Bettina Hamelin
President and CEO, Innovative Medicines Canada
Global drug policy changes are making it increasingly difficult for innovative new medicines to reach the Canadian market.
There’s a quiet crisis unfolding behind closed doors. Canadians have the longest wait times in the G7 for public access to new and innovative medicines — the patented, breakthrough kind that treat cancer, autoimmune disorders, and rare and infectious diseases. In addition, only 18 per cent of new drugs launched globally are available through Canadian public drug plans. Now, global drug policy changes, triggered by a new U.S. policy, threaten to widen this gap further.
The U.S. is advancing most-favoured-nation (MFN) pricing, which would require American drug prices to match lower prices in comparable countries, including Canada. For example, if Canada charges $100 for a new drug and the U.S. charges $300, companies must sell to Americans at the Canadian price. The result is predictable: Canada’s business model quickly becomes unsustainable, and we get fewer new medicines or they stop coming here altogether.
A long and costly process
Bringing a new drug to the Canadian market is already a long and costly process: a journey of 10 to 15 years, an average investment of $2.6 billion USD, and no guarantee of success. The clock starts ticking the moment a patent application is published for a newly discovered compound. It then takes 5 to 10 years of lab work and clinical trials before a drug can even be submitted for Health Canada’s review. By the time it’s approved, a significant portion of the patent and data protection period designed to reward innovation has already expired.
By the time a medicine clears every hurdle, a company may have fewer than five years of market exclusivity left to recoup their investment.
Here’s where Canada’s story gets uniquely frustrating. Before an approved medicine can reach patients through a public drug plan, it must navigate four additional layers of bureaucratic review — adding another two years on average to the process.
First, the Patented Medicine Prices Review Board sets a price ceiling. Next, Canada’s Drug Agency does a cost-effectiveness assessment, often recommending price discounts so steep they undermine the financial case for bringing new medicines to Canada in the first place. Then, the pan-Canadian Pharmaceutical Alliance negotiates the final price with manufacturers on behalf of the provinces. Finally, each province decides if it can afford to publicly list the drug, and may even restart its own negotiations.
Advocating for market reforms
Add it up, and by the time a medicine clears every hurdle, a company may have fewer than five years of market exclusivity left to recoup their investment, often at a price that no longer justifies the cost of launching here.
There is no easy fix. Significant market reforms are needed to ensure Canadians can access the medicines they need. But the cost of inaction is far greater: fewer new medicines, sicker Canadians, an overstretched health system, and an economy that suffers. That scenario is neither acceptable nor inevitable.
Canada has the potential to be a leader in pharmaceutical innovation. We just need the collective ambition and political will to act.
Visit innovativemedicines.ca to learn more.