NEWS RELEASES
GOVERNMENT OF CANADA INTRODUCES LEGISLATIVE CHANGES TO ENABLE EXPORT OF MUCH-NEEDED, LOWER-COST PHARMACEUTICAL PRODUCTS TO DEVELOPING COUNTRIES
November 6, 2003
GOVERNMENT OF CANADA INTRODUCES LEGISLATIVE CHANGES TO ENABLE
EXPORT OF MUCH-NEEDED, LOWER-COST PHARMACEUTICAL PRODUCTS TO
DEVELOPING COUNTRIES
The Government of Canada is leading the global movement to address public health problems, especially human
immunodeficiency virus and acquired immune deficiency syndrome (HIV/AIDS), tuberculosis, malaria and other
epidemics, by introducing today legislative changes that will help give developing and least-developed countries greater
access to much-needed, lower-cost pharmaceutical products.
The proposed changes to the Patent Act and the Food and Drugs Act make Canada the first country to take concrete
measures to implement the World Trade Organization's (WTO) recent Declaration on the Trade-Related Aspects of
Intellectual Property Rights Agreement and Public Health (Doha Declaration). The legislative changes will make it easier
for Canadian pharmaceutical companies to export their products to countries in need.
Under the WTO agreement, member countries may allow patented products to be manufactured under licence by someone
other than the patent holder for a limited period of time and in response to a public demand by a country with insufficient
pharmaceutical manufacturing capacity.
"These proposed legislative changes are broad, flexible and faithful to what WTO members have spent so long negotiating.
We hope that our leading role encourages developed countries around the world to follow suit," said Pierre Pettigrew,
Minister for International Trade. "These actions demonstrate Canada's strong commitment to the development objectives
set out in the WTO Doha Development Agenda."
"Our goal is to address a pressing humanitarian problem, and we have worked with the two pharmaceutical associations
and with non-governmental organizations who provide on-the-ground public health assistance to develop legislation that
will be part of the solution," said Allan Rock, Minister of Industry. "At the same time, we recognize the need to respect
intellectual property rights, which are critical to the development of new products and therapies in Canada. The input of the
industry and non-governmental organizations has been invaluable, and I thank all who have participated in these
consultations."
"Canada has one of the most rigorous drug approval systems in place, and as Minister of Health, I am committed to
ensuring that the system is used to ensure that the pharmaceutical products sent to less-developed countries meet Canadian
safety standards," said Anne McLellan, Minister of Health. "This is an important step in helping other countries fight
HIV/AIDS, malaria, tuberculosis and other diseases."
"This is one of the most important steps Canada can take to advance global health and human rights, and we hope to see
other G-8 countries following suit," said Bill Graham, Minister of Foreign Affairs. "As United Nations Secretary-General
Kofi Annan said last week, our action today could save millions of lives. This is a major breakthrough in the international
community's capacity to address not just the prevention of AIDS and other diseases in the developing world, but also the
provision of treatment and access to pharmaceutical products for those in need."
"Nothing disrupts development like the burden of disease," said Susan Whelan,
Minister for International Cooperation. "Some of the most powerful things we can do to improve the well-being of people
overseas involve changes to how we do things right here in our own country, such as changing our patent and drug
legislation."
With legislation now introduced, the Government of Canada will put in place the complementary regulatory frameworks as
soon as possible. As the government proceeds, it will continue to actively consult with and engage those who will
contribute to the ultimate success of this initiative.
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For more information, please contact:
Sébastien Théberge
Office of Pierre Pettigrew
Minister for International Trade
(613) 992-7332
Media Relations
Department of Foreign Affairs and International Trade
(613) 995-1874
Linda Kristal
Office of Allan Rock
Minister of Industry
(613) 995-9001
Media Relations
Industry Canada
(613) 943-2502
Isabelle Savard
Office of Bill Graham
Minister of Foreign Affairs
(613) 995-1851
Farah Mohamed
Office of Anne McLellan
Minister of Health
(613) 957-0200
Media Relations
Health Canada
(613) 941-8189
Marta Anderson
Office of Susan Whelan
Minister for International Cooperation
(819) 953-6238
Media Relations
Canadian International Development Agency
(819) 953-6534
Backgrounder
The World Trade Organization and access to pharmaceutical products
In the November 2001 Doha Ministerial Declaration, World Trade Organization (WTO) members recognized the gravity of
the public health problems afflicting many developing and least-developed countries, especially those resulting from human
immunodeficiency virus and acquired immune deficiency syndrome (HIV/AIDS), tuberculosis, malaria and other
epidemics.
On August 30, 2003, negotiations among WTO members resulted in a decision waiving certain provisions of the
Agreement on Trade-Related Intellectual Property Rights (TRIPS), which appeared to prevent nations in need from
importing less-expensive versions of pharmaceutical products.
As the first WTO member to announce its intention to domestically implement this decision, Canada's challenge is to
demonstrate leadership in the promotion of an effective international system that will remove barriers to the quick delivery
of affordable pharmaceutical products to developing and least-developed countries. Canada's proposed regime fully reflects
the outcome negotiated among WTO members.
The agreement stipulates that the decision must be used in good faith to deal with public health problems, and not for
industrial or commercial objectives, and that it is important to ensure that these products are not diverted from their
intended beneficiaries.
Canada's approach, when implemented, will allow for vital health and development goals to be advanced, while also
respecting the intellectual property rights that promote the development of new pharmaceutical products.
The proposed amendments to the Patent Act and the Food and Drugs Act, once approved by Parliament, won't result in
better health for the developing world overnight, however, this is a move in the right direction. It complements the work
Canada is doing in a broad range of international programs, exemplified by the commitments made in the Africa Action
Plan introduced at the G-8 Summit in Kananaskis, Alberta.
Canada will continue to work with the WTO, the World Health Organization (WHO) and the World Intellectual Property
Organization (WIPO) to develop effective international means of implementing the WTO decision on access to
pharmaceutical products.
In November 2003, the WTO will implement a notification system for countries that wish to import drugs using
compulsory licences. The TRIPS Council will discuss this when it meets from November 16-18.
In Geneva, Canada is working closely with the WTO, the WHO, the WIPO and other international bodies to advance this
issue.
Amendments to the Patent Act
The Government of Canada is proposing amendments to the Patent Act in order to add a new section authorizing third party
use of patented inventions to address public health problems afflicting developing and least-developed countries especially
those resulting from HIV/AIDS, TB, malaria and other epidemics. The new section in question will allow for the issuance
of compulsory licences to Canadian firms, typically generic drug companies, authorizing them to manufacture in Canada
specific patented pharmaceutical products for the sole purpose of exporting them to least-developed and developing
countries that are unable to produce domestically the pharmaceuticals needed to respond to their public health problems.
The proposed amendments to the Patent Act, developed in consultation with Canada's pharmaceutical industry and non-governmental organizations (NGOs), are designed to implement the provisions of a waiver to certain obligations in the
WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) which had until now prevented
developed countries like Canada from issuing licences to pharmaceutical companies to produce patented brand name
pharmaceutical products for export to least-developed and developing countries. In conceiving the amendments, the
Government of Canada was mindful of the importance of continuing to protect the intellectual property rights of domestic
patent holders and of respecting its other international trade obligations in this regard.
Once amended, the Patent Act will include Schedules which identify the specific pharmaceutical products and importing
countries which are eligible under this new regime. The Schedules setting out the eligible importing countries consist of the
WTO member countries which qualify under the terms of the Waiver but also includes non-WTO members that have been
identified as least-developed-countries by the United Nations. The Schedules will not include the 23 WTO members that
have self-identified as non-importing countries under the regime.
In signing on to the WTO Waiver, Canada, as well as stakeholders, recognized that it was not conceived to apply to all
pharmaceutical products but rather is targeted at the medicines needed to treat grave public health problems. The World
Health Organization (WHO) List of Essential Medicines (which lists the most efficacious, safe, and cost-effective
medicines for priority conditions in a basic health care system) provides a sound guide for establishing the initial schedule
of 46 eligible products that are currently subject to a patent in Canada.
The amendments retain flexibility by providing a regulatory mechanism to add to or delete from these Schedules as the
need arises or as international consensus emerges. They also enable the creation of an expert advisory committee by the
Ministers of Health and Industry, composed of medical health practitioners and other experts in relevant fields, which may
be asked to provide advice on amending the Schedule of pharmaceutical products.
Consistent with Canada's TRIPS obligations, and in keeping with the underlying objective to expedite the provision of
pharmaceutical products to countries in need, under the amended Patent Act, patent-holding brand name companies will be
given the opportunity to be the first supplier of a requested pharmaceutical product. Following a notice of intent by a
pharmaceutical company seeking a compulsory licence, the patent holder will have 30 days in which to decide whether to
fulfill the supply opportunity. If the patent-holder decides not to do so, the other company may proceed with its application
for a compulsory licence. Such a licence will be subject to the following terms and conditions:
• Use of the patented pharmaceutical product must be limited to a specific quantity and for use in a specific country;
• A website must be established disclosing the information relating to the licence;
• The licencee must pay a royalty of two percent of the value to the importing country of the exported pharmaceutical
product;
• The licence shall have an effective period of two years from date of grant; and
• Health Canada must notify the Commissioner that the pharmaceutical product meets the requirements of the Food and
Drug Regulations including that it be distinguishable from the domestic brand product (eg. by labelling, packaging,
marking, embossing etc.) in order to discourage re-importation and diversion.
Subject to Parliament's approval, the legislative amendments and their subordinate regulations will come into force on the
same day. In the absence of an international infrastructure for implementing the WTO Waiver, the development of which is
unlikely for some time, the proposed amendments contain a clause stipulating that the legislation be reviewed by the
Minister of Industry three years after its coming into force, following which a report is to be tabled before both Houses of
Parliament.
Evaluating the drugs and medical devices exported under the WTO agreement
The Government of Canada's objective is to improve access to less-expensive pharmaceutical products that are urgently
needed by the world's least-developed countries to fight these public health issues. This will not affect Canadians' access to
drugs.
Health Canada to review drugs so they meet Canadian standards
The countries eligible under this regime are particularly vulnerable, and may have limited capacity to conduct their own
evaluations. Health Canada will therefore conduct a regulatory review to ensure that the drugs and medical devices destined
for these countries are manufactured in compliance with Canadian standards.
Amending the Food and Drugs Act and Food and Drug Regulations
The bill will amend Section 37 of the Food and Drugs Act (relating to exportation), so that products intended for export
under this program come under the same scientific assessment as those intended for the Canadian market.
Subsequent changes to the Food and Drug Regulations will make necessary new regulations to implement the WTO
decision. These deal with the requirement for Health Canada to notify the Commissioner of Patents that the products
comply with the Regulations (i.e., they meet Canadian standards) and that they carry distinguishing markings as compared
to those available on the Canadian market.
Canadian efforts to fight infectious diseases in developing countries
Canada recognizes that people in developing countries suffer from a lack of basic medical supplies and has responded with
wide-ranging initiatives to help fight the spread of infectious diseases.
Canadian funding for HIV/AIDS initiatives in developing countries will increase to
$80 million per year by 2005, representing a five-year commitment of $270 million. In addition, Canada is also contributing
$50 million over five years to the International AIDS Vaccine Initiative and to the African AIDS Vaccine Programme.
Canada also supports multilateral initiatives that manage and disburse resources through public-private partnerships to
mitigate the impact of infectious diseases. For example, a total of US$100 million is being provided over four years to the
Global Fund for AIDS, Tuberculosis and Malaria. Canada is also a founding member and strong supporter of the Global
Tuberculosis Drug Facility, having earmarked $80 million to help eradicate this disease. Canada also provides
immunization and vitamin A capsules to vulnerable children in more than 40 countries in Africa, Asia and Latin America,
saving more than 1.5 million lives.
Regarding polio, Canada has been a substantial supporter of eradication efforts around the world, funding a total of $95
million to the Global Polio Eradication Initiative over the last five years.
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