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Canada and the AIDS Epidemic

Examining Canada’s role in the production and licensing of AIDS medication around the world.

On March 9, 2011, the House of Commons passed Bill C-393 with a vote of 172 to 111. The Bill’s sponsor was Ottawa Centre NDP MP Paul Dewar and it was advocated for by groups like the Canadian HIV/AIDS Legal Network and the Grannies to Grannies campaign of the Stephen Lewis Fund, as well as generic pharmaceutical companies like Apotex Inc. The bill’s goal is to reduce the red tape around Canada’s production and exportation of generic drugs.

The legislation’s opponents have included Liberal MP Marc Garneau, MPs from the Conservatives and the Bloc Quebecois, and research based pharmaceutical companies like GlaxoSmithKline. The main arguments against the bill include the fact that it violates intellectual property law, creates potential profit losses for research based pharmaceutical companies, and does not address other aspects of the AIDS crisis.

Not only have organizations and MPs communicated their support for the bill, many prominent Canadians, including Somalian born Toronto Hip-Hop Artist K’naan and the Humanitarian Activist Dr. James Orbinski, have stated that they support the bill. The Canadian HIV-AIDS Legal Network also has a petition signed by numerous faith leaders across Canada and another signed by scientific and medical researchers encouraging the federal government to pass the bill.

The main reason so many have campaigned for this bill is to increase Canada’s exportation of Generic Anti-Retroviral (ARV) drugs to Africa for humanitarian purposes. ARV drugs revive the immune systems of those suffering HIV-AIDS. In most cases, these drugs can significantly extend the lives of those living with HIV-AIDS.

As it stands now, India is the only major global exporter of ARVs. Several other countries, including Canada, have the infrastructure to produce and export the drugs in bulk, but have failed to fulfill that potential.

A patented drug is the original drug that a research-based pharmaceutical company produces. A generic drug is the same chemical as the brand name yet has a different marking, colour, and label. The price of a generic ARV drug can be up to 95 per cent cheaper than its brand name competition. This price difference occurs because generic companies do not have to invent the drug the way the brand name companies do.

Currently, the cost of brand name ARV drugs are too expensive for many African countries to afford. Studies have shown that generic production of drugs can reduce the price dramatically. According to Richard Elliot, Executive Director of the Canadian HIV-AIDS Legal Network, “the single most important factor that has driven price levels down has been the ability to get Anti-Retroviral drugs in Generic Form.”

That Canadian ARV exports will increase as a result of C-393 is a near certainty, though the precise extent to which that will occur remains unclear. Following the bill’s passage, Apotex – the largest generic pharmaceutical company in Canada – has additionally committed to producing a drug that is specifically designed for children with HIV-AIDS.

Currently, there are approximately 2 million AIDS deaths per year in Sub-Saharan Africa alone. “Globally roughly 15 million people at the moment out of the 33 million who have HIV-AIDS are in need of antiretroviral treatment,” said Elliot. “There’s a real treatment time bomb here.”

Despite the fact that Africa makes up the majority of the demand for Anti-Retroviral treatment, the developing world makes up a small portion of the demand for brand name ARV drugs. According to Rachel Kiddell-Monroe, the president of Universities Allied for Essential Medicines, the developing world is only receiving a sliver of the pharmaceutical drugs produced worldwide. “Ninety per cent of pharmaceutical companies’ incomes come from the developed world,” she said.

In 2004, the Paul Martin government passed a bill that creates Canada’s Access to Medicine Regime (CAMR). This legislation was designed to encourage Canada’s exportation of generic drugs to developing countries for public health purposes like AIDS and Malaria.

CAMR intended to enhance Canada’s production of Generic ARV drugs by allowing the government to issue a compulsory license to a generic company to produce a specific drug needed to treat a public health problem for a specific country.

But CAMR is mired in red tape and legal contradictions that act as roadblocks to improved levels of treatment. Only one batch of generic ARVs (which was sent to Rwanda) has left Canada since CAMR was passed, and this came only after a four-year process of working through government paperwork and negotiations with the patent-holding pharmaceutical companies. By contrast, in 2008 alone India exported generic ARVs to 96 countries.

Kiddell-Monroe said that CAMR is currently “too complicated, its got so much red tape and bureacacy in it that it makes it really diffficult for developing countries to use. … Developing countries themselves have seen that they don’t have the resources to manage it.”

In an article posted on Apotex’s website, Jack Kay, Apotex President stated, “We invested millions in the research and development of the product and legal costs in negotiating with the brand companies, and made no profits in the process. We did it because it was the right thing to do.” Apotex also indicated that they would no longer export any generic ARVs to the developing world unless the federal government reformed CAMR.

Currently, the compulsory license system produces strains on the exportation of generic line drugs. With this licensing system, generic companies can only export one drug to one country for a specific time period. This type of license is ineffective because viruses transfer between various developing countries and many of these countries need the same drugs. Also, epidemics can persist for longer than the imposed time limit. In addition, the time limitations prevent the mass production of generic drugs that can make these a profitable industry.

In addition to the compulsory license, the legislation discourages generic exportation through arbitrary limits. Currently, there is a list of exportable drugs under schedule 1 of CAMR that are allowed to be exported as generics. Not only are there arbitrary restrictions on the drugs that are allowed to be produced, but CAMR only allows specific countries to receive Canadian generic exports. To receive the drugs, countries must be on a list of eligible countries and these nations must declare that they are unable to produce these medicines domestically.

Bill C-393 removes these disincentives for generic production because it will make the process of obtaining an export license a single bureaucratic step. It additionally removes the arbitrary cap on drug exportation.

Under a one license system, a generic drug company will obtain a permanent license for a drug of any amount, to be exported to any country in need.

Bill C-393 will also remove the arbitrary limitations listed earlier. First, the bill would force CAMR to allow all drugs defined by the WTO as treating a public health problem to be exported instead of just the drugs listed in schedule 1 of CAMR. In addition, the list of coutries allowed to import would be extended to all countries facing a public health problem instead of the limited list of countries allowed to import Canadian made generic drugs.

Conservative MPs and research-based pharmaceutical companies have opposed the bill because they believe that increased generic exportation could violate intellectual property rights under the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The  agreement, in effect since 1994, set minimum intellectual property protection standards for patent holding companies and individuals.

GlaxoSmithKline (GSK) is one of Canada’s large research-based pharmaceutical companies that holds copyright on a number of ARVs. GSK opposed Bill C-393 on the grounds that it would infringe their rights as patent holders, potentially leading to a loss in their profitability. In an email, Michelle Smolenaars Hunter, a spokesperson for GSK stated that “the provision of medicines is only one essential element in addressing healthcare issues in the developing world.”

Kiddell-Monroe dismissed the assertion that drug provisions and health infrastructure improvements are mutually exclusive. In describing the role of health infrastructure she said “of course we need all that but this is not an either or situation… you can have a beautiful health centre but if you got no drugs in it what does it mean.”

The Harper government has largely backed the research-based patent holders. Heather Hume, a spokesperson for Industry Minister Tony Clement, stated in an email that Clement is opposed to Bill C-393 because it “would revoke intellectual property rights.”

Yet, the WTO has since reformed its regulations surrounding generic drug exportation. Section 4 of the WTO’s 2001 Doha Declaration on the TRIPS Agreement and Public Health states, “While reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.”

Pharmaceutical companies like GSK have also claimed that they have donated a lot of ARVs to developing countries, rendering reforms of CAMR unnecessary. Elliot, however, responded that these “donations are not significantly enough in quantity to actually address the real needs of patients.”

For now, however, people fighting for increased global access to ARVs like Elliot and Kiddell-Monroe are hopeful that C-393 will pass in the Senate and fulfill its objective.