with antibiotics and avoid significant costs and intervention with patients and doctors and hospitals.

Many within the industry have attributed Canada's low drug prices to the Patented Medicine Price Review Board, the PMPRB, that regulates patented pharmaceutical prices. Most other developed countries in the world also regulate prices with a similar mechanism with the notable exception of the United States.

The PMPRB establishes the maximum price that can be charged by manufacturers for patented medicines sold in Canada to ensure that they are not excessive.Annually, it ensures that prices do not rise faster than the rate of inflation. Now on occasion manufacturers tend to set their prices internationally at a level that reflects the ability of the marketplace to pay. That is the relative purchasing power in different countries. In Canada's case these prices are often below the PMPRB maximum for marketing purposes.

Despite the sudden growth of cross-border drug sales since December of 2003, sales stabilized at about $1 billion Canadian retail per year, and Internet drug sales have declined from $617 million to $506 million over the past year. Currently, cross-border drug sales represent more than 8% of prescription drug sales in Canada, but less than 0.5% of the $300 billion U.S. market. Average savings to American consumers have fallen from 44% in December 2003 to less than 30% nationally. This is due in part to a strong Canadian dollar and to pharmaceutical manufacturers' restrictions on the supply of drugs to Internet pharmacies.

The recent decline also is due to the fact that Canadian Internet pharmacies are increasingly meeting U.S. demand indirectly through non-North American suppliers in places such as the U.K., India, and China where drug prices are often even lower than they are here. The top three Canadian Internet pharmacies source 50% of their product from Europe. These products do not flow through Canada and do not require approval by Health Canada. We should remember that these Canadian Internet pharmacies are businesses, not philanthropies, that are responding to market demand in the United States. If they do not, other foreign Internet pharmacies will fill that demand.

Another major constraint on the growth of these exports to the U.S. has been the refusal of pharmaceutical manufacturers in Canada to sell to those pharmacies which they have reasonable grounds to believe are exporting to the United States. A March 2003 ruling by the Competition Bureau in Canada determined that since cross-border sales violated U.S. laws against importing prescription pharmaceuticals, manufacturers had a reasonable business justification from restricting the export of Canadian products to sales contracts with pharmacies and wholesalers, so long as they continued to supply our market.

Ten manufacturers have limited the supply of their products to Canadian Internet pharmacies. While these manufacturers supply controls have caused concern for some that Canadians in general might face potential drug shortages, there is no evidence for this concern. Manufacturers have clearly indicated their intention to stop supplying export pharmacies but continue to ensure adequate supply for Canadians.

As well, pharmaceutical manufacturers' inventory levels in Canada continue to be at an all time high, double the level of three years ago, providing further comfort that the drug supply is okay. However, we do not want to rely solely on the current provisions to protect our access to affordable drugs.

In the U.S. 27 states and 19 municipalities are considering drug importation at various levels. Currently, there are bills before the U.S. Congress to legalize the importation of drugs for both personal and bulk rate. Given the relative size of our two markets, I think the health minister has noted that Canada cannot be a drugstore for the Americans. This has resonated strongly in Washington and in the U.S. media.

The government strategy to address the issue of cross-border drug sales has those three clear initiatives: first, a drug supply network; second, legislation to restrict bulk export of prescriptions; and finally, strengthening Canada's food and drug regulations to ensure that drugs are sold based on a prescription within that established patient-practitioner relationship. All of these are undertakings to safeguard the safety and supply of Canadian drugs.

We must continue to be sensitive to the economic dimension as we go forward, but we will move as a government to protect the drug supply of Canadians and we will ensure that our citizens have no reason for concern.

Mr. Steven Fletcher (Charleswood—St. James—Assiniboia, CPC)

Mr. Chair, I thank the member for his presentation and his contribution at the health committee.

I am pleasantly surprised that his description of the industry, though there may be some differences in some of the specifics, is pretty accurate. Compared to some of the hysterics and questionable comments that we heard earlier this evening, the member is quite correct in the context of the argument.

For example, he recognizes that the industry has plateaued at about a billion dollars. It has not increased as what was claimed earlier. A lot of businesses have gone offshore, which is a point that I tried to make earlier tonight and seemed to be lost on some of the members across the floor.

When dealing with reasonable arguments, there is a lot of commonality in where the parties stand. I think we all agree that bulk exports are out of the question and that the appropriate safeguards should be in place.

I think the concern that exists goes to unintended consequences. We have not seen the proposal in its final form, but there seems to be room for concern about the fact that there are many situations where the patient does not see the doctor in a face to face situation. There are also concerns about provincial jurisdiction.

As a member of the health committee, could the member comment on why the minister has taken so long to act when clearly the health committee and the House have stated that bulk exports simply cannot be allowed?

Mr. Michael Savage

Mr. Chair, I thank the hon. member for his indication that we might have some meeting of the minds on parts of this. It leads me to believe I might have made a mistake, but that is not the case.

In terms of the health committee report, we all endorsed that. We all believe that this is an important thing. I believe it was June 6 that our health committee endorsed the resolution. There had been a previous one on February 3 by hon. colleague who asked me the question, indicating that the committee refrain from any action pertaining to the Internet pharmacy industry until the committee had fully studied the issue and submitted its recommendations to the House.

However, on June 6 we asked for action and on June 29 the minister moved. He is consulting in a way that is prudent and reasonable. He is ensuring that stakeholders are considered and he is balancing that with the need for action.

Therefore, I commend the minister and I think we can look forward to a common consensus when the bill comes before us.

Hon. Robert Thibault

Mr. Chair, I thank the member for Dartmouth—Cole Harbour also for his comments. On a related subject, I know the member has been very much involved with the post-secondary initiatives and the post-secondary education caucus. He understands the question of how much effort has been deployed by the federal government in investing in research in Canada, in the universities and in the private sector and ensuring that there has been collaboration between the private sector and the universities.

The member made a great presentation about the drug for ulcers that was developed in Australia. He understands the role that can be played by the research field. Has he any thoughts on the question of research in pharmaceuticals in Canada?

Mr. Michael Savage

Mr. Chair, the parliamentary secretary talked about research and the investment that the Government of Canada has made juxtaposition with the private sector research that has been in place in Canada. When my colleague was the regional minister in the province of Nova Scotia, he was very involved in a large number of those research grants and investments in post-secondary education in Nova Scotia and Canada in general.

As most members in the House probably know, Canada has been hugely successful since 1998, investing in the range of $13 billion in publicly funded research through initiatives like CIHR and supporting granting councils like NSERC, SSHRC, and CFI.

Canada has become a leader, reversing the brain drain, bringing researchers back into Canada, not only repatriating researchers but keeping them here and bringing new ones here. When we look around the world, we see China and India, with populations over one billion people, investing heavily in research, innovation, technology and commercialization, it reinforces the wisdom of Canada's decision over the past five years. It also shows us the importance of keeping that up.

We have not had the level of private sector research that some other countries have had. We have been able to partner in a lot of cases. CIHR partners and leverages a lot of research money. Drug companies and others, some of whom are really responding to the challenge, would do well to keep Canada in mind, when they build their research plants, and continue to invest in Canada where a lot of their consumers are.

Mr. Steven Fletcher

Mr. Chair, I am still looking for an answer as to why the bulk export portion of the health committee recommendation has been delayed. I think we would all agree that we would like to see faster action. The health committee stated that it wanted to study it in its entirety before the minister acted, but there was an issue about bulk exports so we decided that it should not be dealt with.

The member also indicated that the industry had plateaued and may even be in a decline. The urgency on the other issues is not there as it was on the bulk issue.

Would he be in agreement to have the health committee study this issue in conjunction with the consultations that are occurring? I also would like to assure the member that he did not make a mistake. I started to doubt myself too. Hopefully, we can get some progress on this very important issue.

Mr. Michael Savage

Mr. Chair, I would love to see our health committee work on a non-partisan basis as reasonably as possible. I certainly am prepared to work with it.

With all due respect, the health committee has been inundated with ridiculous motions on everything from asking the Prime Minister to appear before it and talk about why he wanted to get rid of the Canada Health Act, as per Sheila Copps' book, to recently proposing that Earnscliffe should appear and discuss why it received contracts with Health Canada. These motions were discussed in committee instead of important issues like the one we are discussing tonight.

If the health committee can play a role, I would be very much in favour of that. The motion was passed on June 6. It was brought up on June 29 by the Minister of Health. We recessed for the summer. It came back before the House and was passed on October 5. We are just barely past October, so we have acted expeditiously on this. The Minister of Health is very sincere and consistent and committed on this issue. I hope the entire House will support this when it comes before us.