Thank you, Mr. Chair.
On behalf of the Canadian Generic Pharmaceutical Association and our member companies, I thank you for inviting us to appear during your study of Canadian science and technology. The CGPA is the national association representing the generic drug industry in Canada.
Generic medicines are inexpensive versions of the original brands, manufactured by a number of companies once the patents on the brand-name originals have expired.
There are no differences as far as the quality, purity, effectiveness, and safety of generic and brand name drugs. All drugs sold in Canada must be reviewed and approved by Health Canada, and Health Canada stands by the quality of both brand and generic drugs. That gives Canadians the confidence in both brand and generics. Both brand and generics must meet the same standards and regulations established by the Food and Drugs Act.
Generic drugs in Canada, for 2007, were dispensed to fill 49% of all prescriptions. I'm actually pleased to say that according to industry data, for the first quarter of 2008, for the first time ever, generic drugs are now the dominant sector in Canada. More than 50% of all prescriptions are now filled with generics in Canada. However, in the United States generics are used to fill 67% of all prescriptions, so we feel we have a long way to go to catch up to our big neighbours to the south.
Generic drugs filled 49% of all prescriptions last year, for only 20% of the cost. When I've been at committee in the past, I've been asked about our pricing. I'm pleased to say that our prices have come down close to 25% in both Ontario and Quebec as a result of intensive discussions with those provinces over the last couple of years. We're now in similar discussions with the western provinces in Canada. Generics will be an even better value and even more important to the health care system on a go forward basis.
Canadian generic pharmaceutical companies are proud of their contribution to affordable health care in Canada. We're equally pleased that we can play a role in getting made-in-Canada medicines to countries facing crises, where they are desperately needed. CGPA member companies donate about 100 million doses of medicines each year, at an approximate value of $20 million. We participated with the Prime Minister at the opening of Health Partners International, and we're strong supporters of that organization.
Also, as announced earlier this week, one of our member companies, Apotex, the largest pharmaceutical company in Canada in terms of research and development spending and employees, will be the first company in the world to obtain and use a licence to export generic drugs for humanitarian purposes under the landmark WTO decision and Canada's own access to medicines regime.
Canadian generic pharmaceutical companies are making significant investments in Canada, and we have aggressive plans to expand these investments over the next five years.
Today generic pharmaceutical companies spend 15% of Canadian revenues. It says here that it's about $450 million--it's actually greater than that now--on domestic research and development activities. Our member companies are actively seeking to expand their domestic sales and increase exports. And we have committed to doubling our industry's employment over the next five years to 21,000 highly skilled jobs. We have a very good news story to tell in terms of being an export-oriented industry, and the high-quality R and D and manufacturing jobs we have. We hope to tell that story more often, and in a better way, than we have in the past in the Ottawa circles.
In regard to issues today, I'll touch on a few.
Canada's generic pharmaceutical industry supports patent rights and the right of any pharmaceutical company--brand or generic--to recoup their investments and turn a profit to help grow and sustain their business. What we do not support, however, is excessive intellectual property protection that guarantees longer periods of monopoly prices to brand-name companies without bringing additional benefits to Canada. Our current intellectual property regime in Canada for pharmaceuticals goes beyond our international trade obligations, through NAFTA and TRIPS.
In the last 21 years, successive Canadian governments have strengthened the commercial monopolies of manufacturers of brand-name medicines with no resulting increase in expenditures, as a percentage of sales, in research and development in Canada. Historical data from the Patented Medicine Prices Review Board in fact shows the opposite. In 1987, holders of pharmaceutical patents made a commitment to Canadians to increase their annual expenditures in research and development to 10% of sales. In 2006, they devoted only 8.1% of Canadian sales to research and development, and, in real terms, an amount of less than 2% of Canadian sales has been invested in basic research on new medications.