SUBMISSION TO
THE STANDING COMMITTEE ON INDUSTRY, SCIENCE and TECHNOLOGY and THE STANDING SENATE COMMITTEE on BANKING, TRADE and COMMERCE
RE: BILL S - 17
AN ACT TO AMEND THE PATENT ACT
MAY 17, 2001
MARCH 22, 2001
Prepared by:
GERDA KAEGI,
Past President, Ontario,
Office: 416-368-5222
On behalf of Canadian Pensioners Concerned National, and Canadian Pensioners Concerned, Ontario Division I wish to thank the Commons Committee for making it possible for me to participate in the committee stage of
Bill S-17
Who we are
Canadian Pensioners Concerned, founded in 1969 in Ontario, is a provincial and national membership based, nonpartisan voluntary advocacy organization of mature Canadians committed to preserving and enhancing a human-centred vision of life. In our advocacy role, we act on issues such as pensions, health care, housing and transportation. We are concerned not only about those matters which involve older citizens but also about all of the factors that make a just, caring, compassionate, civil society for all age groups.
An Overview of the Issue
Let us begin by saying we recognize the need to protect intellectual property rights in the interest of the developer of those ideas as well as in the broader public interest. However, we see limits to those rights when they are balanced against the public interest. In a civil society such as Canada, no one has absolute rights to private property.
The issue of the cost of prescription medications is not a new one for us. In our view, the changes in patent protection and the regulations governing the drug industry have been a recipe for serious disaster.
Compulsory licensing applied to Canadian manufactured drugs, had been legal in Canada since 1923. It applied to Canadian manufactured products but not to imported drugs.
Royalties were paid to the holders of the patent.
In 1969, faced with some of the highest drug prices in the world, the Government allowed compulsory licensing on imported drug products. Overall drug prices were reduced for the purchaser.
In 1987, Bill C-27 extended patent protection and reduced the time frame for compulsory licensing.
In 1993, Bill C-91 was introduced, eliminating compulsory licensing by extending twenty year patent protections to new pharmaceuticals.
We believed that the 1993 legislation would allow prescription prices to rise to an unnecessary high level. Every province but Quebec protested the Federal Government's policy. We predicted that the burden to the Health Care System as a whole would start to compromise the benefits all Canadians had received through our National Medicare Plan, The Canada Health Act, and we were right. What was especially troubling was the fact that the Government's policy appeared to be working in the interest of international corporations (where much of the pharmaceutical industry is found) and against the provincial governments and the public interest. The Canadian generic drug industry had proven its capacity to produce safe and effective prescriptions at less cost.
In 1997, at the Parliamentary Review of Bill C-91, we reminded the Government that Canadians were being harmed by the legislation, legislation that they opposed while in opposition. We argued that there was legal advice that said that the restrictions on generic drugs were not required under NAFTA.
The Escalating Cost of Drugs
In Ontario, the highest increase in private healthcare expenditure per capita between 1994 and 1999 was for drugs - 81% of this expenditure comes from households and private insurance.
In 1997, 53.7% of total patented drugs in the B.C. Pharmacare program were category 3 drugs . . . (the Patented Medicine Review Prices Board( PMPRB) sees these drugs to be "me-too" drugs - new drugs that provide moderate, little or no therapeutic advantage over existing medicines) , many of them marginally different drugs at increased prices
The Canadian Institute for Health Research suggests that the increase in drug expenditure per capita was largely due to increased utilization and the introduction of new drugs.
Starting in 1997, the share of patented drugs in all sales of prescribed drugs was more than 60%, a steadily rising proportion of the market
Nationally, between 1987 and 1996, prescription drug costs rose by 93% compared to an overall consumer price increase of 23.1% In 2000 per capita drug costs were 16% above the costs two years earlier.
Drug costs have grown faster than any other cost item in our national health expenditures and now surpass the payments to physicians. "Drugs are now 15.5% of the $95-billion spent last year on health care."
"Drug therapy is one of the fastest changing components of modern medical care (e.g.drug therapy as an alternative to surgery)."
In 1975 the public funded 76.4% of the total healthcare bill but by 1997 only 68% was covered by public expenditures with the rest paid for by private insurance and individuals.
The National Health Survey 1996/97 carried out by Health Canada identified some disturbing information:
- 80% of those between 65-69 had used prescription medications
- 88% of those over the age of 80 had used prescription medications
Six million Canadians have inadequate insurance for prescription drugs
In Canada, 61% of prescription dollar sales go to patent drugs .
Low Income and Drug Costs
Let me touch briefly on the critical issue of health needs and the capacity to pay. We all know the significant determinants of health which include food, clothing, housing, clean air and water, adequate income. The paper released by Statistics Canada titled The Assets and Debts of Canadians: An Overview of the results of the Survey of Financial Security identified a very dramatic problem for many Canadians.
The median after-tax income of Unattached Individuals was $16,700. 20% of Unattached Elderly Women and 32% of Unattached Non-Elderly women had a median after-tax income of $15,600 or less.
Lone-parent families of two or more had a median net worth of $14,600 and a median after-tax income was $21,800.
These are national figures and we know, through the work of the National Council on Welfare, that 'low income rates' vary greatly from one province to another. A quick study of their latest report Poverty Profile 1998, Volume 113 published in the Fall of 2000 illustrates this very clearly.
Now, think about having to pay for rent, food clothing, shelter and payments for drugs. People are having to forgo needed prescription medication in order to pay for their basic necessities.
Provincial Governments are trying to control their escalating health costs. One strategy is the exclusion of new prescription medications from Provincial Formularies. Many new generic treatments are not finding ready or quick acceptance on these critical lists. British Columbia takes an average of 84 days to list a new drug while Ontario takes 314 days. All Provinces now require co-payments from those on their drug benefit plans. In Ontario, those on social assistance as well as beneficiaries of the Ontario Drug Benefit program(ODB) are required to pay. For those on the ODB, the first co-payment of $100 may occur on the very first prescription drug purchase of the year. In addition, there are dispensing fees for all remaining prescriptions. In Saskatchewan the co-payment for low income seniors is $200.
Finally, with the changing practice of health care moving from institutions to the home, the burden of drug costs is increasingly falling on individuals and drug coverage plans. The people most likely to be covered to some degree for drug coverage are those working full-time, social assistance recipients, seniors etc. This leaves out many vulnerable Canadians.
The World Trade Organization (WTO) and the Agreement on the Trade Related Aspects of Intellectual Property Rights(TRIPs) and the International Pharmaceutical Industry.
We understand that Canada is required under the WTO/TRIPs agreement to either modify its domestic laws when it loses a dispute or face trade penalties. TRIPs extends industrial patent protection to 20 years and we understand the great pressure the Government is under to avoid trade penalties. We believe that the Government must act to balance Private Property Rights against the Public Interest of all Canadians. We have read the carefully documented reports of the active engagement of the International Drug Companies in pushing the boundaries of patent protection and limiting, if not blocking, the production of generic copies of their key products. We also understand that generic copies of patented drugs sell at one half (1/2) to one third (1/3) of the cost of brand name counterparts. We have read with interest about the great pressure the large International Pharmaceutical manufacturers are under from many nations in Africa to reduce the cost of drugs needed in the treatment of HIV/AIDS - pressure that includes the manufacturing of generic counterparts to the brand name drugs. The human cost of high-priced drugs is found in Canada as well as in the industrially developing world.
Provincial Drug Benefit Plans keep some cap on prices as they may negotiate with manufacturers somewhat lower prices. A drug company knows that if its product is not listed the potential market will be significantly reduced.
Companies have the right to reasonable protection of their inventions and we believe that 20 years is far too generous. We are not dealing with can-openers. We are dealing with human needs. We are dealing with companies that have received public support through University research, tax incentives, legislation and direct government grants and loans. We are putting corporate Wealth against Public Health. However, if the 20-year protection is to be imposed, we must ensure that companies do not manipulate the regulatory system to delay the entry of lower cost generic products and thereby extend their patents. We must stop the growing practice of companies continually adding on new patents, through minor modifications, to their existing patents, thus extending the life of the original patent. We must balance the companies' private interest against the clear public interest and public need. Canada and the United States are the only countries that have given extra protection to the International Prescription Drug Industry through the use of the regulatory process. Only Canada and the United States provide these companies with an automatic two year injunction to block the introduction of a generic drug to the market, an injunction that holds until the matter is settled in court. This special treatment of the most profitable industry in the world is not justifiable.
Our Recommendations
Given that the Government has agreed to comply with the WTO/TRIPs ruling by introducing
Bill S-17, and given the public interest /needs directly affected by this legislation (health), and,
given the high level of profits recorded by the International Pharmaceutical Drug Patent Industry,
and, given the essential role played by the production of generic drugs in the overall cost of healthcare, we urge serious consideration of the following recommendations which are fully compatible with the TRIPs code:
- Impose an absolute limit of 20 years and roll back all those patents that exceed that 20-year limit. (Amend Section 45) This would be in full compliance with the WTO ruling
- The 20-year time limit should begin the moment a filing is submitted to Health Canada.
- Repeal the special Regulations targeted at the pharmaceutical industry and treat the industry like any other patent holder. (Repeal existing Section 55.2(4))
- Limit the number of patents per drug to a maximum of two. We believe that the "ever greening" of patents - the adding on of additional patents to the original one - is unjustified and unfair.
- Ideally, we would like to see the institution of a national drug plan where the purchase and distribution of medicines were overseen by federal or provincial government bodies. This would save money for everyone and work to the benefit of all. Australia is an example we should look at.
|
