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For immediate release

Pharmaceutical R&D SpendingDrops to Lowest Level Since 1988

Only 6.9% of brand-name drug companies’ Canadian sales revenues

spent on research and development

Toronto, June 23, 2011 – Research and development spending in Canada by brand-name drug companies has dropped to its lowest level since 1988, according to the latestannual report of the Patented Medicine Prices Review Board (PMPRB).

The PMPRB reports that in 2010, brand-name drug companies spent only 6.9 percent of their Canadian revenues on research and development in Canada, marking the tenth consecutive year that brand-name drug companies have broken their promise to spend at least 10 percent of their domestic sales on R&D.

The PMPRB report also shows that in 2010the brand-name industry spentonly 1.4 percent of its Canadian sale revenues on basic research that could lead to the discovery of new medicines.

The PMPRB’s findings are contained in a new report released today by CGPA. Copies of The Real Story Behind R&D Spending by Brand-Name Drug Companies in Canada, 2011 are available at

In Canada, market monopolies for brand-name drug companies have increased eight times since 1987, yet investments continue to decline,” said Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA). “Canada’s current intellectual property regime for pharmaceuticals exceeds our international treaty obligations and provides greater protections to brand-name drug companies than those afforded any other industrial sector in Canada, yet the brand-name industry continues to lobby aggressively for even longer periods of market exclusivity.”

Canada and the European Union (EU) are currently negotiating a comprehensive economic and trade agreement (CETA), which the federal government hopes to conclude by 2012. As part of these negotiations, the EU has tabled proposals on behalf of brand-name drug companies that would considerably lengthen the period of market exclusivity for brand-name drugs in Canada.

A February 2011 report prepared by Professor Aidan Hollis of the University of Calgary and Paul Grootendorst of the University of Toronto estimated that the adoption of the EU's drug patent system proposals would lengthen periods of market exclusivity for brand-name drugs by an average of 3.5 years and add approximately $2.8-billion annually to Canadian’s prescription drug bill.

“Canada’s generic pharmaceutical industry is a strong advocate for enhanced trade, and supports efforts by the Government of Canada to reduce barriers to trade,” Keon said. “Extending market monopolies for brand-name drugs will not reduce trade barriers. It will, however, increase revenues for European-based drug companies at the expense of Canada’s health-care system. It will also increase trade barriers for Canadian generic pharmaceutical manufacturers.”

(more)

About the Canadian Generic Pharmaceutical Association

The Canadian Generic Pharmaceutical Association (CGPA) represents Canada’s generic pharmaceutical industry. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to fill 58 per cent of all prescriptions but account for only 26 per cent of the $22-billion Canadians spend annually on prescription medicines.

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For more information, please contact:

Jeff Connell

Director of Public Affairs

Canadian Generic Pharmaceutical Association (CGPA)

Tel: (416) 223-2333

Mobile: (647) 274-3379

Email:

Canadian Generic Pharmaceutical Association

4120 Yonge Street, Suite 409, Toronto, OntarioM2P 2B8 Tel: (416) 223-2333 Fax: (416) 223-2425