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Biotechnology
Public Policy agenda
Biotechnology Focus has done an excellent job of providing a forum for members of the biotechnology community to comment on “hot topics”. As one might expect, the responses have been far reaching, covering such issues as access to capital, existing government programs, government procurement policies, the technology transfer process at research institutes and universities, our intellectual property regime and human resource issues.
There is a broad consensus that, as Canadians, we are very good at inventing things, but less capable at bringing products resulting from our inventions to market successfully. This shortcoming is not merely with respect to biotechnology but extends across the many sectors of the economy.
With a new federal government in Ottawa and new governments to be installed at the provincial level in a number of jurisdictions over the next couple of years, starting with Ontario later this fall, there is, perhaps, a new opportunity to make changes that have a positive impact on the public policy framework relevant to the sector in Canada. To do so we need to carefully assess what has been said, who has said what, and what issues are currently under review.
Some Guiding Principles
Let us start with a few guiding principles. First, in all that we do, we must ensure that we are competing against the world outside of our borders, not our fellow citizens. Second, we need to encourage all levels of governments, municipal, provincial and federal, to work cooperatively on our behalf. Third, we must also insist that in shaping policy, government offi cials, both elected and un-elected, consult with those of us in the private sector. Finally, the sector must realize that, with few exceptions, major policy changes will likely be driven by a broader interest in encouraging innovation in the Canadian economy rather than for the benefi t of the biotech sector alone.
A Wealth of Policy Ideas to Build On
Many of the issues that defi ne the current policy agenda have been discussed for a number of years. By way of illustration, the 2003 “Integrated Strategy for the British Columbia’s Technology Cluster White Paper” included recommendations to improve government programs like IRAP and SR&ED, stimulate early stage capital fi nancing through fl ow-through share tax credits, establish an early-purchase program for new technology, and create a targeted inbound investment program for anchor companies. In 2006, the Biotechnology Council of Ontario (which has evolved into Life Sciences Ontario) issued a seminal report entitled “Public Policy For Life Sciences” recommending, among other things, a provincial cabinet committee to align economic and health policy, incentives for pharmaceutical companies to contribute to the pool of risk-based investment capital, formulary/ procurement policy changes to improve uptake of biopharmaceutical innovations, and tax incentives to attract capital including fl ow-through share tax credits. Also in 2006, the Expert Panel on Commercialization established by the federal government and chaired by Joe Rotman delivered its report
entitled “People and Excellence: The Heart of Successful Commercialization”. Among other things, the Expert Panel recommended a Commercialization Partnership Board that would serve in an oversight role for federal commercialization policies and make recommendations with respect to the major commercialization initiatives that the Expert Panel proposed, including a public-private commercialization superfund, a new angel co-investment program, and the Canadian SME Partnership Initiative aimed at helping SME becoming more globally competitive.
In the spring of 2007, a new Science and Technology Strategy and governance structure replaced the federal government’s Canadian Biotechnology Strategy, including a new Science, Technology and Innovation Council. In 2008, the Council recommended a set of science and technology strategy subpriorities for the design of Canada’s research support programs including: biofuels, regenerative medicine; neuroscience; health in an aging population and biomedical engineering and medical technologies.
The 2009 federal budget, known as “Canada’s Economic Action Plan”, contains one of the single largest federal budget investments in science and technology to date. The plan announced $5.1 billion in new spending in the areas of science and technology infrastructure, research, people and commercialization. One might reasonably ask what impact these expenditures have had on Canada’s biotech sector.
In October 2010, the Coalition for Action on Innovation in Canada, co-chaired by Paul Lucas of GlaxoSmithKline and the Honourable John Manley, issued a report entitled “An Action Plan For Prosperity”. The Coalition proposed ten steps toward a more innovative Canada, briefly stated as follows: (i) reform of the SRED tax credit regime (ii) expansion of the pool of risk capital by considering the establishment of governmentsponsored co-investment funds; (iii) adopting the world’s strongest intellectual property regime; (iv) steps to strengthen businessacademic links; (v) tapping private-sector expertise when spending public money; (vi) speeding adoption of innovative products and services by governments in Canada; (vii) launching a national learning and innovation initiative; (viii) seeking out the best and brightest to study in Canada and remain thereafter; (ix) nurturing and strengthening innovation clusters and (x) ensuring ongoing advocacy for innovation - establishing of an independent advocacy body with the single mandate of encouraging innovation by Canadian business.
In addition, the Coalition proposed a number of fiscal priorities for driving innovation, noting that measures with significant impact may either have to wait until governments return to surplus or be matched with offsetting tax increases or spending cuts in other areas. With this proviso, the Coalition joined other voices by recommending tax relief for investors aimed at increasing the flow of capital to innovative companies; tax relief for individuals aimed at increasing the supply of talent; increased financial support for research institutions targeted at greater commercialization of discoveries; and access to capital for innovative firms. The Coalition pointed to an innovative tax credit in British Columbia for investors investing in innovative firms and also noting that another way to compensate for the serious shortage of risk capital would be to apply the flowthrough shares model that has helped make Canada a global leader in resource financing. The Coalition also had a number of innovative tax proposals to encourage recruiting and developing talent.
The majority of provinces have strategies to accelerate and support biotech. One would expect that the sector would watch with interest the recent joint Québec-Ontario announcement of a life sciences corridor. This initiative will undoubtedly shine greater attention on the policy successes of Quebec in having attracted arguably a disproportionate share of R&D to the province, including the impact of its imaginative “best available price plus 15 year” policy.
The Current Agenda
The federal government R&D review panel, chaired by Thomas Jenkins of Open Text Corporation, has been asked to make recommendations to the government on the effectiveness of existing federal programs, including the SR&ED program.
It will consider which federal initiatives are most effective in increasing business R&D. It will also look at the appropriateness of the current mix of tax incentives and direct support and consider whether there are gaps in the current programs. The panel’s recommendations are due in October 2011.
Negotiations on a comprehensive economic and trade agreement between Canada and the European Economic Community (EEC) are expected to be completed in 2012. The EEC has tabled a number of issues that would have potentially significant impact on the domestic biopharmaceutical sector: patent term extension - providing up to five
years of automatic additional protection after a patent expires (plus six months if pediatric studies have been carried out) for drug products requiring marketing approval, where the time period a patent-protected product is on the market has been shortened by the lapse of time between the filing of a patent and the granting of market authorization by Health Canada; extension of data exclusivity for all pharmaceutical products resulting in potentially an additional two or three years of exclusivity; rights of appeal under Canada’s Patented Medicines (Notice of Compliance) regulations for both innovators and generic manufacturers; and border measures that would require Canada to adopt procedures that would allow customs officials to detain shipments of imported drugs at the border where a company believes that the product may infringe one of its patents.
At the same time there are a myriad of issues on the current public policy agendas of either the industry or governments, including modernization of food and drug regulation; provincial price regulation of biopharmaceuticals including coordinated buying/reimbursement by governments; funds for innovative vaccines and green bio-based technologies; and the relationship of the biopharmaceutical industry to CADTH. To that list one might add the review and updating of the jurisdiction and activities of the Patented Medicine Prices Review Board, including its role in reporting R&D expenditures (including the definition of such expenditures) and its controversial role in regulating the prices of vaccines and generic drugs.
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Moving Forward
In arguing for public policy changes, wherever possible, the biopharmaceutical sector needs to align itself with other sectors that have the potential to position Canada as a world leader in innovation. In every instance, the sector needs to present the public interest benefit from its proposals, rather than focus on the private interest. Finally, it must not be discouraged that it has not achieved all that it has attempted. We live in a country where those who are committed to advancing the public interest almost always succeed. Biotechnology in Canada is still a very young sector. In terms of public policy it has already accomplished a great deal and its prospects for future public policy successes are strong.
Jeffrey Graham is one of Canada’s leading biotech and pharmaceutical regulatory counsel. He is a partner in the Toronto office of Borden Ladner Gervais LLP and the leader of the firm’s national biotech and pharmaceutical group. Chantal Saunders is a partner in the Ottawa office of Borden Ladner Gervais LLP. Chantal is a lawyer and a registered patent agent. Beverley Moore is an associate in the Ottawa office of Borden Ladner Gervais LLP. Beverley is a lawyer.
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Company & advertiser index
comPaNY PaGe rc
Afexa Life Sciences Inc. ..................................6 ........................................
Ag-West Bio...................................................22 .......................................
AlbertatBay......................................................... 19.....................................4947
Atrium Innovations........................................9 ........................................
AxSource Consulting Inc.................................. 17.....................................4946
BioTalent Canada............................................. 8, 11...................................4945
BIOTECanada.................................................18 .......................................
Canadian Institutes of Health Research .........8 ........................................
Canadian Science Policy Conference............. 31.....................................4949
Conference Board of Canada ........................15 .......................................
Cytochroma..................................................10 .......................................
DVS Sciences Inc. ..........................................10 .......................................
Eppendorf........................................................... 32.....................................4950 comPaNY PaGe rc
Fisher Scientific................................................... 2......................................4941
Gairdner Foundation ......................................... 7......................................4943
GEA Westfalia Separator................................... 25.....................................4948
Genome BC....................................................6 ........................................
Genome Canada ...........................................20 .......................................
GlaxoSmithKline ................................................. 5......................................4942
Helix BioPharma Corp. ...................................6 ........................................
Intellipharmaceutics Inc. ..............................10 .......................................
Lawson Health research Institute .................. 9......................................4944
Ontario Institute for Cancer Research......... 6, 10 .....................................
Par Pharmaceutical Inc..................................10 .......................................
Performance Plants Inc. ...............................10 .......................................
Roche Canada ................................................7 ........................................
