Thank you very much.
My name is Russell Williams, I am President of Canada's Research-Based Pharmaceutical Companies.
I'm with Debbie Murray, director of policy development of Rx&D.
I appreciate this opportunity to appear before the committee and discuss this important issue with you. You have our written submission and my comments will focus primarily on the three recommendations.
Our company is comprised of 50 Canadian pharmaceutical research companies that employ more than 20 000 employees. Our goal is to develop medicines and vaccines that can help save lives.
We're dedicated to health outcomes and knowledge-based economy in this country.
Let me give you a couple of figures here. We are the largest single source of health R and D from the business enterprise sector. We invest well over $1 billion in research and development in new medicines and vaccines in Canada, and this has been maintained over a number of years. Almost $150 million of that goes directly into our Canadian universities. Access to new medicines for patients, as well as stability, sustainability, and predictability are very important to us if we are going to maintain the presence we have and in fact grow our presence in this country.
Our industry has a number of challenges that we hope to be able to address soon. One is difficult access and a reimbursement environment that is more and more stringent. Another is increased global competition for research and development dollars. Still another is expiration of patents. Over the next few years—2011, 2012, and 2013—you'll see a number of patents terminate in something we call “the patent cliff”. It's a huge challenge for us. Another challenge is a great risk and a lot of cost in the whole development of new medicines.
If we want to remain competitive with the rest of the world, we must ensure that we have an environment that can help the presidents of each company obtain mandates on the international market for making investments.
Approximately 1% of our investment is in research, but we account for 3% of the market. We are not asking for money, but we do want to be able to create an environment for investment in Canada. We want to increase the size of our investment. We do not want to stay at 1%.
As you do your budget preparation, our first comment would be to look to the future. Be focused on the future, and look at the long-term policies and investments that will build on our health care system and strategically place Canada in a position where we can compete for those global mandates.
To develop a sustainable world-class innovative pharmaceutical sector in Canada and build a continued investment into life science research, the federal government should look at the following areas. I'll focus on three.
One is an expanded scientific research and experimental development, or SR and ED, definition. Right now, in the OECD countries, Canada has a very limited definition of what is considered an acceptable tax credit in terms of SR and ED. It doesn't include some of the epidemiology studies or some of the post-surveillance marketing studies we're doing. They'll be working with Health Canada. It doesn't include social services. So we'd like to see an expanded definition of that. If the government can move forward to not more than the OECD countries but to that same level, it would make a huge difference.
Secondly, stability and predictability with respect to the protection of intellectual property are very important. We are struggling... we are wondering whether or not we should increase funds at the international level.
Third, we have to come up with appropriate budget adjustments to the various regulatory and policy environments in Canada. To cut through, there's a lot of jargon there, but put the money in a good place where there's good compliance and it doesn't need increased funds, where there are growing challenges and expectations, like in Health Canada. Adjust those funds to be appropriate. Change the business model. Work with them and build partnerships with the industries. Strategically use the limited dollars.
Just to highlight at the end—and let's not forget the value of medicines—we do save lives. We now have people living with cancer much longer than they ever did. We've reduced hospitalization and mortality in cardiovascular illness by almost 60%.
We are a health care partner. If we can build that innovation agenda so that there is a strong partnership in health care and the economic incentives that I've mentioned, then I think we could move towards what the Council of Canadian Academies has suggested, that we could play a leading role in health innovation as we are improving the productivity in our health care system.
Time doesn't permit going further, but thank you very much for this opportunity to give you our three recommendations.
Merci beaucoup.