Generics, Biotech Drive Pharmaceutical Market in Canada

December 26, 2007

The Canadian pharmaceutical market’s growth in 2007 is estimated to be 6.5 percent, reaching $19 billion (Canadian) in sales, according to IMS Health Canada. That is slower than the 8.4 percent average rate achieved over the past four years — partly due to fewer new product launches — but similar to that of the global pharmaceutical market.

Growth in the generics sector is expected to be 20.1 percent. Excluding biotech products, brand drug growth will be only 1.6 percent, representing the greatest difference ever in growth between the generic and brand markets.

Ian Therriault, senior vice president of IMS Health Canada, said the disparity is primarily due to the large number of patent expirations. “Pharmaceutical products representing $1.2 billion of sales in Canada faced patent expiries in 2007,” he said. “This figure is four times larger than the patent expiries expected during the next two years.”

The growth in generics happened despite cost-cutting initiatives in Quebec and Ontario that led to price cuts for generic drugs of approximately 21 percent in 2007, according to the report.

“The increase in generic market share is an indication that Canadian payers — public and private — are increasingly turning to generics in attempts to better control prescription drug plan costs,” Jeff Connell, spokesman for the Canadian Generic Pharmaceutical Association, said.

 “While this is positive, there is still a long way to go,” he added, noting that generic usage in Canada is still lower than in the U.S.