12th Consecutive Year that 10% Commitment Has Not Been Met
Toronto, January 11, 2016 – Brand-name drug companies’ research and development spending as a percentage of sales in Canada has dropped to new historic lows according to the most recent annual report from the federal government’s Patented Medicine Price Review Board (PMPRB).
The PMPRB’s latest annual reports shows that in 2014 member companies of Canada’s Research-Based Pharmaceutical Companies (Rx&D) spent only five percent of their Canadian revenues on research and development in Canada. This is the lowest level since the PMPRB began tracking R&D spending in 1988. The 5 percent figure is far short of 10 percent of domestic sales, which brand-name drug companies promised to spend on research and development when their periods of market exclusivity were increased in 1987. This marks the 12th consecutive year that Rx&D member companies have failed to meet the 10 percent threshold.
“In Canada, market monopolies for brand-name drug companies have increased no fewer than eight times since 1987. While domestic sales have increased, investments have declined to record lows,” said Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA). “This new data should be carefully considered by the Government of Canada as it prepares to implement the pharmaceutical intellectual property provisions of recently negotiated trade agreements. There is clearly no link between increased periods of market exclusivity and increased investments in Canada.”
The PMPRB Annual Report shows that the ratio of R&D to domestic sales in Canada is the lowest of all comparator countries. The aggregate ratio for R&D spending to domestic sales for all comparator countries was 21.8 percent, three and a half times greater than Canada’s.
The PMPRB’s findings are highlighted in a new report released today by CGPA. Copies of The Real Story: R&D Spending by Brand-Name Drug Companies in Canada: 1988 – 2014 are available at www.canadiangenerics.ca.