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Posted November 5 , 2013

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Brand vs Generic

New Report Highlights 10 Years of Broken R&D Promises to Canadians by Brand-Name Drug Companies

Longer drug monopolies in Canada do not result in increased domestic R&D spending

TORONTO - New data on pharmaceutical research and development spending in Canada provides further proof that no link exists between longer market monopolies for brand-name drug companies and increased domestic investments, Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA) said yesterday.

The recently released annual report from the federal government's Patented Medicine Prices Review Board (PMPRB) shows that in 2012 member companies of Canada's Research-Based Pharmaceutical Companies (Rx&D) spent only 6.6 percent of their Canadian revenues on research and development in Canada. This marks the 10th consecutive year that Rx&D member companies have broken their promise to spend at least 10 percent of their domestic sales on research and development.

The PMPRB also reports that total research and development expenditures by member companies of Rx&D were lower in 2012 than in any year since 1989. Total research and development spending by Rx&D members in 2012 declined by 13.1 percent from 2011. Basic research, which could lead to the discovery of new medicines, decreased by 30.5 percent from 2011 to 2012.

The PMPRB's findings are highlighted in a new report released by CGPA. Copies of The Real Story: R&D Spending by Brand-Name Drug Companies in Canada: 1988 - 2012

"In Canada, market monopolies for brand-name drug companies have increased no fewer than eight times since 1987, yet investments are declining toward record lows," Keon said.

On October 18, 2013 Canada and the European Union (EU) announced an Agreement in Principle in the negotiations for a Comprehensive Economic and Trade Agreement (CETA), which includes more needless and costly increases to market monopolies for brand-name drug companies in Canada.

Keon said that, while the pharmaceutical intellectual property provisions announced in the agreement fall short of the EU's original demands on behalf of brand-name drug companies, they will still delay market entry of cost-saving generic prescription medicines in Canada in the future, increasing health-care costs for provinces, employers that sponsor drug plans for their employees and Canadians who pay for their prescription medicines out-of-pocket. The full cost to Canadians of the actual delays in generic drug competition resulting from the new measures will depend on the specific manner in which they are implemented by the Government of Canada.

Keon noted that while most brand-name drugs sold in Canada are shipped into the country, the majority of generic drugs sold in Canada are domestically produced. The majority of the pharmaceutical manufacturing capacity that exists in Canada is generic.

"A dollar spent on a generic drug supports more jobs, more R&D investment, and more investment in pharmaceutical manufacturing capacity in Canada than a dollar spent on a brand-name drug," he said.

The generic pharmaceutical industry employs more than 12,000 Canadians in well-paid, highly skilled jobs in research and development, manufacturing and other operations. Generic pharmaceutical companies in Canada invest approximately 15 percent of sales in research and development. Canada's generic drug industry generates 40 percent of its sales volume from exporting made-in-Canada pharmaceuticals, primarily to the United States.

About the Canadian Generic Pharmaceutical Association
The Canadian Generic Pharmaceutical Association (CGPA) represents Canada's generic pharmaceutical industry. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to fill 65 per cent of all prescriptions but account for account for only 24 per cent of the $22-billion Canadians spend annually on prescription medicines.

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