Canadian health innovations hampered by government policy
Canada represents less than three per cent of sales in the global pharmaceutical market, yet the country punches well above its weight when it comes to medical discoveries.
Insulin was discovered here, as were stem cells and the cystic fibrosis gene. It was Canadian researchers who led the development of an Ebola vaccine. And using tenets of life science research, Canadian companies are closing in on biotherapeutics that offer better, life- prolonging treatments for terrible diseases like cancer. Recent promising discoveries are widely acknowledged to be the product of pioneering partnerships between government, academia and industry, driven by an economic strategy that fosters innovation and moves bench science out of pharmaceutical silos and into start-ups across the country.
“There’s a lot of stuff going right,” says Andrew Casey, president and CEO of BIOTECanada, a national association of more than 200 businesses operating in Canada’s health, industrial and agricultural biotechnology sectors. “If you look at the Canadian landscape, there’s a remarkable amount coming out of re- search institutions, hospitals, clinical trials or classrooms.”
In 2016, for example, Celgene Inc. ( a global biopharmaceutical company that specializes in cancer treatments) acquired a promising treatment for glioblastoma brain tumours that was developed at a government- f unded incubator for cancer-related research.
But those in the industry say these kinds of discoveries are put at risk by policy double- speak that actively fuels innovation at the beginning of a drug’s lifecycle, only to slam on the brakes in the commercialization phase.
Canada has emerged as a hotbed of innovation in life sciences. When large multinationals look at where to conduct clinical trials, they already face high cost and reasonably long start- up times to bring new innovations to life. When you add Health Canada’s new drug- pricing proposal, this has the potential to jeopardize some $ 20 billion in investment from the pharmaceutical industry in Canada. This would have a gripping effect on Canadian competitiveness down the road, and on its reputation as a prime location for new discovery.
“It’s really suggesting that there’s a complete de-linkage by government on what they want to see happening in terms of supporting innovation and supporting clinical trials, and yet ensuring Canadians have the opportunity to benefit from innovations down the road,” says Kevin Leshuk, vice- president and general manager of Celgene Inc.
It’s a symptom of the longstanding tension between the pharmaceutical industry’s desire to get new treatments to patients efficiently and the government’s desire to set prices that don’t make too big an impact on its health budget.
New drugs are often portrayed as being very expensive, even though many of them have prices that are comparable to other products on the market. For a relatively few drugs the price is high, but this often represents a combination of factors such as an extremely rare condition, the effectiveness of the product relative to other available therapies and unique technologies that may have been required to develop and manufacture the drug. For example, the production of biological medicines requires very expensive, complicated processes and systems before a drug is produced.
Yet when Rob Annan, a fellow at Canada’s Public Policy Forum and vice-president at Genome Canada, undertook a review of opportunities and challenges within the Canadian life sciences sector, he found industry asking for more transparency, not more money. They wanted more services, not less regulation.
What’s needed, he says, is a “whole government” strategy — one that balances innovation with commercialization.
“All parties want to get the right drugs to the right people, all parties recognize the need for balance,” he says. “No one wants to want to bankrupt the health system. But you can’t develop an economic development strategy in isolation. You can’t develop a health strategy in isolation either.”
“I think industry fully understands what provinces are facing,” Casey says. But he points to the kinds of savings that can be derived from new therapies, such as a revolutionary — yet costly — treatment for Hepatitis C that can actually cure the once- lifethreatening disease.
Focusing on controlling costs by cutting drug funding will ultimately choke the innovation process, Casey says. From a business perspective, it makes little sense for drug companies to invest in innovations from start-ups in a market that won’t return on that investment.
“It’s that ecosystem that’s arisen over the past decade that’s a completely different investment model,” Casey says. “We can’t just say we’re going to reduce spending on drugs and expect that there’s not going to be consequences.”