Manufacturers of brand-name drugs have failed to hit a crucial R&D spending target for 14 years
In 1987, brand-name pharmaceutical firms in Canada publicly committed to ramp up their annual domestic research and development (R&D) spending to 10% of their domestic sales revenue by 1996. But a new report suggests the industry has not lived up to that standard.
According to a new report from the Canadian Generic Pharmaceutical Association (CGPA), brand-name drug companies in Canada have been spending less than 10% of their Canadian revenues on research and development since 2003.
There was a 10-year window from 1993 to 2002 during which industry members hit their target, but spending fell to 9.1% in 2003, and has generally declined since. Citing figures from the Patented Medicine Prices Review Board (PMPRB), the report said that R&D spending by member companies of Innovative Medicines Canada reached only 4.9% of their revenue in 2016.
The report also compared Canada’s R&D spending ratio with those of the US and six European countries, including Switzerland, Germany, and France. As of 2014, the top three countries were Switzerland (126.8%), the UK (25.7%), and the US (22.8%); Canada had the lowest ratio (4.3%).
“Brand-name drug companies are pushing for even longer periods of market monopoly in Canadathrough trade negotiations, including the current North American Free Trade Agreement (NAFTA) discussions,” said Jim Keon, president of the CGPA. “Today's report is further evidence that extending patent monopolies does not lead to increased investment in Canada.”
According to the CGPA, the brand-name drug industry in Canada has benefited from nine separate increases to their patent monopolies since 1987. The most recent one was in Sept. 21, when all brand-name pharmaceutical products became eligible for two additional years of patent monopoly under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union.
The CGPA said this has resulted in delayed cost-saving competition from generic and biosimilar medicines, as well as increasing health-care costs for Canadians.
“Canada must hold the line on further costly changes to our drug patent system in international trade negotiations, including NAFTA,” Keon said.
Related stories:
Public-research policy urged as solution to high patented-drug prices
National pharmacare not the answer to drug affordability: CLHIA head
According to a new report from the Canadian Generic Pharmaceutical Association (CGPA), brand-name drug companies in Canada have been spending less than 10% of their Canadian revenues on research and development since 2003.
There was a 10-year window from 1993 to 2002 during which industry members hit their target, but spending fell to 9.1% in 2003, and has generally declined since. Citing figures from the Patented Medicine Prices Review Board (PMPRB), the report said that R&D spending by member companies of Innovative Medicines Canada reached only 4.9% of their revenue in 2016.
The report also compared Canada’s R&D spending ratio with those of the US and six European countries, including Switzerland, Germany, and France. As of 2014, the top three countries were Switzerland (126.8%), the UK (25.7%), and the US (22.8%); Canada had the lowest ratio (4.3%).
“Brand-name drug companies are pushing for even longer periods of market monopoly in Canadathrough trade negotiations, including the current North American Free Trade Agreement (NAFTA) discussions,” said Jim Keon, president of the CGPA. “Today's report is further evidence that extending patent monopolies does not lead to increased investment in Canada.”
According to the CGPA, the brand-name drug industry in Canada has benefited from nine separate increases to their patent monopolies since 1987. The most recent one was in Sept. 21, when all brand-name pharmaceutical products became eligible for two additional years of patent monopoly under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union.
The CGPA said this has resulted in delayed cost-saving competition from generic and biosimilar medicines, as well as increasing health-care costs for Canadians.
“Canada must hold the line on further costly changes to our drug patent system in international trade negotiations, including NAFTA,” Keon said.
Related stories:
Public-research policy urged as solution to high patented-drug prices
National pharmacare not the answer to drug affordability: CLHIA head
