Global Drug Industry Spins Big Benefits for Canada and Quebec
Marcheterre, Andre, Canadian Speeches
President, Merck Frosst Canada
The globalization of the big pharmaceutical industry -- with world sales 2.5 times as big as Quebec's economy -- has meant important benefits for both Canada and Quebec. With the bulk of Canada's pharmaceutical industry, it has made Quebec a world leader in the pharmaceutical and biotechnology industries. Hundreds of millions of dollars spent here each year on R&D are finding new cures for diseases recently thought incurable. The industry is seen as crucial in improving health, reducing health care costs, and generating major socio-economic benefits. But provincial government policies that restrict purchases of new drugs for the sake of perceived cost savings could, in fact, increase health care costs, while impeding the health and socio-economic benefits. Speech to the Conseil des relations Internationales de Montreal, September 17, 1998.
I would first like to thank the CORIM for inviting me to speak to you today. It is always a pleasure to meet with groups like yours to discuss topics of common interest.
Knowing your interest in international issues, I chose to speak to you today about the globalization of the pharmaceutical industry and its implications for Montreal, Quebec, and Canada.
As president of an innovative Canadian pharmaceutical company that is part of an international group, I have a good vantage point on what is happening in the industry and I can say that globalization can be a source of opportunity for us here, as long as we do what is necessary.
I would like to emphasize that these are extremely interesting times for the global pharmaceutical industry.
For example, new tools such as bioinformatics and high throughput screening are accelerating the research process and allowing us to work more efficiently.
By better understanding the mechanisms of disease, we can develop more effective drugs with fewer side effects.
Still more important, scientific progress has made possible the discovery of treatments for diseases that had until recently been considered incurable or part of the normal ageing process. Osteoporosis, for example, can now be prevented thanks to new drugs.
Biomedical and pharmaceutical innovations have already allowed us to control many diseases and to eradicate others such as smallpox; poliomyelitis and measles have almost been eradicated. Life expectancy is now 82 years in Canada, one of the highest in the world. But despite this impressive progress, only 20% of known diseases are curable. There is still a lot of work to do.
The fact is, however, that pharmaceutical innovation is still the best long-term approach to improving public health and, at the same time, to reducing health-care costs and the socio-economic impact of disease. For example, by eliminating the need for hospitalization or surgery, new drugs can generate savings.
That is one of the reasons why the pharmaceutical industry sees itself as part of the solution to the health-care problem, and not as part of the problem, as some people would have us believe.
The global market of pharmaceutical products
To begin with, the global market for pharmaceutical products is estimated at over $300 billion U.S. (manufactures price). At the present rate of exchange, that is the equivalent of approximately $450 billion Cdn., or 2.5 times Quebec's GDP! So it's a sizeable market.
The United States alone accounts for approximately $100 billion US, or one-third of the world market. In comparison, Canada accounts for $4.5 billion (1.5%). North America, Europe and Japan together represent a little more than 80% of the world market. Emerging markets, however, such as Brazil and China are experiencing the fastest growth.
The globalization of the industry
The pharmaceutical sector lends itself especially well to globalization. …