Justin Trudeau is letting Canada get played by Big Pharma

June 23, 2021

Liberals could be reviving Canada’s legacy of public sector vaccine innovation, instead of pumping money into private sector

There aren’t nearly enough doses to vaccinate everyone on the planet against COVID—we’re short by billions. 

If that isn’t bad enough, the inadequate global supply is in the hands of a small number of pharmaceutical companies, whose shareholders are focused exclusively on further maximizing the spectacular profits they’ve made through their de facto COVID vaccine monopoly.

Given that millions of lives are at stake, it’s surprising that so few nations have tried to break this corporate stranglehold by developing and producing their own vaccine.

One country that has—and apparently succeeded—is tiny Cuba, with a population of 11  million. Despite a punishing U.S. trade embargo that makes it hard to even get supplies into the country, Cuba’s state-owned biotech industry has managed to develop several promising COVID vaccines, including one that has just completed the last phase of clinical trials. 

Meanwhile, Canada—a much richer country with far more resources, a bigger pool of science talent and no U.S. embargo to navigate—hasn’t had the chutzpah to try to develop our own vaccine.

Even as Ottawa struggled badly in the early months of 2021 to get vaccine doses to worried  Canadians, the Trudeau government never seemed to consider the possibility of Canada doing something as bold and ambitious as what little embargoed Cuba has managed to do.

Instead, the Trudeau government has shoveled hundreds of millions of dollars into Big Pharma, trusting, hoping, and praying that foreign pharmaceutical companies will take care of us in a future pandemic.

Good luck with that.

A global vaccine leader, once upon a time

Yet Canada, of all countries, should realize that creating a homegrown biotech operation able to produce vaccines is not some far-fetched pipe dream. We’ve done it before.

Hard as it is to believe, Canada used to be a world leader in vaccine development and production. 

Back in the 1980s, when Cuba’s medical research capacity consisted of a modest lab and six technicians, Canada had Connaught Labs—a publicly-owned biotech enterprise that for 60 years had been at the forefront of global vaccine development.

But the pharmaceutical industry never liked Connaught. With its explicit goal of making medication affordable and putting human health before profit, Connaught was considered an unfair competitor by privately-owned pharmaceutical companies focused exclusively on profit. 

The Mulroney government, keen to please the industry, privatized this magnificent Canadian public enterprise in the late 1980s. What’s left of the sprawling Connaught facilities is now incorporated into French pharmaceutical giant Sanofi Pasteur.

Canadian business commentators point to this as evidence that Connaught’s privatization was no big deal since the facilities still exist on Canadian soil.

But they miss the point. The Connaught facilities may still be here, but Canada no longer controls them. Decisions are now made at corporate headquarters in Lyon, France. And, as we should have learned during the pandemic, control matters.

Sanofi, with its global operations, wasn’t willing to meet the Trudeau government’s request to rejig its Canadian facilities to produce COVID vaccines here for Canadians. 

It’s mind-boggling to imagine just how different our experience of the pandemic might have been, had Connaught remained a publicly-owned enterprise, with its top scientists and its superb record of contributing to medical discoveries (including insulin, penicillin and the polio vaccine).

Indeed, it’s likely that Connaught would have been in the vanguard of developing a COVID vaccine—and sharing that vaccine with the world, just as it did with the development of insulin in the 1920s.

Betting on Big Pharma

While the privatization of Connaught is properly blamed on Mulroney, sadly Justin Trudeau has followed Mulroney’s subservience to corporate interests, and declined to consider re-establishing a publicly-owned enterprise that could operate the way Connaught did.

So in March, the Trudeau government announced it was providing $415 million—along with $55 million from Ontario—to help Sanofi pay for a $925 million revamping of its Canadian vaccine facilities (the old Connaught facilities) so the company can serve the Canadian market in a future pandemic.

But pumping money into Sanofi, a foreign-owned global corporation, guarantees nothing for Canadians. Indeed, it’s a reckless use of our public money.

Ottawa has no contract with Sanofi, according to federal industry minister Francois-Philippe Champagne. At the announcement ceremony in March, Champagne told reporters that Canada was in negotiations with Sanofi to work out a deal that would give Canadians priority access to vaccines in the future. (Details were vague, and reporters were surprisingly uncurious about the fact that no contract was in place, despite the large amount of public money involved.)

So why did the Trudeau government make the announcement—a public commitment to hand over hundreds of millions of dollars—before the deal had been sealed? What kind of lame bargaining strategy is that?

Without an ironclad deal, Canadians can only hope—fingers crossed!—that Sanofi will feel sufficient goodwill towards Canada and that it will make sure Canadians are vaccinated first in a future crisis, before it serves the rest of its worldwide market.

Taking control, or getting played

This is hopelessly naïve, especially since Sanofi, along with the rest of Big Pharma, has been furious with Ottawa since December 2017 when the Trudeau government announced regulatory changes aimed at forcing down the price of patented medicines.

Pharmaceutical companies have reacted fiercely, complaining that the changes would cost them billions of dollars. (That’s the whole point—Canadian consumers would save billions of dollars by paying less for patented drugs.)

The companies have retaliated against Ottawa by choosing not to submit dozens of drugs—including treatments for cancer and Parkinson’s—to Health Canada for approval, citing uncertainty over the proposed regulatory changes.

This withholding of drugs for approval—acknowledged by industry spokesperson Pamela Fralick, president of Innovative Medicines Canada—amounts to Big Pharma holding sick Canadians hostage in order to increase its leverage in its fight with Ottawa over drug prices.

In an April 2018 interview with the Financial Post, Sanofi Executive Vice-President David Loew made clear how displeased Sanofi was with the regulatory changes, reminding Ottawa that Canada has to compete with other countries keen to attract investment from the industry:  “Each country is competing with every other country around the world.”

Anxious to placate the companies, especially during the pandemic, the Trudeau government has twice postponed implementing the tough new regulations, now delayed until July 1.

And, of course, Ottawa has also tried to sweeten relations by announcing it will contribute $415 million to help Sanofi expand its Canadian vaccine facilities.

Business commentators have been quick to take the side of the pharmaceutical companies, suggesting that Canada hasn’t been sufficiently accommodating to their interests.

Postmedia columnist Licia Corbella argues that if Canada wants more “innovative” pharmaceutical operations in Canada, it should start listening to the demands of the pharmaceutical industry.

In fact, despite Mulroney’s generous extension of drug patent rights in the late 1980s, Big Pharma has largely operated here through branch plants that carry out little or no research.

If we want innovation, we should stop throwing money at Big Pharma, which happily gobbles up our cash while providing no guarantees about what it will provide in return.

Rather than handing over $415 million to a foreign company, Ottawa should invest that money in creating an enterprise we own and control, and that could be counted on to put the interests of Canadians first.

The only truly innovative medical research company Canada has ever had was the one Mulroney privatized. If we really want cutting-edge, world-class medical research and innovation—and a commitment to serving Canadians first—that path has already been laid out for us. 

Let’s see if we can own that podium again.

Linda McQuaig is the author of The Sport and Prey of Capitalists, which tells the story of Connaught and its privatization.