Mr. Vice-Chair and members of the standing committee, I want to thank the committee for investigating Canadian pharmaceutical sovereignty. This is a topic that is near and dear to our organization. Strong domestic drug manufacturing is necessary for Canada to secure its own pharmaceutical sovereignty.
The Canadian Pharmaceutical Manufacturers and Exporters Alliance is a coalition of generic and contract manufacturing pharmaceutical companies with manufacturing facilities based here in Canada. Our members are the largest producers of medicines in Canada and collectively represent more than 30% of all prescriptions dispensed in Canada, making essential prescription medicines used by patients and in hospitals every day right across the country.
In the past, Canada had a significant number of companies producing medicines for Canadians and for export. Sadly, domestic production has declined over the last two decades, and we have become overly dependent on imported medicines, mostly from India and China. The loss of local drug manufacturing is a cause for concern, especially during this time of increasing geopolitical tensions. If Canadians cannot depend on domestic drug production to meet our needs, we are facing a looming national security and public health crisis.
Most of the pharmaceutical production that still takes place in Canada is generics and contract manufacturing, without which we would be even more vulnerable. Other countries, most notably the U.S. and the European Union, are taking aggressive steps to reshore production, offering attractive regulatory and industrial policies aimed at supporting their domestic producers and luring others to relocate.
We are still waiting for the results of the U.S. section 232 investigation into trade in pharmaceuticals, which is imminent, which is expected to include tariffs or other measures to further encourage reshoring of medicine production in the U.S. Canada has the same opportunity to secure its pharmaceutical sovereignty, and that's why we're here today. We have some specific solutions that we would like to share.
First of all, we're very encouraged that this government has recognized that biomanufacturing is a strategic sector. The buy Canadian policy has committed to direct federal purchases to Canadian suppliers. Why not medicines, too?
The recent national defence industrial strategy promises investment in medical countermeasures and stockpiling; however, this recognition must translate to concrete policies that strengthen domestic pharmaceutical manufacturing.
The CPMEA has developed a five-point action plan for Canadian domestic pharmaceutical production that I encourage you to review in your deliberations. The first action is to prioritize the regulatory review of submissions from Canadian producers by Health Canada. We recommend a priority pathway for new generic drug applications submitted by Canadian manufacturers. As it stands now, there is no distinction between applications submitted by Canadian producers and those submitted by importers, even though domestic producers invest significantly in Canadian clinical development, workforces and production facilities.
Health Canada is currently consulting on the reliance program, which is intended to speed up approvals by relying on authorizations from foreign regulatory agencies. We are concerned that this process will inadvertently harm domestic producers by giving priority to importers' submissions and push submissions from Canadian producers to the back of the line. Those unintended consequences would seriously undermine Canada's goal of greater pharmaceutical sovereignty.
Our next recommendation recognizes that drug production is a very capital-intensive industry. Canada must maintain our industrial competitiveness and provide matching tax and economic policies to compete against the benefits that are being offered elsewhere and to recognize that it costs more to produce drugs here in Canada than it does in countries like India and China, where labour costs are so much lower.
Third, and I can't believe I'm saying this, access to pharmaceuticals can be weaponized and supply intentionally disrupted as a war measure. In addition to shipping disruptions caused by conflict, the blockade of the Strait of Hormuz where ships from India pass is an immediate cause for vigilance.
We recommend that the Department of National Defence treat domestic pharmaceutical producers as critical infrastructure within homeland defence planning. Mechanisms such as reservation contracts and dual-use technology should be explored with Canadian producers.
The next pillar builds on Canada-first procurement. By directing even a portion of public drug plan expenditures to medicines made by Canadian producers, governments—federal and provincial—can reduce dependence on imported medicines without incurring any additional costs.
Finally, we recognize that we cannot make everything we need and that we must have global partners, as others have said.
Canadians are very good at making medicines, and we are ready to expand our facilities, invest in new technologies and work to defend Canada's pharmaceutical sovereignty.
Thank you.
