:
I call the meeting to order.
Welcome to meeting number 95 of the House of Commons Standing Committee on Health.
Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders.
I just have a couple of comments for you, Dr. Humphreys, in participating remotely. You have, on your screen, the ability to use interpretation. You'll see on the bottom of your screen a choice of either floor, English or French. Please mute yourself when you're not speaking. Most of the time that will happen automatically, but if it doesn't, please tend to it, and refrain from taking any photos of your screen or any screenshots.
In accordance with the routine motion, I'm informing the committee that all remote participants have completed the required connection tests in advance of the meeting.
Pursuant to Standing Order 108(2) and the motion adopted on November 8, 2023, the committee is resuming its study of the opioid epidemic and the toxic drug crisis in Canada.
I would like to welcome our witnesses. We are joined by Dr. Keith Humphreys, professor of psychiatry, participating by video conference. We are also joined by Dr. Dan Werb, who is representing St. Michael's Hospital in Unity Health Toronto and is director of the Centre on Drug Policy Evaluation.
Thank you both for being here today.
We'll begin with opening statements of five minutes, starting with you, Dr. Humphreys.
Welcome to the committee. You have the floor.
Thank you for the opportunity to speak to your distinguished committee today.
My name is Keith Humphreys, and I am the Esther Ting memorial professor of psychiatry at Stanford University School of Medicine and a former White House drug policy adviser to U.S. presidents Bush and Obama.
Today I will briefly summarize some of the key conclusions of the Stanford-Lancet commission on the North American opioid crisis, which I chaired and which published its main conclusions in The Lancet medical journal last year.
The commission comprised North American clinicians, scholars and policy-makers who carefully studied the opioid crisis in the U.S. and Canada and made recommendations for how to resolve it.
In both of our countries, the opioid crisis originated in the health care system when insufficiently regulated pharmaceutical companies and health care providers increased per capita opioid prescribing by over 400% in a little over a decade. The fact that these drugs were legally made and of consistent, known quality did not stop them from addicting millions and killing hundreds of thousands of people across North America.
Some of those who suffered were patients. Others were individuals who gained access to medication prescribed for others that was given or sold to them through diversion. When prescription opioids are distributed in the community with little oversight, it is easy for each person who receives them not only to become addicted but also to initiate addiction in others.
To their credit, both the U.S. and Canada have subsequently taken significant steps to make opioid prescribing more judicious and safe. However, the expansion in the illicit drug markets of first heroin and later fentanyl has continued to cause great suffering, as you all well know.
The commission recommended the expansion of robust evidence-based prevention programs, targeting individuals not yet using opioids, coupled with treatment and harm reduction strategies for those who are already addicted. Many of these strategies are in place in multiple locations across Canada, including methadone maintenance clinics, syringe exchange services, drug courts, residential rehabilitation programs and initiatives that distribute the overdose rescue drug naloxone. The commission saw no reason that harm reduction and treatment programs could not be offered side by side. Promoting public health should be a shared journey and not a competition.
The commission also endorsed the goal of recovery from addiction for all services, meaning that while it was clearly valuable and moral to save someone's life today—for example, from an opioid overdose—it is important to not yield to the soft bigotry of low expectations by assuming that surviving from day to day is all an addicted person can be helped to achieve.
Tens of millions of people in North America have recovered from addiction, restoring their health and humanity and simultaneously benefiting their families and communities. Increasing the number of people who leave active addiction and enter recovery is a worthy goal to which all service providers and policy-makers should aspire. This is the animating spirit of the recovery-oriented system of care currently being built in Alberta, a destigmatizing and optimistic vision that I believe should be spread nationally.
The commission recognized that safe supply programs that distribute pharmaceutical opioids and other drugs in the community are a subject of significant discussion in Canada. I'll close by mentioning that commissioners were skeptical of such programs. The reason is simple: We have seen this movie before.
If handing out prescription opioids with minimal supervision was good for community health, neither the U.S. nor Canada would ever have had an opioid epidemic. The first decade of the crisis should have taught us that the fact that a drug is legally produced and of known quality is no barrier to it causing addiction and death.
Further, as the early years of the opioid crisis showed, it only takes a small amount of diversion to new users for an opioid distribution program to increase the prevalence of addiction. Even if we assume optimistically that 90% of people on the safe supply program take all provided drugs exactly as prescribed and that the other 10% divert only enough to each generate one or two new cases each of addiction each year, the number of addicted people doubles every five years.
The commission therefore recommended keeping faith with the prevention, treatment and harm reduction strategies I have just described, which have evidence of making our shared addiction crisis better rather than worse.
Thank you again for the opportunity to testify today. I look forward to your questions.
:
Thank you for the opportunity to present today.
I am a social epidemiologist and the director of the Centre on Drug Policy Evaluation at St. Michael's Hospital in Toronto.
Canada's overdose epidemic is getting worse. This has understandably led to a questioning of the current response and a reflection on what must change for Canada to overcome this all-of-society crisis.
In that context, it's important to recognize where scientific consensus exists and where questions remain. I want to focus my comments on two contested areas: opioid agonist treatment and supervised consumption services.
There is scientific consensus that opioid agonist treatments like methadone, buprenorphine and others are the most effective approach we have for managing opioid use disorders and helping to stabilize people at risk of overdose.
Over three decades, there have been multiple Cochrane systematic reviews and meta-analyses, which are the gold standard for evidence-based medicine. They have demonstrated that this class of treatments, which includes providing opioids such as methadone, buprenorphine as well as diacetylmorphine and others, is effective at retaining people on treatment, reducing their use of non-medical opioids and reducing their risk of overdose.
Work that I led on a study funded by U.S. National Institute on Drug Abuse and the Canadian Institutes of Health Research across four countries also found that enrolment in opioid agonist treatment was associated with a reduced likelihood that people who injected drugs would assist others in initiating injection drug use, thereby potentially preventing people from becoming at risk of overdose.
However, questions remain regarding opioid agonist treatment. For example, how do we best reduce the barriers facing people at risk of overdose who could benefit from treatment? How do we scale up treatment to those who need it? What types of medications are most effective, given the extremely high potency of synthetic opioids like fentanyl, carfentanil and nitazene-class opioids? What kind of monitoring is required to ensure that patient needs are being met and medications are not diverted? Finally, how do we ensure that those who lose access to treatment don't end up reliant on the toxic drug supply and thereby at greater risk of overdose?
These questions are important to investigate, but they do not change the fact that opioid agonist treatment is our best clinical tool for managing opioid dependence and that recovery-based approaches have not demonstrated similar effectiveness. We should continue to focus our efforts on scaling up coverage to meet the needs of those who could benefit from this treatment while also ensuring that we evolve the design of programs to respond to these important questions.
Similarly, there is scientific consensus that supervised consumption services are effective at preventing people from dying of overdose. They are, in fact, the most effective structural intervention that we have. These services have generated evidence over four decades of operation and are now present in over one-third of all countries in the world. They have been shown to not only provide immediate life-saving responses to clients on site, but can also serve as pathways into the broader continuum of care for people who are at risk of overdose. This includes referring their clients to treatment, social services and clinical care.
However, questions have been raised about the limits of their impact. For example, some observers have questioned their cost-effectiveness, on the assumption that their impact is restricted only to the clients within the four walls of the sites themselves.
On that, I would note a study from my centre, led by Indhu Rammohan and currently in press at The Lancet Public Health, the world's leading peer-reviewed public health journal. It recently found that the implementation of nine supervised consumption sites in Toronto, starting in 2017, led to a 67% reduction in overdose mortality in surrounding areas—as far as five kilometres away—with significant positive rate reductions increasing year over year.
This study adds to data from Vancouver, as well as Sydney, Australia, which collectively demonstrates positive spillover effects of these sites across neighbourhoods.
If we're serious about ending the overdose epidemic, the chief question is how we best resource these services to fully integrate with the broader continuum of care, such as social services, including housing, clinical care and substance use treatment, so that they are as effective as possible in preventing overdose as well as in helping to connect individuals with services that they need.
Also, how do we best design and manage these sites to minimize potential public safety concerns for surrounding communities? Rather than seek to reduce the number or the funding of these sites, we need to resource and design them to meet the needs of those at greatest risk of death as well as those of the communities in which they are located.
This is why I am so troubled that supervised consumption sites are slated for closure in both Sudbury and Timmins, Ontario, and are under threat elsewhere. Given that northern Ontario's per capita overdose mortality rate is roughly three times the provincial average, we simply cannot afford to backslide, or more people will die.
The overdose epidemic will soon claim more Canadian lives than COVID-19, and mostly young lives. Let us recognize our collective national grief and transform it into a comprehensive evidence-based road map to end overdose based on the evidence of what works and what must be adapted. The only other option is more death.
Thank you.
:
Alberta has made a major fiscal commitment to treatments of all sorts. They have expensive opioid agonist therapy. They have residential rehabilitation. They also have, by the way, very strong investments in harm reduction. What they are doing that is different from a lot of other places around the country—my country too—is that, first off, it is a system. All the parts are integrated together. There's a province-wide plan. There are steps of care that people go through so they can go on a pathway to come out at the end much better off then when they went in.
The second thing, as I mentioned, is this optimistic idea of recovery. You know, because addiction is a stigmatized condition, there are a number of people who would believe colloquially and say, in a cold way, “Well, once an addict, always an addict. They will never change. They can't get better.” The Albertan model believes that, no, that is not true, that in fact people can recover. We have millions of people who have recovered, who are productive citizens, who are connected to their families and who are people we prize and cherish in the community.
Setting that as the goal, as the aspiration, is extremely important, rather than saying that we're just going to manage this population, that we don't really expect much out of them and that at most we might be able to help them live until tomorrow, and that's all they can ever achieve. That becomes a self-fulfilling prophecy.
I admire that fact when I've gone up to Alberta and visited and have seen what they're doing, seen that vision that every single person is capable of having a much better life through recovery than they have right now.
:
Yes, I did that. I'm not a politician. I'm a policy adviser. Since the science stays the science, anyone who wants to adapt it to.... You can work with a broad range of people, and that's what I've tried to do.
What I saw in both of those administrations was that the commitment to treating addiction as a health problem was profound and important for both of those presidents. Although they differed in many ways, obviously, they both believed the health care system is something we can handle addiction through. Yes, we need law enforcement when someone does something violent because of their addiction, but, for the most part, we want people to be able to talk to their doctors about their addiction as they would talk to them about cancer or a heart problem. They both moved our system that way.
Canada, by the way, does better than the U.S. It gives health insurance to everyone, and I think that's great. We've made some progress towards this. We like to copy you.
I think the concept of trying to manage addiction as much as possible in health care.... You don't need public safety, unless a person does something that threatens another human being.
:
Thanks very much to both of you for your thoughtful presentations.
Dr. Humphreys, I want to briefly go back to you.
You have written a lot about prevention. You haven't focused on it in this talk, but I think you talk about prevention with some sense of urgency, including that you can't solve epidemics by concentrating on people at the extreme end.
Knowing there's a strong relationship between adverse childhood experiences or childhood trauma and addiction later in life, can you very briefly comment on the importance of upstream investments with that same sense of urgency we're thinking about at the other extreme?
:
Thank you so much for raising that, Doctor.
You're absolutely right. Look at how HIV/AIDS and COVID were brought under control. It was through reducing new cases. We are not doing enough of that with addiction.
The commission recommended focusing particularly on kids in low-income environments and on generic investments in their well-being. These would be things like early education programs, nurse-family partnerships that help low-income parents-to-be with their first experience of birth and early child raising, and Communities That Care, which is a very well-studied program for kids a bit older, usually around 11, 12 or 13. It teaches them things like how to recognize and manage their own emotions, connect positively to other kids and connect to positive community organizations, whatever they may be—cultural, religious, artistic or athletic—which provide them with alternatives to substance use.
The evidence in those studies, which is very strong, shows that kids who get those investments not only have lower rates of drug, alcohol and tobacco use but are also more likely to stay in school. They're more likely to go to university someday. They're less likely to get involved in crime. They're less likely to be depressed. Making those investments—again, particularly for children who are growing up in adverse environments—is very critical, unless we all want to be having the same conversation 10 years from now, which I'm sure we don't.
The way we get out of that is through those preventive investments.
:
This is an adaptation of an approach that was used really successfully in the HIV space. Basically, you meet somebody's needs in terms of treatment, and you have positive knock-on effects in terms of the spread. In the case of HIV, you actually reduce the transmission of HIV among people if you provide them with medications like highly active antiretroviral therapies.
This is a slight adaptation of that approach, but of course drug use is a very, very different phenomenon. Essentially, we found in the work that I referred to in my opening remarks, funded by both NIDA in the United States and CIHR here in Canada, that people who were provided with opioid agonist treatments and who were injecting drugs were less likely to report that they had assisted in the initiation of other people into injection drug use. We know that injection drug use is often implicated in an increasing severity of opioid use disorder or other substance use disorders. We also found, for instance, that increasing the intensity of policing actually had the reverse effect. People who were encountering police more often were more likely to assist people in their initiation of injection drug use.
Let me just say that this is not to cast people who engage in this behaviour as predators or anything like that. There are many rational reasons that people engage in this kind of behaviour, but if we're looking to prevent the expansion of substance use behaviours that we think could potentially put people at higher risk of overdose and we rely on the evidence of interventions that can help meet people's needs themselves, we find that there may be this potential knock-on effect on other people being at risk.
On that I'll say that we have not seen the same evidence of the effectiveness of recovery-based treatment as opposed to opioid agonist treatment and pharmacotherapy treatment. I would point to a recent study—it will be coming out in Drug and Alcohol Dependence in January, but it's available online now—that compared overdose mortality among people who had been enrolled in methadone and buprenorphine with recovery-based non-pharmacotherapy treatments. It found that there was a reduced risk of overdose mortality among people who were enrolled in buprenorphine. However, when the authors looked at non-pharmacotherapy recovery-based treatment, there was an increased risk, compared with the placebo, of overdose mortality.
On that note, I would say that the adoption of the Alberta model, while it is of course aspirational.... I think everybody in this field who devotes their time to it is aspirational and optimistic about the possibilities of people becoming well, managing their lives, being healthy and having social well-being. In Alberta, after the adoption of the Alberta model in mid-2019, there was actually a more than doubling of the overdose mortality rate in that province. There was an increase in overdose mortality basically everywhere in Canada, but the rate of increase in Alberta actually outpaced a lot of other places in Canada, so I would just offer a little bit of caution on that.
:
Absolutely. This is what we've seen over and over again. I run a cohort study of people who use drugs in Toronto. We followed them for about five years. There is evidence from cohort studies of people who use drugs in Vancouver and Montreal as well, and housing is one of the key factors that is placing people at risk of overdose.
It's interesting, because we see housing in the news every day, but rarely do people put the links together between the housing crisis that is affecting all of Canada and the fact that this is also really contributing to the overdose epidemic that we're experiencing as well. It's very difficult for people to engage in treatment if they are unhoused.
There is often a requirement that people—often an informal or an implicit requirement—be housed prior to receiving standard treatment because their clinicians believe that they may be too chaotic to actually be able to undertake or be retained in a treatment program. I think you really hit the nail on the head that housing goes hand in hand, and unfortunately when resources are being allocated towards ending the overdose epidemic, this issue of housing really does not come up.
We have a shelter system across Canada that is generally abstinence-based. This means that if somebody is managing their substance use through a methadone or buprenorphine program or some other program, but they're still potentially using a little bit of unregulated opioids, they're unable to stay in that shelter. There are some restrictions around even accessing low-barrier housing that are causing people to have to make a choice between remaining on treatment or being housed.
:
That's a fair question.
I have talked to some people who do this. We do not have this in my country. You would be right to say that I'm looking at this from far away.
We do though, of course, have the experience of opioid prescribing. When it was OxyContin, many of those people getting it were addicted and did addict other people. If we wanted to know if that phenomenon had somehow stopped for some reason with safe supply—I don't know why we would assume that, but if we did—what we would do is run something that has not been done. There's nothing of this sort in the literature. You would run urine screens on every single person on safe supply every day, and any day when they did not have the drug supplied in their urine, you would ask them, “Where did that drug go?” Then you would find that person and see if they overdosed, fatally or non-fatally, or whether they had initiated an addiction with that medication.
That has not been done. That's what I would do if I were really monitoring this closely and I was concerned about harms to the community. We were very casual about that possibility for a very long time with OxyContin, and we regretted it. Because that has not been done, I am frankly worried that we're doing the same thing again.
I don't know if anyone is wilfully trying to misinterpret or misrepresent anything. I will note that I'm the principal investigator of a national evaluation of safer supply pilot programs in Canada, which is funded by Health Canada and run by the Canadian Institutes of Health Research. I can speak a little bit about that.
One of the issues that I find troubling is that there is a conflation of quite a number of different approaches into this idea or term of “safer supply”. Sometimes when people are talking about safer supply, they're talking about regulating the currently unregulated drug market, which I would be happy to talk about. Sometimes they're talking about prescribed clinical guidelines, which are in place in British Columbia. Sometimes they're talking about pilot programs, like the ones that our national evaluation is studying, which are integrated into existing harm reduction and social care programs. All of these programs are very different.
In these programs generally, safer supply is a component of a broader comprehensive approach to meeting the needs of clients, members or patients. All of these programs refer to these people differently. I would echo Dr. Humphreys that the evidence is still emerging. These are programs that have been in place for only two to three years.
I really want to make the point here that the prescribed safer supply guidelines in B.C. are quite different. These are just the opportunity for clinicians to provide a particular type of medications for a particular condition among their patients, which is different from these wraparound, integrated pilot programs.
:
I have read that literature and I have also spent a lot of time in Portugal. Actually, I was just talking to the director of that program a week ago.
Portugal is going through a hard time right now. Overdoses are at about a 12-year high. At least early on, the program did seem to have some benefits from the great expansion of services around addiction. The HIV rate among people who used drugs dropped, and that was certainly very positive.
Portugal also has dissuasion committees, which are able to put some pressure on people who have problematic drug problems to change their behaviour. That is something that was often forgotten when people talked about the Portugal model. They think it's libertarian, and everyone does whatever they want. That is really not the case.
A big difference that goes beyond policy is that the cultures are very different. Portugal is different from both the U.S. and Canada in that it is a country that has a very strong Catholic history, a very communitarian society and a lot of social control on behaviour. When it backed off from the legal control, there was still tremendous social control from families and communities. There was disapproval of drug use, which is particularly less common in the western U.S. and western Canada.
Places that have tried to copy that approach—for example, the city near where I live, which is San Francisco—as well as the cities of Portland, Seattle, and Vancouver haven't had the same results as Portugal. With the same policies and different cultures, you get different results.
:
No. I wouldn't expect it to work, because it's essentially a replication of the policies that we had in the 2000s of distributing opioids in the community and trusting that because they are legal and because they're of known quantity, nothing bad will happen. It will take a while to see that.
I realize that the discussion is on overdose, but you also have to think about addiction. If you're generating new cases of addiction, that will not show up in overdoses for five or 10 years, but it could definitely be happening. That is exactly what happened during the era of OxyContin.
I would point out, by the way, that the main drug being used, hydromorphone, is a very strong opioid. It is not a low-strength drug by any means. It can certainly be addictive, particularly to novice users. That's why it would be very important to evaluate whether any of those drugs are being diverted to, for example, people who are younger as their first drug experience and their first experience getting access. Whether or not that's happening is something that I think should be studied.
:
My initial question is for Dr. Humphreys.
I share a bit of skepticism about the safe supply position for the same reasons that you've already talked about. However, do you not think that it's possible that there is a certain subset of the population that would benefit from safe supply? Some people are dependent on narcotics and perhaps dependent on a fixed level of narcotics. Then there is the fact that they can't get the narcotics, so they buy them on the street, where often they're contaminated with fentanyl or carfentanil.
Do you think it's possible—although, perhaps in general, safe supply is not a good idea for everybody—that there may be a subset of the population for which, in fact, it is a good idea?
:
Thank you for that question, Doctor. It gives me a chance to clarify something that I think has been misunderstood, perhaps.
The commission is very positive about opioid agonist therapy, like methadone, like buprenorphine. In Canada, you also have slow-release oral morphine and hydromorphone, which we don't have. You have diacetylmorphine too. We're very positive about the effects of all those, and for multiple reasons.
Yes, people are avoiding the illicit supply, but it's also because of the stability they provide and the links that they provide to other health services. All those things are true.
When you start distributing, though, without any real monitoring in a community, you have to think not just about that person, even if they benefit a bit, but also about everybody else. If those drugs are going out and harming other people, the net effect could be negative, even though there is a particular person who benefits from them.
That's why doing very careful audits of where these drugs are actually going—in other words, looking at the people around the people in these programs—is really important before we make a judgment, which you can't really make just based on what that person says and experiences.
:
Thanks. It's such a good question.
I'll just note that these sites are implemented in places where there is drug-related activity, right? That's generally where they are placed, so that they can benefit as many people as possible. I think it's important to remember that.
We've been looking at this question. In Toronto, there was some violence—unfortunately, a fatal shooting—less than a hundred metres from a certain supervised consumption site. We worked with the coroner's office to analyze spatial data on homicides, fatal shootings, that could be potentially related to drug market activity across 10 years in Toronto. What we found is that there's no association between the location of homicides and the location of these sites.
On that at least, I think there's evidence from Toronto suggesting that these sites aren't necessarily attracting increased fatal violence. We're still going to look at other measures of violence to see whether they agree with our initial analysis.
I also understand people's desire to ensure that the programs in their communities are run and managed as well as they possibly can be. I fully understand people being concerned about their public safety.
What I found galvanizing is that the conversation that has happened, at least in Toronto around this issue, hasn't gone to the extreme of saying that we need to close these sites. A lot of the conversation is about how we design them and how we can better manage these sites.
Unfortunately, what happens is that these sites are designed for the estimated number of clients they're going to have, and then budgets are often cut and resources aren't provided for them to provide the services to the number of clients they actually have, so you're starting at a deficit. You have waiting lists. People show up and then they leave without actually being able to access the services.
I think a key component here needs to be resourcing these services sufficiently so that they can meet the needs of their client base.
:
I call the meeting back to order.
Pursuant to Standing Order 108(2) and the motion adopted on November 8, 2023, the committee is resuming its study of the government's advance purchase agreement for vaccines with Medicago.
I would like to welcome our witnesses. Representing Medicago Inc., we have Toshifumi Tada, president and chief executive officer, and Sarah Marquis, vice-president for legal affairs and corporate secretary.
I thank you both for taking the time to appear today. You have up to five minutes for an opening statement. You have the floor.
First of all, ladies and gentlemen, I appreciate this invitation to attend the House of Commons Standing Committee on Health today.
My name is Toshifumi Tada. I am president and CEO of Medicago. I'm accompanied today by Sarah Marquis, who is vice-president for legal affairs and a corporate secretary of Medicago.
Medicago was a Canadian biotechnology and biopharmaceutical company specialized in the discovery, development and commercialization of virus-like particles that we call VLPs, using plants as bioreactors to produce protein-based vaccine candidates. Medicago's VLP technology was born out of a research partnership between Laval University and Agriculture Canada in 1997.
Medicago's technology evolved from research and development to having its first VLP vaccine approved by Health Canada in February 2022. It was the first plant-based VLP vaccine approved for human use in the world.
In the clinical trials, our vaccine was found to be 71% effective against symptomatic infection and 100% effective against severe disease caused by the coronavirus. These studies were conducted while there were multiple variants in circulation. I will be clear that these results could only be achieved with the tireless dedication of our employees and the scientific achievement and expertise developed in Canada. Medicago was very proud of this scientific achievement.
Although the science was a success, we experienced challenges in transforming to commercial, scaled-up production. Our experts believed we could fix the issues, but it would take time. At the same time, however, the vaccine landscape was evolving very rapidly, with more and more variants arising. We assessed that significant additional research and development investment would be needed.
This is why our shareholder, Mitsubishi Chemical Group, made the business decision to cease the operations of Medicago. This was a very difficult decision to make, both on a business and human level.
Medicago had been in Quebec for more than 20 years, and at the time of Mitsubishi Chemical's announcement, we had nearly 600 employees, both in Canada and the United States, with 378 employees in Quebec City. The company had strong ties to the local community, and our employees believed in Medicago's technology and its public health mission.
As part of the windup activities at Medicago, we ensured that all employees received the full amount of compensation they were entitled to. In addition, we provided full support and outplacement services, including organizing job fairs for our employees, in collaboration with the Quebec government, to help our employees find their next employer.
We also worked with financial and legal advisers to terminate our agreements with our service providers, to settle our debts and to sell our business operations and assets. This led to several transactions, two of which were with the Government of Canada.
The first one was the advance purchase agreement between Medicago and PSPC, signed in November 2020. Under this agreement, Medicago had received a non-refundable advance payment of $150 million for initiating the manufacturing of its COVID-19 vaccine. This agreement was terminated by mutual consent in June 2023. Medicago was released of its obligations, as it met all the terms under the agreement.
The second transaction was the strategic innovation fund—or SIF—agreement with ISED. This was recently terminated. Under this agreement, Medicago was awarded contribution offers for the development of our COVID-19 vaccine and the establishment of a large-scale manufacturing facility in Quebec.
As part of the termination agreement, we reimbursed the amounts owed to the Canadian government, which included $40 million in cash, and we transferred our key research and development assets, such as our manufacturing pilot plant, intellectual property assets, and equipment to Aramis Biotechnologies, a new local company established by former employees of Medicago.
I would be happy to answer any questions the committee may have at this point in time. It is possible that I may ask Sarah Marquis, my colleague, to answer certain questions that fall within her field of expertise.
Mr. Chairman, that concludes my opening statement. Thank you.
:
Thank you very much for the question.
Thanks to the support and contribution from the government, we advanced technology and science that was born in Canada, by a lot. That resulted in our approval for the COVID-19 vaccine. This is the world's first plant-based VLP vaccine for human use.
Together with our shareholders' investments, the government's contribution was also helpful to provide and advance these technological and scientific achievements. We don't call it a waste. We advanced and we showed significant science advancement for Canada.
Given the situation we were faced with, we had a discussion with ISED, and we agreed by mutual consent to terminate the agreement. We settled the agreement by repaying $14 million in cash and transfers of our key R and D assets, including a pilot plant, IP, assets and equipment to a Canadian company, so our IP will remain in Canada in that sense.
We could not successfully launch a COVID-19 vaccine under the very unprecedented pandemic situation, but we still believe the scientific potential of those plant-based vaccines. For example, the dominant COVID-19 vaccines are messenger RNA vaccines, but having an alternative, such as protein-based vaccines, including our plant-based VLP vaccine, would benefit people's health because it offers another alternative.
We still believe in our technologies. Unfortunately, we are winding up operations because of business decisions, but because we do have scientific achievement and we do have our people, our employees who made it happen, hopefully these technologies can remain in Canada for future scientific expansion.
:
Yes, thank you very much.
Our shareholder, Mitsubishi Chemical, had to make a difficult business decision. This is the business decision that was made. However, it wanted to be as co-operative as possible with the Canadian government so that we can have win-win solutions. As a result of that, we agreed with ISED to terminate the agreement, but we settled by transferring the key assets we had, which were the R and D pilot plant, the equipment and the IP to a Canadian company at the request of ISED.
I believe this fulfilled the Canadian government's requirements, and we also wanted to make that business decision and execute it as soon as possible.
:
I would like to get some answers out of this as well.
On a similar track, on December 29, 2022, CBC News reported that the tobacco giant Philip Morris International had divested all its shares from Medicago. In a statement, Philip Morris's spokesperson, David Fraser, said the company decided that this was “the most appropriate way forward”.
Before the decision, Philip Morris owned 21% of your company's shares. Can you confirm how Philip Morris International was compensated for its Medicago shares?
:
Thank you for the question.
There are two answers. First, after approval, we faced internal challenges in scale-up for the commercialization and we knew that it would take time to fix it. That's the first.
Second, while we were fixing the issue, we started to observe that the COVID-19 vaccine market was evolving quite a lot and that market demands were shifting to the bivalent vaccine, including the omicron strain. Our vaccine did not contain the omicron strain, so we thought additional R and D investment would be needed to catch up. At the same time, we negotiated with PSPC that because of the market change, PSPC would cancel their order because of their inventory position and the variety of strains in circulation.
Given that situation, we understand that Mitsubishi Chemical reviewed the situation comprehensively and decided further investment would not make a business case for them.
:
Thank you very much, Mr. Chair.
Ms. Marquis, Mr. Tada, welcome to the House of Commons.
As an MP from the Quebec City area, I have always been very proud of Medicago. What has happened in recent months and years is very unfortunate, especially the fact that the WHO did not recognize the vaccine you worked on. More disappointing, and even upsetting, is the fact that the writing was on the wall. It was written in black and white in international treaties that the WHO would never recognize the work done by Medicago.
Let us recall article 5.3 of the WHO Framework Convention, adopted on February 27, 2005, which states that “Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry”. Canada is one of the 181 signatories to the convention.
Then, in 2008, Philip Morris International became a minority shareholder in Medicago.
In 2008, did anyone in government or in the company sound the alarm and point out that the WHO would never recognize Medicago's work again? Please answer yes or no.
:
I guess, sir, through you, Chair, it still leaves the Canadian taxpayer confused as to how all this happened.
I'm sitting here and I've been following this meeting and this story for the entire time, and I'm confused. I think all of our jobs, as we sit around this table, are to come to a better idea of what happened to the Canadian taxpayers' money. I don't feel like that's forthcoming, and that's a shame.
With that being said, sir, I hate to do this to the committee, but I do have to table a motion. That motion, Chair, will say:
Given that the Liberal government's carbon tax has had a detrimental impact on the health and livelihood of Canadians, driving two million of them to use food banks in March of 2023 alone, the chair report to the House that the committee call on the government to immediately cancel the carbon tax.
Thank you, Chair.
:
I don't think a suspension would be necessary. The motion has been taken as notice. It isn't in order to be debated today.
Mr. Tada and Ms. Marquis, I want to say thank you so much for being with us. We greatly appreciate your accepting our invitation and coming to take our questions. Thank you, and we wish you all the best for the holidays.
There will be no meeting on Wednesday. This is it until Christmas. I know that you find that hard.
The deadline to submit a complete witness list for the opioid study is this Friday at 4 p.m. There have been partial lists submitted, but please complete your lists by this Friday.
Is it the will of the committee to adjourn the meeting?
Some hon. members: Agreed.
The Chair: We're adjourned.