Summary
According to our newly-published "Canada Pharmaceuticals & Healthcare Report", the Canadian prescriptions drug market grew by approximately 7% in 2005, which was the smallest increase for several years. The slowdown in growth is attributed to government cost-containment measures, fewer innovative product introductions and the collapse of the COX-2 inhibitor class. However, the generics sector increased by 13.8% to CAD2.6bn (US$2.2bn), which was almost three times the growth rate of branded drugs (4.9%).
The generic drugs industry contributes several billion dollars to the Canadian economy each year, leading to calls that the sector should be supported to a greater extent. Otherwise, generics firms may move elsewhere to find a more favourable operating climate, leaving Canada with a sizeable hole in its financial accounts. It is the reports view that the generics sector will account for over 27% of the total prescription drugs market by 2010, posting sales of US$6.2bn.
In mid-2006, US firm Bristol-Myers Squibb (BMS) stunned the regulators, fellow drugmakers and patients alike when it announced that it would not market its breakthrough colon cancer drug, Erbitux(cetuximab), because the government refused to allow the drug to be sold at a price acceptable to the manufacturer. According to a representative from the Patented Medicine Prices Review Board, the federal or provincial government should threaten the drug company with a compulsory licence if it fails to put the drug on the Canadian market. With a compulsory licence, a government can have the drug made by a generic company.
Simultaneously, the country has acknowledged the usefulness of branded drug R&D. According to the country's research-based pharmaceutical association - Rx&D - some 22,000 people were employed in Canadian pharmaceutical R&D in 2003. Out of a population of just over 30mn, this may not seem a significant proportion, but these jobs are of high quality and represent a powerful driver of the economy. The average salary for people employed by research-based pharmaceutical companies was CAD83,000, more than double the average Canadian wage.
Unveiled two years ago as part of the nation's 10-year plan to strengthen healthcare, Canada's long-awaited National Pharmaceuticals Strategy is progressing well, but may be scuppered if the federal government fails to finalise the development, financing and implementation of the scheme. The proposed strategy is meant to ensure all Canadians can get the drugs they need without suffering undue financial hardship. Nevertheless, Canadians enjoy a very high standard of healthcare, with waiting lists shortening and additional funding made. By the end of the forecast period in 2010, the country is expected to spend US$130bn on healthcare, which represents just under 10% of GDP.
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