Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 8 - Evidence - March 5, 2014
OTTAWA, Wednesday, March 5, 2014
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 4:14 p.m. to continue its study on prescription pharmaceuticals in Canada (topic: The nature of unintended consequences in the use of prescription pharmaceuticals); and to consider a draft budget on prescription pharmaceuticals in Canada; and to consider a draft budget for the examination of the increasing incidence of obesity in Canada: causes, consequences and the way forward.)
Senator Kelvin Kenneth Ogilvie (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
I'm Kelvin Ogilvie, a senator from Nova Scotia, and chair of the committee. I want to start by inviting my colleagues to introduce themselves.
Senator Eggleton: Art Eggleton, senator from Toronto and deputy chair of the committee.
Senator Enverga: Senator Enverga, from Ontario.
Senator Stewart Olsen: Carolyn Stewart Olsen, from New Brunswick.
Senator Seidman: Judith Seidman, from Montreal, Quebec.
The Chair: I remind our colleagues that today we will end the meeting no later than 6:10, as we have a budget to consider by the committee. We will take a quick break to clear the table and move immediately into that. That's the first thing.
I also remind colleagues that we are here dealing with the fourth phase of a four-part study on prescription pharmaceuticals. We are dealing in this phase with unintended consequences.
The topic of today's discussion is counterfeit drugs and we have three witnesses with us today. I will introduce them as I call them, in the order that has been agreed that they will speak.
In the first instance, I will call Deputy Commissioner Mike Cabana of the Royal Canadian Mounted Police, who is with federal policing.
Mr. Cabana, please.
Mike Cabana, Deputy Commissioner, Federal Policing, Royal Canadian Mounted Police: Thank you, chair and committee members. Good afternoon and thank you for inviting me here today. To assist the committee in its study, I would like to provide you with a general overview of the current scope of the challenges related to counterfeit pharmaceuticals from an RCMP perspective, as well as an overview of our enforcement activities.
Counterfeit medications have been and will remain a concern for the RCMP. They represent a significant threat to the health and safety of Canadians. They are unregulated, untested, and often manufactured under unsafe conditions.
[Translation]
While the RCMP cannot confirm that there is large-scale manufacturing of counterfeit medications in Canada, we do know that there is large-scale importation.
I can also tell this committee that this phenomenon is not unique to Canada. When Canadians purchase counterfeit pharmaceuticals, the origin varies, and the contents of the conditions under which it has been developed remain unknown.
The consumption of these products can lead to serious personal injury and even death.
[English]
Stemming the flow of counterfeit pharmaceuticals into Canada is a shared responsibility. The RCMP is only but one player. Effectively countering this problem requires the collaboration of the Canada Border Services Agency, Health Canada and the RCMP, with each agency playing a distinct role. Health Canada manages the regulatory enforcement process, while the RCMP addresses the criminality. In instances of larger seizures that are deemed to be of a commercial scale, they are referred by Health Canada or CBSA for criminal investigation by the RCMP.
In Canada, the main source of counterfeit medications is largely from Southeast Asia, and mostly by way of Internet. The movement of counterfeit medications via the Internet is a growing problem and a key challenge for Canadian law enforcement. Counterfeit drugs can easily be acquired online from mainly offshore, unscrupulous operations where unapproved and illegal medications are available for a fraction of the legitimate pharmacy cost. The majority of counterfeit drugs purchased through the Internet enter Canada through the postal or courier services. The RCMP is working collaboratively with its domestic and international partners to find a solution to this growing problem.
While there have been a few cases involving domestic clandestine manufacturers of counterfeit prescription drugs, Canada is not known as a source country for the production of counterfeit medications. In at least one of these cases, organized crime was involved. However, the RCMP has not detected, on any great scale, the involvement of organized crime in that particular area.
The RCMP has been concerned with the issue of counterfeit pharmaceuticals for a decade or so. We have hosted and co-hosted several conferences on this issue dating back as far as 2007 with a range of interested partners, including Interpol. As recently as 2012, the RCMP hosted the Permanent Forum for International Pharmaceutical Crime in Ottawa. It was attended by 11 countries, with a mix of health regulators and law enforcement representatives. Between 2005 and 2012, counterfeit pharmaceutical investigations accounted for an average of 5 per cent of all RCMP intellectual property rights investigations.
Once cases of counterfeit pharmaceuticals are referred to the RCMP by our partners, they unfold very much like other criminal investigations. Currently, charges may be laid under the Criminal Code, Food and Drugs Act, and the Copyright Act. Bill C-8, the Combatting Counterfeit Products Bill, if enacted, will allow law enforcement to investigate and pursue new charges that previously were not possible, such as new criminal offences for trademark counterfeiting. Bill C-8 will also provide new enforcement tools that will allow the RCMP to better investigate intellectual property crimes that are connected to organized crime groups.
Since 2008, the RCMP, CBSA and Health Canada have participated in Operation Pangea, an annual international week of action tackling the Internet sale of counterfeit pharmaceuticals coordinated by Interpol. In June 2013, the RCMP, CBSA and Health Canada intercepted prohibited and counterfeit pharmaceuticals entering Canada through the mail stream. As a result, in excess of 238,000 units of illicit and counterfeit medications worth in excess of $1 million were seized. The seized packages originated from 19 foreign countries. These results are the product of a one-week operation and represent only a small fraction of the counterfeit medications available in Canada.
Furthermore, Operation Pangea results in Canada have demonstrated that seizures of counterfeit and unlicensed medicines are consistently and significantly increasing year to year.
[Translation]
This is only one example of how we are tackling the illicit counterfeit pharmaceutical market. The RCMP remains committed to working closely with its partners to bring global attention to this emerging and borderless threat, and to address the challenges presented by counterfeit pharmaceuticals. Working hand-in-hand with our partners in Canada and abroad allows us to define the broader landscape of this criminal trend and focus our efforts more effectively.
[English]
Thank you again for inviting me to participate in these important hearings and I'll be happy to address any questions you may have.
The Chair: Thank you very much. I will now invite Martin Bolduc, Vice-president, Operations, for the Canada Border Services Agency.
[Translation]
Martin Bolduc, Vice-president, Operations, Canada Border Services Agency: I would like to thank the chair and members of the committee for giving the Canada Border Services Agency the opportunity to participate in the committee's study on prescription pharmaceuticals in Canada.
It is evident that the committee's study is very complex and involves many players, directly and indirectly, with regard to pharmaceutical products, especially in relation to counterfeit products. The agency's role is very specific in this regard and I will expand on the subject for the committee.
As you are surely aware, the CBSA's mandate is to ensure Canada's security and prosperity by managing the flow of legitimate people and goods into Canada.
[English]
In order to achieve this, the agency enforces over 90 acts and regulations on behalf of other government departments, and works with its partnering departments to identify and prevent those individuals and goods that do not meet admissibility requirements under the law from entering the country. In that vein, the agency takes pride in knowing that the work we do makes a difference in the lives of Canadians while contributing to global security and commerce.
Currently, the agency does not have the legislative authority to search for, examine or detain suspected intellectual property rights infringed goods. Therefore, with respect to counterfeit pharmaceuticals, the agency's main responsibility is to enforce the policies and regulations set out by Health Canada under the Food and Drugs Act in the traveller, postal and commercial streams.
In the traveller stream, the CBSA ensures that all border services officers receive the necessary training to identify high-risk and prohibited goods when enforcing legislation under the purview of other government departments. Border services officers use a risk management approach when determining if travellers entering Canada require a secondary examination, where they will be further interviewed and their belongings further examined. Historically, secondary examinations have demonstrated that volumes relating to counterfeit pharmaceuticals in this stream are negligible.
[Translation]
On the other hand, it is in the postal and commercial streams that the CBSA sees greater volumes of counterfeit pharmaceutical products. The agency is responsible for identifying, examining and detaining suspect postal and commercial shipments at the border for Health Canada's inspection and decision regarding the goods' admissibility.
The authority for the CBSA to detain goods is contained in section 101 of the Customs Act, which allows border services officers to detain goods until they are satisfied that they have been dealt with in accordance to the act. Officers also apply other acts of Parliament that prohibit, control or regulate the importation or exportation of goods, and any regulations made thereunder.
Pharmaceutical products are controlled, regulated or prohibited. Products suspected of posing a health risk are referred to Health Canada who will ensure their safety and their compliance with the legislation.
[English]
Products which are non-compliant or are suspected of being counterfeit are subject to Health Canada's enforcement actions, which include the refusal of entry, seizure and/or voluntary disposal. The importation of illegal pharmaceutical products is a concern for the CBSA and our partners. Over the years, the CBSA has worked closely with the RCMP and Health Canada to interdict illegal or harmful counterfeit medical products. The CBSA will continue to deploy its efforts at the border to identify and intercept suspected high-risk goods and conveyances that may pose a threat to the security, safety and prosperity of Canada.
To conclude, I would like to inform the committee that CBSA's partnership with the RCMP and Health Canada has been very positive and that the agency will continue to work with its partners to enforce the policies and regulations of the Food and Drugs Act to intercept counterfeit pharmaceuticals at the border to protect Canadians.
[Translation]
I will be pleased to take your questions.
[English]
The Chair: I will now invite Amir Attaran, Canadian Research Chair, Population Health and Global Development Policy from the University of Ottawa who is appearing as an individual.
Amir Attaran, Canadian Research Chair, Population Health and Global Development Policy, University of Ottawa, as an individual: Thanks to everyone who is here today. I'm a lawyer and a scientist, and my research includes helping other countries fight substandard and falsified medicines. I work with several international organizations, the World Health Organization, the United Nations Office of Drugs and Crime, the World Bank, and it's meant to try and improve the shared fight against the problem that my friends here have set out so well and I'm delighted to see them doing what they're doing.
I was in the United States Congress a week ago talking about the subject and it's really a pleasure to be here now in our Senate talking about this because, to tell the truth, Canada has among the feeblest attitudes of any developed country on this problem. We need to shape up. I'll give you two examples. First is that the medicines imported into Canada, the ones that are foreign medicines that come into Canada, are not necessarily safe. In the United States, 80 per cent of medicines and medicinal ingredients are now imported. We don't know what the figure is in Canada. It's probably about 80 per cent, too.
Most of what is being supplied is coming out of developing countries like China or India, and they have quality problems. For anyone who wants to see these, here are some Indian-made malaria medicines. One is real and one is totally fake. If you give this to a child with malaria, that child will die. It is very common that what comes out of China and India just isn't as good as it should be.
India is particularly scary. The federal government there barely regulates exported generic medicines at all. In a notorious case last year, an Indian company called Ranbaxy was found to be fabricating data on its medicines. It pleaded guilty to fraud in the United States. It paid a $500 million penalty for the crime and had its imports banned, but as of today, all Ranbaxy medicines — this criminal company — are available in Canada. About 160 medicines from Ranbaxy today are available in Canada for heart disease, Alzheimer's, pain, infection — you name it. We have not taken the regulatory steps, even though we know they're criminal, even though they pleaded guilty in the United States to fraud.
Our defences in this sense, and I hate to say it, are among the worst. It gives me some reason to worry. The U.S. Food and Drug Administration does several hundred foreign inspections annually of plants abroad. In 2011, Health Canada did three, not hundreds but three. In the European Union, every batch of imported medicine is tested — not here. Unfortunately, Parliament here has left the doors open to medicines being imported and not tested, unlike the European Union. We don't know — and my colleagues can't say, either — how much falsified or substandard medicine there is in Canada because we're not doing that testing, but it's potentially a lot.
What makes this the case is that our criminal penalties are not as strong as they should be. For possessing, for importing and what have you, an adulterated medicine under the Food and Drugs Act, the penalty on indictment is $5,000 or three years. But I'll tell you this: No one has served three years. I don't think anyone has served three minutes. In my research, I have not found that.
This brings me to the second point. While Canadians are in danger of imported bad medicines, we also, as a country, endanger foreigners by allowing Internet pharmacies on our territory to sell illicit medicines abroad. This doesn't happen very often, but it does sometimes. There are Canadian pharmacists illegally selling medicines on the Internet, mostly to Americans, and these include medicines from India, Turkey and so forth that have never been approved by Health Canada. They're completely untested and completely unregulated by our authorities.
Now, that's obviously an organized crime. Unfortunately, Health Canada has not taken this as seriously as I think they should have. It has not enforced the law on these pharmacies. I know of not a single prosecution in Canada against persons selling unapproved medicines on the Internet. What is interesting, though, is that the Americans have prosecuted several Canadians for the crime. When I go to the U.S., I'm often asked why we aren't enforcing our laws on our pharmacies. I have written to the Prime Minister about this. Unfortunately, there still haven't been any prosecutions.
I'll be giving my friend from the RCMP some information, and I know he will act on it. He has shown great interest in it, but we do need to get this under control. I'll help him in any way I can to make some arrests. We need stronger laws and we need those arrests to take place.
To wrap up, here is where I think we stand. In Canada, we import questionable medicines such as those like Ranbaxy made. Unfortunately, we also sell unapproved medicine to foreigners through the Internet. Other governments do take steps to defend people against those evils. We have not taken enough steps. That's not a partisan statement. No Canadian government has ever taken enough steps in this area. Our laws are poor. We've just heard from law enforcement that they need new tools. I agree with them totally.
Let me pose this question here in Parliament — this is the house of laws, after all: Why do we not take organized crime that victimizes sick people more seriously? Why does that not bother us more? I hope someone can tell me. I'll be looking to you for an answer to these problems.
The Chair: Thank you, Dr. Attaran.
Before I open up the floor to questions, I would like to clarify something, Mr. Bolduc, with regard to your summary of your authority for things crossing the border. You started off with a comment about people crossing the border, and I got a sense there are some limitations on what you can do there with regard to this particular issue. Then you explained your authority with regard to the postal service and packaging. There seemed to be a considerably higher level of authority with that, but perhaps I misunderstood. Could you clarify?
Mr. Bolduc: Thank you for the question. We have the authority under the Customs Act to detain goods that we assess as being non-compliant. In the case of counterfeit medication, we will detain those goods and refer them to Health Canada for their assessment and final determination as to whether or not they are compliant.
I was referring to the authorities that CBSA would get under Bill C-8 once it gets Royal Assent, where rights holders would be able to request assistance from the CBSA in detaining goods crossing the border while the rights holders would go to civil court to have their rights enacted or enforced.
The Chair: Thank you very much. Do you have authority with regard to parcels in the postal service?
Mr. Bolduc: We do have authority.
The Chair: Thank you very much for that clarification. That's very helpful.
Senator Eggleton: Can I follow up on that? You said in your comments here, and I think you're referring to this: "Currently, the agency does not have the legislative authority to search for, examine or detain suspected intellectual property rights infringed goods."
Then you go on to say that you can enforce the regulations set out by Health Canada in the Food and Drugs Act. Doesn't one contradict the other?
Mr. Bolduc: No, not necessarily.
Senator Eggleton: Can you explain that?
Mr. Bolduc: Yes. The CBSA right now has no authority to detain goods because they are suspected to be a copy of a trademark. We would detain goods because, in the case of counterfeit medication, we suspect that the goods would represent a risk for the safety of Canadians and then refer back for a final assessment by Health Canada.
Senator Eggleton: How would you know? You do not have the expertise to know that.
Mr. Bolduc: We use different indicators, and over the course of many years we have developed indicators that would lead an officer to believe that a package with a jar containing pills might be counterfeit.
Senator Eggleton: What if it came from a company that is one of the largest companies in the world like the Ranbaxy company in India? Would you suspect that? It comes from what is considered to be an established company. How would you know?
Mr. Bolduc: We also assist Health Canada, who asks us to target importers or exporters that they suspect would be non-compliant with Canadian legislation.
The Chair: At the moment, Health Canada can give you advice that will allow you to operate on their advice. You can suspect things and turn them over to Health Canada, but under Bill C-8, an actual corporation could give you an indication or target to look for specific products coming across. Is that right?
Mr. Bolduc: Exactly.
The Chair: But we do not have that as yet.
Mr. Bolduc: Exactly. A rights holder would request assistance from the Canada Border Services Agency for their copyright or intellectual property.
The Chair: That is for clarification. We will move into full questioning now. I will turn it over to Senator Eggleton.
Senator Eggleton: I want to ask Dr. Attaran about Ranbaxy. You said that they have products coming into this country that are not allowed into the U.S. as a result of the U.S. going over there and examining their practices. Is that true?
Mr. Attaran: That is absolutely right. When I checked this morning on Health Canada's website, there were about 160 different medicines and dosage forms. They have a big business here.
Senator Eggleton: These are products that have been banned in the U.S. because the FDA checked the production of them in India and decided that they did not meet the standards.
Mr. Attaran: Some of those 160, yes. Let me correct one thing: The FDA, despite being a better-resourced, better-equipped and, I would say, more capable regulatory agency than Health Canada, by a long way —
Senator Eggleton: There is no doubt about that.
Mr. Attaran: — was not able to detect this fraud. It came to light because a senior executive at Ranbaxy blew the whistle and told the FDA.
The nature of this crime is that it is so insidious — that a company can carry on with it and not easily be caught even by the likes of the FDA, which is why I am so very concerned. The FDA has given the world clear notice that this company is operating on criminal terms, but as far as I know Health Canada hasn't opened an investigation.
Senator Eggleton: The fellows in uniform here are doing their best, but they don't have the expertise to know some of this stuff if even Health Canada doesn't have it.
Mr. Attaran: It is no fault of theirs because their agencies are not technically equipped in this sense. They are not drug regulators.
Senator Eggleton: I will ask the RCMP representative about what Mr. Attaran says about the Internet. He mentioned a company out of Manitoba and wrote to the Prime Minister about it.
The Wall Street Journal reported in 2012 that an internet pharmacy in Manitoba, CanadaDrugs.com, distributed a fax advertisement to doctors for a cancer medicine (Avastin) . . . that contained industrial solvents rather than a real drug.
Has there been an investigation of these Internet operations?
Mr. Cabana: Thank you for that question. There has been and continues to be an investigation. Actually, in 2010, to try to understand the prevalence of the problem and how widespread it was, we initiated a pilot project, Project Centurion. It specifically looked at the sale of medication, without terming it "counterfeit medication," over the Internet. From April 2010 to April 2012, we received 49 referrals from partner law enforcement agencies. We examined 70 Canadian pharmacy websites. Those were determined to have an associated address or server located in Canada. We examined 400 international pharmacy websites and 600 classified ads that were appearing in Canada. This resulted in the initiation of 27 investigations plus 9 major projects.
Senator Eggleton: How many successful prosecutions?
Mr. Cabana: To my knowledge to this date, none.
Senator Eggleton: Well, I don't know. Is the Internet pharmacy in Manitoba, canadadrugs.com, still operating? Do we know that? Does anybody know that? This was in your letter to the Prime Minister a year ago, Dr. Attaran. Is this Internet pharmacy in Manitoba still operating?
Mr. Attaran: Yes, it is still operating.
Senator Eggleton: Yes.
Mr. Attaran: To be honest, they are one of the cleaner players; nonetheless, they were implicated by American authorities in advertising a fake cancer medicine that was bought by doctors and used by patients.
Senator Eggleton: Who determined that there were industrial solvents in the drug?
Mr. Attaran: I believe, but I could be wrong, that it was the FDA in the United States.
Mr. Cabana: I would like to clarify my previous response. On a point of clarification, out of the review that we conducted, we found, as Dr. Attaran mentioned, that some Internet pharmacies are located in Canada and operating out of Canada. We also found that a large number of pharmacies purport to be operating in Canada. When you look at the website, all the indicators are that they are Canadian. But when you conduct the investigation and drill down, you realize that they are actually located in a foreign country offshore somewhere.
Senator Eggleton: Do you share that information with authorities in that country or do you do anything to try to shut down their Canadian website?
Mr. Cabana: We try to shut down the Canadian websites if clear offences are being committed, of course. In terms of sharing information with our international partners, for the most part we do. Some of the locations where they are operating make it more difficult to share information.
Senator Eggleton: Please have a look at canadadrugs.com.
Senator Stewart Olsen: Thank you for coming here once again.
I suspect that the magnitude of this problem is quite large. Because there is not a ton of clear data, I have a lot of questions. How do you ever find out? I know you could probably look at something and specifically try to flag it or does someone else have to bring it up? Does someone have to die before a particular import is found out? I am not blaming anyone; I just think the magnitude of the problem is difficult to solve. I don't know how you would even know that a drug is counterfeit.
Mr. Cabana: Is the question directed at me?
Senator Stewart Olsen: Anyone, please.
Mr. Cabana: Thank you for the question. It is a hard one to answer.
Senator Stewart Olsen: I know.
Mr. Cabana: It is not a situation where we wait for someone to die from the use of these counterfeit medications. We investigate referrals provided to us, as I mentioned, either by some of our partners in law enforcement agencies, the CBSA, or Health Canada. We are paying attention to the problem and we are investigating them. Unfortunately, as you point out, without having a full understanding of how broad the problem is, although we know it is significant, we cannot investigate every activity out there.
The other thing we have seen in the course of investigating some criminal organizations is activity outside counterfeit medicine that would be of interest to the RCMP. From time to time, because we are no longer focused on commodity, we are focused on the activities of the criminal organization. We can identify some criminal organizations that are also involved in counterfeit medicine. When we can establish that, we actively investigate them.
Senator Stewart Olsen: Usually you are not the initial point of contact.
Mr. Cabana: No.
Mr. Bolduc: I would agree with my colleague that it is a difficult question. It is a challenge for the CBSA.
To give you a sense of what we handle every day, over 137,000 postal shipments and over 100,000 courier shipments are processed every day in Canada. We are leveraging intelligence when the data are available. We try to provide the latest trend to our frontline officers so they can pick up on those indicators and intercept those products. But it is like trying to find a needle in the haystack because of the way that the Internet has increased shopping and the use of the postal stream. It makes it challenging for our officers to be able to pick up those parcels and the counterfeit pharmaceuticals.
Mr. Attaran: Senator, you asked an excellent question. Your suspicion that this is a big problem is possibly correct. I cannot tell you whether you are right or wrong because we don't do the monitoring in this country. Health Canada is very far behind global best practice in not doing that monitoring.
As to the problem of what gets across the border, which Mr. Bolduc talked about, other countries have had good success with equipping customs with some laboratory equipment at ports of entry or in the postal facilities so that they can conduct testing on the spot to know if a medicine is substandard or even outright fake, without having to refer it to the health agency, without having to refer it to Health Canada.
There is a technology we have used in our studies — and even Nigeria is using this, so goodness knows why Canada has not caught up with Nigeria yet. At their ports of entry, a piece of equipment known as a Raman spectrometer is used. It can test a medicine even through its packaging, through the blister pack that you've seen pills come in. You simply point this device at the sample and it will give you a reasonably good idea of whether or not that medicine is authentic. FDA is using this; the U.S. customs authorities are using it; as I say, Nigeria is using it; and several other countries, too. It is the sort of thing that would really help the job of my friends here, and I think definitely CBSA and RCMP should be using that technology as well. But, of course, that takes leadership from beyond them. They need a mandate to do that, which I hope you can give them.
Senator Stewart Olsen: That is very helpful.
I like the doable things. I'm wondering why we couldn't work with some of the search engines, the websites and things like that, to put a little flag on something, buyer beware, from Canada. When people go on those sites, they probably think they are legitimate; and often they say they are legitimate and they have been approved.
Is there no way to work with today's technology to flag those so that people who are buying online can pick up on that and think: Maybe this wouldn't be that safe?
Mr. Cabana: Again, senator, that is a very reasonable suggestion. I can explain what we've done, which to some extent is buyer beware, basically the same principle as you are suggesting.
With Project PANGEA, the parcels that are intercepted by CBSA and deemed non-compliant by Health Canada, for those that we can identify the intended recipient, letters are sent. The RCMP sends letters out to each of those recipients, outlining the fact that what they have purchased is counterfeit, the potential health risks associated with buying these types of commodities over the Internet, as well as some of the criminal sanctions that are possible.
You touched on something that is of importance to the RCMP: the awareness piece. You are right; especially if it looks like a legitimate Canadian site, buyers have no way of telling the difference. We have partnered with the Canadian International Pharmacy Association. We have had awareness campaigns where we have put posters out. We have had videos playing in some of the pharmacies to raise people's awareness. But clearly more could be done.
Senator Stewart Olsen: I am not suggesting that you guys should do it all, but there has to be some onus on whoever has bought the product.
I am even wondering, Mr. Bolduc: What about when that product comes through? No matter what it is, is there not some kind of sticker that you can smack on it and say, "Take this at your own risk. We don't know, but you should be aware"? I think that public awareness in this instance will probably identify more than maybe we would ever be able to.
The Chair: On that, even if that were practical, I assume it requires an authority for you to operate to that, or do you already have that kind of authority?
Mr. Bolduc: Once a parcel is intercepted and there is a decision that the goods are not admissible into Canada, the importer is made aware that the goods have been intercepted and seized.
The Chair: Thank you very much.
Senator Stewart Olsen: If I could clarify, though. I wasn't suggesting the ones that you have proven. I am suggesting maybe all of them that come through. I don't see any other way of making people aware.
The Chair: I think we will leave it at that point, but I think this is a more complicated issue in terms of the total questions. But we have it on the record.
Senator Seidman: You have spoken to my first question, which had to do with prevalence. I understand how complicated it is to try to understand how large a problem it is, but perhaps you could speak to whether there has been an increase in it over the last number of years, because you would have concrete evidence of that in terms of seizures or whatever else you do.
Then you might, if you could, tell us if there is a particular class or classes of pharmaceuticals that are more likely to be counterfeited than others.
Mr. Attaran: I don't have good data from Canada. Maybe my friends do. From Europe and the U.S., yes, definitely the problem is growing in scope and scale.
A few years ago — and I apologize because I can't remember the year — the EU recorded a 700 per cent increase in a single year of medicines they seized at ports of entry. A 700 per cent growth in a year is a fairly big deal.
There is no apparent restriction as to therapeutic class or what kind of medicine is affected. Obviously, the ones that get all the headlines are fake Viagra and fake Cialis, for rather obvious reasons that I don't need to get into. People buy those online because they are embarrassed, I suppose, to get it from their doctor.
We have seen fake malaria medicines, such as I showed you, fake antibiotics, fake drugs for cancer and heart disease, fake neurological medicines for depression, for example, fake analgesics. If there is a limit to this, I haven't seen it yet.
Senator Seidman: Would CBSA or RCMP have a comment? I would be especially interested.
Mr. Bolduc: We are, in fact, seeing an increase in the overall volume of imported goods throughout the postal stream. Last year we processed 44 million postal shipments. This year, after Q3, we are at 36 million.
Using Health Canada's information for fiscal 2012-13, in the postal stream we've intercepted 25,938 products, and mainly prescription drugs, that were counterfeit. For this fiscal year, after only the first three quarters, we have intercepted 27,151 products. Again, it is limited data, just over the course of a year and three quarters.
Senator Seidman: But it is data.
Mr. Bolduc: It is data, and that aligns with increasing volumes.
Senator Cordy: Is this just drugs or is it overall? Is this just drugs that you're talking about?
Mr. Bolduc: I'm talking about drugs, medical devices, human use drugs. Overall, for drugs last fiscal, it was 11,756; and this year we are tracking a little over 7,000 for the first three quarters.
Senator Seidman: Excuse me. If I could just pursue this for a moment.
Are you categorizing the drugs that you're intercepting?
Mr. Bolduc: We're not. Those statistics are from Health Canada. They're the ones making the determination.
Senator Seidman: Have they categorized? Do you have records or any data on particular classes of drugs that are more likely to be counterfeited than others?
Mr. Bolduc: No, they just refer to Schedule F, which is prescription drugs. I don't have more details than that.
Senator Seidman: We've heard that the technology does exist to detect whether or not a drug is counterfeit. We've heard that. I'll leave that for the moment because I would like to ask CBSA about the new bill, Bill C-8, if I could. It's before Parliament now, in fact, in the House of Commons. That gives border guards more power to detain goods they suspect could infringe on copyright or trademark rights, which would apply in this case to counterfeit drugs. I would like to know what you could tell us about how that would improve the current system.
Mr. Bolduc: If Bill C-8 gets Royal Assent, it will give new border authority to Canada Border Services Agency, and the fact that a rights-holder will be able to make a request for information to the CBSA. Based on that request for information, if CBSA does intercept shipments that would imply the rights-holder, then CBSA would be allowed to share the information back to the rights-holder who then turn to the civil court to pursue civil litigation if needed.
So those authorities would be embedded into the Customs Act and rightfully be able to detain a shipment, pending a determination by the courts as to whether or not those goods are infringing the rights-holder.
Senator Seidman: That would come with some penalty, ultimately, if the rights-holder would be able to then pursue that?
Mr. Bolduc: Those would be led by the rights-holder in front of a civil court, yes.
Mr. Attaran: I agree with what was just said, but I would like to dial us back a moment to make a distinction that I think would be helpful to everyone here. We're really talking about two problems. We're talking, first, about medicines that never have a place in the legitimate supply chain for medicines — the counterfeits that law enforcement seizes at the border, for example. Those never have a place in the legitimate supply chain at all. They're just fake or counterfeit goods. Then we're talking about medicines that are in the legitimate supply chain, produced by real manufacturers like Ranbaxy, but are substandard for some reason. Those are products that are registered with Health Canada and have gone through all the hoops, but for some reason the company is not maintaining the quality standards it should, whether for accidental or deliberately fraudulent reasons. Please bear that distinction in mind because you need a solution on both sides.
The Chair: The latter would fall clearly under Health Canada's right to regulate that product because they give authority in a very clear label with regard to what they have approved. Is that correct?
Mr. Attaran: Yes, but at the moment where Health Canada is not doing as well as it might is because —
The Chair: We'll pursue that aspect. Senator, one more question?
Senator Seidman: Thank you. Could an authentic product end up being detained at the border?
Mr. Bolduc: If Health Canada would make a request at CBSA to target a specific exporter or a specific product, yes.
Senator Seidman: Looking at it from another angle, we have heard a lot about drug shortages in this committee. My question would be: Could drug shortages be creating a market for counterfeit drugs, and therefore an increase in this whole problem?
Mr. Attaran: That's definitely been observed in other countries that follow these things more closely than we do. There was an absolutely devastating incident over a year ago in the United States where, because of shortages of a steroid drug, a compounding pharmacy — a pharmacy that makes its products on site, they mix it up from scratch — produced a drug that was given to hundreds of patients, many of whom died and became ill because they did a poor job of it. Whenever we're forced for whatever reason — shortages being a leading one — to depart from the ordinary supply chain, we are putting patients at risk.
[Translation]
Senator Chaput: Please forgive me for being late.
My first question goes to the RCMP and deals with counterfeit pharmaceutical products.
If I correctly understood your answer to the senators who asked the question, there has been an increase of counterfeit pharmaceutical products on the Canadian market in recent years.
Mr. Cabana: Thank you very much, Senator. What we have observed is an increase in seizures of counterfeit pharmaceutical products.
If I may provide a statistic that is somewhat related to the previous question, the number of cases that the RCMP investigated between 2008 and 2013 increased by 100 per cent.
Senator Chaput: Very good. The practice is illegal in Canada, correct?
Mr. Cabana: Yes.
Senator Chaput: Are penalties set for this illegal practice?
Mr. Cabana: For importing?
Senator Chaput: Yes.
Mr. Cabana: Yes.
Senator Chaput: Can you give me an example?
Mr. Cabana: I am sorry; I do not have that information with me. I could send it to you, if you wish.
Senator Chaput: You cannot give me one example of a penalty that has been applied to a company or to people?
Mr. Cabana: You have to make a distinction. Most of the investigations that the RCMP undertakes are into organized crime. At the end of the day, the resulting charges are not always laid under counterfeiting legislation. They may be charges under the Criminal Code, fraud charges. So the penalties are those established in the Criminal Code.
The range of those penalties is quite wide. We have individuals who have received fines and others who have been sentenced to prison for up to five years.
Senator Chaput: Are you able to tell me the percentage of people arrested for this kind of offence who have received penalties?
Mr. Cabana: Unfortunately, no. I cannot give you that number.
Senator Chaput: Mr. Cabana, has the RCMP recently taken any steps to improve your ability to intercept these counterfeit medications?
Mr. Cabana: I think you have to make a distinction there too. Intercepting counterfeit medications is not what the RCMP does. We work with our colleagues at the Canada Border Services Agency, who are really the people on the front line in terms of counterfeit medications entering Canada.
Senator Chaput: Do you hold discussions with the people who are responsible? Do you communicate or exchange ideas? Because surely you would have recommendations or suggestions for them.
Mr. Cabana: I can tell you that ideas and information are exchanged on a regular basis. CBSA representatives sit on committees formed by law enforcement committees and take part in the discussions that are held about counterfeit medications at the Drug Abuse Committee of the Canadian Association of Chiefs of Police. Measures have been put in place as well. So that type of dialogue goes on all the time.
Senator Chaput: If I understand correctly, in terms of counterfeit medications, you are responsible for intercepting them, if you believe that they are being imported. But you do not have the responsibility to impose penalties?
Mr. Cabana: Our responsibility is to investigate. Interception is not our responsibility. So we conduct the investigations. The penalties are at a criminal level, and they are imposed by the courts.
Mr. Bolduc: I would like to add to my colleague's answer. CBSA is responsible for interceptions. So if we have any indication that the volume is commercial in nature or that organized crime could be at the source of a specific import, we then pass the information to the RCMP, who will investigate allegations of a criminal nature. It is a partnership. I can also tell you that information like that is exchanged on a daily basis.
[English]
Senator Segal: There is a principle in the law called "the reasonable man" — the average person and what they might conclude. I am afraid my conclusion — and please correct me if I am wrong, and I'm talking to our uniformed guests first as I have a particular question for our other panel member — is that despite intense professionalism, hard work, due diligence and operating with the law that allows you to do what you can do and understanding what you can't do, you are, in fact, overwhelmed by the flow of counterfeit coming into the country. You don't have the tools and the instruments, and I'm not blaming you guys for this, to actually do the kind of detailed stop, look, investigate and charge process that you would be doing if you were investigating other kinds of crimes that are not Internet-based. That was my first conclusion. Let me add two questions to that.
Question one: Is there a single individual in the Government of Canada, in Her Majesty's employment in this country, who is responsible for ensuring that no counterfeit drugs are shipped into the country or shipped out of the country? Is there one person, either someone to whom you report or some interdepartmental group with which you are associated? I think from the point of view of this committee, understanding who that person might be or if there isn't one person, how that might be remedied, it would be very helpful to know.
Question two: We license all kinds of things in our society. You can't buy cigars unless there is one of Her Majesty's stickers on the top. I know of the RCMP going into cigar stores because they have criminal intelligence information that the cigars in that store were not properly excise taxed, and they have closed down the store. They do that by saying that all the supply is evidence in our larger investigation, and the store closes. Fair or unfair, they have a difficult job to do and they do it the best way they can.
If we have that authority for cigars and we have that authority for liquor, which we have always had, and I'm not asking you to comment on insufficiency in the law as it's not your fault, why would it not be more helpful to your task if we had the kind of tough legislation such that you don't get to sell anything that is a pharmaceutical on the Internet or anywhere else unless there has been some licensing provision? That licensing provision then relates to a presale testing process that would begin to affect the quality of what's out there.
The Chair: On the first question, the ultimate authority, I think there are two possible major sources. Would you like to start, Mr. Bolduc?
Mr. Bolduc: I'll take the first one, part of the second one and leave the third one for my colleague. Thank you for your questions, senator. In fact, it is a challenge. Dealing with increasing volumes makes it very difficult to pick up the parcel or the shipment that contains counterfeit pharmaceuticals. An additional challenge is the postal stream. CBSA does not get advance information on parcels coming into Canada, which is somewhat different than what we see in air and marine modes where information is provided to the CBSA and we are able to target. In those cases, when goods show up at the border, we know exactly which container or which shipment we want to see.
We don't have that ability in the postal mode; but that is about to change. A new postal facility in Vancouver will be up and running at the end of March. In the redesign, we will get partial advance information essentially from the U.S. and parts of the U.K., which might help us to target those specific packages.
The agency responsible for regulation and controlling the environment is Health Canada. Again, Health Canada relies on partners like CBSA and the RCMP. CBSA is the face of most departments at the border. The challenge in dealing with counterfeit pharmaceuticals is no different than other aspects where we tag team and try to do our best to prevent potentially dangerous products from reaching the streets and causing a safety risk for Canadians.
Mr. Cabana: Are you leaving me the third one?
Mr. Bolduc: Yes, I'm leaving you the third one.
Mr. Cabana: Thank you for the question; but I guess I'll probably challenge the premise of it from the enforcement component.
Slightly over a year ago, we changed the way we approach investigations, but more important, we changed the way we target. The premise of your question, I would say, would have applied probably a year or year and a half ago, when focus on commodities and resources was split between the different priorities found within those commodities. That's no longer the case. We have a single prioritization tool that's applied nationally. All our files are prioritized the same way based on a number of factors: political, economic, social integrity, strategic relevance, targets, vulnerability, impact and resource requirements. Those are a few of the concerns taken into consideration in determining which file is investigated first.
Of course, presence of organized crime is a priority for the RCMP, as is the safety and security of Canadians. I would challenge the premise that we have fewer resources assigned to the counterfeit medicine problem than we have assigned in other areas for other offences as not necessarily being the case anymore. Our focus is squarely on organized crime's involvement in the commission of offences, including participation in the distribution and importation of counterfeit medicines. When that is present, and if there is a risk to the Canadian public, those types of files, for lack of a better term, "bubble to the surface" and proper attention is paid to them.
Senator Segal: Let us see if I understand you correctly, commissioner. If a company in India that is not part of organized crime happened to be shipping drugs that are substandard or toxic, they would not necessarily get as much attention as an organized crime unit would get that was trying to do the same thing?
Mr. Cabana: We are operating in the hypothetical.
Senator Segal: Indeed.
Mr. Cabana: If it is clearly indicated in the referral we receive that the drugs are substandard and a serious significant danger to the Canadian public, it will be prioritized. In circumstances where we don't have that knowledge and there are drugs coming in — and there are significant amounts of drugs that are coming into the country — we don't have any oversight over those instances.
Senator Segal: Dr. Attaran, in the journal article that you wrote in November 2012, with respect to "How to achieve international action on falsified and substandard medicines," you say on page 2:
The pharmaceutical industry, researchers, and governments must better partner in acquiring, analysing and publicising knowledge. The Pharmaceutical Security Institute maintains a large database on various medicine crimes, but the industry keeps nearly all the data secret, lest transparency should undermine law enforcement efforts and deter patients from consuming its products. Unfortunately, the industry's secrecy deprives researchers and governments of data that would help raise public awareness of falsification, catalyse political action, and thus improve patient safety. Some form of cooperation and compromise must be reached . . .
Are you suggesting by that paragraph that because of the anxiety about intellectual property, we're not getting the kind of cooperation between industry enforcement, Health Canada, our colleagues from the uniformed services, which would allow us to get ahead of the problem rather than be behind the eight ball, as I think you believe we are?
Mr. Attaran: That's an outstanding question. I'm going to answer it a bit more broadly than you posed it. This is a fantastically multidisciplinary problem. It is the hardest problem I've researched in my life, because you have to be a bit of a scientist, a bit of a lawyer, a bit of a law enforcer. You have to understand the pharmaceutical industry and its business practices, and you have to be able to think like an organized criminal.
No single person or single agency is going to do this well. You alluded earlier to there being a need for a single person. I would actually say what we need is an inter-agency task force that also includes some people from outside, from the pharma industry — both branded and generic — and researchers from academia if we're going to crack this. To mobilize knowledge, as Senator Stewart Olsen said, is necessary, and I agree with her, we're going to need better data. Whether that comes from the Pharmaceutical Security Institute, like you quoted from my paper, or from our own made-in-Canada efforts, is not so important. What's important is that we have data and better knowledge, so that everyone from manufacturers to law enforcement officers to parliamentarians focuses their attention better on the task at hand.
Here is what I would like to propose. I think within our own country we can form this inter-agency task force including the deputies of the relevant ministries, senior officers, industry, researchers. One of the things we want to do quickly, I would hope, is test what comes into the country so we can begin to answer some of the questions that have been posed to us today. Which drugs are affected? Where are they coming from? Are we dealing mainly with a counterfeiting problem or also a substandard problem that's imperilling our health?
Of the 7,000 or so medicines that Mr. Bolduc said were seized to date this year, I don't know how many have been tested by Health Canada, probably not very many. I don't think any of us knows.
Let's start generating some knowledge and data around this, and then that will put us in a better position to act.
Senator Segal: Thank you, chair.
The Chair: Thank you for the small question, senator.
Senator Enverga: A lot of those questions have been discussed that I was thinking of. However, if we think that these drugs we're talking about are dangerous or a safety or security risk, for the lack of power that we have, can we possibly treat them like narcotics or drugs, so we can have more power and discourage smugglers or the import of these drugs? Is it possible? What do you think? Would this help you?
Mr. Bolduc: If Health Canada or the RCMP comes across information that a particular medication would be important commercially that would be substandard, we would target the exporter, the importer, and make sure that the shipment or the goods would not make it to the street. Again, we're leveraging intelligence that is out there, and one of the main goals of CBSA is to prevent those goods that could present a risk for the safety and security of Canadians. There is no negotiating when we're talking about safety and security.
Senator Enverga: Will the enforcement be any different from any illicit drugs, like narcotics, if you classify them as really dangerous counterfeit drugs?
Mr. Bolduc: Hypothetically, depending on what we have — and we would leverage the expertise of Health Canada — and on the result, then the RCMP could be called in if we believe that there's a criminal element in there that would require an investigation.
Senator Enverga: On another note, I know it's either Internet or widespread right on the ground, what role do you think the post office, FedEx, those types of organizations can do to help you implement this?
Mr. Bolduc: That's a good question. We do work in partnership with the courier companies, FedEx, UPS and so on. We are able to do better targeting in the courier stream because the courier companies are able to get advance information on the shipment themselves. It makes our lives a little easier in being able to target those particular shipments we want to see. As I referenced before, we use indicators, type of goods, where it's coming from, description, packaging. There is a fairly long list of indicators that our officers use in trying to intercept those particular shipments.
Senator Enverga: Do you have any thoughts about it?
Mr. Cabana: I would be repeating what my colleague just said.
Senator Enverga: One more quick question, if I may. I know in spite of all these provincial coverage, prescription drugs, insurance, I'm wondering, Mr. Attaran, why do you think people get those counterfeit drugs, cheap drugs, if they have insurance and everything? We have all the agencies that help them get the drugs.
Mr. Attaran: Bear in mind that in this country we don't have an insurance scheme for most pharmaceuticals. Some of us, through our employment in the Senate, the University of Ottawa, the RCMP or CBSA, have that benefit. We have that through private insurance, but in the scheme of the Canada Health Act, medicines are not covered unless they're administered in hospital.
For many people in this country, they may find their medicines too expensive and may wish to get them cheaper on the Internet. That's unfortunate when it happens.
Senator Seth: Thank you, chair. I can understand this is a very complex, serious topic. From what I understand, you are saying in Canada, the main source of counterfeit medication is largely from Southeast Asia, by way of the Internet. Of course, I would like to know, did we try to find out why it's south Asia, why it is coming from there, what is the reason? We have to find the cause.
My second question is how many individuals or companies have been charged with selling or buying counterfeit drugs from abroad?
Third, what measures have been taken by the RCMP to ensure that citizens are safe and secure?
Fourth, what percentage of people do you think die due to counterfeit medications? Do we have the data on that?
Fifth, what is the percentage of adverse reactions that we are seeing with these medications?
The Chair: The last two, we will hold. Go to the first two and then, unless you have expertise with regard to the health system, perhaps we will hold those questions for Health Canada or someone else. If you do have information, please apply it to those questions.
Mr. Attaran: I have a bit of information on Southeast Asia. My bigger concern is the manufacturing of medicines or medicine ingredients, particularly in India, that enter the legitimate supply chain — like the Ranbaxy situation.
We are very dependent on India as a supplier and China as a supplier. It is perhaps the subject of a different hearing for a different day, but there are such extreme lacunae in India's drug regulation that I am very afraid that our basic medicine supply — not counterfeit — is not consistently up to standard because India's quality of drug regulation is abysmal, to choose my word carefully.
Senator Seth: Why does Canada buy from them? They should stop.
Mr. Attaran: We are in a world that is more globalized than it used to be. About 30 years ago, a medicine you would take in Canada was probably made in Canada, the United States, Europe or Japan — a country that was in the developed world ranks and where there was a relationship of trust between the regulators in Canada and the foreign regulators. However, with free trade, which I support totally, we have globalized the industry to the extent that markets are now far ahead of where regulation is. We are buying medicines increasingly and knowingly from countries that are very far below our standard or European standard, and so forth.
As I said, perhaps that is a different hearing for a different day. It is the hearing that we had in Washington, D.C., before the U.S. Congress last week. I regard it as extremely serious, but I don't think it's today's subject.
Senator Seth: My question is hypothetical. Medicine comes here from different countries. Is it not known that these countries have lower standards? Should medicine not be checked chemically to know what ingredients are in it before it is given to the patients who could have a bad reaction and die?
Mr. Attaran: Our laws in Canada do not stipulate that. In Europe, for example under the Falsified Medicines Directive, the European Commission has decided and European Union countries are implementing that any medicine imported from outside the European Union and outside a handful of other trusted countries — Canada is one of them — must be tested. Each batch entering the European Union must be tested. We do not have that legal requirement.
The answer to your question is that we are not doing that testing because it is not a legal requirement in our country.
Senator Seth: It puzzles me. Why is the survival rate or lifespan better in Canada than in the U.S.? Why do we not have higher mortality rates when we have so much counterfeit medication and low-grade medication? Yet, we do well medically here. The lifespan is better here than it is in the U.S., unfortunately.
Mr. Attaran: Fortunately, I would hope. Glad that we live longer.
Senator Seth: No, it's not because of our health system.
The Chair: Senator, you are getting into a broad social issue. Unless there is a specific pharma-answer you can give, we will move on past that question. Thank you, senator.
Senator Cordy: This is very informative. It doesn't leave you with a great feeling but it has been informative. Thank you all for the work you are doing because I know it is a tough challenge.
Mr. Bolduc, Senator Seidman asked a question and you talked about 44 million pieces of mail and you said 36 million after three-quarters. Are you referring to overall packages or is that specifically related to drugs and medical devices?
Mr. Bolduc: Overall.
Senator Cordy: I thought it was overall, but I wanted to confirm it.
You said that 7,000 medicines were seized at the border. Do we know how many of these were counterfeit or substandard medications? Do we have that data?
Mr. Bolduc: I don't have that data with me. The number I quoted was close to 7,000 products — Schedule F of the Food and Drug Regulations — counterfeit prescription medication.
Senator Cordy: Is the data available through Health Canada?
Mr. Bolduc: The numbers I provided are coming from Health Canada, so I am sure that Health Canada would be able to provide them.
Senator Cordy: Of the 44 million pieces of mail, do we know how many would be related to pharmaceutical drugs or medical devices?
Mr. Bolduc: Unfortunately, we don't have that information. As I mentioned before, the postal environment is not one where we get advance information. It is difficult as it is a manual process. We know what we intercept; but we don't know what is coming through.
Senator Cordy: The numbers could be significant. We just don't know, although 7,000 is pretty significant. You don't get advance notice, so are you targeting? For example, if it comes from Ranbaxy, I assume it would get a closer look than something coming from another company. Is that it?
Mr. Bolduc: Again, for a specific company, we would need to have indicators that it is a shipment from that company, so packaging is an element. If that is not obvious because of the speed that parcels are processed through a postal centre, we would not be able to pick up on those.
Mr. Attaran: Bear in mind that the true counterfeit products coming in aren't going to be honestly labelled as to which company they are from, right? The legal definition of "counterfeiting" is that you fake the trademark deliberately. The product may say on its label "Pfizer" or "GlaxoSmithKline" but it won't have come from those companies. Using trademarks and brand names as a screening tool at the border, I would think, is not very effective for that reason. The problem with Ranbaxy is not that they are producing medicines coming through the illegitimate supply chain but that their medicines in the legitimate supply chain are compromised and substandard.
Senator Cordy: If you know that a company is sending substandard medications, can you look at those and red flag them? I assume they would have the Ranbaxy label on them.
Mr. Bolduc: That would be a question for Health Canada, who controls and regulates importation. If Health Canada were to provide either the RCMP or us with information, we would be able to act on it. Health Canada is responsible for that.
Senator Cordy: Do we know country of origin for packages coming in? Companies on ships would have country of origin. Do we have that on parcels going through the mail?
Mr. Bolduc: We have on the packages a customs declaration, so we usually get the country of origin.
Senator Cordy: Is it against the law for an individual to import drugs, whether sub-standard or legitimate pharmaceuticals, into the country? Is that legal?
Mr. Bolduc: I wouldn't be able to answer that question.
In the travel scheme, let us take someone at an airport coming back with a prescription drug legally acquired for personal use and in appropriate packaging with a prescription from a doctor. That person would be permitted to import that medicine.
Senator Cordy: Do you know whether or not it is?
Mr. Attaran: It's a grey zone. It is one where officers exercise their good discretion. For example, these malaria medicines, one which is real and one which is fake, bringing them into Canada today did not land me in jail. Thank you very much for showing me the consideration.
The Chair: You are not there yet?
Mr. Attaran: So far. It is subject to the officer's good discretion. We benefited in our research from CPSA showing us the discretion to bring in samples for testing or research purposes.
Senator Cordy: You spoke about departments working together, RCMP, Health Canada, CBSA. Dr. Attaran, you talked about bringing in private industry into these discussions. Still, in some ways, it seems to me that it is almost siloed because you cannot do this because it is Health Canada. How smoothly is this working together? Could you give me an example of how smooth it is or the challenges that you are facing?
Mr. Cabana: From my perspective, the best example is Pangea, which occurs on a yearly basis. Granted it is only one week in duration, but during that week the agencies are working and collaborating closely with one another in terms of providing the necessary indicators to make sure interdictions and seizures are made, and necessary investigations are followed up on. It can work.
Mr. Bolduc: To add to that, for the part of our basic training that deals with these issues, we leverage the expertise of Health Canada to get training for our officers.
Again, it is a challenging issue, but I would not leave the senators with the impression that that cooperation is not working well; it is.
Mr. Attaran: What I would hope is that in Canada we are able to get to a point where inter-agency cooperation is actually very routine. What that will inevitably require is blurring some of the lines between what the agencies do. I am a strong advocate of giving, for example, CBSA equipment and training so that at ports of entry they can test medicines in a rudimentary way so that they know better whether or not to call in Health Canada.
We are seeing that done in more of our peer countries. In the U.K., the MHRA works nicely with law enforcement. In the U.S., that relationship is also growing closer. In Belgium it's growing closer. We can emulate the best of what our partners do but, yes, it will mean every agency unsilos itself to a certain extent.
Senator Cordy: I know this is quasi-related to Health Canada, but do we have data at all — the RCMP, for example — about adverse reactions to drugs that are illegal? I say "illegal" meaning counterfeit or not up to standards. Do we have any of that data? In her presentation, Senator Stewart Olsen said, "Do we have to wait until somebody dies?" If you are receiving a counterfeit, taking a counterfeit medication it can't be particularly good for you.
Mr. Cabana: No, but the role of the RCMP is to investigate. In terms of collecting and measuring reaction to drugs that are coming into the country, that doesn't really fall within the ambit of our mandate. We are aware of instances where there have been individuals who died as a result of taking counterfeit medicine.
Notionally, we have that knowledge. We know that it is serious and significant. There are people who have lost their lives because of it. But to say that we are actively collecting statistics around that particular aspect, no we are not.
Senator Cordy: That doesn't surprise me — and not that you would have the data; I assume it would be Health Canada — but it is certainly not something that the public is very aware of. Going back to Senator Stewart Olsen, who talked about the component of education of the public, I think it is a huge, complex situation.
The Chair: I would point out that in our other studies we have noted that less than 3 per cent of all adverse reactions, for whatever reason, are detected. It's a very significant issue and we have made significant recommendations in that area.
Senator Eaton: Are most generic drugs manufactured offshore, in India and Asia?
Mr. Attaran: Those data are not available for Health Canada. I've asked Health Canada, but they have not given that data to me.
In the United States, yes, most generic drugs come from outside of the United States. Now Canada has an even smaller drug industry than the U.S. so it should be the same here, perhaps even more so.
Senator Eaton: I am asking that question, doctor, because we have heard from previous witnesses that there is already a shortage in antibiotics and it is going to get worse. We also heard that for most hospitals, 70 per cent of their drug orders are generic.
Should we recommend in our report that we set up something like the EU and anything that comes from offshore, unless it is a registered country like the U.S. or has the same standards as we have, should be inspected?
Mr. Attaran: I am certainly in support of batch testing, as the European Union is doing. I see no reason not to do it. The cost of implementing it would be relatively modest and the security we would gain from it would be quite major. This has been adopted by the 28 EU countries, and 28 countries don't come to a conclusion lightly. We would be very well advised to follow in their footsteps.
Senator Eaton: Mr. Bolduc and Mr. Cabana, are there pharmaceutical counterfeit companies in Canada?
Mr. Bolduc: I wouldn't know that.
Senator Eaton: I am asking that because apparently in 2010 the RCMP launched Project Centurion, a Montreal-based initiative specifically aimed at investigating pharmaceutical counterfeiting in Quebec.
Mr. Cabana: We have seen instances, but those are rare and few and far between.
There was one in January 2010, two individuals pled guilty in Montreal. They were sentenced to five years in jail — but the charges were under the Controlled Drugs and Substances Act — and two years concurrent under the Criminal Code in addition to a fine of $10,000.
In that particular case they were producing in a clandestine lab in Canada. They were producing Viagra pills and Cialis but, in addition, they were also producing ecstasy and meth in the same facility.
What is interesting is it was produced in an unsanitary commercial space and house latex paint was used as colourant for the pills.
Senator Segal: They weren't mixing? I am just checking.
Mr. Cabana: I can't say it does not occur in Canada because we do have instances where we have seen it, but the vast majority of what we have seen comes from offshore.
Senator Eaton: So all the Canadian Internet sites that we see are mostly manufactured across the ocean somewhere?
Mr. Attaran: Yes, that seems to be the case, although in that organized crime collective there are Canadian participants, including some on Canadian soil.
Senator Eaton: Americans order a lot of drugs from Canada because I understand our drugs are cheaper. I am talking about my mother's friends in Florida; they all buy their drugs from a Canadian Internet site because they are so much cheaper than drugs in the United States.
We don't do anything about exports to the United States, do we? That is not our concern. If they dropped dead in Florida because they bought drugs on a Canadian Internet service, that doesn't concern us. Or does it?
Mr. Attaran: It should concern us.
Senator Eaton: I agree.
Mr. Attaran: Our laws are clear on this, and Health Canada has lucidly stated what the law is, as long ago as 2006. They said that a Canadian pharmacist cannot fill a foreign prescription written by a foreign doctor for a foreign patient. That is not what pharmacists in this country are supposed to do. They are supposed to be serving Canadians.
It is not legal to do this kind of cross-jurisdictional end run for persons in Florida, as you described, and yet Health Canada's enforcement here has been lacking.
The Chair: Let us come back to the counterfeit aspects of this. That is one issue, but we are dealing with the counterfeit issue here. How does that apply to the question that the senator asked?
Mr. Cabana: I guess one comment is despite the fact that they think they are ordering drugs from Canadian Internet sites, our assessment seems to demonstrate that, in fact, they are not Canadian Internet sites. The Canadian flag might be there, but that doesn't make it a Canadian site, so that is even more concerning.
Senator Eaton: What do you recommend we do about that? Is there something in our report or legislation that we can do so they cannot put a Canadian flag on an Internet site if it's not Canadian? Should there be a warning on all Internet sites? What do you recommend?
Mr. Cabana: I don't think it's my place to direct or recommend what the committee should be putting in its report.
Keep in mind that the ability of the Canadian government to control and legislate criminal organizations that are operating offshore and are hiding behind the Internet is probably limited.
Mr. Attaran: Mr. Cabana is right. The way jurisdiction works is that we can easily regulate or criminalize that which happens in Canada, but that which is done abroad is harder to do. Normally, it requires an international agreement; that is, a treaty of some kind.
We can and should regulate those pharmacies in Canada that are violating the law to supply medicines, often unapproved, to persons abroad. I think that belongs in your report.
I also think what belongs in your report is an eye towards the future. This is an international organized crime. There are persons sitting well outside of Canada, sticking the Maple Leaf on their websites to make it seem as though the victims are buying genuine Canadian medicines when they are not. The only way that will be solved is through international cooperation of law enforcement and laws that interlock nicely with other countries. That requires a treaty.
Senator Eaton: We are going to the TPP now, for instance. Is that something they might be able to bring up?
Mr. Attaran: I think it goes beyond the TPP because what we are really talking about is international criminal activity, not legitimate trade activity, which is the main subject of the TPP. We need, I believe — and many of my colleagues believe — international criminal law on medicine quality that counterbalances what international trade law has done.
If I can use an analogy, the WTO agreements opened our doors and everybody's doors to imported medicines. For the most part, that has been a very good thing because we can now get medicine from more places at less cost. But when you open the door to the world, you also need to have a guard at the door. What we have failed to do is come up with the international criminal law, the international treaty that would make it easier for my friends in the RCMP and the CBSA and their counterparts elsewhere to work together on investigations, mutual legal assistance and transnational prosecution where crime rings span several countries. They need those tools, but those are tools, unfortunately, that Parliament can only ask for, and then it becomes the job of our foreign affairs ministry to try to negotiate those with other like-minded governments.
Senator Eggleton: I think Senator Eaton has asked the questions I was going to ask, namely how to get a better handle on the substandard versus the fraudulent pharmaceuticals. If Health Canada is not stepping in and doing anything about the substandard ones, then there is something further that needs to be done.
You have suggested, I think, in answer to Senator Eaton, if I understood you correctly, that there needs to be an examination of all batches coming into the country. Do you think that can be done on a practical basis?
Mr. Attaran: Well, it's being done in Europe and it's working rather well.
Senator Eggleton: Do they do it in the United States?
Mr. Attaran: No.
Senator Eggleton: But they do in Europe?
Mr. Attaran: It's certainly being discussed in the United States.
Senator Eggleton: The international treaty is not a UN kind of treaty? It would be different countries coming together? Who would facilitate this? Does the World Health Organization have any interest in doing that?
Mr. Attaran: It could be the World Health Organization, the United Nations Office on Drugs and Crime or something sui generis. It could be a protocol under the Convention on Transnational Organized Crime. There are many ways this could be done, but the current reality is that the pharmaceutical industry does not benefit and patients cannot benefit from any international criminal law that keeps our international trade channels safe from fraud, potentially fatal fraud. That's an international law reform project that must take place in which Canada can lead. I know other countries are thinking about it. The French government is quite enthusiastic about this idea, for example.
Senator Eggleton: Could it be done at the WTO maybe? I am just trying to think what the appropriate vehicle might be, such as the WTO, the WHO or the UN. Thank you.
The Chair: There's time to cover only a couple of small parts here, and I want to come back to the authority role.
I think I clearly understand what both Mr. Bolduc and Mr. Cabana have said, that indeed, if the appropriate regulatory authority identifies a target and provides information, you can pursue that in your respective jurisdictions at the time. Clearly, under evidence before us on a number of our hearings and topics that have been reviewed by this committee, we do know that there are limitations on Health Canada's existing authority, but it does have a great deal of authority, particularly with regard to the labeling of drugs and enforcing the labeling of drugs and the authority to require testing of pharmaceuticals. It does have that authority. Indeed, it has the authority to go abroad and visit the sites of production.
In the hearings held by this committee on the H1N1 pandemic, Tamiflu was one of the drugs that appeared. It may be surprising to bring it up in this context, but it is a very significant production of drugs. One of the questions that I asked during that hearing of a pharmaceutical company that has the rights to Tamiflu was where that drug is produced, and they refused to answer.
I asked Health Canada subsequently as to whether or not they check the production sites abroad with regard to the production of that and other drugs. The answer I got was a very carefully constructed bureaucratic answer that told me nothing. I understand that in the last year, they have inspected possibly three sites abroad.
I think you have given us the information; I will not get you to expand on it, but very clearly, Dr. Attaran has identified the second and perhaps even the most substantially significant aspect of the need for testing of pharmaceuticals entering the country, and that is with respect to subperformance pharmaceuticals. We know of numerous recorded examples, and indeed in Canada we have seen pharmaceuticals with glass in them and other kinds of situations.
I'm making certain that this is an important part of our record, and that we will deal with this in our discussions of the committee.
I'm quite fascinated by the term "organized crime." The Ranbaxy situation strikes me as one of the most highly criminal organizations that one might encounter. Indeed, it was a well-masterminded plot to fabricate pharmaceuticals using multiple countries as the source of ingredients or production; the deliberate fabrication of testing results; the deliberate seeding of tests with authentic pharmaceuticals, the results of which would be transferred to the investigating authorities; and all of that protected under the laws of the country in which they were operating.
It took some time to convince the FDA that they should look into that particular issue, even when they would attempt to investigate they required giving advance notice, which gave them the opportunity to obfuscate a clear situation. But it strikes me that Ranbaxy was indeed an organized criminal operation in this field of operation.
Dr. Attaran, you referred to a number of medicines from this company in Canada. I was under the impression that it had been taken over by a Japanese company. Does it still operate in North America under the name Ranbaxy, because it does have a major facility in the United States?
Mr. Attaran: Yes. Ranbaxy was acquired in a merger by Daiichi Sankyo, a Japanese pharmaceutical company. Interestingly, Daiichi Sankyo has sued the former directors of Ranbaxy for selling it a company that was engaged in fraud. But it does continue to operate under the Ranbaxy brand, that's right.
The Chair: So the medicine that you were referring to, the 160 from Ranbaxy in Canada, that is very recent and still under the Ranbaxy label?
Mr. Attaran: As of this morning, when I went to Health Canada's drug product database, which is online; you can try it yourself. It's very easy to find; you just Google "drug product database, Health Canada." You can plug in Ranbaxy's name, and I got 159 approved medicines back.
The Chair: I'm not going to pursue this much further. It's a fascinating example of exactly why we need very strong regulations, including the deliberate analysis of products entering this country.
The firm operating out of the U.S. — I didn't have a chance to check this completely — are they issuing product from their operation in the United States under the Ranbaxy label now, or do you know whether they are changing the brand name on their label out of the U.S. operation?
Mr. Attaran: No, the Ranbaxy brand name is alive; it is just not well. About three weeks ago, the Commissioner of the Food and Drug Administration went to India and was implored, according to the newspaper reports, by Ranbaxy's senior executives, to open America's doors to the products from Ranbaxy's suspect factories. She declined. I think she made the right decision. What I find surprising is we have not made any decision.
The Chair: We need to wind this up because the committee has another item on its agenda, but I want to thank you for an exceedingly important contribution to our study here. I want to repeat the two significant issues — that is, counterfeit drugs, for which there is a very clearly defined legal description on counterfeit drugs; and the other very substantial issue, and I will use the term "underperforming," those that would meet the approval requirements that Health Canada is operating under.
As a consequence, you have given us a number of issues to consider in the committee with regard to this very important issue, as it ultimately affects the health of Canadians. It ties into our other observations and recommendations, my colleagues, the senators, who have asked about numbers of adverse reactions, for example; we can't determine that in this country.
It's very clear that we have a number of areas where we have already made significant recommendations and will continue to do so, and you have been exceedingly helpful to us. I want to thank you for being here with us, and my colleagues for their questions today.
Your steering committee has reviewed these requests and has approved them and is bringing them to you, as a committee, for approval. We are required to submit these under the regulations of the Senate. They will go to Internal Economy for their final approval.
We have two budget submissions. I'm going to deal with them one at a time.
The first one is for our current study, phase four of our study on pharmaceuticals, and it includes the possibility of two reports. The budget that we're requesting for our pharmaceutical study is entirely associated with the reports. There is no travel or anything else. The total is $20,470, which covers the issue of the graphics designer, the editing services, miscellaneous expenses of $250 and printing. I'm asking for approval of this budget by the committee. So moved.
To the committee, are you agreed?
Hon. Senators: Agreed.
The Chair: Any contrary minded? Thank you.
The second budget is for the reference that we have been given with regard to studying obesity in Canada. It is for a report only. Again, we nixed Senator Eggleton's request that we interview individuals in all known countries in the world. We nixed it because we understand the Standing Senate Committee on Agriculture and Forestry has already used up the travel budget. This is for a total of $10,360. Can I have a motion to approve?
Senator Segal: I assume there's no food in the budget for the obesity study.
The Chair: We took that under advisement, and we thought that it would compromise our objectivity, if we were to make a decision on food for that study.
Senator Segal: I'm delighted to move approval of that budget.
The Chair: It is moved. Agreed?
Hon. Senators: Agreed.
The Chair: Any contrary?
Thank you. I call the meeting adjourned.
(The committee adjourned.)