Canada's pharmaceutical sector
The pharmaceutical sector is one of the most innovative industries in Canada. It is composed of companies developing and manufacturing innovative medicines and generic pharmaceuticals, as well as over–the-counter drug products. The sector is made up of a number of sub-sectors that service different market segments. These include brand-name pharmaceuticals, generic pharmaceuticals, biopharmaceutical small and medium sized enterprises (biopharmaceutical SMEs), contract research organizations (CROs), and contract manufacturing organizations (CMOs).
Size and structure of the industry
- Pharmaceutical sales in Canada have a 2.1% share of the global market, making Canada the 9th largest world market. Since 2015, compound annual growth has remained positive at 5.1% (IQVIA Pharmafocus 2024).
- Companies undertake research and development (R&D) to develop new or improved patented therapies, while others develop bio-equivalent copies of innovative drugs once patents expire. Emerging fields of biopharmaceuticals include gene and cell therapies, and nanomedicines.
- Brand-name products account for 81.3% of Canadian sales by value and 27.1% of prescriptions by quantity. Generics account for the rest (IQVIA Pharmafocus 2024).
- In 2020, the manufacturing portion of the sector employed an average of approximately 31,500 people and over the last 5 years, employment has grown by 15.5% (Statistics Canada; Table 14-10-0201-01).
- The industry is clustered mainly in the metropolitan areas of Toronto, Montreal and Vancouver.
Year | Employment |
---|---|
Source: Statistics Canada. Table 14-10-0201-01 Employment by industry, monthly, unadjusted for seasonality, Yearly employment is 12 month average. | |
2011 | 26,710 |
2012 | 26,979 |
2013 | 26,983 |
2014 | 25,934 |
2015 | 27,302 |
2016 | 28,494 |
2017 | 29,870 |
2018 | 29,804 |
2019 | 30,853 |
2020 | 31,521 |
Canadian drug sales
According to the 2019 PMPRB Annual ReportFootnote 1, from 2011 to 2019, the value of total pharmaceutical sales (including non-patented over the counter medicines) in Canada have increased by 35.3% to $29.9 billion, with 86.7% sold to retail drug stores and 13.3% sold to hospitals. Governments account for 37.2% of drug expenditures and private payers account for the remaining 62.8% (private coverage and individuals) (IQVIA Pharmafocus 2024).Year | Patented | Non-Patented | Total |
---|---|---|---|
Source: 2019 PMPRB Annual Report | |||
2011 | 12.9 | 9.2 | 22.1 |
2012 | 12.9 | 8.9 | 21.8 |
2013 | 13.4 | 8.7 | 22.1 |
2014 | 13.8 | 9.2 | 23.0 |
2015 | 15.1 | 9.4 | 24.5 |
2016 | 15.5 | 10.0 | 25.5 |
2017 | 16.8 | 10.2 | 27.0 |
2018 | 16.7 | 11.6 | 28.3 |
2019 | 17.2 | 12.7 | 29.9 |
R&D activities
- Total business expenditures on R&D by Canadian pharmaceutical companies have fallen below $1 billion since 2011. From 2011 to 2019, industry R&D spending fell by 9.9%Footnote 2 (2019 PMPRB Annual Report).
- New medicines and drug candidates are increasingly being developed externally via partnerships with academia, small and medium sized enterprises (SMEs), government and research centres as well as contract research organizations (CROs). Drug research and development is increasingly done via external partners, as over the past decade, 60% of innovator small molecules and 82% of innovator biologics have their roots outside of big pharmaceutical companies (source: Accenture). As a result, the innovation activities of large pharmaceutical firms have diversified, and Canadian CROs perform an increasingly important share of R&D.
- According to Research InfosourceFootnote 3, the pharmaceutical industry is first ahead of the Software and Computer Services and Energy/Oil and Gas sectors in R&D intensity. Twenty-seven pharmaceutical and biotechnology companies are listed in the Top 100 Corporate R&D Spenders 2019 in Canada.
- R&D costs per drug averaged US$1.4 billion over 12–13 years (Tufts Center for the Study of Drug Development). Full costing (including amortization of research failures and opportunity cost of capital) raised average costs significantly. A generic drug may take 2 to 3 years and requires $3 to $10 million of R&D to develop and prove equivalency with the original drug.
Year | Expenditure (in $ billions) |
---|---|
Source: 2019 PMPRB Annual Report | |
2011 | 0.99 |
2012 | 0.94 |
2013 | 0.80 |
2014 | 0.79 |
2015 | 0.87 |
2016 | 0.92 |
2017 | 0.87 |
2018 | 0.89 |
2019 | 0.89 |
Region | R&D Distribution (%) |
---|---|
Source: 2019 PMPRB Annual Report | |
Ontario | 50.9 |
Quebec | 28.3 |
West | 18.3 |
Maritimes | 2.4 |
International trade
- From 2011 to 2020, pharmaceutical exports and imports between Canada and the rest of the world increased by 143% and 58% respectively.
- The United States is Canada’s main trading partner, accounting for 64% of exports and 29% of imports in 2020. Another 48%of imports originate from the European Union.
Year | Domestic Exports | Imports | Trade Deficit |
---|---|---|---|
Source: Statistics Canada, Industry Canada Trade data online | |||
2011 | 5.2 | 13.6 | 8.4 |
2012 | 5.5 | 13.5 | 8.0 |
2013 | 6.1 | 13.7 | 7.7 |
2014 | 8.3 | 15.4 | 7.1 |
2015 | 10.5 | 16.9 | 6.4 |
2016 | 11.8 | 17.2 | 5.5 |
2017 | 8.9 | 17.6 | 8.7 |
2018 | 11.0 | 19.5 | 8.5 |
2019 | 12.2 | 21.5 | 9.4 |
2020 | 12.7 | 22.6 | 9.9 |
Leading companies
- In 2020, the top ten pharmaceutical companies accounted for over half of total Canadian pharmaceutical sales including both prescription and non-prescription medicines (IQVIA Pharmafocus 2024).
Rank | Leading Companies | Total Sales ($ billions) | Market Share (%) |
---|---|---|---|
Source: IQVIA Pharmafocus 2024 | |||
1 | Johnson & Johnson/Actelion | 4.19 | 13.3 |
2 | AbbVie | 1.62 | 5.10 |
3 | Novartis | 1.60 | 5.10 |
4 | Merck/Cubist | 1.59 | 5.00 |
5 | Pfizer/Hospira | 1.35 | 4.30 |
6 | Apotex | 1.22 | 3.90 |
7 | Bayer | 1.20 | 3.80 |
8 | Roche | 1.17 | 3.70 |
8 | AstraZeneca | 1.13 | 3.60 |
10 | GlaxoSmithKline | 1.07 | 3.40 |
Leading products
- The top ten pharmaceutical products sold in Canada account for 16% of 2020 industry sales. Leading therapeutic categories include medicines for arthritis, ophthalmology and autoimmune diseases (IQVIA Pharmafocus 2024)
Rank | Leading products | Therapeutic subclass | Total sales ($ millions) | 2020 Growth (%) | Company |
---|---|---|---|---|---|
Source: Source: IQVIA Pharmafocus 2024 | |||||
1 | Remicade | Anti-arthritic | 1,153.0 | 2.0 | Merck |
2 | Humira | Anti-arthritic | 931.0 | 8.5 | AbbVie |
3 | Eylea | Ophtalmology | 560.0 | 3.3 | Bayer/Regeneron |
4 | Stelara | Autoimmune | 476.0 | 24.0 | Bayer/Regeneron |
5 | Epclusa | Liver health | 385.0 | -40.1 | Gilead |
6 | Elquis | Blood Thinner | 331.0 | 20.8 | Pfizer/Bristol-Myers |
7 | Imbruvica | Autoimmune | 323.0 | 31.8 | AbbVie |
8 | Lucentis | Ophthalmology | 318.0 | -4.5 | Novartis |
9 | Keytruda | Autoimmune | 308.0 | 19.6 | Merck |
10 | Xarelto | Blood Thinner | 269.0 | 9.0 | Bayer |
Health expenditures on drugs
According to the Canadian Institute for Health Information's National Health Expenditure ReportFootnote 4:
- In 2019, 56% of total health expenditures were directed to hospitals, physicians and drugs.
- Pharmaceuticals are the second largest component of health care expenditures, representing 15% of total expenditures.
- Although spending on pharmaceutical continued to grow, the pace has slowed in recent years across provinces and territories.
Expenditure ($ billions) | |||
---|---|---|---|
Year | Total Health Expenditures | On Drugs | Share of Total (%) |
Source: Canadian Institute of Health Information (CIHI); f=forecasted | |||
2011 | 199.3 | 33.0 | 16.5% |
2012 | 207.4 | 33.4 | 16.1% |
2013 | 212.2 | 33.6 | 15.8% |
2014 | 218.4 | 33.9 | 15.5% |
2015 | 227.9 | 35.6 | 15.6% |
2016 | 237.2 | 37.0 | 15.6% |
2017 | 245.6 | 38.2 | 15.5% |
2018 | 254.6 | 38.9 | 15.3% |
2019f | 265.5 | 40.3 | 15.2% |
For More Information Contact:
Manufacturing and Life Science Branch
Innovation, Science and Economic Development
235 Queen Street
Ottawa ON, K1A 0H5
Telephone: 613-954-3077
Fax: 613-952-4209
Website: Canadian life science industries
Footnotes
- Footnote 1
The Patented Medicines Prices Review Board (PMPRB) protects and informs Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends. To learn more visit Patented Medicine Prices Review Board
- Footnote 2
R&D refers to Scientific Research and Experimental Development (SR&ED) expenditures outlined in Income Tax Regulation. For more information please visit A brief history of the definition of SR&ED
- Footnote 3
Research Infosource publishes a list of the top 100 corporate R&D spenders in Canada annually. The most recent version can be viewed here: The survey was published by Innovative Medicines Canada, and can be viewed at http://www.researchinfosource.com/top100_corp.php
- Footnote 4
This annual report published by CIHI tracks and reports health care spending across Canada. To learn more visit Canadian Institute for Health Information