The Innovation Equation

Canada has the scientific talent and world-class facilities to become the leader in life sciences research. But it will need to dramatically increase access to new medicines and vaccines to get there.

Canada should have a thriving, robust knowledge-based economy fuelled by the life sciences research sector. After all, its public health care system is the envy of most countries, and boasts world-class talent and infrastructure, from its universities and hospitals to its healthcare centres and research facilities. Yet of the almost $100 billion being invested globally into the discovery of breakthrough new medicines and vaccines each year, Canada’s share is a relatively paltry $1.2 billion.

“If we could double that amount, imagine the exciting research that could potentially improve and save people’s lives,” Russell Williams, president of Canada’s Research-based Pharmaceutical Companies (Rx&D) says in an interview in which he outlines an innovation equation that could help Canada build on its strengths in competing for those global research dollars. “That money would go directly into our universities, teaching hospitals and, in the end, directly into doctors’ offices for patients who need those new medicines.”

 

Key to economic prosperity

In addition to making discoveries that could improve quality of life, R&D of new medicine is a significant economic saver as well as driver. Studies show that access to medicines can help sustain Canada’s health care system, helping to reduce wait times, hospitalization and surgery and by keeping people healthy and productive in the workforce. “When you look at the country’s demographics, there is a very strong argument to be made that increased access to medicine will be part of the solution in the sustainability of the health care system,” says Williams. “We need to protect the viability of the health care system, which is the cornerstone of some of Canada’s economic development strategies.”

At the same time, R&D into new medicines is an economic driver. Currently, Rx&D represents 15,000 employees working at 50 member companies, is responsible for generating 60,000 jobs across Canada and contributes $5 billion into the Canadian economy annually. If Canada could increase its share of investment dollars made by global, brand name pharmaceutical companies, the effect would be two-fold: the creation of more jobs, which in the sector average more than $100,000 per year, plus a domino effect to other industries connected to pharmaceutical research.

 

Canada lags

But the competition for those global R&D dollars is fiercer than ever before, as other jurisdictions look to attract those high-paying jobs. “The quality of infrastructure is getting better in other jurisdictions, and the cost of entry has become extremely competitive which is putting Canada at a disadvantage,” says Williams. “Seventy-five percent of the $1.2 billion being invested in Canada is through clinical trials – that is the most flexible money. It can come to us the fastest, but it can also leave the quickest.”

So how can Canada step up and become a global leader in the life sciences sector? While improvements can be made in terms of intellectual property (IP) protection as well as tax reforms, Williams says the last, and most critical part, of the innovation equation is providing increased access to new medicines.

In the Rx&D International Report on Access to Medicines 2009/2010, Canada ranked 26 out of 29 countries, ahead of only Luxembourg, New Zealand and Poland, when it came to reimbursing first-in-class drugs. As well, Canada lags other countries in the public coverage of new drugs in 11 out of 16 therapeutic areas, including cardiovascular, neurology and arthritis. In fact, the Common Drug Review only approves 50% of new drugs, compared to other jurisdictions which approve north of 70%.

“We tend to be slower for the most innovative medicines, which is a concern first and foremost for the patients and healthcare providers but also in terms of encouraging innovation,” says Williams. “What signal are we giving the world when we’re not embracing those kinds of innovations?”

 

 

Improve Intellectual Property Protection

Canada can become a world leader in generating jobs and investment in life sciences and the knowledge economy by adopting top of class intellectual property rules, adds Mr. Williams. These include giving innovators an effective right to appeal a patent challenge. This would level the playing field with generic companies who already have the right to appeal an adverse court ruling.

The countries of the European Union also have significantly better rules to protect the data of innovative companies which puts Canada at a competitive disadvantage.

“With only three of 10,000 molecules ending up as an approved new medicine, it costs well over $1 billion in research dollars to discover and bring to market a new drug,” says Williams. “Brand name pharmaceutical companies need proper protection for IP to recoup their investment and re-invest in research and development.”

Canada also needs to adopt a patent term restoration (PTR) mechanism, which helps research-based pharmaceutical companies recoup some of their investment costs by restoring part of the patent term eroded by often lengthy drug reviews and approvals (including from Health Canada, provincial/territorial governments and the Common Drug Review). “This gives a medicine or drug a more active lifespan, but Canada is the only OECD country without it,” says Williams.

 

Canadians overpay for generic drugs

Innovation in new medicines is also being held back by other factors, including the fact that Canadians pay almost twice as much for generic prescription drugs as Americans, according to a study released late last year by the Fraser Institute.

“To their credit, governments are now looking at reducing generic pricing, and our hope is that those savings are reinvested in innovative medicines that keep the innovative chain going,” says Williams.

He says the industry has also been caught up in excessive levels of bureaucracy, including a multitude of ethical review boards which slow down decision making. “You need an ethical review process, because our industry lives and dies on its ethics,” he says. “But we have a multiplicity of ethical review boards, when in reality we only need one. In a fast-paced world, that can make the difference between a company deciding to invest here or somewhere else.”

 

Optimism for the future

Williams says there is no magic bullet to the innovation equation. He says it involves all stakeholders, including the public and private sector as well as researchers, to synergistically work together towards a knowledge-based economy. But despite the challenges, he is optimistic Canada can emerge a global leader in the life science’s sector.

“Canada has a real opportunity to build on its strengths, which is our health care system,” says Williams. “We have to help create an environment in which we can grow that $1.2 billion investment, to the benefit of the economy, the healthcare system and, ultimately, the patient.”

 

www.canadapharma.org