News Releases

Generic drugs in Québec: spinoffs totalling more than $1 billion

Montréal, May 11, 2006 – The Canadian Generic Pharmaceutical Association (CGPA) released the results of a study today on the economic impact of the Québec generic drug industry, which indicate a contribution of more than $1 billion to the economy. According to the study conducted by Stratem Inc., the direct and indirect annual contribution of generic drugs breaks down as $287 million in salaries, $507 million in the purchase of goods and services, and $400 million in savings for the healthcare system. According to the Chairman of the Board for the CGPA, Mr. Jean-Guy Goulet, these latest data attest not only to the vitality of the industry, but also to the niche the industry has forged in the healthcare system. “Not only do generic drugs allow substantial savings to be generated for the government and for users, but they also guarantee quality jobs and significantly stimulate economic activity,” he explained.

The study, which was carried out using the data collected from nine of the largest manufacturers in the province, also sheds new light on the industry. Accordingly, between 2000 and 2005 alone, international sales of generic drugs produced by Québec manufacturers more than doubled to attain $1.1 billion. Direct and indirect jobs followed suit to total 6,200. “We are particularly proud to note that all economic indicators are positive,” Goulet added. “We hope that this will prompt the government to further improve accessibility to generic drugs, whose use is in fact lower in Québec than in the rest of Canada.”

Sustained growth in research and development

The results also demonstrate that research and development activities are extensive enough to have a significant economic impact in Québec. “Contrary to the urban myth that generic drug manufacturers do not conduct R&D,” CGPA president Jim Keon explained, “the study produced by Stratem Inc. demonstrates that R&D is in a phase of significant growth (totalling as much as 11% of sales for some manufacturers), even though the regulatory context is less favourable here than in Ontario.”

R&D alone accounts for close to 500 quality jobs in Québec. To this we can add more than 300 jobs at contract research companies, some of which draw the majority of their revenues from generic drug companies.

With regard to tax implications, in 2005, the generic drug industry enabled the governments of Québec and of Canada to collect close to $128 million after deducting research credits.

About the Canadian Generic Pharmaceutical Association

The CGPA represents the Canadian generic drug industry, which is a dynamic group of companies that specialize in the production of high quality drugs; in the sale affordable generic drugs; and in the rollout of clinical trials necessary to receive government approval of generic drugs. It plays an important role by contributing to the overall control of healthcare costs by reducing the cost of drugs: on average, generic drugs are 40% less expensive than their original counterparts.

Source: Yves Dupré Executive Director – Québec CGPA 514 286-6061

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