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Table of Contents
                            Red Tape, Red Flags: Regulation for the Innovation Age
	by G. Bruce Doern
Author’s Acknowledgements
About The Conference Board of Canada
About the Author
About the Commentators
Table of Contents
	by Anne Golden
	by Allan Gregg
	The Three Central Arguments
	Key Definitions and Conceptual Issues
	Structure and Preview of the Framework
	Table 1: Preview of Framework for Regulatory Regime Case Studies
Chapter 1
	Key Forces for Regulatory Change and the Current Regulatory Policy Context
		The Three Key Forces for Change
			The Increased Speed and Complexity of Underlying Economic and Technological Change
			Consumer Demands for Faster Access to New Products
			The Complex, Science-Based Nature of Risk-Benefit Regulation
		The Relationship Between Regulation and Innovation
		Regulatory Policies and Reform: The Limits of the One Regulation at a Time and Periodic Regulatory Reform Approaches
			Current Federal Regulatory Policy and Decision Processes
			Periodic Regulatory Reform Initiatives
Chapter 2
	The Pharmaceutical Drugs-Public Health Regulatory Regime: Access and the Common Drug Review
		The Regulatory Regime: Core Features
		Context, Regime Change and Evolving Criticism
			The Thalidomide Model and the Pre-Market Safety Focus
			The Backlog Problem and Slow Product Approval Times
			Higher Volumes of Drugs, New Levels of Access, and the Rebalancing of Pre- and Post-Market Review
			Health Canada’s Blueprint for Renewal in an Innovation Context
		Illustrative Regime Change: The CDR, Access and the Drug-Public Health Regulatory Regime
Chapter 3
	The Biotechnology–Intellectual PropertyRegulatory Regime: Access to Genetic Diagnostic Tests
		The Regulatory Regime: Core Features
			Intellectual Property Aspects of the Regime
			Biotechnology Aspects of the Regime
		Context, Regime Change and Evolving Criticism
			IP and Biotechnology in Innovation Agendas
			Industry Pressure and Fast-Changing Biotechnology Industry Dynamics
			IP Rights, Public Health and Global Access to Patented Life-Saving Drugs
		Illustrative Regime Change: Patented Genetic Diagnostic Tests and the Biotechnology-Intellectual Property Regulatory Regime
Chapter 4
	The Energy–Environment: Environmental Assessment of Energy Projects
		The Regulatory Regime: Core Features
		Context, Regime Change and Evolving Criticism
			Energy Industries, Project Approvals and Incentive-Based Regulatory Flexibility
			The Internalization of Environmental Costs in Energy Prices
			Sustainable Development as a Policy-Regulatory Paradigm
			The Climate Change Debate and Policy-Regulatory Failure
			Alternative Renewable Energy Sources and Regulatory Push
		Illustrative Regime Change: Environmental Assessment and Energy Projects
Chapter 5
	Federal Regulatory Policy: An Annual Regulatory Agenda and Related Institutional Reform
		What Is Wrong With the Current Approach to Regulation? The Basic Case for an Annual Regulatory Agenda
		To What Extent Does Regulatory Agenda Setting Occur Now?
		A More Complete Regulatory Agenda and Agenda-Setting Process: What Would They Look Like?
		Related Institutional Reform: A Regulatory and Risk Review Commission
Chapter 6: Conclusion
	Red Tape, Red Flags: Complex Interactions, Integration and Role Shifts
	The Gaps in Current Regulatory Policy and Governance
	A Strategic Regulatory Agenda and Related Institutional Reform
From the Lecture: Richard Thorpe’s SIRP Lecture Comments
From the Lecture: Elizabeth May’s SIRP Lecture Comments
From the Lecture: Janet Yale’s SIRP Lecture Comments
Panel Discussion and Q & A
	Q & A With Audience
About the CIBC Scholar-in-Residence Program
ISBN 0-88763-793-0
Document Text Contents
Page 2

Red Tape, Red Flags:
Regulation for the

Innovation Age
The 2007 CIBC SCholAR-In-ReSIdenCe PRogRAm

by G. Bruce Doern
Foreword by Allan Gregg

The Conference Board of Canada • ottawa, ontario • 2007

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90 Red Tape, Red Flags

concerned with the details of this provision or the regime’s current
review. Rather, I cite it as an important indicator of evolving criticism
of the patent system.18

Both the WTO’s waiver and later permanent amendment on this
matter, and the Canadian regime to implement it, were motivated by
broad and wholly desirable foreign and international development and
health policies. But the policy of access, backed up by legislative and
regulatory change, also had to ensure that Canada was still complying
with its international obligations under TRIPS and the North American
Free Trade Agreement (NAFTA), was respecting the integrity of its
own patent law, and was responding to the competing industry and
NGO interests involved in this issue.

The access to medicines debate was only one facet of the under-
lying critique of the patent regime. There was also criticism related to
excessive patenting, the ease of getting patents for questionable inven-
tions, and the rise in some fields of patent thickets that were harmful
rather than conducive to innovation. These aspects and their links to
biotechnology are best seen through the discussion that follows regard-
ing patented genetic diagnostic tests, but the criticisms are by no means
confined to this sector.

ILLustrAtIve regIme ChAnge: PAtented genetIC dIAgnostIC
tests And the bIoteChnoLogY–InteLLeCtuAL ProPertY
reguLAtorY regIme

Concerns have emerged about the effects of granting IP rights over
human genetic materials in the health sector.19 A recent particular

18 For information on broader global issues, including recent decisions by Thailand and Brazil
to overrule patents, see “Pharmaceuticals: A gathering Storm,” The Economist 383, 8532
(June 9, 2007), pp. 73–74, and oliver mills, Biotechnological Inventions: Moral Restraints and
Patent Law (Aldershot, U.K.: Ashgate Publishing, 2005).

19 See Canadian Biotechnology Advisory Committee, Human Genetic Materials, Intellectual
Property and the health Sector (ottawa: Canadian Biotechnology Advisory Committee, 2006),
and health Canada, Human Genetics Licensing Symposium (ottawa: health Canada, 2007).

Page 96

91Chapter 3

manifestation of these concerns has arisen in relation to control over
access to patented genetic diagnostic tests. Several high-profile cases
triggered these concerns, when patent holders exercised their rights in
ways that many felt harmed the provision of health services and innova-
tion by impairing access to patented genetic diagnostic tests in areas of
public health research. A related concern centred on the potential for
patent holders to charge excessive prices for their products or services,
thereby imposing heavy cost burdens on the health system.

One such case involved Myriad Genetics. Ontario and several other
provinces objected to the way the firm exercised its patent rights and
called for the inclusion of a compulsory licensing provision in the
Patent Act. An Ontario report argued that such an amendment “should
not obligate the provinces to first negotiate with patent holders for a
licence.”20 Section 19 of the Patent Act does not require a priori nego-
tiation where the use is public and non-commercial.

The President of the Canadian College of Medical Geneticists
points out that the demand for these testing services is increasing “as
the number of disease genes identified and the number of tests offered
in North America increases….Genetics was once considered an eso-
teric speciality that did not affect the services provided in other parts
of the hospital. Even five years ago, most referrals to labs came from
genetics clinics and specialized doctors. . . . Now there is an increasing
trend for referrals to come from family physicians and a wider variety
of specialists.”21

Because of these concerns, Health Canada and Industry Canada
asked CBAC to review these linked biotechnology–IP regime issues
in 2004. CBAC in turn asked an expert working party to examine the
issue, and that body presented its report to CBAC in August 2005.
CBAC then sought further input from stakeholders and issued its own
views of the matter.

20 Quoted in Canadian Biotechnology Advisory Committee, Human Genetic Materials, Intellectual
Property and the Health Sector, p. 9.

21 diane Allingham-hawkins, “Addressing Challenges to Providing medical genetics Services,” in
health Canada, Human Genetics Licensing Symposium, p. 9.

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196 Red Tape, Red Flags

ago, we had some national experts in their field; we no longer have
that, we have managers. This is not a universal state�there is some
good science�but there is not anything like what we used to have.
Regulations aren�t even the beginning of the issue of what Environment
Canada needs to do. We are no longer even tracking the issues well
enough to be able to put together the kind of state-of-the-environment
reports that used to be done 15 years ago and that were cancelled in the
budget-slashing of the early �90s. We couldn�t put together that kind of
report now because we are not tracking the same indicators. We don�t
know about freshwater health across Canada, since we have closed the
research stations. So it�s not a question of fewer regulations to do a
better job. I think we need to have a better capacity within the depart-
ment. We certainly could do a better job if we enforced the regulations
we have. We could do a much better job if we reviewed all the regula-
tions to see if they are consistent with one another. And why don�t we
focus on best practices? Global best practices�for instance, in pesti-
cide regulation�would say that we should regulate fewer products,
understand them better and know what we are doing, rather than being
on a constant treadmill of how many new pesticides we should register.
We�re behind the eight ball with thousands of commercial chemicals
that have not been properly assessed.

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