New Report: R&D Spending by Brand-Name Drug Companies in Canada Drops to Lowest Level in Recorded History

Providing longer market monopolies has not increased domestic R&D spending

Toronto, October 14, 2014 –Research and development spending by brand-name drug companies in Canada has dropped to the lowest level ever recorded according to a recently released study by the federal government’s Patented Medicine Price Review Board (PMPRB).

The PMPRB’s latest annual reports shows that in 2013 member companies of Canada’s Research-Based Pharmaceutical Companies (Rx&D) spent only 5.4 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 5.4 percent figure is far short of 10 percent of domestic sales brand-name drug companies promised to spend on research and development when their periods of market exclusivity were increased in 1987.

“In Canada, market monopolies for brand-name drug companies have increased no fewer than eight times since 1987, yet investments have declined to record lows,” said Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA). “This new data provides further proof that no link exists between longer market monopolies for brand-name drug companies and increased domestic investments.”

The PMPRB also reports that total research and development expenditures by member companies of Rx&D were lower in 2013 than in any year since 1996. Total research and development spending by Rx&D members in 2013 declined by 16.7 percent from 2012. Basic research, which could lead to the discovery of new medicines, decreased by 41 percent from 2012 to 2013.

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 21.7 percent, nearly four 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 – 2013 are available

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 66 per cent of all prescriptions but account for account for only 24 per cent of the $22-billion Canadians spend annually on prescription medicines.

For more information, please contact:

Jeff Connell
Vice President, Corporate Affairs

Canadian Generic Pharmaceutical Association (CGPA)
Tel: (416) 223-2333
Mobile: (647) 274-3379