Thank you.
Good morning, Mr. Chair and members of the committee.
Thank you for inviting Pharmascience to appear before the House of Commons Standing Committee on Health. I'm here today to share our perspective as a manufacturer of medicines on the crucial issue of access to pediatric drug formulations and the challenges we face in bringing these child-friendly formulations to market in Canada.
For some context about who we are, Pharmascience is the second-largest Canadian-owned pharmaceutical company, founded nearly 40 years ago by pharmacists Morris Goodman and Ted Wise. We're a proudly Canadian company, with our global headquarters, manufacturing facilities and R and D labs all located across the greater Montreal area, where we employ almost 1,500 people. Importantly, we invest about $40 million to $50 million annually in R and D in Canada, consistently appearing among the top 100 companies investing in R and D.
In 2019, Pharmascience representatives appeared before the House of Commons Standing Committee on Industry, Science and Technology to express their concerns regarding the issue being studied.
Compared to other similar countries, Canada lags behind in the availability of drug formulations specifically for the pediatric population. This is not a matter of demand; pediatricians, nurses, pharmacists, and parents of sick children have always asked for specific pediatric formulations.
Pediatric formulations are drugs that have a dosing regimen tailored to children and have certain characteristics that differ from those of adult products, such as specific formulation ingredients, formulation form—liquid or solid—concentration of active ingredients, indications for product approval, or packaging.
Pediatric formulations are not necessarily simple to develop, but they are essential to have. There are numerous new approaches that allow us to tackle the challenges, but market conditions have made it difficult for manufacturers to launch these formulations in a commercially viable manner.
That being said, I do want to recognize that there has been progress since 2019, including Health Canada's pediatric drug action plan in development and a recent decision from the pan-Canadian Pharmaceutical Alliance that will allow Pharmascience to market levetiracetam, one of the most needed pediatric formulations for epileptic children. This decision marks a possible breakthrough in the reimbursement of pediatric drugs, but it's still early and there's much more work to do.
As a manufacturer, I'd like to highlight our main general concerns that make it difficult to manufacture pediatric formulations in Canada. First, the pediatric market is completely different from the adult one; it is much smaller. The market size difference alone challenges the viability to market these formulations. On top of this, pediatric drugs have been treated the same way as their adult equivalents in pricing. Given the extra effort it takes to market pediatric formulations, this makes prices so low that no one can successfully market the drug. A different pricing grid for public reimbursement of pediatric drugs is needed. Third, nearly all of the drugs identified by pediatricians needing a pediatric formulation are off-patent. This makes the R and D investments by manufacturers extremely risky for pediatric formulations as we may not be able to recoup the investment.
Thankfully, Health Canada has heard the call and is developing a pediatric drug action plan with the goal of improving the availability of pediatric formulations in Canada. We are working closely with Health Canada to develop this plan.
As part of the pediatric drug action plan, measures that would help us get more pediatric formulations to market include the waiving of submission fees, as well as a period of market exclusivity for non-patented or generic pediatric formulations. These are measures that exist in the European Union and the United States. Those regions have recognized the need to encourage the creation and availability of these drugs.
It will be absolutely crucial for Health Canada to implement regulatory changes to support the development of new pediatric formulations. This isn't just a call from us. Many other stakeholders in the pediatric space put out a call for change earlier this year. It will also be critical to change the public reimbursement environment and to recognize that pediatric drug prices need a different pricing standard from adult dosage forms. We need to keep up the momentum to get this done, and the steps that are made today will create a better future for children.
Pharmascience is one of the few Canadian manufacturers that have taken the risk to invest in pediatric drug formulations to meet this important unmet need in spite of the unfavourable market conditions. At stake is the health and safety of children. If the policy changes that we are endeavouring are implemented, simple, affordable and significant innovation can be brought to the practice of pediatrics.
Once again, thank you for the invitation to appear, and I'd be pleased to answer any questions that you may have.