Advocacy

Provincial

Overview of Ontario's Generic Pharmaceutical Industry

Based largely in the Greater Toronto Area, Ontario is home to one of the world’s largest concentrations of generic pharmaceutical research, development and manufacturing.

Employment

• Approximately 11,000 in Canada
• Approximately 8,000 in Ontario
• CGPA member companies pay out more than $400-million annually in salaries and benefits in Ontario

Innovation

• CGPA member companies spend approximately $300-million on research and development in Ontario
• CGPA member companies invest 15% of sales in research and development
• Ontario-based Apotex is the largest R&D spender among all pharmaceutical companies in Canada
• According to Research Infosource’s 2006 annual list of the top 100 corporate R&D spenders in Canada, Apotex spent $183-million on R&D, which is 18.3% of sales

Exports

• Canada’s generic drug industry generates 40% of its sales volume from exporting made-in-Canada pharmaceuticals, primarily to the United States
• Generic pharmaceutical companies export more than $1-billion annually from Ontario
• At its Toronto R&D and production facilities, Apotex has developed a triple-combination HIV/AIDS drug for export to developing countries under Canada’s Access to Medicines Regime (CAMR) and offered to sell it at cost

Key Economic Numbers: Brand vs. Generic

Sales in Ontario (total = $7.5-billion - public and private sector)
Brand = $5.9-billion
Generic = $1.6-billion

Jobs in Ontario
Brand = 9,000
Generic = 8,000

R&D spending in Ontario
Brand = $360M
Generic = $300M

As the numbers above clearly show, a dollar spent on a generic drug supports more jobs, more investment in R&D, and more investment in pharmaceutical manufacturing capacity in Ontario than a dollar spent on a brand-name drug.

Manufacturing

In terms of who is doing what in Ontario, most brand-name drugs sold in Ontario and Canada are shipped into the country. Almost all generic drugs sold in Canada are made in the GTA or Montreal area. The majority of the pharmaceutical manufacturing capacity that exists in Canada is generic, and the majority of that is in Ontario.

Trade Balances: Pharmaceutical and Medicine Manufacturing
Source: Statistics Canada
Value in Millions of Canadian Dollars

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total Exports 1,562 1,681 1,853 2,307 2,552 3,401 4,011 4,337 5,442 6,800 Total Imports 4,196 5,086 5,962 7,044 8,071 9,044 9,563 10,031 11,183 12,063 Trade Balance (2,634) (3,405) (4,109) (4,737) (5,519) (5,643) (5,551) (5,693) (5,741) (5,262)

Canada’s Trade Deficit in Pharmaceutical and Medicine Manufacturing

As the chart above illustrates, data from Statistics Canada shows that Canada’s trade deficit in pharmaceutical and medicine manufacturing has grown from $2.6-billion in 1998 to nearly $5.3-billion in 2007

In its 2004 Annual Report, the Patented Medicine Prices Review Board (PMPRB) points out that, “most generic drugs sold in Canada are produced domestically.”

The PMPRB report confirms that Canada’s large trade deficit in pharmaceutical and medicine manufacturing is due to the brand-name pharmaceutical industry.

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	Overview of Ontario's Generic Pharmaceutical Industry