Let’s talk, briefly, about pharmaceutical innovation
Leading up to the 2022 federal budget, one of the hopes of the pharmaceutical sector is that the government will repeal and rethink certain regulatory updates to the Patented Medicine Prices Review Board (PMPRB), whose purpose is to prevent excessive pricing and the abuse of drug patents.
Artificially lowering drug prices, as the government is doing, makes Canada an unattractive market for pharmaceutical companies to sell to, which can result in Canadians waiting longer for medications and medical devices. This is because manufacturers have an incentive to introduce drugs first where prices are higher. Considering it costs about one billion dollars and takes 10 years to get a drug to market, companies need to finance the high costs of research and development in order to recover their investments and, yes, make a profit.
Outside of its numerous and obvious health benefits, the sector generates between $19 billion and $26 billion of added value for the Canadian economy. If reducing prices is the goal, a more sustainable way to do so would be to scale back the overregulation that needlessly inflates the costs of R&D for drug manufacturers.