A look ahead: The Pharmaceutical Industry in Canada

Russell Williams President Canadas Research-Based Pharmaceutical Companies (Rx&D)

Rx&D - Who we are

National association for Canadas research-based pharmaceutical community A voice for the pharmaceutical industry in Quebec and accross Canada since 1914

Mission

Advocate for policies that will bring the best innovative medicines and vaccines to Canadians in a timely and appropriate manner

Improve Canada's global competitiveness

Make Canada a world leader in attracting pharmaceutical and biotechnology investments, which are key components of the knowledge-based economy.

Rx&D Members

Industry Overview
Rx&D represents 15,000 men and women in the innovative, knowledge-intensive, pharmaceutical industry. Our members contribute to the investment of over $1 billion annually in health R&D. Rx&D member companies are the leading funder and performer of therapeutic products research and are the largest single source of health R&D research in the Canadian business enterprise sector.1 Every year, about one in 5 research dollars are invested in hospitals and universities.2

1. Statistics Canada Science Statistics, Estimates of total spending on R&D in the health field in Canada, 1989 to 2006, March 30, 2007 1. PMPRB Annual Reports

Rx&D Members R&D-to-Sales Ratio averages 9.97% over 21 years (1988 to 2009)
Following changes to the patent laws in 1993, Rx&D member companies have consistently maintained a higher R&D-to-sales ratio than all patentees combined.
All Patentees Rx&D Members Only

Despite challenges in the domestic environment in recent years (CDR, PMPRB, price freezes), the innovative pharmaceutical industry has maintained an overall R&Dto-sales ratio of nearly 10% since the change of patent laws in 1987.

14 12 10 8 6 4 2 0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Average

R&D as % of Sales

Source: Patented Medicines Prices Review Board (1988 2009)

Challenges
Access to medicines Patent Cliff Global competition IP Perception/understanding

Rx&D International Report on Access to Medicines

International- P itiveReim os burs entP em ercentag es
BasedonCanadia DrugL n ist
Source: Wyatt Health Management 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

R K T C S E I U A Z C C I L N . e v A C . e v A W O R

K D I F T A H C S K B G S E E B R F T I O N E D R G T P S U

P L Z N U L E S P J T R

Global competition

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Source: Thiers, Fabio, Anthony J. Sinskey, Ernst R Berndt. Trends in the Globalization of Clinical Trials in Nature Reviews Drug Discovery, 7: 13-14, January 2008.

Total R&D Expenditures to Total Sales Revenue 1988 2009 in $M (PMPRB Reporting companies)

Source: Patented Medicines Prices Review Board (1988 2009)

Opportunities
CETA Streamlining regulatory review process Broadening access to medicines Building trust

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Comparison of Canadian and Non-Canadian Bio/pharmaceutical IP Regimes

European Union
(27 Member States)
No linkage regimes like in Canada PM (NOC) Regulations that link Linkage regime similar to Canadas or in US. market approval to patent validity. (the Hatch-Waxman system)

Canada

United States

Other Countries

Right of Appeal

However, provisional measures (e.g. No provisional measures available. Absence of problematic inequities: Canada and US are only major countries with interlocutory relief ) also available in e.g. innovators have a right of appeal. linkage regimes. EU to prevent patent infringement. Inequities in linkage regime (e.g. no right of appeal for innovators) favor generic manufactures over innovators. Provisional measures available.

Chemical Entities

Biologics Japan: 8 years equivalent + 4 year new indications South Korea: 5 year exclusivity + 3 year extension for new indications Switzerland: 10 years

Data Exclusivity

10 years exclusivity 8 years exclusivity + 1 Year extension for new indications No extension for new indications

5 years exclusivity + FDA approval time (1+ years) + 3 year extension for new indications

Maximum 5 years additional market exclusivity.

Maximum 5 years additional market exclusivity. None Maximum combined post-approval market exclusivity 14 years.

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Patent Term Restoration

Maximum combined patent/ Supplemental Protection Certificates (SPC) post-approval market exclusivity of 15 years.

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Raising the bar

Established in 1988 Sets the standard for corporate responsibility Based on 11 guiding principles

Transparency Guidelines
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Looking Ahead
Demonstrating our value Health care system sustainability Fighting chronic disease Attracting investments Attracting people

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