News March 2007

Canada's Drug Industry To See Steady Growth: Report

Sales for Canada's pharmaceutical industry will grow at an annual rate of 7.5 percent over the next few years, an industry report said on Wednesday, swelling to a value of $23.4-billion by 2010.

This steady growth in Canada's pharmaceutical and healthcare sector is seen being boosted in part by the development of cancer treatments and specialty products, market intelligence group IMS Health said.

"The industry will continue to prove that it succeeds by bringing innovation to the marketplace, and that is one of the key things that is underpinning the growth," Ian Therriault, IMS Health Canada's senior-vice president, told Reuters.

"Obviously there will be strong fundamental consumption and demand in the marketplace. There will be some setbacks on patent expiries, but they will be offset by innovation."

Generic drug manufacturing is also seen booming over the next few years as manufacturers take advantage of patent expirations.

The IMS report estimates that more than $1-billion in sales of brand-name products will face competition from "copy-cat" products this year alone. Sales of generic medication grew 13.6% in 2006, which was twice the rate of branded sales.

Biovail Corp., Canada's biggest publicly traded drugmaker, announced recently a strategy shift and job cuts in anticipation of lost revenue from generic brands.

Earlier this month, Biovail reached a comprehensive patent settlement with a number of companies manufacturing similar versions of its anti-depressant Wellbutrin XL.

It also dramatically scaled back its revenue outlook for Wellbutrin in the coming years.

Privately held Apotex Inc. is seen as a major beneficiary of the genericization of products. Apotex became the first generic drug manufacturer to reach sales of more than $1-billion in Canada in 2006, and is now the fourth-largest pharmaceutical manufacturer in Canada behind brand-name companies Johnson & Johnson, AstraZeneca and Pfizer.

"They (generic drugs) will continue to be a challenge, but the challenge will be limited to those brands where product expiry will occur. It's a very specific situation," Therriault said.

The Canadian Generic Pharmaceutical Association was quick to respond to IMS's findings, urging government and employers to increase the use of generic drugs to the same levels.

The association claims in a release that Canadians could save $700-million on the cost of prescription medicines in the first year alone if use of generic drugs were increased.

Source http://www.canada.com/