January 24, 2012
The Future of the Québec Provincial Biopharmaceutical Strategy
Marc Leduc, Director General (Coordination and Sectoral Intervention Branch), Government of Québec
Claude Perron, General Manager, Shire Canada
Walter Robinson, VP, Government Affairs, Rx&D
Mobilize. Innovate. Prosper. Wise words for the future. But are Pharma’s strong points - an immense pool of talent and a great infrastructure - enough to survive and succeed in the new global reality?
Joseph Atallah, moderator and VP of PMCQ, welcomed the audience to the second half of the season at this Shire-sponsored event. Guest speakers for this excellent program, Marc Leduc, Director General of the Coordination and Sectoral Intervention Branch of the Government of Québec, Claude Perron, General Manager of Shire Canada, and Walter Robinson, Vice President of Government Affairs, Rx&D, gave their perspectives on the direction in which Québec’s Pharma industry is heading.
Pharma, a key sector in the Québec economy, is weathering a difficult storm. With the patent cliff looming on blockbuster drugs, development of emerging markets in BRIC (Brazil, Russia India and China), relocation of activities, decrease in intramural R&D investment, a dip in the number of jobs from over 20,000 in 2008 to a projected figure of approximately 16,000 in 2012, the industry is witnessing unprecedented changes and restructuring.
As enumerated by Mr. Robinson, mergers, acquisitions, consolidations, partnerships, a changing research model and economies driven by payers have all affected our sector. It makes one wonder how Pharma can not only cope, but also succeed in this volatile environment … but history gives us hope.
Which raises the question: What will the provincial government do to partner with our industry in Québec at this critical juncture?
Mr. Leduc, in his presentation entitled “Maintaining Excellence by Creating Wealth in Québec”, succinctly outlined the provincial government’s plan of action to ensure that our industry remains a strong, growing, and innovative part of the economy’s future.
He began by pointing out that Québec, as a leader in the Biopharmaceutical Sector, boasts the world’s top 10 pharmaceutical companies and is home to the Canadian headquarters of 15 international Pharma companies, 4 of the 5 private basic research centres in Canada and 75 public and university health research centres. Impressive though this may seem, Mr. Leduc stated that it is a “sector where Québec must be ready to fight to maintain its leadership position”.
There are numerous ways in which the province aims to preserve its status and maintain an attractive and competitive environment through its proactive Biopharmaceutical Strategy stated Mr. Leduc.
Some of its goals are to step up research ($39M), inject funding into the development and collaboration of biotechnology ($30.9M) and pharmaceutical ($50M) firms, globally promote Québec’s image as an international biopharmaceutical hub ($2.5M) and maintain a labor force to meet the industry’s needs.
Yet another part of the strategy is to foster collaboration between the industry and universities by funding the Québec Consortium for Drug Discovery ($9M) over 3 years, funding Génome Québec ($30M) in order to stimulate drug development research and advances in genomics, and funding Fonds de la recherche Québec-Santé ($6M) for the “implementation of a new program devoted to broadening the availability of resources in research centres to carry out clinical research”.
In addition, other key elements that will help promote a healthy industry are the investment of over $6 billion into the construction of a University Hospital so that it can become an engine of economic development, financial support toward building a prosperous regional economy in the Québec-Ontario corridor so that it can attract foreign investment, and the development of a personalized health care strategy so that, in partnership with Québec’s health research fund and Génome Québec, it can adapt to the specific needs of each patient.
And what would a plan be without tax credits? Included in the plan were competitive R&D tax credits for 2006-2011 and a tax holiday for foreign researchers and experts for 2010-2011.
Add the creation of startup funds and the maintenance of a competitive business environment through the Forum permanent d’échanges — which aims to bring all of Quebec's research-based pharmaceutical sector stakeholders together — and you have quite a comprehensive package.
Walter Robinson was next up to bat.
“Turbulence might be a great word for where the sector is today… We’re at an inflection point,” he stated.
Pharmaceutical sales in Canada have a 3% share of the global market and we attract a little of over 1% of global life sciences investments, but with China and India representing 2.9 billion people between them - 36% of the world’s population - “competition for $110 billion in annual global pharmaceutical investments is fierce… They are growing markets in our sector which we have to compete against and to acknowledge”, continued Mr. Robinson.
He added that Canada presently has an “uncompetitive and unpredictable IP (intellectual property) regime” and supporting IP within CETA (Canada-European Comprehensive Economic and Trade Agreement) is critical to better positioning Canada for a greater share of this $110 billion pie.
Due to our “evolving health technology assessment regulatory (body) and a very challenging reimbursement environment”, on average, only one out of every 5 new medicines is accepted and reimbursed.
“That’s a challenge that your companies live with each and every day. CEOs have to go back to their global offices and say, ‘Great product, but the market right now — not so much’”, stated Mr. Robinson.
He reiterated the impact of the patent cliff, “There will be $8.7 billion wholesale market loss from 2010 to 2014 for innovative companies represented in this room. This is a tough business reality that many of you and your colleagues are living through.”
Is it time to put aside our attitude of gloominess and look at all of the good things that are happening? Mr. Robinson believes so.
Despite several blockbuster drugs going off patent, it is “an opportunity where governments can find savings in terms of generics on the market but also to take those savings and reinvest into new innovative medicines and vaccines,” he stated. “And to the credit of the Québec government they have a history of implementing innovative policies.”
“The Federal, Provincial and Territorial governments support innovation…We need to acknowledge the positive history of thought, action and leadership here in the province of Québec in terms of Règle de 15 ans1, Politique du medicament2 and Forum permanent d’échanges3,” he stated. “Quebec’s opportunities continue with INESSS4 (Institut national d’excellence en santé et en services sociaux), your health technology assessment agency that acknowledges and values incremental innovation.”
Building the Québec-Ontario Life Sciences Corridor is not only crucial, but is a big plus that proves that the industry is working as a nation. “The key message is that other countries have very aggressive life sciences strategies and Canada is slowly realizing this,” Mr. Robinson stated.
In addition, meeting the needs of an aging population with a rising incidence of chronic disease, meeting previously unmet needs through biologics, devices, IT, vaccines, nutrition, and developing robust pipelines with promising therapies in Oncology, infectious diseases, mental health, pain management and Alzheimer’s all offer further opportunities for growth in our industry but more importantly, hope for patients.
Mr. Robinson’s parting words left us with food for thought: “We have great work to do as an industry, in terms of advancing human health, in terms of driving great jobs… We have great things to offer… Our message as Rx&D is that Québec’s leadership in terms of the policies we want to co-create with you is essential because in this stage the rising tide lifts all boats. You have the experience, the talent and the passion in this room to work with the government of Québec. You have our pledge that we will work with you.”
Mr. Perron, our next panelist, emphasized that the reimbursement policy for innovative drugs must change. Only 20% of new medications are now covered compared to 70 - 75% that were reimbursed to payers in the past. He added that Quebec has always been ahead of the curve and in a leadership role and that now it’s time to “differentiate” in the global market.
Addressing the question of Quebec’s relevance as an attractive destination for talent and investment in relation to the new global reality, Mr. Perron stated that through discussion and working in partnership to find solutions and ways to implement them, we can determine how Quebec sets itself apart from other markets so that we can ensure a vibrant future for the biopharmaceutical sector.
He added that Quebec is very avant-garde with its government policy as well as its incentives for companies to invest. The province is very competitive in regard to these aspects, but globally everyone is catching up now and giving incentives as well.
We’re at a crossroads stated Mr. Leduc. We have to make sure that we stand out in regard to what Quebec and Canada do best. Mr. Leduc agreed that we have to accelerate the promotion of the industry and that the Quebec government is willing and eager to stimulate innovation and consider prioritizing promotion.
We have to be ready to do it right away and keep our tools up to date so that we can continue to progress added Mr. Perron. We have to make decisions and sell ideas to decision makers, and not only CEOs and GMs, but also to medical directors and policy makers and do it quickly.
When discussing examples and ways that Quebec has created conditions to assist in managing the risk in discovery and innovation, Mr. Perron talked about the fact that over the years, Quebec has lost many drug manufacturers. The Biopharmaceutical market is a risky business and we have to make sure to protect our intellectual property. Quebec’s Règle de 15 ans rewards our innovation and understands that a 6-8 year life span of a drug is not a good business plan and is not profitable.
When discussing Quebec’s position in terms of high technology biomanufacturing and what can be done to support its development, Mr. Robinson talked about personalized medicine and biologics. In terms of what the future holds, he mentioned a potential new oral rheumatoid arthritis blockbuster, vaccines, biologics, diagnostics, devices, oral tablets, nutrition, animal health sciences and crop sciences. “Personalized medicine? Yes, very much part of the future. Biologics solely? When I think of our membership, I challenge that,” stated Mr. Robinson.
On the topics of research through the Quebec Consortium for Drug Discovery, Genome Quebec and opportunities of information exchange and collaboration, our panelists talked about the two new hospital centres (Centre hospitalier de l'Université de Montréal and McGill University Health Centre) that present a unique opportunity for collaborating and connecting with the academic world. According to Mr. Perron, it creates a “win-win” situation. He hopes that their state of the art research centres will encourage the different stakeholders involved to work together to put Montreal on the map as a research and development centre. This, in turn, would create an attractive and competitive business environment that would encourage more investors. Everyone would then benefit.