|
|
 |
|
Viewing report
|
|
|
|
Canada Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Dec 2011, Pages: 91
Business Monitor International's Canada Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Canada's pharmaceuticals and healthcare industry.
BMI View: While we believe cost constraints will hit the public healthcare system, it is highly unlikely the Canadian government will introduce punitive price controls like those witnessed across Europe. Instead, the country’s healthcare market will continue to place downward pressures on pharmaceutical prices as policies mandating generic substitution compress headline growth. In addition, we note that with reimbursement trends favouring cost-effective studies over clinical success stories, public officials are unlikely to prefer slightly modified versions of previously patented medicines when generic substitutes are just as effective.
Headline Expenditure Projections
- Pharmaceuticals: CAD25.94bn (US$25.19bn) in 2010 to CAD26.30bn (US$27.39bn) in 2011;
+1.3% growth in local currency terms and +8.7% growth in US dollar terms. Forecast revised down moderately to reflect analyst intervention and new macroeconomic data.
- Healthcare: CAD176.23bn (US$171.10bn) in 2010 to CAD181.75bn (US$181.33bn) in 2011;
+3.1% growth in local currency terms and +10.7% growth in US dollar terms. Forecast revised down slightly to reflect new macroeconomic data.
- Medical devices:CAD6.54bn (US$6.35bn) in 2010 to CAD7.00bn (US$7.29bn) in 2011; +7.1% growth in local currency terms and +14.9% growth in US dollar terms. Forecast revised down slightly to reflect new macroeconomic data.
Business Environment Rating: In BMI’s Business Environment Ratings (BERs) for Q112, Canada remains in fourth place in the global matrix, trailing the US, UK and Switzerland. The ratings criteria serve to reinforce BMIs estimation of the country’s potential, owing to a stronger emphasis on the regulatory environment, which we see as a major factor affecting the business environment for drugmakers. However, cost-containment pressures at both federal and provincial level will continue to pose problems for manufacturers of novel products.
Key Trends & Developments
- In November 2011, the Canadian Medical Association Journal (CMAJ) called on the government to introduce new pharmaceutical intellectual property rights. The proposed changes would support and safeguard innovation in creation of new drugs. According to the author of the article, Paul Grootendorst from the pharmacy faculty at the University of Toronto, improvement in the legal and regulatory framework is required for market exclusivity of innovative drugs. The current regulations could be replaced with a standard assured fixed period for market exclusivity of up to 10 years. It was also suggested the Patented Medicines (Notice of Compliance) regulations could be abolished and the Patent Act could be used instead.
- In October 2011, under Canada's public drug plans, it was reported there had been a fall in the number of drugs eligible for reimbursement since 2003, when new Common Drug Review (CDR) processes came into existence. According to a study published in the Canadian Medical Association Journal (CMAJ), the number of new medicines listed on participating drug plans fell from 47-66% in the five years before 2003, to 12-40% in the following five years.
- In August 2011, Swiss pharmaceutical company Roche's Canadian business announced plans to invest more than US$191.8mn over the coming five years in a global pharmaceutical development site in Mississauga, Ontario. The establishment of the site will create 200 highly specialised research jobs and means Roche will have more than 650 employees in Ontario. The project is being supported by Ontario's Ministry of Economic Development and Trade as part of the government's plan to encourage job creation and boost local economies.
- In August 2011, Canadian speciality pharmaceutical company Paladin Labs signed a definitive agreement for the acquisition of local small molecule drugmaker Labopharm – for CAD$20.5mn (US$20.8mn). Under the deal, Paladin is entitled to secure the ownership of all of Labopharm’s issued and outstanding common shares at a price of CAD0.2857 (US$0.29) per share in cash. According to Paladin’s CEO Jonathan Goodman, the deal will strengthen the firm's pain franchise through the addition of several product candidates and complement its growth strategy in the country. The completion of the deal is pending a number of customary conditions, including gaining approval from the Superior Court of Quebec and winning over 66% of Labopharm's shareholders.
- In July 2011, after gaining approval for the insomnia drug Sublinox (edluar), Swedish pharmaceutical firm Meda and its Canadian partner Valeant announced that they expected to launch the product during Q411. Sublinox will be marketed by a joint venture (JV) between Meda and Valeant – Meda Valeant Pharma Canada. Meda has global rights to the drug, which was originally developed by Orexo, and has marketed it in the US since 2009.
BMI Economic View: We have slightly adjusted BMIs CAD/US$ forecasts for the time being, given global financial market volatility and a drop in commodity prices. BMIs average 2011 forecast has been pushed to CAD1.02/US$ (from CAD0.96/US$), while for 2012 we forecast CAD1.01/US$ (was CAD1.00/US$). With their Canadian rate outlook downgraded, this would otherwise warrant a greater depreciation in the dollar, were it not for the fact that the US rate outlook has been similarly downgraded. The strong Canadian dollar will continue to act as a natural tightening mechanism on growth, and will give the Bank of Canada leeway with regard to hiking rates.
BMI Political View: Canada has one of the best long-term political risk ratings in the world, reflecting its history of stable governance and strong institutions. Nevertheless, Canada faces political challenges over the coming decade, including a potential shift in power from east to west. The country’s strong performance across their structural political risk rating categories, reflects Canada's strength in the areas of rule of law, policy continuity and relative socioeconomic equality. Subsequently, we see limited risk of a Canadian fiscal crisis and, in fact, see debt ratios declining, with the budget returning to surplus by the 2014/15 fiscal year.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
