Home Parliamentary Business Senators and Members About Parliament Visitor Information Employment


Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 14 - Evidence, November 18, 2009

OTTAWA, Wednesday, November 18, 2009

The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill S-232, An Act to amend the Patent Act (drugs for international humanitarian purposes) and to make a consequential amendment to another Act, met this day at 4:05 p.m. to give consideration to the bill.

Senator Michael A. Meighen (Chair) in the chair.


The Chair: Honourable senators, good afternoon. As you will recall, this bill was introduced by our former colleague and former deputy chair of this committee, the Honourable Yoine Goldstein, on March 31, 2009.

According to the bill's summary, Bill S-232 would:


This enactment amends the Patent Act and the Food and Drugs Act to make it easier to manufacture and export pharmaceutical products to address public health problems afflicting many developing and least- developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.


We will begin today's hearing with Health Partners International of Canada, a relief and development organization that has provided medical aid to more than 100 developing countries. From Health Partners International of Canada, we welcome Mr. Glen Shepherd, President and CEO.

I gather you are alone today, Mr. Shepherd. We are pleased to have you with us. Do you have an opening statement?


You have the floor.

Glen Shepherd, President and Chief Executive Officer, Health Partners International of Canada: Thank you, Mr. Chair, for this opportunity to address an issue that is dear to the heart of an organization that cares a great deal about the healthcare needs of people in the developing world. We are committed to bringing healing and hope to those who cannot afford quality medicine.

HPIC is a humanitarian not-for-profit relief and development organization dedicated to improving access to medicine and enhancing health in the developing world.

I will be making my presentation in English, but I will be happy to answer any questions put to me in French in that language.


Health Partners International of Canada, HPIC, contributes to well-being by providing donations of essential medicines, supplies and vaccines, building national health sector capacities and responding to emergencies and health threats. To do this, HPIC partners with ministries of health, as well as a network of nongovernmental organizations, NGOs, and health care professionals.

The medicines and supplies we receive are donated by Canada's leading pharmaceutical companies. Thanks to their generosity, since 1990, HPIC has safely and effectively distributed desperately needed products to more than 100 countries. The total value of this humanitarian aid to date surpasses the $300 million mark, expressed as wholesale value.

HPIC is here today because of our concern about the devastating effects of major diseases. We are committed, within our means, to help alleviate suffering related to the HIV/AIDS pandemic that affects vulnerable persons as well as the social and economic life of poor nations.

I think it is safe to say that by now few people in Canada fail to understand the scope of the situation, expressly as it affects the poor in sub-Saharan Africa. However, it is another matter to feel deep in our heart the crippling and demoralizing effects of this horrible reality of our age.

The staff of HPIC has seen with our own eyes the faces of abandoned HIV/AIDS-impacted orphans and despairing mothers. Even as we speak, one of our staff is in Sudan working with other Canadian partners in the development of a significant project to increase medical capacity in that country. Anyone who has eyes to witness their plight, ears to hear their sorrowful pleas and a heart to feel compassion can only be moved to help in whatever way we can.

For most of the history of HPIC, Africa has been an important focus of our work. Today, HPIC stands ever ready to work with our partners to deliver Canadian-sourced anti-retroviral drugs to points of focus and need in Africa. We provide needed products that deal with opportunistic infections related to HIV/AIDS. However, these volumes need to be greatly increased. For this reason, I use this opportunity of appearing before this committee to express our regret that the government's initiative to provide a tax incentive for donated medicines has been effectively suspended for more than a year because of administrative issues.

HPIC is very much aware that HIV/AIDS drugs must be delivered in a coordinated framework that includes patient counseling, home-based care, trained medical professionals, blood-testing laboratories, a consistent supply of ARVs, and other medicines and medical supplies. HPIC assists in improving the general health of people who would die were it not for the medicine supplies that are donated generously to us by the Canadian pharmaceutical industry.

Mr. Chair, we are pleased that in Canada there is a broad consensus about the intent of CAMR. It expresses the generosity and compassion of Canadians who wish to facilitate access to pharmaceutical products that address public health problems afflicting many developing and least developed countries. With many others, we applaud the government's commitment to ensure the delivery of affordable medicines to some of the poorest regions of the world. With fair and balanced policies in place, you can make it possible for Canadian humanitarian organizations such as ours to be the outstretched hand of Canadians in a way that is both reasonable and responsible. We are aware that this committee must address practical legislative and regulatory issues. We trust that people with a heart to do so will find workable and equitable solutions. We understand that there is much work to do to ensure that medicines are delivered and used in ways intended by the legislation. Proven Canadian organizations such as ours can serve to ensure that this happens.

With all that is at stake, we are pleased to commend the research-based and generic pharmaceutical companies and other stakeholders, who have addressed this committee, for working diligently to respond to the current crisis in the developing world. HPIC also commends our biotech and over-the-counter health care product partners for their active participation in bringing healing and hope throughout the world. For millions of people in impoverished countries, the desire of caring Canadians to help is their only real hope. Many of them are counting on the will and ingenuity of men and women in the industrialized world to bring practical solutions to bear in alleviating so much needless suffering and in preventing an alarming situation from deteriorating further.

The situation calls for wisdom to consolidate Canada's humanitarian response in a determined and sustained manner in the face of divergent opinion regarding issues of intellectual property, access to medicine and fair pricing. We are confident that the committee has a heart to do this with a larger picture in view. This is not about pills or about us. Rather, it is about the values that we share as a nation.

Thank you, Mr. Chair, for the time you have granted us today. Certainly, I am pleased to answer any questions that members of the committee might have.

The Chair: Mr. Shepherd, that was short and succinct leaving more time for questions. We appreciate it.

I do not hear you taking a specific position on the wisdom of Bill S-232 unless, perhaps, in the context of saying that anything that helps to bring medicine to so many needy people in Africa is welcome. Do you think that Bill S-232 will be of substantial assistance, or is it your organization's position that we can and should work within CAMR and other mechanisms to achieve the goals that all of us espouse?

Mr. Shepherd: Mr. Chair, we have not taken a position on the bill. If I may explain, we work with all sectors of the health care industry. We endorse the objectives of the legislation. We do not have the expertise or first-hand experience to comment specifically on whether the current legislation is adequate. We accepted the committee's request to appear because we wish to speak from our work experience with the brand companies and the generic companies for almost 20 years and to attest to their cooperation in working with us, which brings healing.

Certainly, we would hope that the discussion would take place in the context of all the issues involved. I made reference to the medical aid tax incentive in our presentation. I stress that a significant amount of medicine is being donated. There is a question of the Canadian government's desire to invest in overseas development and what percentage of the GNP would be appropriate. If this bill were reworded to make it work more smoothly or to increase opportunity, then we would endorse that objective. We have not experienced any difficulties by the pharmaceutical industry to donate medicine. That is our view.

The Chair: You bring an interesting and refreshing perspective. You work with both the generic and research-based segments of the pharmaceutical industry. You have expressed an existing common ground such that if all were to work together, the shared objectives could be achieved.

Mr. Shepherd: I suppose that would be a summary, yes. We are well aware of the tensions and the debates. We meet regularly with the two industry associations and with the management of individual companies in the generic segment, the brand segment, in biotech and in over-the-counter medicines and supplies. We know about the keen differences of opinion, but our expertise and strength, without going beyond our capacity, can be found in our delivery and controls for the medicines donated to us. We bear witness to the fact that there is a significant movement of medicines to the developing world.


Senator Hervieux-Payette: Thank you for coming. You spoke about some administrative and financial problems that resulted in the suspension for one year of an initiative that was already in place.

I was wondering if the problem was with the agency that issues permits. What is in fact the problem? As parliamentarians we are of course familiar with the legislation, but we do not know where things are not working. We wonder if the problem lies with CIDA, with the industry, or with the Minister of Health. What obstacles have led to the suspension of this initiative for over a year, as you stated earlier? That is my first question.

My other questions will be rather brief. How many people does your organization employ on a full-time basis? Who funds your organization's operations, given that medicines are donated to you?

Finally, what role does your organization play? Does it manage the drugs, or does it oversee their distribution to ensure they go to the right people, to humanitarian organizations such as Doctors Without Borders? Are you aware of any cases involving the misappropriation of drugs? That is all. I just want to know what you do and how you do it.

Mr. Shepherd: I appreciate your questions. I will start with the easiest one, that is: How many people work for our organization? We have 22 full-time employees, sixteen of whom work in our Pointe-Claire office in suburban Montreal. The remaining six employees work at our warehouse in Mississauga. We receive deliveries of donated products, store them and ship them on request.

Another employee works on a part-time basis. I should also have said that three of the 22 employees are working full-time on a project that we are developing with CIDA in Afghanistan, in cooperation with the Afghan Ministry of Health.

It is taking a while to get this project up and running. There have been some complications owing to the current situation in that country. I will note that I have answered your question.

Senator Hervieux-Payette: Who pays the salaries of these 22 employees?

Mr. Shepherd: We rely on four sources of funding for our budget: public donations, private donations, donations from foundations and major donors. Donations from these sources account for about 25 per cent of our budget.

Another 25 per cent is derived from payments received from CIDA. We have worked on projects in Cuba in response to emergencies and disasters. CIDA finances development projects carried out in Cuba and Afghanistan.

Another 25 per cent of our budget comes from funds received directly from industry, that is from generic and patent drug manufacturers. Donating funds is completely optional for them. The last part of our budget is not derived from fees, because we do not sell our products. However, if we do work with another NGO or with a doctor who takes delivery of some drugs, we explain to them that we do have management and monitoring costs. We have to file reports with the manufacturers, with CIDA and with Revenue Canada. We ask our partners to help us out. But we do not charge a set fee. We never charge a set fee, or say that if you do not pay, you will not receive the medicines. That would conflict with our values.

So then, based on our experience over the past 15 years, one quarter of our budget comes from CIDA, another quarter from the industry, one quarter from donors and one quarter from our partners.

Senator Hervieux-Payette: And what is your total operating budget?

Mr. Shepherd: Our total operating budget is approximately $2 million at this time, and it has increased steadily since our organization's inception. Our budget for next year is roughly $2 million.

Senator Hervieux-Payette: I mentioned the misappropriation of drug products and distribution problems. What role do you play in the field? Are you in fact active in the field or do you ship orders to different partners?

Mr. Shepherd: We do not have any personnel outside of Canada.

Senator Hervieux-Payette: Except in Sudan.

Mr. Shepherd: One of our employees is in Sudan for three weeks working with the Faculty of Medicine of the University of Calgary and with another Calgary-based NGO that is carrying out a project in Sudan. They contacted us to see if we wanted to get involved in a project to help Sudanese doctors who had trained at the University of Calgary and who now practise medicine in their native country. There is a possibility that we will be providing some drugs to them.

All of these doctors have gathered in Sudan at one location, the name of which I cannot recall right this moment, and our employee has gone there to see how this project can be expanded with the help of HPIC.

Senator Hervieux-Payette: I see.

Mr. Shepherd: Nevertheless this gives you some idea of the work we do. If we do send shipments of drugs, the onus is on us to check the reputation, values and work of the persons requesting them, as well as their medical and health qualifications. We have to know whether they are prepared to write reports, so that we can verify with our partners, with the companies that supply the drugs, exactly where these drugs are being shipped, what has happened to them, details such as who has been treated, the people who have been affected, the exact country or region that received the drugs, what illness the drugs were used to treat, the number of men, women and children who were treated, and so on. And if we do not receive a report back from them, then we do not send a second shipment.

We work with about forty or fifty different NGOs and we are always trying to broaden our contacts. Occasionally, we have had to sever our ties with certain agencies because of problems with Revenue Canada, such as the misappropriation of drug products or the lack of reports.

Senator Hervieux-Payette: Is the misappropriation of drugs a problem that you encounter often, or only rarely?

Mr. Shepherd: Only rarely. I have been working with HPIC for almost two years now. I have not encountered a single case since coming on board. If I understand correctly, we have had two cases of misappropriation involving staff in the past 15 years. Manufacturers do have personnel on site to verify the identification numbers. We check the numbers in case there is a recall. We know exactly how to trace the products.

Senator Hervieux-Payette: In medical terms, they are referred to as lots. The lot numbers generally assigned tell us the date of manufacture by the company and gives us an overall history of the drug. The lot number and the date of manufacture appear on the packaging.

Mr. Shepherd: That is correct. Once, a representative of one of the manufacturers found some drug packaging somewhere in Eastern Europe. We were able to trace the drugs back to us. Cases of misappropriation happen, but very rarely.

Senator Hervieux-Payette: My final question takes me right back to my first one: What kind of problems are you encountering with our government? Are these related to health, or more to the administration of the funds, programs and patents? One year is a long time.

Mr. Shepherd: This particular tax incentive, which was included in the 2007 and 2008 budget, allowed for bigger tax deductions for drugs distributed to developing countries. This initiative was included in the budget approved by the House of Commons. The governments of Ontario and Quebec harmonized their budgets. The tax incentive worked for six months.

The idea was that donated medicines could qualify for a tax deduction of double the manufacturing costs. The same incentive is available in the United States, the aim being to encourage companies to donate pharmaceutical products to help people in developing countries.

For reasons that we cannot fathom — and this is not a criticism — the Department of Finance forwarded the file to CIDA which put in place a system to evaluate organizations like ours. It maintains that an organization must be accredited by CIDA before it can issue tax receipts pursuant to the act.

In October 2008, we submitted our file to CIDA and we presented our qualifications and our staff and outlined our procedures. We have yet to hear back from them. If you log on to CIDA's website and check the list of accredited agencies, you will see that none is listed. We believe that on some level, the government is responsible for the delay.

Senator Hervieux-Payette: Your file is being processed somewhere!

Mr. Shepherd: Exactly.

Senator Hervieux-Payette: You submitted your file and fourteen months later, in November 2009, you have yet to receive an answer. Correct?

Mr. Shepherd: That is correct. I think there are some legitimate questions that need to be asked. In our opinion, we should have received an answer by now. This is a problem that we address in our short submission.

Senator Hervieux-Payette: Thank you.


Senator Peterson: I had intended to ask questions on diversion, but the witness said that is not a major issue, so I will put it aside.

We have received literature that says that cash-strapped developing countries can get better value when buying generic drugs almost anywhere other than Canada. Is that your experience?

Mr. Shepherd: I will not say that is not true, but I have not found that in my experience.

We are aware of an organization called IDA, which operates out of Amsterdam, that sells some medicines that I believe are manufactured in India. That is almost as cost effective as our model. Our budget of $2 million allows us to send $30,000 worth of medicine, so it is about one fifteenth of the wholesale price.

I am not aware that there is a wide range of sources in other countries where medicines can be purchased less expensively than they are available in our model. I have heard that they might cost less in other countries if you bought them directly there rather than buying them in Canada. I do not know since I have bought all my medicines in Canada, or in France when I lived there and enjoyed the benefits of the French medical care system.

I believe there are countries where the production costs are lower. Intuitively I would say that sales costs would be lower, but in our model we are dealing with donated medicines.

Senator Peterson: That should not be a deterrent if generic companies from Canada are prepared to compete. We have heard the comment that other countries sell it cheaper, so why are we getting into it? That is not a reason for not proceeding with this bill. We should have the product available and then see what happens. The important thing is getting the product.

Mr. Shepherd: The issue is having a range of bridges to make the product available to those who need it. We are one of those but are not the only one. This legislation could help. If it is difficult or complex, then it should be amended or simplified. As I see it, it is more about facilitating the movement of medicines than it is about the pricing of medicines.

Senator Greene: Under the current legislation we have had one shipment, that being to Rwanda. Should we view that as a success, a failure or as what we could have expected? What might the future hold given that the supply of drugs in demand in Africa is changing and prices are falling in general?

Does that mean that the legislation we have is not necessary or does it mean that it is a tool that will be used from time to time, but not often, and we should be happy with that?

Mr. Shepherd: The fact that we used it one time is a success in that sense. There should perhaps have been more successes. We would encourage the industry to work out the mechanics and how they cooperate.

I have listened to both sides of the debate. We meet regularly with officials and management on both sides. I am not familiar enough with the legislation to comment on its adequacy. It has worked, I think it can work, and it is part of a broad range of options.

I am not trying to be evasive but I do not want to comment on legislation that I do not know well, because that is not our domain.

Senator Greene: I am sure that you are aware of the intent of the legislation.

Mr. Shepherd: Yes.

Senator Greene: Given the changing supply of drugs and the ability of a number of countries to produce and sell more cheaply than we can, what is the future of that kind of legislation in place in many countries in the world as a result of the WTO decision? Has the landscape changed since the legislative effort began?

Mr. Shepherd: Absolutely. I think the landscape continues to change. This morning, I met with the president of one of the manufacturing companies. The discussion revolved around how the industry has become more global for both brand and generic companies. They are manufacturing all over the world. The medicines we buy in most cases are not manufactured in Canada. Manufacturing is drifting for cost reasons and because of the increasing availability of skilled workforces in many developing countries. Companies are buying each other and consolidating. The plates are shifting at an increasingly rapid pace.

I do not think that invalidates the legislation, but a lot of the context is changing.

Senator Harb: I have read your notes and listened to you answer some of the questions. What you are telling us is quite clear, namely, that both brand and generic pharmaceutical companies are playing a role now in Africa. Health Partners International of Canada is distributing drugs from both parties. Is that correct?

Mr. Shepherd: Yes, we receive significant quantities of medicines from both groups.

Senator Harb: Indirectly, you are saying that it must be a multi-faceted approach. On the second page of your notes, you state that:

. . . Africa has been an important focus of our work. We can and do provide needed products that deal with opportunistic infections related to HIV/AIDS, malaria and tuberculosis. These volumes, however, need to be greatly increased.

You are saying that there is a problem and everyone knows there is a problem, but we need to increase our effort. Would that be accurate?

Mr. Shepherd: Yes. We do a lot of good. We do not reach a lot of people. We have limits to our budget and to the amount of medicine made available. That was the whole purpose of the medical aid tax incentives that I discussed with Senator Hervieux-Payette. Its purpose was to increase the amount of medicine by encouraging donations through the tax structure.

If we had more money and medicine, we could help more people. We estimate about 1.5 million people are helped by what we do every year with donated medicines from generic as well as R&D companies.

The Chair: You said that if you had more money and more medicines, you could help more people. If I could wave a magic wand and double the amount of medicine available, would you and/or other similar organizations be able to get it to those who need it?

Mr. Shepherd: I would say yes, though not immediately. We work with a network of NGOs. We work with some large ones such as the Salvation Army that has a network of hostels around the world, CURE International, World Vision and groups like that. It might take a year or two from the waving of the wand until we execute it. I believe there is a need, and there are dedicated people around the world working in the medical care field.

We are trying to develop a project in Zimbabwe to go further than we do now. I estimate that we could double our volume in that country alone.

Senator Harb: There is a missing link to which you allude, I think. Namely, a large chunk of Africa and the countries within that chunk are not even members of the WTO. They are the least developed countries and do not have the resources or infrastructure. Many of those countries may not know we have programs in Canada to help them.

Do you see a role, for example, for our government, embassies in Africa and NGOs to reach out to Africa to create a level of awareness about making requests of countries like Canada among others to provide them with the resources that your organization and others can make available?

Mr. Shepherd: Yes, absolutely. One role of the Government of Canada would be through our embassies to let it be known that there are organizations in Canada willing to help. Another is on a diplomatic level, to help us with questions of customs clearance that are always a problem when we send medicines. At times, we have had to refuse to send vaccines particularly because we could not be guaranteed expeditious customs clearance in a receiving country. It would violate the need to protect the cold chain.

We work with the Department of Finance, CIDA and, at times, Foreign Affairs. I do not want to leave the impression that the Government of Canada is not involved. However, as we could do more, the government could also do more. We are all aware of the need; it is a question of allocation of resources and time.

Senator Zimmer: These are good intentions, but what is your success rate? Maybe it is not your responsibility. It is one thing is have a non-patent drug, lower costs and good intentions through NGOs and embassies to make shipments. However, in your experiences, which apparently are few, are there pirates within? It is fine and dandy with all these intentions to make the shipment, but if it is not making it, then the system must be reformed. Have you experienced the situation whereby it has been sent through the NGOs and embassies, but never makes it to the right places?

Mr. Shepherd: I am aware of one case in our 20-year history of moving $300 million worth of medicine where medicine wound up in a drug store and was sold. I think there was a second case of diversion, but I cannot recall the details.

This goes back to the whole question of the controls we try to put in place. We demand an engagement that medicines will not be sold, trafficked or exchanged for services and competent medical staff at the other end must sign that the medicine was received. We need reports within 30 days and 90 days. It is all part of our tracking procedure.

No system is fool proof. You are always trying to do risk minimization. It is a critical part of what we do and of the partners with whom we deal. It might be the most demanding part of our work.

Senator Zimmer: I will add that when they had that huge storm in the southern part of the United States about 15 years ago, donations were made to build a village. Millions of dollars of lumber and equipment either rotted or was stolen. You have these experiences, but that is the bad apple in the barrel.

If you are saying there were only one or two such experiences, that is very low. It sounds like you have a very secure system.

Mr. Shepherd: We like to think so and we hope so. I hate to say "yes" because the minute I do so, something will happen tomorrow. We work hard and we trust our partners.

In the last year we had suspicions about one partner. We stopped a shipment that was already in a container in our distribution centre in Mississauga and broke the relationship because we were not willing to take that risk.

Senator Gerstein: If I understood it correctly in your opening remarks, your medicines are donated by both Canadian generics and the innovators alike.

Mr. Shepherd: That is right.

Senator Gerstein: Subsequently in your comments, I thought I heard you say that you take your $2 million budget and lever this into $30 million worth of medicines. Is it all donated or are you using part or all of your budget to acquire drugs that you can lever off?

Mr. Shepherd: No, it is all donated. Let me clarify. The leverage is that our donors — CIDA, the industry, our partners and our individual donors — give us a budget of $2 million to work with. Last year we moved $32 million worth of medicines. On average, in a typical year, it is $30 million worth of donated medicines. It is a 15-to-1 leverage.

Senator Gerstein: You are using the $2 million that you are given for your operational costs, and you are acquiring through donations the $30 million to $32 million that you distribute, is that correct?

Mr. Shepherd: That is right. We do not buy medicines. The $2 million covers staff salaries, office and shipping costs, running the warehouse, all the warehousing and so on.

Senator Gerstein: Now I understand. Could you expand a little on how you work with the generics and the innovators? How does the discussion go? How do you approach them? Do they approach you with what they have? Do they make it specifically for you?

Mr. Shepherd: It is both. Each year, about this time, we go to the companies and say, "Here are the needs we anticipate next year. We know what you manufacture. Could you give us "planned product." In other words, "Could you donate at different stages during the year so it is always remaining well in date?" We do not want medicines that are near expiry because of quality issues and World Health Organization requirements. We have this ongoing dialogue with a company for planned product.

That is probably one quarter or one third of what we receive. It sometimes gets higher if we have a major project. For example, for this project in Afghanistan, we will require planned product to meet specific requirements from the approved drug list.

In addition, the drug industry will be in touch with us to say they have this product available. It might be an over- production or simply that sales were slower, but it is available before it loses its medical kick. Before we say yes, we will either see what our need is for that medicine or, in some cases, we will even contact NGO partners that we know well and say, "We have this. Can you use it and use it up before the expiry date?" That is how the model roughly works. It is dialogue.

Senator Gerstein: Could you give us some indication, of the $30 million of medicines that you would have donated to you, approximately how many suppliers might that come from? Are we talking in the 10s, 20s, 100s?

Mr. Shepherd: We say we deal with 80 suppliers. However, I would think the overwhelming percentage comes from maybe 30 suppliers. In all fairness, that is tied to the products they manufacture. We are dealing with the developing world. We are sending basic, life-saving drugs — anti-malarials, antivirals, antibiotics and so on. The people whom our partners serve are not in the market for Botox or Viagra. It is basic medicines.

I say that to point out that it is not their fault if companies are legitimately manufacturing something that our partners do not need. I think 30 companies would account for the lion's share of what we send.

Senator Frum: As Senator Greene mentioned, there was one shipment used under the CAMR regime from Apotex to Rwanda. What is your understanding of why other generic companies have not used the program?

The explanation we received in general has been that it is the bureaucracy, the difficulty of using the program. Is that your feeling about why it has not happened?

Mr. Shepherd: The most honest answer I can give is that I do not know.

I know how Apotex feels; we work with Apotex. I have not heard the same argument from some of the other generic companies. However, the fact that I have not heard does not mean they have not had frustrations with the complications. We have a very focused relationship with the industry; for me to go further gets me into speculation and beyond knowledge.

Senator Frum: I am speculating here but listening to your prior answer to Senator Gerstein, I am wondering if the generics, in order to satisfy their humanitarian mandate, prefer to use you and donate product rather than going through a bidding or market process. Is that possible?

Mr. Shepherd: It might be. I do know that the volume of medicines coming from the generic industry is increasing, and it is very significant to our work now.

The Chair: Before I thank you, that leaves the question hanging of what is the percentage, increasing or decreasing, that you get from the research-based companies?

Mr. Shepherd: The percentage obviously is decreasing since it has to sum to 100, but the actual value of the medicines is increasing. Since 2000, it has probably quadrupled and it has grown fairly consistently.

The Chair: What would be the rough division between generics and innovators?

Mr. Shepherd: About half and half last year.

Senator Greene: Are there other organizations like yours?

Senator Harb: Not as good.

Mr. Shepherd: We discussed this in the office. I am not aware of anyone. There are organizations in the U.S. that are similar to us. There are other organizations that take medicine and distribute it; I am aware of that. I do not think there is any direct comparator who would have the same focus of mission that we have. There are others who do some of the same work.

Senator Gerstein: Do you feel that the donation program of the generics and the innovators is primarily through yourself, or are they donating to other organizations in Canada that you might be aware of?

Mr. Shepherd: I know one manufacturer that donates significant amounts of medicines to another charity, but we do not discuss with the industry who donates what to us. That is sort of privileged information and they do not tell us to whom they donate. I could not go further than that. I know, however, that companies help other organizations.

The Chair: Thank you, Mr. Shepherd. Your testimony has been helpful to us and very frank, as Senator Harb said. We appreciate the answers that you have given to our questions. They will all be complied for our ongoing study of this bill, and hopefully will lead to a helpful response from the committee.


We are pleased to welcome Professor Amir Attaran who is here to speak to us about Bill S-232.


Professor Attaran is an associate professor of law and population health and the holder of the Canada Research Chair in Law, Population Health and Global Development Policy at the University of Ottawa. He has worked to reduce the prevalence of malaria in Africa and has written in the fields of human rights, health and international development. He has been invited here to share his views about Canada's Access to Medicine Regime and about reforms proposed to CAMR by Bill S-232.

Professor Attaran, you are well qualified. I have rarely heard of someone who is a PhD in biology and a lawyer. That is a strong combination. Please proceed with your presentation.

Amir Attaran, Associate Professor in the Faculties of Law and Medicine, University of Ottawa: You are quite right, Mr. Chair: My qualifications are as a lawyer and I studied the biomedical sciences for many years and received a PhD in that field.

I combined my two educational backgrounds and studied access to medicine problems for about a decade, currently at the University of Ottawa and previously in other positions at Harvard, Yale and Chatham House in London. I have advised both sides of the debate and I admire the contributions that both sides have made, such as those by Médecins Sans Frontières and by drug companies such as Novartis, both of which I advised. I have also advised the World Health Organization, the World Bank and the Government of Brazil on access to medicine issues over the years. Thus, when I approach this issue, I hope I do so as a centrist and as someone who does not want to have ideological goggles placed on the debate any longer.

It is my opinion that Bill S-232 will not work now and probably not ever. I am sure that you approach Bill S-232 with the best intentions and that the most diligent work has gone into it, along with the fondest hopes and prayers. Despite that, the bill will not likely improve public health for persons in poor countries very much, if at all. I will explain.

When CAMR was enacted in 2005, the raison d'être was to make it possible for poor countries, such as those in Africa, to buy generic versions of patented drugs manufactured in Canada. To make this possible, CAMR authorized patent overrides of a sort called, compulsory licences. Parliament believed at the time that by overriding patents in cases of acute humanitarian need, as for AIDS and malaria, poor countries would beat a path to Canada to buy medicines. However, it has not worked in that way, as you are well aware. Only one country, Rwanda, ever sought to buy Canadian generic medicines under the provisions of CAMR. That fairly gimmicky deal was entered into with Apotex and neither Rwanda nor Apotex wishes to repeat that experience. CAMR has been a one-shot wonder, we would find if we assessed it truthfully today. Bill S-232 is meant to fix CAMR and to make it systematically workable, but I believe strongly that it will fail to do that. Why?

In a correct diagnosis, CAMR has failed for economic reasons, not for legal reasons. Where the causes of CAMR's failures are deeply economic, it stands to reason that amending the housekeeping provisions of the law is not likely to help. Now, please follow me closely for the next two minutes because this is the most important point that I can impart.

We would all agree that CAMR exists to foster the export of Canadian generics to poor countries; but obviously for that export to take off, the precondition is that Canadian generics must be price competitive with other generics on the global market. That is necessary as a starting point. The trouble is that through no fault of CAMR or those who worked for it, Canadian generics are possibly the most expensive generics in the world. Therefore, no poor country is eager to buy them.

Let me share with you some data from this report of the federal government's Patented Medicine Price Review Board. I will be referring to data on page 11, for your reference later. In 2006, the Patented Medicine Price Review Board compared generic prices in Canada and abroad. It found that compared to Canada, generics in America cost 35 per cent less, in Finland 51 per cent less and in New Zealand 77 per cent less. In that study, Canadian generics were actually more expensive than generics in any other country.

Here is the most important point: What poor country in its right mind would buy generics from Canada that it could buy elsewhere for half or less than half the price? The poor country doing its comparison shopping would rather buy from America, Europe, India, China or perhaps New Zealand — anyone but Canada.

In tweaking the rules of patent law, Bill S-232 misses that point entirely, for it does not alter the economic reality that Canada's generic medicines are overpriced by global standards. Put it this way: If you think of Bill S-232 as a magic wand that can be waved to make all patent barriers disappear, the fact remains that today, for existing unpatented Canadian generics, this country is not price competitive as a supplier.

Poor countries get a better price buying elsewhere. That is why CAMR has lacked traction over the years and an effort in Bill S-232 to fix it is effort misspent.

I realize that my testimony is perhaps surprising in this regard, because I am an advocate of doing the most possible to treat people in developing countries for diseases that are treatable. You have heard from others that Canada's patent laws are a terrible problem and that with a little amendment to the laws this country can make a big difference to global health. I respectfully disagree with that point of view.

While I have too many reasons to cover in my 10 minutes, let me offer some examples where the supporters' analysis is illogical. For instance, supporters of Bill S-232 say it is necessary to remove the rule in CAMR that a compulsory licence expires after two years. Currently, it expires automatically two years after issuance. Remove that expiry date, say the supporters of the bill, and CAMR will blossom.

However, do a thought experiment with me. All 27 countries of the European Union have laws that are similar to CAMR, except that in the European version, there is no expiry date; the compulsory licence is eternal. Likewise in India and China — they have laws similar to CAMR. There is no expiry date on the compulsory licence.

If the expiry date in Canada's law were truly a bottleneck, you would expect to see the European, Chinese or Indian approaches without an expiry date working better than Canada's law. That is not the case. Among the super powers of the European Union, India and China — obviously more significant a grouping than Canada, 29 countries in all — the equivalent laws to CAMR have never been used, not once. The result of those laws has been to produce zero medicines taken by zero patients for zero public health benefit to date — a total failure.

I should add that much the same argument, looking to other countries' laws and their experience with those laws, could be made with respect to the other desires expressed by the supporters of Bill S-232; for example, the proposal to eliminate the list of medicines eligible for compulsory licences. This has already been tried elsewhere, notably in the European Union and in India, and it has also had no useful effect. Those laws have never been used.

Please understand what I am about to say is in no way intended to cause offence; it is intended to make a point and do so in a way that one can introspect on it. It sounds a little naive perhaps or lacking in humility when someone in Canada offers up a bill to make CAMR succeed, where equally creative and intelligent legislators in the advanced countries in the European Union, plus China, plus India, plus Norway — I could go on — have tried and come to naught.

The parliaments in those countries have experimented and turned the knobs of patent law and compulsory licensing into every configuration that one might imagine. Still it has not worked.

I wish that I had a new magic amendment that I could offer to Bill S-232 that has not been tried before in these other countries' laws, and which therefore holds out some hope. I am not aware of anything in Bill S-232 that has not been tried elsewhere fruitlessly.

This is not to say that the Senate should cease caring about public health in the poor countries. Far from it; please maintain your interest. However, it is to say that if you want to make a difference, please take the energies that are now absorbed in the futile endeavour to better CAMR and steer those energies into more constructive law reforms of other kinds.

For example, fix the problem of CIDA's budget for ongoing health needs like childhood immunization and malaria prevention — things that take place year after year. The budget at CIDA fluctuates wildly. Please solve that problem.

Please put a stop to the shameful fact that Canada exports asbestos to developing countries, when every other civilized nation long ago stopped doing that practice and exited that deadly trade.

By putting the Senate's efforts into these and other attainable objectives, you can help the health of the world's poorest for real and we can feel proud as Canadians for real. That would be a better accomplishment than any theoretical changes to CAMR.

I will be glad to take your questions, and I thank you for your time and your attention.

The Chair: You said you have not seen anything in CAMR that has not been tried elsewhere, without success. An opponent might say to you, look, who knows? Maybe this is the time that we will hit a home run so why not give it a crack anyway?

The only argument I heard in testimony against that was that Bill S-232's proposals are contrary to the World Trade Organization's rules and regulations, and that it would skate us offside if we were to pass Bill S-232. Do you have an opinion on that?

Mr. Attaran: Let me give you a different reason, apart from that, as to why this is effort misspent. There are many rationales for enacting legislation. However, the rationale of let us try because it could not do harm, which is essentially your point, is possibly the weakest argument.

Many things compete for time on the Senate's calendar. An amendment about which the best that can be said is at least it will not hurt is fairly low in priority when there are real problems that need real attention and for which the legislative path is clear.

In other words, there is an opportunity cost. Each time CAMR comes up for debate in the House or Senate it drives from discussion those more tangible things we could do. One million women will die in pregnancy and childbirth this year. Roughly the same number of children will die of malaria. In Africa, a small minority of persons get access to antiretroviral medicines for AIDS. Those are real problems. To put time toward CAMR when there is ample demonstration in other countries that it is an utterly futile exercise in terms of results detracts from discussing problems for which you may have ready solutions.

I do not see the downside as possibly going offside with WTO rules. I will say that I do not think we would be offside, but there is a much more significant downside to me. That is the crowding out of the public health agenda in both the Senate and the House that this bill has brought about in the last few years.

Senator Harb: First, you said that no one has really taken advantage of what is on the table. It strikes me that it could be one of two problems. Either developed countries are not reaching out to Africa to inform them of the program or African countries themselves are not calling on the developed countries to supply medicine. Which is the cause in your opinion?

Mr. Attaran: It is the second item exclusively. It is certainly not the first item.

Senator Harb: African countries are not reaching out to developed countries to ask for the medicine?

Mr. Attaran: When a recipient foreign country wishes to make use of the flexibilities provided in the WTO agreement on public health, it must notify the WTO of its intention to do so. Those notifications have not been forthcoming.

Senator Harb: How many least developed countries are members of the WTO?

Mr. Attaran: Most, I do not know the precise number.

Senator Harb: For example, out of Africa's 49 countries?

Mr. Attaran: I would have to count, but I think probably over half are WTO members.

Senator Harb: Would you be surprised to know that the vast majority of those countries do not have representation in Geneva at the WTO?

Mr. Attaran: No, I am not surprised at all.

I am reminded of a trip I took to Malawi years ago to advise the government on these issues. On that occasion, I briefed the government about the emerging law at the WTO. It was clear to me they had rather little capacity to make use of it.

However, the point is that there are many more advanced countries that have the capacity to make use of it. I mentioned that I had also advised Brazil. Brazil is a country that could use the WTO and is not. There are also many others that are not. It is because this solution is one currently looking for a problem that it is not used.

Senator Harb: Why?

Mr. Attaran: You have all heard of problems looking for a solution. Here we have a solution looking for a problem. It is quite the other way around.

Most developing countries are able to gain access to the medicines they need by buying on the international market from countries where the medicines are not patented, buying through designated programs for particular products as may be run by UNICEF or the Global Fund or by obtaining donations as you heard in the previous hour. The mechanism provided in CAMR has fallen into non-use.

I suppose you can say, perhaps, some day it may be used. You are entitled to that point of view. Frankly I think it is naive having been in the field for 10 years now. I encourage that before you put further effort into this bill to have a concrete scenario in mind such that if you were to pass the bill and it were to become law, then but for the law, the medicine would not have reached the developing countries. I am not aware of such a scenario at present.

Senator Harb: I think you are being too general. Is that what we have? The system is very noble. There was an agreement in order to make drugs available to least developed countries and developing countries that need them. Everyone agreed on that.

However, there do not seem to be takers. Some of the witnesses that appeared before the committee told us the reason people are not buying from developed countries is because of cost. They are buying from China, India and Brazil and so on. For first-line medications, they have the ability to buy it cheaper than we sell it for here. They told us that second-line medications, more advanced medications, are where the problem is. That is what this whole discussion is about, to find the mechanism to facilitate the availability of the product to those countries.

From my perspective, the problem is twofold. Least developed countries do not have the capacity to ask or do not know how. Developed countries are not doing their job to reach out to those countries and telling them about the program and what they can have. That is what I believe.

Mr. Attaran: I strongly disagree with you. In my experience, there is not a shortage of consultants at the international level who can assist developing countries to make use of this mechanism. That is not to say those consultants are always deployed to the right places, but they exist.

If it is a public education question as you say, that will not be addressed by the bill before you.

I can only emphasize that many other countries — the 27 of the EU, for instance — have laws that are already able to be used more easily and without some of the constraints that persons see in CAMR. In some cases, those persons are correct. Europe has a long tradition of closeness with Africa following the colonial era, which we do not have. There is a great deal more back and forth between Africa and Europe than Africa and Canada. Even with all those advantages, the laws in Europe have not been used.

I think it is fanciful that we could amend Canada's law in any way that Canada will succeed where 27 European countries have given it their best and not succeeded. It is hubris and it is something about which we must be quite careful.

Senator Zimmer: Thank you for an inspiring presentation. You have me excited.

If Canada's generics are overpriced, how and why did the deal with Rwanda occur? You call it a one-shot wonder. Was it a mistake?

Mr. Attaran: We do not know what price was specifically offered to Rwanda or whether the public price was somehow subsidized through other channels. There has not been adequate transparency around that deal.

I know that neither side to that deal wishes to repeat the experience. This means that for whatever reason, and it is not known, there is dissatisfaction. It is the only time that the WTO exception has been used in the world by any country. In fact, if one were keeping a scoreboard of how often laws were used, CAMR in Canada would have scored one and the rest of the world zero. We are actually in the lead.

There could be an argument made to not mess with success. It is not an argument I would choose to make, but logically one could make it. It would not be wise to get ahead of the facts. If in a few years a public health situation emerges where but for some relaxation of patent law patients cannot be treated, I would be the first tell you to relax the law.

When I advised Brazil, it was in the context of a WTO lawsuit that the U.S. had brought against Brazil. I was on the Brazilian side. I am not before you as a diehard advocate of patent law. Rather, I am an advocate of public health and access to medicines. I caution you against the central planning mindset in which we think we can draft a bill that will work in some future context. Central planning does not function. It is better to wait for the set of facts and to legislate as needed to solve the specific problem when it arises.

Senator Zimmer: The one-shot wonder speaks for itself.

Mr. Attaran: Sadly, it does so.

Senator Zimmer: India's patent laws prohibit the manufacturing of generic versions of pharmaceutical products after 2005. Why is that?

Mr. Attaran: India had to introduce patentability of medicines under WTO rules as a transitional country. It has now done so. It could be that in the future, the ability of Indian companies to meet the needs of the developing world will be lessened because of that development. Could we have a problem in the future for this reason? Yes, we could have, but we should wait until that time so that we understand the true nature of the problem and can better direct our proposed legislative solutions to it, rather than trying to anticipate it at the present time.

It should also be borne in mind that not everything to do with access to medicines is best solved by compulsory licence. In 2003, I had the privilege to negotiate a voluntary licensing scheme between a pharmaceutical company and a nonprofit organization that supplied Médecins Sans Frontières with its medicines. In what was at the time a heated public policy climate, we were able to come up with a framework for voluntary licensing that has since been followed by several pharmaceutical companies to supply their products in African countries. GlaxoSmithKline, Merck, Boehringer Ingleheim and others followed that scheme. That scheme of negotiated voluntary licensing has been responsible for treating immeasurably more patients than has any compulsory licensing scheme to date.

Senator Zimmer: To what extent is re-importation, diversion and counterfeit of pharmaceutical products a problem in developed and developing countries?

Mr. Attaran: The counterfeit problem is truly frightening. Some colleagues and I did studies this and last year on malaria medicines purchased at random from pharmacies in African countries. We sent people into pharmacies to buy medicines as if they were regular consumers. We chemically analyzed those products later. We found that about one third of medicines sold in retail channels in Africa were either substandard or outright counterfeits. We repeated that study in India, where we found an approximately 10-per-cent rate. This is a huge threat to global well-being because the user of medicines has no way of knowing whether a pill is genuine or counterfeit. It is ironic to say, but as an example of needed law reform, today's laws are more stringent in Canada and internationally for counterfeiting a $20- bill than for counterfeiting a medicine that could kill a person. International currency counterfeiting is a international crime, but international medicine counterfeiting is not an international crime. That is a grotesque omission of law and the sort of thing toward which the Senate could better direct its efforts.

Senator Zimmer: Mr. Attaran, thank you for your candor.

Senator Hervieux-Payette: Let us start at the beginning. We have a G-8 meeting and Africa was at the forefront of the discussion. Canada decided to devote $300 million in relief for people suffering from AIDS in Africa. Some expert at the time developed the formula and determined the formula to be put in place. Five years later, not many dollars have been spent and the program does not work. I feel comfortable today realizing that perhaps we should go in another direction. We are legislators in the Senate, but we are able to advise the government in different ways as well. Senate reports in many areas are substantial and often result in corrections to government policy. The Standing Senate Committee on Banking, Trade and Commerce reformed the Bank Act, which probably saved the Canadian economy.

Although you are not the adviser of the Prime Minister in 2009, but because the program has not worked, what would you tell him to do with the $300 million over five years? We heard from another witness a few minutes ago who said that likely they could manage to double not only the money but also the drugs for network distribution. Certainly, we need distribution channels for the drugs. As far as I am concerned, provided the manufacturing meets the standards of the Food and Drug Act in Canada, we do not have anything to say about it. I am not an expert but if the highest standards are being met, then perhaps we could recommend taking one or the other with the best price or the same price. For example, perhaps we would have been better off with two suppliers of the H1N1 vaccine. How could we put that on the market?

If the government decided today to spend $300 million on relief, how would you channel it to help these people? AIDS is a growing problem in the Caribbean islands, for instance. The related expense eats up a large portion of a country's scarce resources. Some will have to sacrifice education in favour of health to save lives. They have a crucial decision to make. As well, there is the component of education to prevent AIDS that should be part of the help for such countries.

Mr. Attaran, you said that Bill S-232 will not accomplish what you want it to do. How do we do it? It is easy for me to ask the expert. Eventually, my colleagues and I will draft a report to try to come to a solution for efficient and effective help to all developing countries, not just Africa. In this case, it was directed to Africa but we know that those are not the only countries in need.

Mr. Attaran: There are two answers to your question: First, how can we better use existing funds? Second, what can we do to assess the sufficiency or insufficiency of those existing funds? I will break it down in that way.

The existing funds for Canada's global health efforts are channeled mainly through CIDA. There is a tremendous lack of transparency in how those funds are used. There is little consistency in how the funds are used from year to year. For instance, I recall that at some time in the last five years, I believe, CIDA gave about $150 million in one year for childhood immunization. By the next year, that number was down to about $10 million. It eventually plummeted to zero.

How can you manage an important health program like childhood immunization when your budget is low, rockets up to $150 million for one year and drops to $10 million the next year? If there is not budgetary consistency, you cannot have a consistent program. You will fail.

The way CIDA allocates money currently does not emphasize budgetary consistency. Nor is there transparency except many years after the fact, if at all, to ascertain what CIDA did right or wrong.

I would undertake a root and branch reform of CIDA. I mean essentially its abolition and to restart it. That is not to say we do not need a CIDA; we do.

One should look at the history of the United Kingdom. In the late 1990s, it essentially abolished its aid agency, the ODA, Overseas Development Administration. They replaced it with the Department for International Development, DFID. I bring this history to you, senator, because it was a white paper from the U.K. Parliament that catalyzed the thinking. It ultimately led to one development agency being wound down altogether and a new one was born. ODA was one of the worst development agencies on earth. DFID, which has replaced it in the United Kingdom, is one of the best.

Renaissance is possible, but you have to start with what is essentially tabula rasa, a blank slate.

Second, I queried whether the sufficiency of funds going forward is there. I do not think so. Canada is one of the few countries not to have committed to an increase in its foreign aid budget in the direction of the much neglected old goal of 0.7 per cent of GDP. Most other countries have now committed to that goal. In a few months time, we will be hosting the G7, G8 or G20, depending on which number you prefer.

Senator Hervieux-Payette: No, we will have the two.

Mr. Attaran: Do we have it all?

Senator Hervieux-Payette: We have it all.

Mr. Attaran: It is our unparalleled opportunity to follow suit with countries in Europe, particularly those that have committed to the 0.7 per cent goal and a timeline for that goal. The goal came from Lester Pearson and it lies neglected today. How shameful is that? It has been decades.

We have the stage in the next few months with the global summits, with the G8. Now is the time to do it. However, I absolutely emphasize my first point that you cannot increase aid in this country unless you undertake a root and branch reform of CIDA. Those go hand in hand. I suspect, although I do not really know, that the reason our foreign aid budget remains so low in this country is because Parliament lacks confidence in CIDA and, therefore, has been reluctant to increase the funds. You are precisely right to lack that confidence, but you are not right to walk away from the commitment that Lester Pearson made.

The solution has to lie in a tandem approach of root and branch reform of the agency coupled with, at the G8 months from now, a firm timetable to commitment in line with what the Europeans have done.

Senator Hervieux-Payette: Regarding malaria, there are groups selling nets as a preventative measure. Is it a worthwhile program or is it only something we feel good about?

Mr. Attaran: Bed nets for the prevention of malaria are a highly effective strategy. They are not the only strategy. One can also: spray insecticides indoors; improve housing to prevent mosquitoes getting in; and provide certain medications to pregnant women who are at high risk of contracting malaria. These all work. A comprehensive approach needs all of this and more.

The Canadian Red Cross, with CIDA money, pioneered the most successful way of getting bed nets distributed in large numbers in Africa. It was a made-in-Canada solution earlier this decade that caused a rethinking in the global health community on this issue. Should bed nets be sold to poor people or given away for free? For the previous decade, they were sold. Perhaps, it was only for 50 cents — they were heavily subsidized — but even that 50 cents prevented people buying them.

Then the Canadian Red Cross became involved. I think they deserve the Nobel Peace Prize for this accomplishment. They said, "Forget it. We will give these bed nets for free. It is not worth collecting 50 cents. The administrative fee of collecting 50 cents is 60 cents. It is a waste of money and it prevents people from having the nets." The effect was dramatic.

Senator Hervieux-Payette: A dramatic change?

Mr. Attaran: Yes. Every agency — UNICEF, the United States, the Global Fund — has now followed suit with that pioneering experiment of the Canadian Red Cross to give nets away for free. We set the tone for the world.

Here is the punch line to the story: For having revolutionized how this was done and saved hundreds of thousands of children's lives if you look at the ripple effect, the Canadian Red Cross was rewarded by CIDA by having their budget cut. That is an example of why you need root and branch reform right there.

Regarding your question whether bed nets are worth it, it is an emphatic yes. Is it worth us each giving $10 at a time? It would probably be better to have a central program administered by public funds like we have for our own central health programs in Canada.

Senator Hervieux-Payette: I am not talking about us sending money, but for the money to be channelled through the Red Cross for that program.

Mr. Attaran: Through them or through others. It would be a wonderful sign of reform if Canada became committed in the long run to malaria prevention.

Senator Hervieux-Payette: I think it is worthwhile for people listening to this session. I am not the only one who thought it was a good idea, but I am not on the ground. When one makes a charitable gesture, it should not only be for yourself, but it should produce the result for the people you want to help.

The Chair: It sounds to me as if one of our other standing Senate committees, perhaps Foreign Affairs, if they are looking for something to study, could study foreign aid if they follow the professor's advice.

Mr. Attaran: Please take a look at the history of Britain's reforms and the white paper that was central to Britain's reinvention of it foreign aid programs. We need the same in this country.

The Chair: That was in the last five or 10 years?

Mr. Attaran: I believe it was in 1998 or 1999. I can provide the committee with an exact citation later. I will undertake to send it tomorrow.

The Chair: If you could send that to the clerk, it would be very helpful.

Senator Zimmer: I have a supplementary question about the bed nets.

I sit on The Belinda Stronach Foundation that she established a couple of years ago. First, we found out that it is not only the net, but chemicals inside the weave that results in such a high success rate. Second, two or three people sleep under the net and not only one. Ms. Stronach has been working with the Red Cross, but the way she raises money is encouraging people to send money for bed nets instead of sending flowers or presents on one's birthday.

Mr. Attaran: All of that is correct.

Senator Peterson: In this bill, we have been focusing on HIV/AIDS in Africa. You talked about many other things. They are problems and issues that we must deal with at some point, but we are dealing with this.

Children are being born in Africa with HIV with a life expectancy of two years. We have medication that can help them to extend their life. The price on the Rwanda deal was 19.5 cents on a small order. If we can expand that by taking the two-year cap off and let them produce as much as they can, I am sure the price will come down. I think it was 11 cents in India. How long will we let this tragedy occur while we are quibbling about price? There are NGOs such as the Grandmothers to Grandmothers Campaign that are prepared to put money on the table to buy this medication. Why would we not try? Why would we let these tragedies continue?

Mr. Attaran: By all means, it is important that we try. There is something I do not understand and perhaps I can ask a question of you. Why does it matter if those grandmothers and others who wish to help are buying medicines from Canadian producers?

If the Indians are prepared today to supply it for less, is there any problem in supplying Indian medicines that are of good quality? Do you want to engage in a long and arduous and perhaps misdirected law reform project at a time when you could simply be buying the medicines from the best quality, cheapest source elsewhere? That would be the more expeditious way to proceed.

Senator Peterson: That could be questionable. If we can get the price down to be an equal amount, and they are more comfortable with a Canadian manufacturer channeled through government regulation, I do not understand why we would say "there are all these other problems so we will sit back and do nothing." I do not know where these other countries are that you can do this. Maybe we should phone the grandmothers and tell them where this is.

Mr. Attaran: Maybe so. At present, there are a number of nonprofit generic drug companies in the world — Mission Pharmaceuticals is one; International Dispensary Association is another. These are companies that supply the NGO sector throughout developing countries.

Their job is to buy the least expensive, good quality generics they can find on the international market. They have laboratories of their own to test the medicines. They will contract with a producer in India, Europe, China or what have you to purchase a bulk lot of medicines. They will test that batch of medicines to ensure the quality; and then if the grandmothers wish to buy some and have it supplied to a developing country, that can be done. These systems are already in place. They could be used tomorrow, and they should be used.

Senator Peterson: But they are not. We have been told that there is no other country in the world that is doing this. Why is that?

Mr. Attaran: Whoever told you that was wrong.

Senator Peterson: It is in the literature here.

Mr. Attaran: Which literature?

Senator Peterson: It is in here somewhere. We have lots of it.

Apotex is prepared to do this. They just say take out a few of these restrictions and let us go. They are prepared to compete internationally.

They are not saying "give us a subsidized price." They are saying "we will compete with anyone, but do not restrict us to two years; do not say we can only do a little bit." That is all they are asking.

Why can we not do that? I do not understand.

Mr. Attaran: You can do it if you wish. I just think it would be a misspent effort. I do not believe that in the amount of time it would take to achieve that law reform in the Senate and in the House of Commons, you will have a law at the end that is the least bit more advantageous than what already exists in the 27 countries of the European Union, in China and in India — and which are not being used.

Go ahead and reform the law if you like. I think you will be spending time on something that is likely to have little, if any, benefit.

Senator Peterson: It will save a few lives, though.

Mr. Attaran: On that point, we will have to disagree.

Senator Peterson: Okay.

Senator Frum: You made the point that CAMR has failed for economic reasons, not legal reasons. I think you have made your case extremely well.

I was intrigued when you said that Canada is the only country that has expiration dates on its regime. This is not a legal question, and you have made that clear. Is Bill S-232 actually WTO compliant? According to what you are saying, it sounds like it might very well be. Some of the testimony we have had about why it is not is because of the expiration dates that this bill seeks to remove. Yet you tell me they do not exist any place else anyway.

Mr. Attaran: I would not be worried about the WTO compliance issue, to be frank. It may be surprising to have a law professor tell you not to worry about international law. However, the reality is that in this space of patents and access to medicines, law has, in large part, receded. It is all about politics now.

Therefore, WTO compliant or not, I think it is fanciful to imagine another country bringing a WTO complaint against Canada for the law. It simply will not happen. The outcry against it would be so tremendous that no country would dare to take that step.

Coming back to my main point, remember that equally intelligent and committed people as yourselves in 30-odd parliaments around the world have worked on laws very much like this one. They have tried to do the best they can and they have not hit on a formula that worked. It would be rather presumptuous to believe that you can out-think all of them put together. Maybe this problem does not have a solution in law.

Senator Frum: You have been very persuasive on that point and I agree with you. I just think it is intriguing that of the witnesses who have come before us to argue against the bill, their argument has been on WTO. I think it is interesting to hear that is actually not the problem with the bill.

Mr. Attaran: At least not one that Canada would ever be challenged on.

The Chair: I thank you, professor. This has been a stimulating exchange of views.

I envy your students. None would fall asleep, I am sure, during your lectures.

Senator Zimmer: I want to enroll in his class.

The Chair: I hear it is full, Senator Zimmer, but maybe we could get an exception for you.

Mr. Attaran: I work them pretty hard. Do you really want to sign up for that?

The Chair: We do in the Senate as well, so we are used to that.

We stand adjourned until tomorrow at 10:30 in the morning, when we will be discussing via videoconference with Mr. Antony Taubman, the director of intellectual property division at the WTO in Geneva, followed by Mr. Frederick Abbott, who is the eminent scholar at Florida State University. The wonders of high technology will assist us tomorrow.

(The committee adjourned.)

Top of document