Don’t let the next pandemic meet this pharmaceutical sector

Having rounded the first year of the COVID-19 pandemic, it is interesting to see that no made-in-Canada COVID-19 medicines or vaccines have been approved for the treatment and prevention of the disease. That, in turn, contributes to the national mortality and morbidity due to the limited supply of imported COVID-19 therapies and vaccines, as well as the opportunity cost of improving the nation's real GDP through the export of “made-in-Canada COVID-19 therapeutics” to other nations that need them, and the accompanying improvement of the national economic well-being. Currently, only four vaccines and two medicines have been authorized by Health Canada for the prevention and treatment of COVID-19 all to foreign multinational corporations such as AstraZeneca and Gilead Sciences, which have their footprint in Canada. As the nation gradually recovers from the pandemic, the government should prioritize addressing this longstanding market failure in the pharmaceutical sector by providing competitive funding for pharmaceutical research and development, and strengthening the regulation of patented medicines and drug price to meet the standards of leading pharmaceutical nations such as the United States and China. The discovery and development of drugs is a very expensive process, with an average cost of about $1.3-billion, and about a 90 per cent chance of not making it to the clinic. Therefore, drug development should be a collaborative process amongst academic and research institutions, hospitals, private organizations, and government allowing them to optimize resources to expedite the development and share the cost and benefit of both drug failure and success. Despite having many talented scientists and reputable institutions, Canada ranked seventh in scientific output for life sciences, and ranked low in research and development spending compared to the U.S., due to inadequate funding and support to develop clinically relevant drugs. This could inevitably stimulate Canadian inventors to sell their work to other competing nations, such as the U.S., reducing Canada’s innovation output while increasing its dependence on imported innovative medicines. If the government elected to reverse this current narrative, several strategies could be adopted to advance the pharmaceutical sector. First, revitalize direct and indirect funding opportunities for life science research. The government should maintain a track record of increased funding for research and development to avoid doling out exorbitant last-gasp dollars to magically bridge the long-lived gap in Canada’s pharmaceutical sector in a global health crisis. Furthermore, competitive fiscal incentives can be used to encourage innovation in life sciences, ultimately limiting the barrier to entry for Canadian life science entrepreneurs, especially contract research organizations. This industry is expected to reach $64.4-billion by 2027 at a projected compound annual growth rate of 6.5 per cent. If it capitalizes on this opportunity, Canada could improve its standing in the global pharmaceutical sector. Beyond funding life science research, efforts should be directed towards establishing an active expertise map in the life science sector to ensure that funding is channelled to laboratories with greater potential for generating positive returns for the nation. Funding agencies should start identifying laboratories with strong expertise in virology to provide sufficient funds for the development of broad-spectrum antivirals in preparation for future pandemics. More so, strategic partnership opportunities between research institutes and pharmaceutical industries should be developed to ensure that basic science research is translated from bench to bedside. The two major government regulations that directly affect pharmaceutical business are the Drug Patent Act and Drug Price Control. Because the process of drug development is very long, risky, and expensive, drug developers will often target turning a profit for their investors and shareholders in addition to meeting the health care needs of society. Hence, weak patent regimes that discourage innovation, as well as price controls that disregard the initial cost of drug development, mostly serve as barriers to entry for many innovative pharmaceutical corporations. The patent regime in Canada can significantly be improved to match other leading countries, such as the U.S. and European Union, by demonstrating adequate patent term restoration, competitive intellectual property incentives for orphan drugs, and strong patent enforcement. These updates have the potential to motivate innovative pharmaceutical companies to continue developing made-in-Canada medicines to ensure immediate access to Canadian patients that desperately need those medicines, reduce the unemployment rate, and improve Canada’s real GDP. These benefits are evident in countries that have strong patent regimes such as the U.S., where the biopharmaceutical industry is a leader among other patent-driven industries, contributing significantly to the nation’s GDP by directly employing 800,000 Americans and supporting 4.7 million jobs. Furthermore, it is imperative that Canada continues to create a common pharmaceutical market with other countries to allow access to innovative medicines for Canadian patients and improve revenue generation from potential export of made-in-Canada medicines. The current deficiencies in the Canadian patent regime could impede a common pharmaceutical market. In a recent Special 301 submission, the Pharmaceutical Research and Manufacturers of America, listed Canada as a priority foreign country for the U.S. Trade Representative to further enhance efforts to strengthen America’s pharmaceutical innovation. While the overall goal of the Patented Medicine Prices Review Board (PMPRB) is to ensure that the price of patented medicine is not excessive, it is also important that the board sets prices that would not adversely affect patient access to innovative medicines in Canada. An important aspect of the amended Patented Medicines Regulations, set to come into force on July 1, 2021, is the removal of the U.S. and Switzerland from among PMPRB’s reference countries for costs. And, it adds seven other countries with arduous price control, including Australia and Spain. This presents potential trade issues as most innovative pharmaceutical companies are based in the U.S., and if enacted, could spell doom for Canadian patients that depend on those imported innovative medicines for survival. Moving forward, the Canadian government should maintain a track record of increased funding for life science research, use competitive fiscal incentives to stimulate indirect funding, reduce the barrier to entry for life science entrepreneurs, and strengthen drug regulatory policies to balance affordability and reward for innovation. Chukwunonso Nwabufo is a scientist with over four years of experience in drug development across academia and the pharmaceutical industry and is currently a senior research associate at Gilead Sciences in Alberta, where he contributed to the development of Remdesivir. He has received over 10 international and national awards for research, academic, and leadership accomplishments, and has authored about eight scientific papers. The Hill Times