A KPMG study commissioned by Canada’s Research-Based Pharmaceutical Companies (Rx&D) revealed that for the third year in a row, R&D investments made by Canada’s pharmaceutical sector continue to be underreported. In 2012, reported figures were down by approximately 34 per cent. KPMG gathered their findings in a report called “Summary of 2012 R&D Spending and Investments by Rx&D Members,” which presents a more accurate portrayal of the industry than the reports done in previous years by the Patented Medicine Prices Review Board. One can only assume the PMPRB’s report for 2012 will show a consistent pattern.
Russell Williams, president of Rx&D, says the report reinforces the industry’s commitment to Canada and its citizens by highlighting the $1.11 billion investment in Canadian life science in 2012 and showing that Rx&D’s contribution is significant and diversified. “We know that our work translates into a $3 billion dollar impact on the Canadian economy. That’s 46,000 direct and indirect jobs and approximately 3,000 on-going clinical trials.”
By painting a better picture of Rx&D’s fiscal contributions, the report demonstrates an immediate need for the Government of Canada to update the 26-year-old criteria with which the PMPRB evaluates companies.
“If the Government feels it’s important to report pharmaceutical R&D investments to Canadians then surely they have an obligation to immediately fix a methodology known to produce incomplete, inaccurate and misleading results year after year,” says Williams.
Williams goes on to say that he believes the industry has somewhat successfully maintained an adequate level of financing, despite the challenging environment. He suggests that Canada looks to improve troubling areas, such as patient access to new medicines, regulatory burden, and duplication and protection for intellectual property, before we begin to think of competing internationally for funding.
“We know the trend is heading in the wrong direction and we are committed to reversing it – but it won’t happen in the absence of strong public policy,” added Williams. “This report reminds us that Canada’s life science future hinges on our ability to create and sustain an environment that encourages investment, with the right policy policies that allow us to compete globally and drive our knowledge-based economy.”
“We look to the Government to ensure that we accurately capture our investment – which amounts to $3 million each and every day – and to support public policy initiatives that help secure more international investment in life science research and development for Canada,” concluded Williams.
PMPRB’s current evaluation system has also underreported funds in the following examples:
• ASTRAZENECA CANADA – $6.5 million to support the establishment of new NEOMED Institute life sciences research centre.
• ELI LILLY – contribution to a new $150 million Life Science Fund in Canada to enable the development of a new investment model that will support early stage drug development and benefit researchers, entrepreneurs, business partners and service providers in the province.
• GLAXOSMITHKLINE – venture capital investment made in late 2012. GSK was one of the syndicate partners contributing a large amount of the $35 million total raised.
• HOFFMAN-LA ROCHE – investment of over $190 million to establish a major global pharmaceutical development site. This project includes the creation of more than 200 new highly-skilled jobs.
• JANSENN – investment of nearly $6 million in support of leading Canadian centres including the Vancouver Prostate Centre, the BC Centre of Excellence for HIV/AIDS, the Ontario Institute for Cancer Research, and other universities, research chairs, centres of excellence and research hospitals.
• MERCK – commitment of $35 million to a Biosciences Fund that will fuel future pharmaceutical innovation, support early stage biotechnology companies and attract more life science investors.
• PFIZER CANADA – $500,000 contribution to Alberta Innovates Health Solutions for the “Alberta Pfizer Collaboration Fund” to identify and support promising healthcare innovations with market potential, transforming medical discoveries into new drug therapies and health products.
• SANOFI PASTEUR – $101 million investment in a vaccine research and development facility. This investment retains over 300 highly-skilled vaccine research positions.
An online copy of “Summary of 2012 R&D Spending and Investments by Rx&D Members” is available here.