Bill C-91: the debate continues
George D. Sweeney, MB, ChB, PhD
Clin Invest Med 1997;20(3):193-195.
From the Department of Medicine, Faculty of Health Sciences, McMaster University, Hamilton, Ont.
The views expressed in this editorial are those of the author and do not necessarily reflect the views of the Canadian Society for Clinical Investigation or the Canadian Medical Association.
Reprint requests to: Dr. George D. Sweeney, Health Sciences Centre, McMaster University, Rm. 3N51D, 1200 Main St. W, Hamilton ON L8N 3Z5; fax 905 526-6610; sweeney@fhs.csu.mcmaster.ca
Revisions to the 1993 Patent Act Amendment Act (Bill C-91), currently under discussion, are of great potential interest to Canadian manufacturers of pharmaceutical products (proprietary and generic alike), to all those who pay directly or indirectly for drugs, and to the Canadian academic community. Matthews1 recently provided an excellent account of the evolution of Bill C-91 through the era of compulsory licensing of patented pharmaceuticals and the revisions that began in 1983 with Bill C-22. Last year, Baird2 argued cogently against the increasing importance of money from the pharmaceutical industry in supporting the academic activities of Canadian faculties of medicine and health sciences. The article by Dr. David W. Scheifele in this issue of Clinical and Investigative Medicine (page 188) emphasizes that accepting money from industry can have implications very different from, for example, accepting a grant from the Medical Research Council of Canada (MRC).
Although Canada constitutes only 2% of the world pharmaceutical market, sales of proprietary drugs in Canada are worth $5 to 6 billion annually. Although there are the huge costs incurred in new drug development, there are also large profits. Envious eyes have been cast at these profits; looking back, one can only be embarrassed at the compulsory licensing that was required in Canada before Bill C-91. It is standard practice in the industrial world to protect patents, and drugs should be no exception. This should not even be a subject for debate. A good portion of the 20-year lifespan of a patent is spent bringing a new drug to the stage of regulatory approval; rather than attacking patent protection, we should be supporting some flexibility in restoring the term of patent protection to allow for this delay. On the other hand, there is no justification for the present provisions of the act that permit frivolous challenges to prevent drugs with expired patents from being marketed by a generic competitor.
One has only to stroll the halls of a Canadian health sciences centre to realize that the world is changing. Laboratories are sitting vacant, equipment is often old and obsolete, and it is becoming more and more difficult to conduct research that is competitive on the world stage. To its credit, the federal government has promised $800 million over 5 years through a newly established Canadian Foundation for Innovation to support research facilities, but the operating budget of the MRC remains unchanged. It is hardly surprising that the envious eyes are cast toward the pharmaceutical industry to provide, in some form, operating funds that have not been obtainable elsewhere.
During the first 5 years of Bill C-91, leading up to the present review, a gentleman's agreement existed whereby, in exchange for the 20-year patent protection provided by the act, companies belonging to the Pharmaceutical Manufacturers Association of Canada (PMAC) would collaborate with the MRC through a joint program to fund research. PMAC companies would contribute $200 million and the MRC $50 million over 5 years to support projects that were mutually acceptable. This was in addition to the 1987 commitment by the industry to increase research expenditure in Canada when compulsory licensing was abolished. Matthews1 discusses these arrangements in detail and the extent to which industry has lived up to them.
But the purpose of this editorial is to question whether any pressure of this type should be brought to bear on a specific industry to return part of its profits to support research. (Should Intel be taxed to support Canadian microchip development because the Pentium microprocessor is selling well?) Baird raised cogent arguments against the MRCPMAC fund. This money is not handed over to the MRC for a purely scientific decision on the merit of a project. It can lead only to support of research that has the approval of industry, which is hardly likely if the work may show that the drug being investigated is ineffective or harmful. Further, if the money appeared on the ledger as profit it would be taxed, so a part of it comes indirectly from the Canadian taxpayer. Because the research financed is research in which companies have an interest, the agreement subverts a publicly funded research machine to work both with, and for, a wealthy industry. One could argue that, instead of the pharmaceutical industry supporting this research fund, drug costs could be lowered, except that the effect would be rather small for a $6 billion industry.
The principles seem clear: patent protection is a cornerstone in the legislation of industrialized countries, obliging an industry to return some of its profits to support research seems to be an unusual strategy, and requiring the MRC to administer research funds that disappear if the science is unattractive to a company seems to lessen the stature of this body. And yet concern remains: expenditure on pharmaceuticals is rising more rapidly than expenditure on other sectors of health care. While the licensing of pharmaceuticals for marketing in Canada is a responsibility of the federal government, the provincial governments administer budgets for health care. The inclusion of drugs in health care insurance is long overdue. It makes no sense to pay for coronary artery bypass grafting but not for cholesterol-lowering medication. But, even now, the provincial governments pay varying amounts of drug costs for seniors and those on social assistance. To the extent that the cost of drugs is borne by governments, whether federal or provincial, strenuous efforts will be made to control these costs. Substitution, closed formularies and reference-based pricing are strategies in this direction. Is there a defensible strategy tied to a real need to know more about the safety and efficacy of the drugs we use that would also benefit the Canadian academic community?
Quite apart from patent protection, there are 2 actions by government that the Canadian pharmaceutical industry absolutely depends on for its commercial success. The first is the responsibility of the federal government to grant the Notice of Compliance that permits a drug to be marketed in this country. The second is the provincial government's placement of an agent on a provincial formulary. To obtain a Notice of Compliance a drug must be both safe and effective, but efficacy has tended to be interpreted quite narrowly, using end points with limited clinical relevance. Information available when a drug is first marketed is often insufficient to determine its place in therapy and to permit the managers or committees that oversee provincial formularies to decide whether it should be purchased with public money. For both of these purposes -- initial approval for marketing and inclusion in 1 or more provincial formularies -- there is a need for more research conducted at arm's length from the commercial interests of the company concerned.
This is where a defensible deal with industry can -- and should -- be struck. This is not the place to consider the approval process in detail; however, suffice to say that the final hearing could be public and should provide an opportunity for the best scientific minds available to comment on any additional research required to establish safety and clinical efficacy. Approval of the drug could be conditional on the company agreeing to support, but not execute, the research. Similar strategies should be pursued by those who oversee provincial formularies: if they are dissatisfied with the evidence available, they should withhold approval until there is an agreement that the required research will be carried out.
Academic medicine in Canada has an enviable reputation in the conduct of clinical trials, and there should be no shortage of expertise. But the concerns should not be limited to clinical trials: drugs still come to market with fundamental questions about their mechanisms of action unanswered. While it may not be necessary to delay marketing, there is no reason why licensing should not be tied to a commitment to support work that aims to fill such gaps in knowledge. Negotiation along these lines would generate significant research activity, improve the quality of our formularies and contribute to cost control by exposing inflated claims for efficacy.
References
- Matthews JH. Relationships between the academic community and the pharmaceutical industry: the legislative background and its effect on spending on medical research and development. Clin Invest Med 1996;19:470-8.
- Baird PA. Funding medical and health-related research in the public interest. Can Med Assoc J 1996;155:299-301.
