Harry Cruickshank HARLEY

HARLEY, Harry Cruickshank, M.D.

Personal Data

Party
Liberal
Constituency
Halton (Ontario)
Birth Date
June 4, 1926
Deceased Date
September 27, 2014
Website
http://en.wikipedia.org/wiki/Harry_Harley
PARLINFO
http://www.parl.gc.ca/parlinfo/Files/Parliamentarian.aspx?Item=2f15dfc9-fa48-427a-a525-50f18f0f419d&Language=E&Section=ALL
Profession
physician

Parliamentary Career

June 18, 1962 - February 6, 1963
LIB
  Halton (Ontario)
April 8, 1963 - September 8, 1965
LIB
  Halton (Ontario)
November 8, 1965 - April 23, 1968
LIB
  Halton (Ontario)

Most Recent Speeches (Page 1 of 19)


February 14, 1968

Mr. Harley:

Mr. Speaker, may I rise on a question of privilege. This arises as a result of something which came to my attention late last evening. During the debate on Bill No. C-190 on February 12 as reported at page 6851 of Hansard I stated that chloramphenicol manufactured in the United States by nine companies had been allowed back on the market after rechecking. My information, Mr. Speaker, was incorrect. These products have not been allowed back on the United States market. I apologize to the house and express my appreciation in particular to the hon. member for Simcoe East (Mr. Rynard) and the hon. member for Queens (Mr. MacLean) for drawing this matter to my attention.

Topic:   PATENT ACT-TRADE MARKS ACT AMENDMENTS RESPECTING IMPORTATION OF PRESCRIPTION DRUGS
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February 12, 1968

Mr. H. C. Harley (Halion):

Mr. Speaker, it is my honour to participate in the debate. Tonight I wish to do so as the ex-chairman of the special committee on drug costs and prices, to which reference has been made during this debate. I would like to put on the record the terms of reference of the committee, which were as follows:

That the committee be empowered to consider and recommend, as it may deem expedient, respecting a comprehensive and effective program to reduce the price of drugs.

As the house is aware, the committee reported on April 3, 1967 after over one year of intensive and detailed study. I think the basic feeling of the majority of the committee was that if we were to make recommendations which were to be taken seriously by the government, these recommendations had to be based on fact, and I believe we accomplished that. While many people have disagreed with our conclusions and recommendations, to my knowledge no one has challenged the material in the report on which these conclusions were based. I should like to remind the house that this was the unanimous report of a committee of the House of Commons composed of members from every political party in the house.

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Patent Act-Trade Marks Act

I would remind the house that there was no mention in the terms of reference to the matter of safety or quality of drugs. I am sure hon. members are aware that two years previous to that time a committee of the house had dealt in considerable detail with drug safety. The present committee realized that the question of costs could not be completely separated from that of safety. The actual cost of safety or quality control cannot be segregated from ordinary manufacturing costs, as they are often an integral part of the manufacturing process in any industry, whether it be a pharmaceutical or any other product. In any event, the committee found the actual cost of safety or quality control to be small but very essential. I would emphasize to the house that no recommendations of this committee would reduce the money spent on safety. As a matter of fact, the matter of safety must come before that of cost. After all, life is more important than money, and no recommendation of our committee should be carried out unless safety can be assured as much as possible.

We all know that the complete safety of any drug cannot be guaranteed, no matter how minor the drug or how major the government's caution and concern. As a matter of fact, if I were to summarize the report of the committee, I would say that the majority of the recommendations, by actual count 20 out of 23, fell into two major categories: first, those that were intended to make lower cost drugs available in Canada and, second, those that would ensure as much as practicable that these lower cost drugs would be safe for the use of the consumer.

[DOT] (8:40 p.m.)

I should like to review a few of the conclusions of the report and make a few comments on them. The first one I should like to comment upon is that no significant change has taken place in the drug cost structure since the recommendations of the Hall commission, which were primarily based upon the recommendations of the Restrictive Trade Practices Commission. So far as the committee could see, the drug industry had made no attempt to reduce drug costs, despite those reports which were very critical of the drug industry. The drug industry had not taken the report seriously and apparently had never expected the government to take any further action on that report, or on our report.

As has been mentioned before, there exists no single method or simple approach which

February 12, 1968

Patent Act-Trade Marks Act can be taken to reduce the price of drugs to the consumer. It was therefore necessary to present a series of recommendations to effect this purpose. As hon. members are aware, and as the minister said, the federal sales tax has been removed and some changes have been made in tariffs. This bill No. C-190 deals with another series of recommendations our committee made.

The medical profession, of course, is responsible for prescribing most drugs. If these committee recommendations are to be fully effective, the medical profession must be completely assured by the food and drug directorate of the safety of all drugs. If the medical practitioners in Canada cannot be assured that drugs in Canada are as safe, and I mean "safe" in a reasonable manner as human effort can reasonably make them, and are, therefore, prepared to use the lower priced drugs, then the report we submitted and the minister's proposed legislation is not worth the paper it is printed on. This legislation will be of no benefit to anyone unless the medical practitioners in Canada can be assured that the drugs that would be available under the minister's legislation would be safe for them to use.

The next conclusion concerns the implementation of the recommendation in connection with marketing and promotional expenses, and the reduction of excessive profits. As an example, the committee was greatly concerned with the average expenditure of 30 per cent of the manufacturer's dollar on promotion and marketing as opposed to 7 per cent being spent on research. In other words, more than four times as much money was being spent on marketing and advertising a drug as was being spent on research into medicinal products. As the hon. member for Hamilton South (Mr. Howe) said, it is important to know also that a good deal of the 7 per cent spent on research was spent on applied research, applying the benefits of other forms of research. Only a very small proportion of that was spent on basic medical research. The committee realized that the implementation of our recommendations could alter, in some respects, the form of the drug industry as it exists in Canada today, removing inefficiency and increasing competition. What the committee felt must be done is to introduce competition into the drug industry, not product competition such as duplication of another successful product which increases cost, but competition on prices, which is the kind that is needed in the drug industry.

I should like to say in passing that many countries, including the United States and the United Kingdom, are having a series of studies made of this problem. It is interesting to note in passing that the Sainsbury report in the United Kingdom recently recommended abolishing trade names and using only generic names for drugs.

I should like to talk for a few minutes about one of the major recommendations of the committee, namely that the food and drug directorate publish not less than once a month an informative bulletin to the medical profession giving complete details on drugs and their actions, and reviewing major drug usage in Canada. This would of course go not only to the medical profession but also to the related professions including pharmacy. The committee realizes that to ask a doctor to change his prescribing habits is a very serious responsibility. It should be done only if the doctor can be assured that the drugs he has the option of prescribing are as safe as possible. To do this the doctor should, and indeed must, have free access to a non-biased current report on drugs which would include certain data-and I should like to emphasize the words "non-biased". In other words, the bulletin would not be put out by a drug company and would be available free to the medical profession. The committee felt the following should be included in that bulletin:

1. The generic name of the drug.

2. Names of all manufacturers of the drug, and brand names of the drug.

3. Comparative costs and clinical effectiveness of the drug.

4. How the drug works; side effects, contraindications and toxicity.

5. The last assay for each company's prod-duct, of content and availability of active ingredient, solubility and disintegration.

6. Any problems with any company's product such as toxicity, impurity, seizures, court actions failure to meet food and drug directorate standards.

The committee feels that the food and drug directorate has been keeping some of its activities from the medical profession. The findings on drugs should be openly reported to the medical profession in public documents. If there are poor quality drugs on the market, then the medical and pharmaceutical professions should be told. The medical and related professions have to be convinced that

February 12, 1968

the food and drug directorate has full and accurate knowledge of the drug industry. To do this, they have to report fully and I believe, in a public bulletin. If the medical profession cannot be assured by giving them freely full and unbiased evidence of all the factors concerning drugs, then it is obvious we cannot expect the medical profession to change their prescribing habits in favour of the lower cost drugs.

I have been asked in what way this might tend to lower the price of drugs. Certainly, the staff that would be required by the food and drug directorate to publish such a bulletin would be expensive and would probably take up to two years to set into motion. I believe, however, that the savings that could be made if the medical profession used this bulletin to their own advantage, and more particularly to their patients' advantage, would be very substantial. The consumer would benefit greatly from this saving, enough to more than justify the expense.

Many hon. members here are aware of the large savings that can be made, many of which have been referred to today, when drugs are purchased under a tendering system. Most of these drugs do come from generic manufacturing houses. Many generic drugs are used by the staffs of various hospitals. These same staff doctors may not use generic drugs outside their hospital practice, but many are often doing so inside the hospital without being fully aware of the source of the medication they are prescribing.

I am convinced more doctors would prescribe the lower cost drugs of generic manufacturers if they were convinced that they were safe to use and equally effective. I hope therefore that the government will see fit, in the very near future, following these recommendations, to introduce the type of bulletin to which the committee made reference. Obviously the federal government has no power to implement some of the recommendations of our committee. Some of the recommendations come under the jurisdiction of provincial governments and some come under the heads of pharmaceutical bodies and other public bodies. I hope all those interested bodies will see to it that the recommendations are given serious consideration. Obviously the government cannot implement in a field in which it has no jurisdiction; we can only bring in recommendations. For instance, we have no control over the field of retail pharmacy, and therefore the government can make no recommendations in that area.

Patent Act-Trade Marks Act [DOT] (8:50 p.m.)

The unanimous conclusion-I emphasize the word "unanimous"-not only of the special committee on drug costs and prices but of the various other inquiries in Canada is that drug prices are higher than they need be and certainly higher than the public is prepared to pay without question. One of the major causes of drug costs has been attributed to the degree of protection accorded to the drug manufacturing industry by such laws as the Patent Act and the Trade Marks Act. This has resulted in a lack of competition. What the committee hopes the recommendation will accomplish is the injection of a greater degree of competition in the pharmaceutical industry at all levels. Despite the many studies that have taken place over the past ten years the industry has not, as far as I am aware, made any attempt to produce solutions to the problems. As I have said, Mr. Speaker, the government has removed the federal sales tax and has made changes in some of the various laws. Today's move is to bring in recommendations that change the patent and trade marks laws in such a way as to provide Canadians with less expensive but equally safe drugs.

There has been a great deal of discussion about patents and patent protection. I should like to point out to the house that patent protection at the present time in Canada is for 17 years and that the present legislation will not change it. The system of compulsory licensing that we are talking about has actually been in effect since 1923. The principle that food and drugs are different from other inventions was actually established in 1923, and is not being established now.

As far as compulsory licences are concerned, Mr. Speaker, I should like to quote the report of the special committee of the House of Commons on drug costs and prices. At page 38 appears this paragraph:

The committee found that up to 1949 no applications for compulsory licences had been made in Canada.

As I have said, Mr. Speaker, this was included in the legislation in 1923.

-Since 1949 the commissioner of patents has had to deal with thirty-four applications for licences upon medicinal products. Fourteen were granted, thirteen were abandoned or withdrawn, one was refused and six are pending.

Those figures were as of September, 1966. The system of compulsory licensing has been

6650 COMMONS

Patent Act-Trade Marks Act in existence in Canada since 1923, and up to the present time has not been put to any great use.

As the minister mentioned previously, patents in Canada-at least those relating to drugs-are now over 95 per cent foreign owned. Patent rights, despite this legislation, will be retained; and I do not believe that there will be any international implications of the kind several hon. members of the house alluded to during the debate.

As I have said, compulsory licensing has been the practice in Canada since 1923. It is also a system that is used in the United Kingdom under very similar legislation. To my knowledge, no one in the United Kingdom or in Canada has ever complained on an international level that the compulsory licensing system interfered with their patent rights, to their great detriment.

Some reference has been made to some literature that all of us have received during the last few days, particularly to a letter and a brief forwarded to various members of the house by P.M.A.C., the Pharmaceutical Manufacturers Association of Canada. The second paragraph of the letter reads:

Bill C-190 essentially would abolish normal patent and some trade mark rights as they relate to prescription medicines made in Canada.

Then it goes on:

We believe it might set an unfortunate precedent.

I have just pointed out to the house, Mr. Speaker, that this is not so. First of all, it would not abolish normal patent protection; nor would it set a precedent. The precedent was actually set in 1923.

In the third paragraph of their letter the association say that they had hoped there might be consultation on this legislation prior to its introduction. This legislation was introduced almost a year after the recommendations of our committee. The Pharmaceutical Manufacturers Association of Canada had the advantage of making many representations to the committee. Since that time the minister's office has been open to them for representations, and the minister has seen representatives of the association as a body on at least two occasions. He has also seen representatives of any drug company that wished to see him regarding the legislation, and has seen them, as far as I am aware, to the fullest of their wishes. Certainly it is my understanding that no one has been denied an interview with the minister or the department on this matter.

DEBATES February 12, 1968

While I am talking about the Pharmaceutical Manufacturers Association of Canada, Mr. Speaker, I should also like to disagree with a statement that was made in Florida by the president of the association. He stated that the Canadian parliamentary committee was willing to put Canada at the mercy of foreign nations in the event of world wide epidemics.

I am not sure how I should qualify this statement. Whether the changes in the legislation with regard to compulsory licensing go through or not, this statement could perhaps be said basically to be true. As was pointed out this afternoon, Canada does not have a significant, basic fine chemical industry. I might point out that the basic chemicals used by the drug industry in Canada today do not originate in Canada, but come mainly from the United States. Therefore, Mr. Speaker, if the statement to which I have referred is true after the legislation passes, then it is equally true before the legislation passes.

I also think the house should understand that under the laws and regulations of the food and drug directorate at least a five-year monopoly is given to any company that introduces a new drug into Canada under the principle of patent protection. This is because a drug that comes into Canada under a patent protection is classified as a new drug until it satisfies the directorate that the company has met their requirements concerning research on the particular drug in question.

The minimum period of time that elapses before a drug loses its new drug status is five years, and usually is a great deal longer than that. In other words, the company that produces the drug does indeed have a five-year monopoly, during which time it may regain its research costs and can actually go out and try to corner the market for that particular product. The company has five years' access to a completely monopolized market; and as I have said, Mr. Speaker, usually the period is more than five years.

No company, Mr. Speaker, has asked or is likely to ask for a compulsory licence before new drug status is lost. If it does this, it means that it has to reduplicate all the investigational work on the particular drug. No compulsory licence has ever been applied for by a company while that stipulation was there. It is a very expensive procedure to introduce a new drug. Therefore I think it very unlikely that a compulsory licence would be asked for during that time. So there is no question, Mr. Speaker, that the major

February 12, 1968

patent rights are retained, and certainly a complete monopoly without any risk of compulsory licence is available to the company for at least five, and perhaps many more years.

There is no question that patents do influence the price of drugs. I think reference was made to the fact that the United States, does not have a compulsory licensing system, as we have in Canada. Chloromycetin was much cheaper in Canada under our compulsory licensing system than it was in the United States. Recently the patent in the United States ran out, and practically overnight the price of Chloromycetin in the United States fell almost 50 per cent. So indeed, Mr. Speaker, patent protection does influence greatly the price of drugs.

The hon. member for Simcoe East (Mr. Ry-nard) made reference this afternoon to Appendix A of the brief submitted by the Pharmaceutical Manufacturers Association of Canada. This appendix refers to nine drug companies which were told to stop marketing chloramphenicol. It is my understanding the chloramphenicol has been rechecked by the food and drug directorate and is now free to come on the market.

[DOT] (9:00 p.m.)

I point out to the house that if drugs are imported into Canada in final dosage forms under compulsory licences, which is what the legislation recommends, those drugs must pass the food and drug regulations as they concern quality and safety, in the same way as the drugs of Canadian manufacturers must pass those regulations. Those drugs will not be exempt from any tests that are applied to other drugs.

Mention has been made of inspection services. How are we to maintain inspection services, particularly in foreign countries, some hon. members have asked. So far as food and drug inspectors are concerned I point out that inspectors at present work in foreign countries, and particularly in European countries. These inspectors are Canadian members of the food and drug staff who act as inspectors in connection with the purchase of drugs. Certain classes of drugs, namely biological products, require inspection at source before they are allowed into Canada. As I say, at present we have inspectors in Europe.

Sending inspectors of the food and drug directorate to other countries, including European countries, cannot be considered a precedent. They inspect manufacturing facilities

! DEBATES

Patent Act-Trade Marks Act and make sure that proper quality control and safety standards are being met, and in this regard their service is an extension of the service that is presently performed in Canada.

Another point I wish to mention is that if drugs are brought in under compulsory licence, the originating company will receive royalties which are based on the cost of production and not on the selling price of the product. Because, as has been mentioned and admitted in evidence before the committee, the selling price of a product bears no relation to the cost of producing that product.

This afternoon the hon. member for Simcoe East (Mr. Rynard) quite justifiably mentioned that great Canadian discovery, insulin, and he paid compliments to the Canadian discoverers, Drs. Banting and Best. He knows that insulin was discovered, not in the laboratory of any drug company, but at the University of Toronto. He mentioned that the University of Toronto now spends a great deal of money on medical research because Drs. Banting and Best turned over the royalties to the university in order that the royalties might be used in medical research. Exactly the same situation might prevail if a compulsory licence were granted. Royalties are still paid and there is no reason for the type of activity I have just mentioned not to continue under the proposed legislation.

The committee was greatly concerned with the fact that the manufacturing companies spend 30 per cent of their dollar on promotion and marketing and only 7 per cent of their dollar on research. The committee believed that the 30 per cent that was spent on promotion and marketing was unnecessary. Almost every doctor in Canada will tell you that most of the material that crosses his desk is never read but thrown into the waste-paper basket, at great expense to the drug companies.

We believe that if drug companies in Canada are forced to cut back, because of drugs at more competitive prices being brought into the country, they can do so by cutting down on some of the frills, particularly the 30 per cent they spend for promotion and marketing. They can still make a profit within the Canadian economy. As everyone knows, the drug companies must make some profit in order that investors may invest their money in such companies.

February 12, 1368

Patent Act-Trade Marks Act

I point out that though generic drug companies sell their drugs at prices that are different from the prices charged for brand name drugs, the companies still make a profit. No one suggests that they are doing this at a lower profit than is available to companies selling brand name drugs.

As I have already mentioned, the committee heard a great deal of evidence about the safety aspect of drugs. We have been very fortunate in Canada because we have had few problems with drugs that have been manufactured in Canada. Few serious problems have arisen in connection with trade mark or generic brands, yet the Question of safety has been talked about and worried about in Canada and in the United States, much more than the evidence of unsafe drugs would warrant.

I expect that members of the house are aware that the government of Canada purchases great quantities of drugs to be used in the Department of National Health and Welfare and the Department of Veterans Affairs, as well as in the Canadian Armed Forces. The committee called members of the government purchasing service before it, as shown in volume 2, page 1509 of the testimony before the special committee on drug costs and prices, 1966-67. The questioning was about the safety aspect of drugs and on that page Mr. Ellis, a witness before the committee, says this:

Mr Chairman, as far as the Department of National Health and Welfare is concerned, we depend on our two suppliers, as I pointed out in my statement. We get all our drugs from either Department of Veterans Affairs or through the surgeon general's branch of the Department of National Defence. We depend on the testing procedures of those two departments.

I can make an unequivocal statement, though, that we have had not a single complaint of lack of efficacy in our drugs. This was borne out this past week by phone calls to four senior pharmacists across the country.

of dosage forms of drugs of all types. At present you can import drugs into Canada in their chemical form. The changes in the act would allow the importation of drugs in all forms. The second matter, the doctors' bulletin, I have already referred to.

I wish to refer briefly to one statement that the hon. member for Simcoe East made. Toward the end of his remarks he asked for this matter to be sent to committee for further study. Originally, the special committee on drug costs and prices was set up in 1963 as a result of the thalidomide tragedy, and originally it was to consider only the safety aspect of drugs in Canada. The question of costs was added about one year later, in the new terms of reference which were established by the minister of national health and welfare of that day. As I said, the committee which brought in its report on April 3, 1967, sat extensively. It lasted for well over one year. The entire idea behind the setting up of the committee is several years old. Anyone reading the evidence will find that of the 2,700 pages of evidence which are concerned with the cost of drugs and the price of drugs, at least half have to do with the aspect of safety.

[DOT] (9:10 p.m.)

I believe it would be nothing but repetition to send a matter like this back to a committee of this House of Commons. I believe nothing is to be gained by it. The legislation which the minister has introduced is the product of the recommendations of a committee of this house, and to send the same legislation back for further committee study would be repetitious, ridiculous and a great waste of time of the house. I hope the house will see fit to pass this legislation quickly because I believe the need in Canada is to provide safe and effective drugs at reasonable and competitive prices.

I expect members of the house know that the government buys under a tendering system and most drug supplies are bought from companies that are classified as manufacturers of generic drugs.

I believe that the questions of safety and quality are not debatable. They are factual. For the reasons I have already given, the first consideration with respect to drugs must be safety and quality. Two things must be done if safe drugs at lower costs are to be made available to all Canadians. As the committee recommended, the first of these would be to grant compulsory licences for the importation

Topic:   PATENT ACT-TRADE MARKS ACT AMENDMENTS RESPECTING IMPORTATION OF PRESCRIPTION DRUGS
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June 28, 1967

Mr. Harley:

Mr. Chairman, I want to take advantage of the debate on the estimates of the Department of National Health and Welfare to say a few words about some of the committee reports which are so seldom debated in the House of Commons. First of all, I want to say a few words about the health and welfare committee and its hearings last year on birth control. As I am sure all hon. members of the house are aware, the committee recommended that the words "preventing conception or" be removed from the Criminal Code, the effect of which would be to make the dissemination of knowledge and the sale of contraceptives legal in Canada. I must say that during its hearings the committee was greatly concerned about the fact that if these words were taken out of the Criminal Code there might be some trouble with the advertising of contraceptives which would be considered to be in bad taste and the indiscriminate sale of contraceptives in various stores which again would be in very bad taste. The committee made some very sensible recommendations regarding a few amendments of a simple nature to the Food and

June 28, 1967

Supply-Health and Welfare Drugs Act which would cover the sale and advertisement of contraceptives.

I should like to say as a member of that committee which adopted the report almost unanimously, a report which in my view reflects the feelings not only of members of this House of Commons but of the people of Canada, that I would be quite shocked and surprised if the government did not carry out the recommendations which that committee made. I certainly expect it will do so in the fall when amendments to the Criminal Code, about which we have been told, will be brought about.

In that connection I should like to say a few words about a subject which has not been discussed in the committee to date, namely, the matter of abortion. When the committee met on the question of birth control it was understood by the committee that they would be dealing solely and specifically with the question of birth control and not the question of abortion. The two matters are completely separate and should not be considered together or confused.

As the house is aware, yesterday several private members' bills dealing with abortion were sent to the committee on health and welfare which now has that reference before it. It is hoped the committee will meet soon in view of the fact that representations have already been made to various members of the committee, and hearings should be held in the fall. It is hoped that during the summer recess the people who are interested in the subject of abortion will have two or three months in which to prepare briefs and get ready for an appearance before the committee which should sit early in the fall. I believe that full and detailed hearings will be necessary. I think most people in Canada agree that some changes with regard to abortion are necessary in the Criminal Code, but there are a great many different opinions as to how far these changes should go and how they should be brought about.

I should like to devote most of my remarks to the special committee on drug costs and prices which reported to this house on April 3 of this year. However, before I get into that subject to any great extent I should like to say a few words about the 12 per cent federal sales tax on drugs which, as the Minister of Finance mentioned in his budget, would be taken off the price of drugs as of September 1 of this year. Hon. members will note that the report of the committee did not recommend that the sales tax should come off all drugs

but that it should come off prescription drugs only. It is my understanding that the government removed the sales tax from all drugs because it was administratively very difficult to take if off one form of drugs only and it would also create great difficulties for a doctor to whom a patient might say "I know I can buy such and such a drug over the counter without a prescription, but if you give me a prescription for it I can buy it without having to pay the federal sales tax." This would mean a great deal of paper work for the doctor. I thought the government made a wise decision in removing the tax from all drugs.

[DOT] (4:40 p.m.)

The reason, of course, that the effective date is September 1 is to allow the drugs now on the druggists' shelves, and on which tax has been paid, to be used up. A druggist always has to keep a large stock of drugs on hand to meet any demand, and these stocks will not be used up by the time the change is made on September 1. Unless a druggist is willing to absorb the loss on these stocks, prices will not automatically fall on September 1, 1967. As is mentioned many times in the report of the committee on drug prices, the prices of drugs will not fall 12 per cent when the 12 per cent federal sales tax is removed.

I should like to put on the record two paragraphs from the report of the joint committee on drug costs and prices, starting at page 30:

From these figures one might be inclined to conclude that elimination of sales tax could result in an average reduction of 5 to 10 per cent in the price of drugs to the consumer, depending upon the particular pricing method in use. However, reduction in prices is not ensured simply by the elimination of the sales tax. This point was emphasized by many who made representations to the committee. It was pointed out that the elimination of the federal sales tax should be taken as part of a program to reduce drug prices and that this can be better assured by introducing competition into the drug market. Evidence, for example, has been shown that tariff reductions have not always been accompanied by a corresponding decrease in the price of drugs although the cost to the manufacturer was lower.

Both the drug manufacturers and retail pharmacists offered the opinion before the committee that the benefits of a reduction in sales tax would be passed along to the consumer. However, the committee concludes that, without more effective operation of competitive forces than presently exists in the drug industry in Canada, the only certain result from removal of the tax would be a reduction in costs to the manufacturers. The consumer must also understand that the removal of the 12 per cent federal sales tax on drugs will not, (however much drug manufacturers and retail

June 28, 1967

pharmacists honestly co-operate), lower the price of drugs 12 per cent for the reasons already discussed in this section.

_ Since the publication of this report, Mr. Chairman, we have heard rumours that drug prices either have gone up or will go up prior to September 1 so that there will be no effect from the removal of the sales tax. I personally, along with many other members of the committee, have had a great deal of interest in this subject. I have taken pains to make as many detailed inquiries as I could concerning this rumour. I must say I have found no evidence at all other than the case of one drug by the name of demerol, which is a narcotic that is not prescribed very widely nor it is very expensive. I feel it is only fair to the drug manufacturers and pharmacists to point out these facts. I have found no evidence that drug prices have gone up or will go up. As a matter of fact, I am told no increase in drug prices will take place now after all the adverse publicity. I should point out that one of the companies brought about a reduction in the price of a fairly expensive antibiotic during the hearings of the drug committee.

As I know all members are aware, the special committee made 23 recommendations, which we refer to as a package deal, to bring down the cost of drugs. Generally speaking, the recommendations contained in the report can be divided into two sections, each of which emphasizes a basic idea. The first section of these recommendations to lower drug prices would make cheaper drugs available in Canada or make drugs manufactured in Canada less expensive. Fifteen of these recommendations were designed for that purpose.

The second group contains six recommendations, and these are designed to make sure that if available drugs are cheaper or if cheaper drugs are available-I am sure hon. members will see the distinction-they meet the requirements for safety established by the food and drug directorate. There were three other recommendations made in the report which probably have no effect on the first two groups but which the committee felt might be useful.

I should point out that while lower drug prices are important, they are of no use if the drugs are not prescribed. I should point out too that the report itself is not worth the paper it is written on if we cannot convince the medical profession that they can safely prescribe the drugs that are available in Canada. Less expensive drugs must not be 27053-133J

Supply-Health and Welfare less safe. We must do what we can to bring down prices but we cannot do that by sacrificing the safety or the quality of our drugs. There is no question but that less expensive drugs are available in Canada now. If one has any doubt about this, one has only to look at the practice of the government of Canada and most of the provinces in tendering. I am pleased to say that there was no evidence before the committee that any significant problem dealing with the safety of drugs had been introduced since the government began issuing the requirements for drug firms tendering on a particular drug.

These requirements come under the Canadian government specification board and are called standards for manufacture, control and distribution of drugs. Certainly the drugs purchased by the government are cheaper because no federal sales tax is paid on them, but the saving as a result of tendering on drugs goes far beyond that. The inspection of drugs intended for government use or public use comes under the food and drug directorate.

It seems to me that cheaper drugs can be made available because the inspection services are the same. I feel that to ask doctors to change their prescribing habits would be a very serious responsibility, but the committee undertook it and eventually the government will have to take that responsibility. When the doctor prescribes drugs he wants to be sure they are safe. I should point out, and I am sure every member of the committee is aware, that any drug can kill if it is taken in large enough doses. Some drugs can kill even if they are taken in the prescribed manner because the person may develop an idiosyncrasy or allergic reaction. As a result of my experience I can say that no drug is ever prescribed or taken lightly by the medical profession.

In order to ensure knowledge of drugs and their safety, the committee also recommended that a bulletin be published and that copies of it be given free to the doctors. It should be published by the federal government and sent to the doctors monthly. Here I would include the following information which is found in the report on page 17, and this information should be contained in the publication:

(i) Generic name of the drug

(ii) Names of all manufacturers of the drug, and brand names of the above drug

(iii) Comparative costs and clinical equivalency of the above drugs

(iv) Therapeutic action of drug

(v) Side effects of drug, contra-indications and toxicity

June 28, 1967

Supply-Health and Welfare

(vi) Last assay for each company's product, of content and availability of active ingredient, solubility and disintegration

(vii) Any problems with any company's product toxicity, impurity, seizures, court actions, failure to meet standards, etc.

4f this bulletin were published it would provide the doctor with knowledge of all the products which were available on the Canadian market, how safe they were and how much they would cost in each case. I am convinced that cheaper drugs, or perhaps a better expression is less expensive drugs, can be made available in Canada, first of all, by importing cheaper drugs. The committee made many recommendations concerning trade mark and patent changes. If these were carried out as recommended by the committee the importing of cheaper drugs would be possible.

[DOT] (4:50 p.m.)

I know that the drug manufacturing industry in Canada is afraid that if these recommendations were carried out the industry would suffer a great deal and perhaps disappear. I do not agree with that view at all. I think it is a very live industry and that it would drop its prices and be forced to compete. Bringing in cheaper drugs from outside Canada, provided they were safe-and the committee report took that into account -would inject competition into a relatively non-competitive market as it exists at the present time.

The second way that less expensive drugs could be made available in Canada is by lowering the cost of the drugs that are actually manufactured in Canada. One of the startling things to committee members, I think, was when it was revealed that approximately one third of the manufacturers' dollar in Canada actually goes on marketing and promotional expenses.

Reference was made in this debate earlier and also in the committee hearings to a recommendation in the Hall report concerning marketing expenses, and I should like to put it on the record. I read from page 22 of the committee report on drug costs and prices:

The Hall commission likewise came to the conclusion that marketing expenses in the drug industry were too high, and recommended a compulsory method whereby this expense might be lowered, namely, "that in the application of the provisions of the corporation Income Tax Act to the manufacturers, importers and distributors of drugs, consideration should be given to establishing a maximum of 15 per cent of total sales as the allowable deductible expense for advertising, sales promotion, 'detail men', and other similar items",

The committee did not agree with the Hall commission on this point, and in explanation of that disagreement I want to put on the record a sentence in our report. If I may again quote the committee report, in the next paragraph there appears this passage:

Yet again, regardless of the savings hopefully expected as a result of the recommendation, it might well be that the drug companies would, regardless of increased taxes, press their promotional activity to meet the continued competition of their rivals-which might easily result in higher costs at the manufacturers' level, and then higher drug costs to the consumer.

So the committee felt that the recommendation of the Hall commission would actually tend to increase the price of drugs rather than lower it.

We often hear a great deal about the question of quality control or safety of drugs. Evidence put before the committee showed that this is not a feature of great cost; therefore the question of safety is not a debatable one. There is nothing in this report that would jeopardize the safety or quality of any drug. To use safety as an argument for the high cost of drugs is just not acceptable.

In summary, Mr. Chairman, what the report really says is that price competition is the answer in the Canadian drug market, not product competition between companies as now exists, with the accompanying high marketing and promotional costs. As I mentioned earlier, this is a package deal. The recommendations made in the report would mean changes to the Food and Drugs Act, the Customs Act, the Patent Act, the Trade Marks Act and, as I have already said, there have been changes made in the budget.

The federal government actually has no power to carry out many of the recommendations which have been made, but we certainly hope that those who have jurisdiction in these areas will carry out their own investigation based on our recommendations. Personally I am convinced-and I think the members of the committee are too; the report was adopted unanimously-that less expensive but safe drugs are possible in Canada. I ask the government, and in particular the Minister of National Health and Welfare and the Registrar General who are responsible for implementing many of these recommendations, to bring in the necessary legislation early this fall.

Topic:   EXTERNAL AFFAIRS
Subtopic:   DEPARTMENT OF NATIONAL HEALTH AND WELFARE
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June 21, 1967

Mr. H. C. Harley (Hallon):

Mr. Speaker, on rising to take part in this debate this afternoon, I should like first to congratulate the mover of the private members' notice of motion, the hon. member for Winnipeg North (Mr. Orlikow). As he mentioned, he has presented this motion previously, although I think in somewhat different form. I took part

1802 COMMONS

Mental and Tuberculosis Hospital Program in the debate on several occasions and I am pleased to do so again today.

When I say that his motion is in a slightly different form, I should point out that I believe when it was first presented he restricted his motion to the consideration of people suffering from tuberculosis and mental illness. Since that time I think he has added the care and training of mentally retarded children. I have no complaint to make with his addition, because certainly we are all aware that today there are many children in Canada who need such care and attention. There is a great shortage of hospital beds and care facilities for these people. I would have thought that the hon. member might have left off the word "children" and just said "people suffering from tuberculosis and mental illness and the care and training of the mentally retarded".

Before I pass on to discuss the other subjects with which I should like to deal more fully, I might say that I believe all of us are aware of the various workshops which have been set up for mentally retarded adults. I believe there are two in my riding. These workshops provide shelter and training for these retarded adults until they can be trained to the point where they can take their place in society, usually under the guidance of families or friends. These workshops, however, do train these people to do various jobs according to their ability.

We have heard from the parliamentary secretary why, originally, the two diseases, tuberculosis and mental illness, were excluded when the Hospital Insurance and Diagnostic Services Act was passed.

[DOT] (5:50 p.m.)

We listened to the reasons given and I wondered why these were excluded. I think one of the considerations that must have been weighed at the time was that in 1957 these diseases were considered chronic. I include the mentally retarded, to which the hon. member has made reference. These were diseases that required a great deal of treatment over a long period of time, and, generally speaking, a long period of hospitalization in a tuberculosis sanitorium or mental institution.

Fortunately, with the progress being made in medical science at the present time this situation is rapidly changing. Both of these diseases are treated a great deal differently than they were in the past. The patients are being more adequately and efficiently treated as outpatients in the hospital setting rather than inpatients.

DEBATES June 21, 1967

We are all aware that the incidence of tuberculosis is the same as it always has been. I noticed that the Canadian Medical Association, at its meeting a year ago, spent some time expressing the opinion that the incidence of tuberculosis was as high as it always has been. Certainly, the time of treatment is much less, and much less in hospitals because a great deal more time is being spent treating patients as outpatients, often with weekly injections of streptomycin, or putting the patients on various kinds of oral medicines. As has been mentioned, the beds in sanatoria are emptying. As an example, in 1953 there were 18,977 beds devoted to the care of tuberculosis. In 1962 this number had decreased to 10,673, and in 1963 to 8,500. The latest year for which we have any figures is 1964, and there were less than 8,000 beds devoted to tuberculosis patients. In something over ten years there has been a decrease of just less than 10,000 beds devoted to the treatment of tuberculosis.

As the parliamentary secretary mentioned, generally speaking this does not mean there has been a reduction in the number of beds devoted to medical care, because many of these have been devoted to the care of chronic and incurable patients. In keeping with the reduction in the number of beds and the length of time for the treatment of tuberculosis, the federal tuberculosis control grant, which in 1962 was $3,500,000, has fallen in 1966 and 1967 to approximately $2 million. One of the reasons tuberculosis cannot be treated in general hospitals openly like any other disease, including mental disease, is that a certain percentage of these cases are highly infectious, and to do so might give rise to the spread of tuberculosis through the general hospitals. We are pleased that although the incidence of tuberculosis remains the same, the death rate has actually declined by 83 per cent since 1951.

I should like to say a few words about mental disease. It is apparent from the figures available that mental disease is either increasing or is being treated at an increasing rate. Certainly, we have far better diagnosis of mental disease than we ever had in the past, and the diagnosis is much easier to carry out now because the treatment available either to the general practitioner or the psychiatrist is a great deal more effective than it ever has been.

In 1962 we had 83 mental hospitals with something like 67,000 beds devoted to the care of the mentally ill. In 1963 there were 87 mental hospitals with something over 68,000

June 21, 1967

hospital beds devoted to the mentally ill. This does not represent the true number of patients who are suffering from mental illness as many psychiatric patients are under general hospital care. At one time I believe there were many mentally ill patients admitted to general hospitals under a different diagnosis, where these patients could be rapidly treated. Now, as a result of changes in the Hospital Insurance and Diagnostic Services Act, we are actually admitting them for mental hospital care as psychiatric patients.

Today in Canada more than 60 general hospitals have organized psychiatric units with

2,000 more beds than were devoted ever before to the care of the mentally ill. This gives us well over 72,000 beds in Canadian hospitals devoted to the care of the mentally sick. As the hon. member said, I think this represents almost half of the hospital beds in Canada devoted to this illness.

For some years now the mental health grant has been stationary at approximately $9 million. I hope the government will see fit to increase this amount so that a greater amount of money can be spent on research in respect of mental illness. We are all aware that one of the first breakthroughs, if you wish to call it that, in the treatment of mental diseases was the discovery of the drug L.S.D., about which we hear a great deal in the press and elsewhere at this time. L.S.D. is able to re-

Business of the House

produce the symptoms of the mental disease schizophrenia. It is obvious that when we can reproduce symptoms of a mental disease by the use of a drug, we have come a long way

toward finding a treatment for that particular disease.

I have every sympathy for the private member's notice of motion now before the house. Certainly if we are to expect the general public to treat tuberculosis, mental disease and mental retardation like any other disease, we must expect the federal government to do the same thing.

May I call it six o'clock, Mr. Speaker?

Topic:   EXTERNAL AFFAIRS
Subtopic:   HEALTH AND WELFARE
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April 26, 1967

Mr. H. C. Harley (Halton):

Mr. Speaker, by leave of the house I wish to table the minutes of proceedings of the special committee on drug costs and prices referred to in the second and final report of the committee presented to the house on April 3.

Topic:   TABLING OF MINUTES OF PROCEEDINGS OF SPECIAL COMMITTEE
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