[Recorded by Electronic Apparatus]
Thursday, October 3, 1996
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[English]
The Vice-Chair (Mrs. Payne): Pursuant to Standing Order 108(2), in consideration of the topic of biotechnology, we have with us today and I would like to welcome the delegation from the German and Canadian Parliamentary Friendship Group.
I want to start off by saying we have a different means of interpretation. This is going to be a very informal meeting. We have in our interpretation booth the German interpreter, and to accommodate our member of Parliament from the Bloc, we have an interpreter sitting with him. Hopefully that will flow very well.
My warmest welcome, again, to the delegation from Germany.
Before we begin, I would like to do some brief introductions. I believe Mr. Hornung is conversant in English. If there are any other members of the delegation who can speak English, perhaps they can introduce themselves briefly by name and affiliation.
By the way, my name is Jean Payne, and I'm the vice-chair of this committee.
Can we start with Mr. Braun?
Mr. Ruldolf Braun (Member of the Bundestag of the Federal Republic of Germany): [Witness speaks in German]
Ms Hannelone Saibold (Member of the Bundestag of the Federal Republic of Germany): [Witness speaks in German]
Mr. Manfred Lischewski (Member of the Bundestag of the Federal Republic of Germany): Manfred Lischewski is my name. I am the chairman of the committee on economic cooperation and development.
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Mr. Lothar Ibrugger (Member of the Bundestag of the Federal Republic of Germany): My name is Lothar Ibrugger. I'm a member of the Social Democratic Party and have been a member of Parliament since 1976. I'm also a member of the European Parliament, and now I'm vice-chairman of our transportation committee.
Mr. Siegfried Hornung (Member of the Bundestag of the Federal Republic of Germany): [Witness speaks in German.
Ms Marion Caspers-Merk (Member of the Bundestag of the Federal Republic of Germany): I'm Marion Caspers-Merk. I'm a member of the Social Democratic Party and of the committee on environment, nature protection and nuclear safety. I'm also chairperson of the commission for protecting humanity and the environment.
The Vice-Chair (Mrs. Payne): You're a very busy lady.
I neglected to mention at the beginning that we are very honoured to have the ambassador with us as well this morning.
Ambassador, please introduce yourself. Thank you.
Mr. Hans Sulimma (German Ambassador to Canada): Thank you very much. I am the German ambassador, Hans Sulimma. That's all I have to say. Thank you.
Some hon. members: Oh, oh!
The Vice-Chair (Mrs. Payne): A man of few words.
All right, then, we'll just continue around the table.
Mr. Steckle (Huron - Bruce): I'm Paul Steckle, the member for Huron - Bruce riding in southwestern Ontario and member on the government side.
Mr. Anawak (Nunatsiaq): I'm Jack Anawak. I represent the eastern Arctic, Nunatsiaq.
Mr. Adams (Peterborough): I'm Peter Adams. I'm the MP for Peterborough in Ontario, and like the others on this side, a member of the Liberal Party.
Mrs. Kraft Sloan (York - Simcoe): My name is Karen Kraft Sloan. I'm parliamentary secretary to the Minister of the Environment. I've been a member of the environment committee since the beginning of this Parliament in 1993. I'm the member for York - Simcoe, which is a constituency north of Toronto, and I had a fabulous visit in Germany with my son this summer.
Mr. Knutson (Elgin - Norfolk): And she'd be a member of the Green Party if she could.
Some hon. members: Oh, oh!
Mrs. Kraft Sloan: Thank you.
Mr. Knutson: My name is Gar Knutson. I'm a member of Parliament. [Member speaks in German].
Ms Kristen Douglas (Committee Researcher): I'm Kristen Douglas. I'm on the committee's research staff.
Mr. Thomas Curran (Committee Researcher): My name is Thomas Curran. I'm also with the research staff of the committee. Actually, we're both with the research branch of the Library of Parliament, and we are assigned to this committee.
The Vice-Chair (Mrs. Payne): The other thing you don't know about me yet is that I'm a member of Parliament from Newfoundland. Also, I spent much of my career working for Volkswagen Canada.
The Clerk of the Committee: I'm Norm Radford. I'm the clerk of the committee.
Mr. Jac van Beek (Principal, KPMG Management Consultants): My name is Jac van Beek. I'm a consultant with KPMG, and I'll be presenting some findings of a recent study we conducted in the area of biotechnology and regulations.
Mr. Geoff Golder (Manager, KPMG Management Consultants): I'm Geoff Golder. I'm also a principal with KPMG Consulting, and I'll be presenting with Jac.
Mr. Tremblay (Lac-Saint-Jean): I'm Stéphan Tremblay, MP for Lac-Saint-Jean.
Mrs. Jennings (Mission - Coquitlam): I'm Daphne Jennings, the member of Parliament for Mission - Coquitlam, which is in British Columbia. I'm a member of the Reform Party. I have been literacy critic and seniors critic for the last three years, and I continue to be so, and I'm on the environment committee now.
Mr. Taylor (The Battlefords - Meadow Lake): My name is Len Taylor. I'm a New Democratic Party member of Parliament, first elected in 1989. I have sat on the environment committee here for two sessions of this Parliament.
The Vice-Chair (Mrs. Payne): Thank you all very much.
Now, Mr. van Beek, we will go to your presentation.
I would invite questions from the members of the German delegation. Also, our own parliamentarians will be having questions afterwards.
Thank you very much.
Mr. van Beek: I think I might be breaking with tradition by standing up, but it seems to be that kind of meeting.
The Vice-Chair (Mrs. Payne): It's that kind of day.
Mr. van Beek: Before I get started, I think it's important to explain the perspective we bring to this study.
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We were invited by one of Canada's federal government departments, Industry Canada, to answer a compelling question. There was an assumption that the American regulatory system governing biotechnology was superior to the Canadian version. It was deemed to be more effective and more efficient. That was the assumption going in. We were asked point-blank: ``Is this true and how so? What can we learn from the American system?''
Not only were we working for the industry department, which automatically gave us an industry perspective, but our history as a firm generally is strong in two areas. We do have a fairly strong environmental practice, but we also have a long track record in the research and commercialization aspects of biotechnology.
We also operate somewhat in the public policy realm, having been involved in the development of the national biotechnology strategy several years ago for the Government of Canada. I personally have spent a number of years working for the National Research Council on various projects, helping them to define their national biotechnology strategy and the strategies of five of their institutes engaged in research around biotechnology.
So that's our perspective. We were not asked to look at the societal impacts of biotechnology. We were asked very specifically to look at the biotechnology regulatory framework, with the fairly specific purpose of answering the question of whether or not there are lessons we in Canada can learn from the American system as far as the support of commercial activity is concerned.
I will make available some documents, and if you're interested, please, at some point this morning, come and grab them from us. They're just a few publications to give you an idea of the kind of work we do and where we fit into the broadening landscape that is becoming the biotechnology sector. A typical publication is this guide, Blueprint for Growth. It's a guide that biotechnology firms are encouraged to follow in developing their business. I also have here, if you want to take notes, copies of the slides I'll be talking about. Possibly I could just start handing those around now.
The Vice-Chair (Mrs. Payne): Sure, thank you.
Mr. van Beek: To reiterate, our perspective was guided to a large extent by the mandate we were given, which was to isolate key features of the American regulatory framework: those elements that are considered to be more supportive of innovation and commercialization and those that could be applied to Canada.
Our journey included an extensive review of the literature. We had a fairly extensive interview program that involved a lot of the original architects of the American system, including two members on our team. We also engaged in four separate case studies, where we looked at four specific cases where a firm had gone through both countries' regulatory approvals processes.
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Finally, I don't know if these names are familiar to any of you, but both Henry Miller, a former FDA official who is now out of government, and Bruce Mackler, who is now with Fenwick & West and was the co-founder of BIO in the United States, were members of our team.
I want to start off with a common understanding of the context within which the study was conducted. This is the framework we were looking at. There really are not only regulatory considerations but market considerations that have to be assessed as a product starts its process slowly but surely through the regulatory approvals process.
From a producer's point of view, it starts with conceptualization and some understanding that there is a growing, crying customer need out there. From a regulatory point of view, this constitutes nothing more than a contained experiment. It's activity within a fairly controlled environment.
As the producer moves from conceptualization towards development, of course the equation starts to change. They are now involved in clinical or field trials, depending on the nature of the application, and the focus becomes product approval. From a market perspective, it becomes an equation of performance expectations. There's a need. Is the product starting to demonstrate that it can in fact deliver on promised performance?
Then we move into full commercialization or launch. The regulatory hurdle then becomes labelling, which we did not look at in this study. We were asked not to look at it. But the market considerations are numerous now that the product itself is in the marketplace.
That was the first context. The second context - and this is something that emerged throughout the study - is there is no absolute when it comes to regulatory development. It is very much a function of the extent to which the effects of a technology are known or unknown.
Quite often we've found that as you track a series of regulations, you start at this very extreme end, and as familiarity increases, you start eventually to see a dramatic decrease in regulatory tools - laws, regulations, etc. - that govern the oversight of a product. Eventually you can tolerate guidelines as opposed to a new law or a regulation. This was an important context area for us as well.
We also found that public confidence plays a very big role in how quickly you move along that curve. Generally the equation that emerged was this: where there is low public confidence, there is a predictable adverse political reaction, which translates into usually two related trails. The regulation becomes very averse to risk - zero tolerance, if you will - and something else is emerging. We're finding there is tremendous debate - and possibly our German guests could enlighten us on this - on the fourth hurdle, the need for socio-economic review, as well as the traditional focus on safety and efficacy.
The inevitable outcome of moving down this left trail is a loss of competitiveness. The costs of approval become prohibitive, the timeframes become unbearable and eventually the investor decides this is not in fact such a promising area. Eventually there is a fairly significant retardation of the development of an area.
Of course on the high side - and this is the side Industry kept pushing on us, and we recognize that while in some cases there's merit to it, it doesn't always hold - where there is high public confidence, you tolerate and eventually accept risk-based assessments, recognizing that not in all cases is there risk.
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Eventually, if you can gauge the inherent risk in a product, you can afford to streamline your regulations. Then, as has been the case especially on the health side of American regulation, you can also introduce all sorts of interesting techniques, such as points to consider, that circumvent the need for discrete laws.
As many Americans we interviewed would point out, this lays the groundwork for an attractive climate for not only product R and D but also investment.
One final area that.... It was interesting; we eventually had to call these ``beliefs''. They're very pervasive in many of the discussions we had. We don't know if they're true or not. In fact they're not provable at this point. There are equally compelling arguments on both sides.
The first area is whether or not new applications of a discrete technology are at play. Is biotechnology in fact a brand new, discrete technology. There are those who would argue it is and there who would argue that in fact forms of biotechnology have been around for, in some cases, thousands of years.
We did find that many of those seeking funding were playing up these arguments as a means of attracting funding to fairly extensive research programs. So, if you will, it was convenient to perpetuate this belief.
There are others, though, who would hold that the unknowns outweigh the knowns. There is not enough known about biotechnology and its impacts for us to move down the path of product-based risk.
There are others who would hold that novel and dangerous organisms will be created. We were able to view quite a lot of the literature from various different groups that would support that view. We also heard that non-pathogens will be transformed into pathogens. Again, there are arguments on both sides.
Finally, we heard the belief - and this is almost a verbatim quote from someone in the EPA in the United States - that all technology is intrinsically dangerous. Yet we found there are arguments on both sides.
So the lesson that came out of this surfacing of these underlying beliefs, depending on how your belief system comes together on these six points, goes a long way towards determining how you view the regulatory framework that is most appropriate for biotechnology.
In fact, if I could just add one final piece, it would appear there is a slightly different model operating in the health and, in some cases, agricultural sphere from that operating in the environmental sphere. To a large extent, as we argue in the report, a lot of it stems from the fact that there are probably more unknowns in the area of environmental impact than there are in the health and agricultural areas.
Mr. Knutson: Is this in the U.S. or in both countries?
Mr. van Beek: I think it's the case in both countries. There's an interesting parallel in the attitudes in both countries.
We had to understand how the industry itself is coming together. We found - and this was the basis for the claims that the American regulatory system is operating at a fairly high degree of efficiency - that the regulatory system in the U.S. has gone to great lengths to support the development of the industry. There are all sorts of special features inherent in the American system that have promoted the growth of the industry.
The first feature we came across in the industry itself was that we are now at a phase in its development where scientific discovery is outpacing commercialization. There's a huge backlog of research wending its way towards commercialization. They now perceive that in some areas they are approaching a real crunch. There's a huge backlog, and it's growing fairly dramatically.
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There's an ongoing consolidation taking place in the industry. There have been about 15 or20 years of fairly significant investment taking place throughout the United States.
It has now come to the point where various forces are starting to squeeze smaller companies. The investment climate is a little more cautious. There's more reluctance to put huge long-term dollops of investment funds into biotechnology. There is a demand for greater returns and shorter timeframes; I think that is the most appropriate way to express it.
There have been a few high-profile failures that have scared investment communities. So there's more caution now than there was five or six years ago.
The other side of the equation is what's happening in the pharmaceutical industry. As it starts, and continues, to consolidate, they are constantly looking for new innovations. As it turns out, the 20 years of investment in research and biotechnology is in fact yielding some very novel and innovative approaches to some age-old problems.
We now are witnessing the continued.... I won't yet call it ``marriage'' at this point, but there's certainly a lot of interest between cash-rich pharmaceutical firms and cash-starved generally small to medium-sized biotechnology firms. This phenomenon is probably most pronounced in the United States.
We also found that the pace of technology development is having an impact on the ability to regulate. The very simple truth is that introducing a new law in the United States is a five- to seven-year proposition. The pace of technological change at this point, if commercialization is an objective, can't tolerate that type of moratorium.
The issue in the United States has really circumvented whether or not five to seven years is an issue. The issue now is time lines for approvals - that is, a product that already has been submitted for some type of oversight. The question now is how quickly we can get an answer.
Again, as the volume of applications continues to rise, the pressure for approvals or for greater efficiency in that approval process also rises with it. You may be aware of some recent, fairly sweeping changes that have been not only proposed but in some cases adopted in the FDA - particularly the FDA, because this is where the greatest pressure lies. They have in fact looked very carefully at their approval processes.
When we actually looked at the two frameworks, we found that the mechanics of the two frameworks are fairly similar. They both share philosophies - at least stated philosophies - and as we tried to point out in our work, in many cases we adopted, although not necessarily verbatim, a lot of the features of the American system after they had gone through their development process.
We have similar regulatory agencies with fairly similar mandates. We found that while there are probably more statutes, you can find parallel examples of the statutes, regulations and approval processes in the two countries. We found that both countries are struggling with how to deal with environmental regulations. We have a theory on that, which I'll bring out in a few minutes.
There are differences. ``Events'' is probably the area that showcases it most dramatically. In the United States there was, and continues to be, a very visible scientific debate. That debate, if you recall from any of your history, raged fairly dramatically in the mid-seventies in the United States, and led to a lot of voluntary guidelines. It continues today in the whole area of bioethics.
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There are a lot of concerns in the United States about how to deal with the ethical issues around biotechnology. Fairly typically, they've created a committee on bioethics. We were witness to not only a fairly public debate but also eventually to public participation. That of course was at their discretion. I'm not sure the interest level was that high, but the offer was extended to participate in the review of NIH-funded research applications.
A very dramatic difference between the two systems is that there is in fact court support, if you will - if I can use that term - for the patentability of life forms. There is a precedence now in the United States for patenting life forms, a fairly famous court case in biotechnology history, Diamond v. Chakrabarty.
In the United States, unlike Canada, they do have a very strong - some would argue united - industry voice. There is a very strong industry association, the Biotechnology Industry Association, representing a fairly large number of biotechnology and biotechnology-related firms. That is different from in Canada. We have associations, but they tend to be much more fragmented.
Finally, from what we did learn through our case studies - and these are through the one-on-one conversations and discussions with people in industry - we felt confident suggesting that Canada offers greater potential for flexibility but with more data requirements.
The American system tends to be very much of a check-off system. The Canadian system tends to be more of a review of the circumstances, and then a decision on how the review should proceed. It's a much different approach. We tend to ask for more data than they do in the United States, but not in all cases. It all depends on whether or not there's a sense that what we are dealing with is an inherently risky product.
The American advantage, if we look at it strictly in terms of supporting competitiveness.... They have a very complex and confusing environment. In fact, it's much more complex than the Canadian equivalent. They have more regulations, they have a longer history, and they have the federal, plus 50 states, to deal with.
Mr. Knutson: Why is that an advantage?
Mr. van Beek: We thought when we looked at the American system we wouldn't get this answer. We found it overly complex. So that's not where the advantage is. We did find that, despite this complexity, there was actually quite a lot of support for competitiveness in biotechnology.
Mr. Golder: In some respects, it's the case that it works despite itself. There is a strong intent to make it work.
Mrs. Kraft Sloan: But when you say ``advantage'', whose advantage is that? Is it to the advantage of the public interest or that of industry?
Mr. van Beek: From an industry perspective and in support of competitiveness, the American system appears to work. I don't think the word is ``efficient''; that's not the right word. But it does appear to be able to support competitiveness or the launching of innovative products more effectively than is the case in Canada. It's not because of the regulations, but other features in their system seem to support it.
Mrs. Kraft Sloan: But hasn't Porter come out with studies that say a strong regulatory environment supports innovation and competitiveness? Why would that refute that, then? Why would that be ``despite''? Isn't that in support of what Porter said?
Mr. Golder: I think it's more the case of making the point that, from an external perspective, it's a complex system. Companies have to deal with multiple agencies at both federal and state levels.
Mrs. Kraft Sloan: It's not that there are more regulations but there is more interaction.
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Mr. Golder: There are more agencies to deal with. In Canada there is the single-window approach, so one agency or department has the lead responsibility and handles it through there, and it's federal.
The Vice-Chair (Mrs. Payne): I wonder if we could continue with the presentation and go to questions later.
Mr. van Beek: The features of the American system indicated to us that they were a little more supportive of the notion of supporting competitiveness. They adopted very early the stance that they would work within existing legislation as opposed to creating new legislation. They have been tinkering with features in the approval process; for example, where warranted they have reduced prior notice time periods from 30 to 24 days in many cases.
Within their system they have demonstrated support for intellectual property protection. I cited the earlier court case. They have a system of tax credits that supports the development of biotechnology companies. They also have fairly attractive export-import legislation, which has just recently been amended again to make it easier for American companies to export prior to American approvals under certain circumstances. They have a well-developed set of voluntary registrations and notifications in the United States. They have used features such as points to consider as a way of circumventing, if you will, the need for new legislation. It's a question of interpretation based on experience.
Over the last one or two years they have been constantly trying to improve efficiency even further within the agencies, the lead agency in this case being the FDA. They have tried a couple of different ways to translate product-based risk assessment into features of their system, so there is the ability to slot an approval into a much more efficient stream than going through an entire approvals process. They are also re-engineering the approval processes themselves. One feature many of you may be aware of is the concept of charging user fees and then reinvesting the money in increased resources - i.e., reviewers.
They are also making extensive use of exemptions and expediting low-risk applications. In the past they were the first to introduce the idea of a coordinating framework so that there was a common framework for all regulations in the country across various agencies.
One of the underpinnings of the American approach is that there has been quite a strong scientific consensus on the risk qualities of various products. There is a general statement by the National Academy, for example, supporting the safety of biotechnology, with an underlying assumption that in certain cases.... It isn't a blanket statement. They are saying that biotechnology in and of itself does not pose the risk; it's the application that should be considered. This is based on fairly extensive experience now with a number of applications, especially in FDA.
They also have a fairly extensive number of existing regulatory mechanisms that have protected human health and the environment while protecting innovation. What they are now doing is folding biotechnology into that existing framework. At this point they have pointed out that biotechnology in and of itself does not pose unique hazards. That's coming from the scientific community. On that basis they felt there was no need for a new regulatory paradigm; they would work within the existing one.
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In the United States, as I mentioned earlier, the role of industry is well articulated. It is not the case, at least to the same extent, in Canada. Not only is it highly concentrated in one large association, but they do play a very specific role in assisting regulators through the development of various positions on issues. They do provide a strong voice in ongoing public debate in the United States, and they do, I think, provide an industry perspective to regulators. It's providing at least the potential for some balance between issues of safety and efficacy and issues of commercialization.
The United States has had some very visible champions and that has made a difference. The White House has taken a very direct role in making key appointments to senior regulatory posts. They have in fact encouraged the growth of biotechnology in a product-based policy versus process-based regulations.
Finally, it is very hard to measure whether there is public confidence and whether it's different in the United States from in Canada. There are signals that it might be higher, but we're not sure, the signals being that there has been and continues to be public debate. Also the White House, by providing endorsements, whether for specific policy statements or through the appointment of senior people, is sending strong signals that somehow biotechnology is being taken care of. To that extent we got a strong message that the confidence of the public was reasonably high.
We found a slightly diverging point of view when we looked at the various surveys that measure public understanding. I don't think there's much difference between Canada and the United States. The level of understanding of the issues and the technical aspects of biotechnology remains fairly low in both countries.
In summary, if we are to put forward that there is an advantage in the regulatory system in the United States, we would put forward these points. They do allow the patenting of life forms, and that provides impetus for innovation because commercial activity stimulates investment. They have a very strong investment environment that's based not only on the patenting of life forms; because they are part of their regulatory process and have influence over the eventual path that a regulation or a regulatory framework takes, they tend to be more confident about placing some of these fairly significant investments. They do have a very strong, united industry voice in biotechnology. They have very visible leadership, both in government and in industry. I think it's fair to say they have had, and continue to have, a much more open and sustained public debate in the American system. And of course, a lot of the confidence in biotechnology is based on the depth of scientific capability in the United States.
However, there's always a good side to these stories. We're not necessarily sure that Canada must adopt the American system willy-nilly.
Mr. Adams: Good.
Mr. van Beek: I was waiting for that.
One of the interesting features of the American system is the approach that seems to have emerged in biotechnology, not unlike other sectors, that there is an appreciation for the role of the marketplace. I think the underlying assumption is that if something goes wrong, there is some recourse. They're a very litigious society. They will sue if something goes wrong. We tend to have more faith in our institutions' ability to protect us from that eventuality, and I think as a result we have a much different philosophy. But it's interesting how in the American system that underlying faith in the marketplace, and the power of the marketplace to smell and eventually correct an injustice, seems to drive their system.
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What we did find in Canada was that while we've both adopted fairly similar frameworks, in Canada we're more consistent with our policy intentions than would appear to be the case in the American system. They say product-based risk, but we found all sorts of examples where that isn't the case, and we bring out one example of the USDA.
We do have greater potential for flexibility here. It needs more transparency and consistency, but the potential is there. We have a smaller group of regulators. They are aware of each other and they keep tabs on developments in each other's respective areas. We have adopted the single-window approach, which is a big potential advantage. As a result of this, the potential exists to enhance Canada's competitive position based on our regulatory system.
For what it's worth, we did offer some recommendations, and I think this is probably the end of it, mercifully.
We suggest that if Canada were to emulate the American system to any extent, there would have to be the fostering of some leadership, both in industry and politically. Right now there are a couple of champions, but there is no strong leadership in this area.
We suggest, and this was a recommendation to the Minister of Industry, that there at least be some promotion of the best practices being adopted in the U.S. We think some lessons can be learned from the nuts and bolts of the bureaucratic machinery that supports the approval process.
We endorse the acceleration of the application of equivalency and some reciprocity. We like the word ``equivalency'' better than ``harmonization''. We chose that word on purpose. ``Harmonization'' tends to imply a sameness and we don't think that's what we're looking for. We're really looking for the same results, not necessarily the same process. With reciprocity, we came to appreciate fairly directly that when we talk about reciprocity to an American, it usually means ``you adopt what we have'', end of equation.
Internally, we do think ``harmonization'' is probably the right word. Across the provinces harmonization does make a lot of sense so that there isn't a federal regime and ten different provincial regimes.
Finally, we felt there was a strong case to be made for enhancing public understanding of two aspects of biotechnology. One is the technical limitations, the technical promise, if you will, of biotechnology. The second is a greater understanding of the regulations that govern the application of biotechnology.
I believe that's it.
The Vice-Chair (Mrs. Payne): Thank you very much, Mr.van Beek, for that very interesting and in some ways provocative presentation.
We have, as we expected, a number of questions around the table. I would like to start with the opposition.
I notice that two of our members had to leave. Mr. Taylor is still here. Would you like to begin the questioning?
Mr. Taylor: I have a couple of questions, but in the interest of time I'll make it short.
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I come from Saskatchewan. I had the opportunity with the agriculture committee a month ago to tour Innovation Place in Saskatchewan, which is certainly Canada's leading biotech centre. I was impressed by a number of things that were happening there, including the amount of technical research and scientific work.
They were obviously concerned about regulation, but they were also well aware of one of your first points: that unless there is public confidence in the work they are doing, they will not attract investment and they will not be able to achieve their goals. Therefore, they understood the value of regulations. Although they were concerned about the timeline involved in these matters, they wanted to ensure that there was a set of regulations that not only they understood and could work with, but that the public had confidence in.
The more I saw going on there, the more concerned I got. Industry was playing more of an investment role than the public interest was. Because industry was driving the development of product, the public good was being pushed aside. If there is public confidence today, the more that industry is involved and the public presence is pushed away, the greater the shift will be against the public confidence in the system. We don't trust the corporations. We don't trust the people who are paying to have products made for us so that they can make more money.
The Vice-Chair (Mrs. Payne): Could you speed up the question a little in the interest of the other members here?
Mr. Taylor: Your recommendations today seem to stress the importance of industry involvement. In your study, how much did you look at the role of public-funded research and public-supported intervention in the regulatory process?
Mr. Golder: Within the terms of reference we worked with, we weren't specifically asked to look at questions of the role of public and private sector investment in research. Certainly it's a phenomenon and the industry interest has led to significant increases in the amount of industry research.
In terms of public acceptance, the contact we had with industry showed that industry wants an appropriate regulatory framework. It certainly wants to see and support public debate and public understanding and acceptance of the products. Then it's a matter of judgment as to the extent to which there is an appropriate balance between industry interest and public interest in formulating the regulatory framework.
Mr. van Beek: I would just add two perspectives to that. First, a great deal of research has to support a decision, first of all, whether a review is necessary. Once a review has been deemed necessary, there is a requirement for research to support various claims being made about safety, efficacy and impacts. So to a large extent the research is being used. It's necessary.
Let me shift it a bit. Another interesting dilemma has emerged. You mentioned what you saw occurring in Saskatchewan. We shouldn't lose sight of the difference between the acceptance of biotechnology in the health domain, in the agricultural domain and in the environmental domain.
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It's probably safe to say that up until now, most of the applications in the form of products that have gone through the regulatory process have been of primary benefit to producers as opposed to consumers. So a producer has a tomato with a longer shelf life. A producer in many cases is able to enjoy greater milk yields from dairy cattle. That has been the focus of ag-bio up until now.
On the health side, however, the targets of therapeutics especially tend to be more life-threatening. As a result there seems to be a much higher acceptance of biotechnology applications in the health field up until now. Most people can view those targets as being worthy, and if biotechnology can help, there tends to be greater acceptance.
We found that in the environmental realm there was not as much scientific support of the impacts on the environment. As a result, to go back to your question, the environmental research that should be supporting claims isn't there. The level of support for environmental research is not as high as it tends to be on the health or even the agricultural side. So there's a relationship there.
The Vice-Chair (Mrs. Payne): We'll go to Mrs. Kraft Sloan, then to Mr. Adams andMr. Knutson. I also want to invite our guests from Germany to indicate if they want to ask some questions. We will be glad to accommodate them.
Mrs. Kraft Sloan: I share Mr. Taylor's concern about the public interest. I guess it's always my view that competition and innovation are better served in the long run when the public interest is served as well. There are associated problems and externalities that aren't brought into some of these costs vis-à-vis social, environmental and health externalities.
You had also been saying that the position within the regulatory life cycle was based on public confidence. There's another factor as well, the flip side of public confidence, which is the level of industry maturity and industry responsibility. If the industry is functioning as a good corporate citizen and is willing to truly self-regulate, then you can have higher public confidence and a regulatory system that reflects that. If the industry constantly needs to be watched because it tries to get away with things, then you need more emphasis on command and control. So that's the flip side of the public confidence.
I do have a specific question that relates to the beginning of your presentation and it's about labelling. You said you didn't look at labelling.
Mr. van Beek: We were asked specifically not to look at the labelling issue.
Mrs. Kraft Sloan: The labelling issue came up in some hearings we had last spring around the biotech issue. It is a very contentious and controversial issue.
I suggest that public confidence increases when the public is able to look at a product. When a product is properly labelled, public confidence does increase. But the biotech industry seems to be very averse to that. I am just wondering if you have any comments, if there are other studies you have done, or if you could tell us why you were asked not to look at labelling.
The Vice-Chair (Mrs. Payne): Mr. van Beek, this is an unusual request, but our guests from Germany have to leave for a meeting with the minister in ten minutes. Before you respond to that question, Mrs. Caspers-Merk has a question. We would like to entertain her question.
Ms Caspers-Merk: I don't want to take part in the debate in general, but it would be very interesting for us to know what your regulations are for labelling and if you are introducing public consensus. I think this is one of the most important questions.
I would say to the two gentlemen that if you are asking the wrong question, you are getting the wrong answer. It's not the question for me how the regulations work, but whether we can get public consensus on what we want, which part we want in biotechnology, and which parts we feel we should not touch. We have a vivid debate about bioethics in the European Parliament and within our Europarat.
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The Vice-Chair (Mrs. Payne): Perhaps we can get an answer to both sides from both of you.
Mr. van Beek.
Mr. van Beek: The simple answer is that you're right. It's a very contentious issue. It probably falls to a large extent in the grand landscape of the bioethics debate currently taking place.
We weren't asked to look at that area and we didn't. Rather than get my fingers chopped off for an off-the-cuff remark, it's probably wisest for me to say that I'm not qualified to answer the question.
Mr. Golder: The other point is that at the time the work was undertaken, 18 months ago now, the actual debate around labelling had not started getting a lot of attention in Canada. But the signs were there. It was enough to just try to look at what was happening within the regulatory framework in place then, as opposed to getting into a more hypothetical discussion about what it might look like in the future.
Mr. van Beek: This is maybe a sideways attempt to at least provide some insight, because we were privileged enough to talk to some of the original architects of the American system.
The one very strong feature that kept coming back again and again, and it is inherent in the American political system, is that from about 1975 there has been ongoing debate about biotechnology. To a large extent it has involved scientists and academics and in some cases regulators, but the initial alarm bells were sounded within the scientific community itself, through the Asilomar conference and eventually through the NIH. They were the ones to develop guidelines for the safe handling of research in this area. It sends a very strong message to the American public that those who were involved have taken that responsibility you spoke about.
The tendency in Canada has been to let the Americans do the dirty work and then we'll adopt it, which we have done in the case of guidelines and in the case of our framework. The result is that in Canada we don't have the same type of debate. The same sort of people are not involved. We tend to have the regulators fighting amongst themselves and eventually coming up with fairly clear approaches to various issues. The American system is much more adversarial, and one of the adversaries happens to be the public.
The Vice-Chair (Mrs. Payne): I'm going to interrupt here. The researcher has a comment on the labels.
Mr. Curran: We did hold a session on labelling. There is no requirement in Canada as yet to specifically label foods containing a component that is genetically engineered - for example, genetically engineered tomato, corn or whatever.
Canada is working through the Codex Alimentarius Commission of the United Nations to participate in the development of an international policy on labelling. At the same time, there is no prohibition for a manufacturer to say on a label that this product does not contain genetically engineered food, for example. Voluntary labelling is also acceptable.
The Vice-Chair (Mrs. Payne): Thank you. Mr. Adams.
Mr. Adams: Thank you. I'm sorry that you have to leave, and I want to welcome you here myself. I thought the presentation would be the basis of some dialogue with us, so I wonder if you could look at pages 7 and 8 of the material provided.
When you introduced yourselves I heard that we have people with agricultural interests, people with environmental interests, people who have experience at the European level as well as in Germany.
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This is with regard to public understanding and public confidence in these matters we're discussing - public understanding of biotechnology itself and public understanding of the issues we're trying to discuss, the ethical issues and the regulatory issues. I hate to mention it like this and I don't mean to be flippant, but given mad cow disease, of which we have heard.... There is a spectrum of things in biotechnology in people's minds. Where in this chart that we have here does the German public lie? I'd be glad to have a response from agriculture or environment or wherever.
Ms Saibold: [Witness speaks in German].
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The Vice-Chair (Mrs. Payne): Thank you.
Mr. Hornung: [Witness speaks in German].
The Vice-Chair (Mrs. Payne): Thank you.
I wanted to ask if there was another view from any of the other delegates. If you would like to do that, please do.
Ms Caspers-Merk: We don't have the time. We don't want your Minister of Foreign Affairs to have to wait for us.
I think you first have to strictly divide biotechnology and genetically altered things. Biotechnology means from beer brewing up to the cleaning of water, so it's a very wide range.
What we are talking about, what our debate is on, is the bioethics convention and on the side of genetically altered crops, such as canola or something like that. That's highly controversial in Germany. Our government is intending to get a consensus within the European Community for a sort of labelling of these things so the consumer can decide if he wants it or not.
Mr. Adams: Madam Chair, briefly, I wonder if there are any marked differences in the European Union on these matters. We understand this range. We have been looking at the issue of biotechnology for some time, but is there a marked difference between countries in Europe?
Ms Caspers-Merk: There is a marked difference. You just told us about that small painting there. In Germany, we are very aware of that. We are on the left side of that picture. I think that in other states of the European Union they are more on the right side, but we have a debate about that within the European Union.
Mr. Adams: Thank you, Madam Chair.
The Vice-Chair (Mrs. Payne): Thank you. My thanks to the delegation from Germany. We hope that the rest of your stay will be enjoyable. I know that these are hectic visits. Again, we regret that we haven't had more time with you. Thank you very much.
To the ambassador, thank you for being here this morning too.
For the remaining part of our meeting, we'll go to our normal type of forum. We will have an official transcription of this.
Maybe Mr. van Beek can now continue with his answer to the question that was raised by the parliamentary secretary, to whom I think you were responding. Did you get a full answer?
Mr. van Beek: I think I answered.
The Vice-Chair (Mrs. Payne): In that case, Mr. Adams, did you finish your question?
Mr. Adams: Very briefly, I did that deliberately because I thought we should involve -
The Vice-Chair (Mrs. Payne): Okay.
Mr. Adams: On the other hand, I know you focused on Canada and the U.S., but did you in fact have any cause to look at other jurisdictions? I know the focus of your study. You must have some sense of what's going on in other parts of the world.
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Mr. van Beek: Again, we weren't asked specifically - this was to be an American-Canadian comparison - but yes, in our wanderings, we got glimpses of the European debate. We got a fairly radical perspective, but then an admission that in fact there are lots of other points of view.
It's interesting that, for what it's worth, the American approach to the whole issue of bioethics has been to set up a presidential committee. Again, this is very much in keeping with how they've dealt with the various controversies surrounding biotechnology as it's wended its way from the laboratory to the shelf.
All the way through this process, they have at various points in time set up presidential committees and made some key appointments that got the administration's point of view translated from broad policy into actual operational features. So they're doing it again.
The Vice-Chair (Mrs. Payne): Mr. Researcher, I think you wanted to add something.
Mr. Curran: I can give a little information. I'm hardly an expert in this area at all.
There's a fundamental difference between the German approach to genetically engineered organisms - biotechnology, if you will - and that of Canada. Canada and the United States,I believe, both use the genetically engineered product of the process as the trigger for regulatory action. It's the perceived risk or the supposed or possible risk of the product itself.
In Germany, however, the fact that it is a product of recombinant DNA technology is the trigger for regulatory action. In 1990 they passed the genetic engineering law, and if members think back,I think they will remember that William Leiss made a proposal somewhere along those lines for Canada, and it's one of the things we'll be discussing on Tuesday at the round-table.
Mr. Adams: It seems to me that in their report they do actually imply the processes involved in these product analyses, as I read the report.
You mentioned the presidential council or whatever it is. It seems to me that openness and public awareness go hand in hand. We have spent a fair amount of time, and this is a very modest forum, I suppose, but I do tend to think that our openness in the end will be an advantage. Is that your sense? Also, are we as open, in this particular sense, as the United States is?
Mr. van Beek: We might be as open, but we're not as public as they are in the American system. They have fairly strong spokespersons on all fronts. There are and have been fairly strong public interest voices in the United States. They have very strong political spokespersons, usually a president or vice-president, for example. They also have a very strong industry voice.
Their system is evolving through this constant clashing of points of view. I don't think industry necessarily gets away with the brainwashing approach, which was implied by our guest. They don't get away with it for long. Eventually the system has checks and balances in it because the parties are fairly well informed. They tend to all draw on the same base of publicly available scientific knowledge, and they use that, of course, to spin their particular points of view on it.
I find they tend to be much more open and public in the approach. It's not a small committee. It's an ongoing debate and has been going on in various spurts for the last twenty years.
Mr. Adams: Thank you, Madam Chair.
The Vice-Chair (Mrs. Payne): Mr. Knutson.
Mr. Knutson: I'd like to ask a question that admittedly right up front wasn't part of your terms of reference, but just as somebody who works in the field.
Before I do that, I want to thank you for your presentation. I found it cogent, to the point and relevant. I appreciate the quality.
As to this whole issue of public confidence and the White House being able to act as a leader in helping increase public confidence and maintain it, do you think one could make an argument that if the White House is perceived to be an environmental advocate in other areas - let's say climate change, for example, or through the EPA - that would give the executive a certain credibility such that when it spoke out on biotechnology, your average citizen would be prepared to take some confidence in that?
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If that's true, do you think it's true that if people are reading headlines in The Ottawa Citizen that governments aren't doing a very good job in terms of regulating polluters in Canada, this anxiety might translate to when they go to the grocery store in that they're afraid to buy BST milk? This is just a general lack of confidence in the whole regulatory regime. I know you don't have any evidence to support it, but does it sound reasonable?
Mr. van Beek: I think there are generally many voices in the public debate. There are a number of different influences that will move toward the shaping of personal opinions. Of course, unfortunately, we either suffer from not enough information, misinformation or too much information.
What tends to happen is that we then start looking for sources other than the scientific community, for example. In the American system, the position of the president is listened to. I can't speak for the American system, but I know that in my dealings with my American colleagues, they aren't all unified on their points of view either. They're very critical of their own system. It ebbs and flows. In one administration, you may find very strong support for biotechnology. Four years later, you may find that in fact the door is closing pretty rapidly on biotechnology. It does ebb and flow; it's not a constant.
Mr. Knutson: My point though is around the issue of public confidence. We had some evidence last week that the EPA is historically much more rooted into the American consciousness. It's much more present. A person made the point that it's much more effective. It's in the face of businesses. That's why you hear about it in the news.
Is that an example whereby if the administration in the U.S. is perceived as taking an active role in protecting the public interest in other areas of environmental protection, some of that credibility can translate and be useful in the area of endorsing a particular regulatory regime for biotechnology and having people take some confidence in that?
You're shaking your heads, but that doesn't appear on the record.
Mr. van Beek: You should indicate which way they're shaking, for the record.
I think the point I'm taking from your question is that there is a halo effect. Leaders don't create situations; they tend to read situations and then position themselves appropriately. I think there is a sense at least in the president's office that biotechnology is a good cause to stand in front of, as is the environment and issues of the environment.
I don't know if you can reconcile the two. I think they are trying to reconcile the two, depending on whose point of view you're listening to. But there is a halo effect. If there is a certain level of credibility established in the president's office, then there's a general acceptance of many things that come from the president's office. If the question is about supporting the environment and helping support biotechnology, it's probably so.
Mr. Golder: It's not just a single event or source that you could speak of. There are these combinations, and I guess the very much more public role that agencies like the EPA and FDA play in the U.S., compared to the equivalents in Canada. This means that there is this high level of publicity that in turn may be translating into something that says to the public there's somebody there who has my interest at heart, or has that responsibility at least. It's a little more muted in Canada. It's very hard to say that we have these same combinations of events or public positions that contribute to it.
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Mr. Knutson: I just want to make it clear that you're saying we don't have an equivalent outspoken EPA or FDA here.
Mr. van Beek: We don't have the same system here. An adversarial approach forces extreme points of view into a public forum. We don't operate the same way. I'm not convinced that we could adopt the American system.
The Vice-Chair (Mrs. Payne): Our researcher had a question. I'm going to entertain his question first. Then we'll go back to Mrs. Kraft Sloan and Mr. Taylor.
Mr. Curran: I had a couple of questions.
One of the advantages you identified for industry in the U.S. system was the patenting of life forms, but you didn't mention what the situation is in Canada. I wondered if you could summarize that, and whether there is any possibility that the Canadian system could move toward the patenting of life forms. The only legislation I can think of is the Plant Breeders' Rights Act, which is a quasi form of patent protection, I guess. Could you perhaps enlarge on that?
Mr. Golder: Interestingly, the U.S. doesn't have a plant breeders' rights act, but it does allow -
Mr. Curran: No, but they have the Plant Variety Protection Act over there.
Mr. Golder: Yes. It's a little hard to answer, I guess, in part because the intent of our work in this study was more to look at the agricultural and biotechnological sorts of applications, but human health and bio-pharmaceuticals did enter into it.
I think that we weren't working at patenting because in a sense the issue was really put aside for the purposes of our work.
I suppose some circumstantial evidence would show that a lot of Canadian companies that are doing research in this area would tend to focus their patenting interests, as well as the registration of proprietary interests, on the U.S. In theory, that may lead to a greater level of investment subsequently by those companies in the U.S. as opposed to Canada, but that's very circumstantial.
Mr. Curran: Are you aware of whether any Canadian companies or inventors have made applications for patenting life forms and have been refused?
Mr. Golder: No, I have no information.
Mr. Curran: No information on that.
I have one more question, if I may. You made reference to a harmonization of regulations between provincial and federal governments as being a desirable development in Canada. I'm wondering what provincial regulations apply to the various categories or sectors of biotechnology products in Canada. We've only heard so far about federal regulations.
Mr. Golder: It's relatively narrow. I guess the best instance I can think of here is with bio-pharmaceuticals or pharmaceutical products, which undergo a federal review process, just as it is with other products. But then once the product is approved, there's a provincial system with the provincial formularies, which in a sense is another review and regulatory hurdle. It's very much becoming an economic justification type of hurdle. It's not an efficacy and safety question, which is determined by Health Canada. Then the provinces determine if it is worth their while to put this product on their formularies. Does it have social and economic benefits to hospital patients, for instance?
Mr. Curran: I suppose the same thing could happen with registration under the Pest Control Products Act. Should a genetically engineered organism be registered under that act, a provincial counterpart legislation could then accept or ban that particular product.
Mr. Golder: Yes, it could. Or it may put controls or limits on the use at a provincial -
Similarly, in the environmental area, at a federal level we can only review production or import, but not actual use. Use and disposal is a provincial jurisdiction.
Mr. Curran: Thank you very much.
Mrs. Kraft Sloan: A lot of what happens in the area of biotechnology is obviously driven by industry. They think they can make some money out of it, whether it's in the pharmaceutical sector or the agricultural sector.
In the research you've done, have you been able to identify whether the public debate, or any kind of debate, around this issue has focused on whether we need the product, period? Why do we have to bring the product on the market just because it will make money?
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I think of rBST as a good example of that. When you have one of the best dairy-producing industries in the world, and indeed in my riding there are a lot of people who make most of their money from breeding high-quality dairy cows.... We don't have a deficit in milk production in this country. We have a milk control board that controls the amount, and often we have surplus problems.
So given the downsides to some of these questions and given the huge cost for the public and governments to entertain regulations and analyses of these particular products and processes, what about asking the first question: Do we need this product? I'm wondering if this debate ever occurs.
Mr. van Beek: In the American system, the assumption is that the proponent has deemed fit scads of money invested in the development of a process, that in their deliberations prior to embarking on this fairly expensive approval process, they've also established that they feel they can get some return on that investment.
The assumption in the American system is that the market needs are known prior to entering the regulatory system. So they don't ask that question.
In the Canadian system, I don't think we have enough experience yet for us to do otherwise. There has to be an assumption built in that an industry proponent feels there is a market justification, not only for the research investment, but also for the expensive and time-consuming regulatory approvals required before they can reap some of those rewards.
So it's built into a market mechanism as opposed to a discrete debate. I'm not aware of people asking that question, but I think it probably is starting to emerge in the bioethics debate.
Mrs. Kraft Sloan: Certainly around rBST it was inherent in the debate: Why do we need this product; the product is going to be forced on us. There were milk producers who had grave concerns about using the product from an animal safety point of view and from a health point of view, but because of so-called short-term competition, they felt they would be forced into using this product, along with all of the other pharmaceuticals they would have to use to ensure the health of their animals. So that particular issue certainly begs this question.
Mr. van Beek: It's fair to say a lot of people are questioning the wisdom of putting forward rBST so early in our experiences. In retrospect, they probably wouldn't have done it.
Mrs. Kraft Sloan: Yes.
Mr. van Beek: But that's after the fact, of course.
Mr. Golder: In fact they may have chosen another product where there was a consumer benefit and less of a producer benefit - or certainly potential producer benefit - such as PST, porcine somatotropin, where it's really a benefit in terms of the leanness of the meat or the fat content.
Just to look at your question from another perspective, the question of whether the product is appropriate applies to any new product development or research.
Mrs. Kraft Sloan: Oh, I know it's not just relegated to the biotech. We could ask that about television.
The Vice-Chair (Mrs. Payne): Mr. Steckle.
Mr. Steckle: I want to follow up a little bit on what Madam Kraft Sloan has questioned.
I took note of the fact that you chose words such as ``equivalency'' rather than ``harmonization''. In many of the things we do in government programs, when it comes to federal-provincial, we talk about harmonization and balancing our costs by simply doing things better together than doing them independent of one another and then competing for things.
My question follows on what Madam Kraft Sloan has asked. Our political system is somewhat different from that of the United States, thank God, and I hope it stays that way. Just to be elected in America, there's a tremendous cost involved.
When politicians are beholden to the interests of industry, as they are and must be in order to extract those kinds of dollars - we're talking about millions of dollars to get elected, in some cases - how can we expect to draw any kind of wisdom from the American experience, given the fact that those are the realities of United States politics?
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This is not being negative to our American neighbours, because we have many good friends and neighbours, and we need to keep them as good neighbours. But they obviously must be beholden to someone, because people don't just dole out great huge sums of money for the sake of being friends. There's usually a price to pay for that.
So I asked the same question, I guess, in terms of the rBST. Europe has not accepted that, while the Americans have. We have not yet accepted that, and I have good reason to believe that we won't for some time. What is your comment on that?
The Vice-Chair (Mrs. Payne): Could we have a condensed answer? We have the minister waiting to come in here for a meeting.
Mr. van Beek: I'll keep it very brief.
You'll note in the final recommendations that we boiled it down to five or six, which is what we felt were manageable features that could be adopted from the American system. We do believe that leadership, for example, is one important area. This will instil more confidence in the public that biotechnology is understood to some extent, that it's being regulated, and that we're watching over biotechnology. We think that's important.
I think the third feature - this is easier to adopt - is to look very carefully at some of the features that are being implemented at FDA. They are looking for approval process efficiency measures. It's simply a series of mechanisms they are adopting.
Consider that we adopt, or borrow, if you will, a lot of their scientific information. We already do that. We already look at the data. We don't create all of it ourselves.
We think those are practical features. What we're not suggesting is that we adopt the American system.
Thank you.
The Vice-Chair (Mrs. Payne): Thank you very much. Mr. van Beek, thank you for your presentation. As usual, time leaves us a little short.
To the members, our researcher and the clerk, thank you very much. It was a very wonderful meeting, I think. I wish we had more time with our German friends, but that's the way it is.
The meeting is adjourned.