Canada's Drug Sovereignty Study

On March 10, the House of Commons Standing Committee on Health (HESA) convened its first meeting on Canada’s Pharmaceutical Sovereignty study, which aims to assess the country’s capacity to ensure access to essential medicines during times of crisis (House of Commons, 2026). The study is focused on strengthening domestic pharmaceutical manufacturing and innovation, securing reliable access to critical drugs, and reducing dependence on global supply chains (House of Commons, 2026). As part of this work, the committee will hear from industry leaders, academics, and patient groups to inform future policy recommendations.

Canada’s pharmaceutical market is characterized by a strong reliance on brand-name drugs, which account for 80.5% of total sales value but only 23.4% of prescription volume. In contrast, generic drugs represent 76.6% of prescriptions but just 19.5% of market value (IQVIA, 2024). Between 2019 and 2024, pharmaceutical imports grew significantly, underscoring Canada’s dependence on external supply (Statistics Canada, 2024). The United States remains Canada’s largest trading partner in this sector, accounting for a substantial share of both exports and imports, while the European Union represents a significant portion of imports (Statistics Canada, 2024). Market concentration is also notable, with large multinational firms such as Johnson & Johnson, Novo Nordisk, and AbbVie holding a significant share of the Canadian pharmaceutical market (Patented Medicine Prices Review Board [PMPRB], 2023). Demand for certain drugs continues to rise rapidly, with medications like Ozempic experiencing sharp increases in utilization, alongside broader growth in immunologic, ophthalmic, and oncology therapies (PMPRB, 2023; IQVIA, 2024). However, supply disruptions—including those affecting Ozempic—highlight ongoing challenges in timely access to medications (Health Canada, 2023).

There is ongoing debate about whether delays in drug approvals are driven by Health Canada’s regulatory timelines or by pharmaceutical companies strategically delaying submissions due to Canada’s smaller market size and pricing controls (Fraser Institute, 2023; Health Canada, 2022). Another concern is how publicly funded research is commercialized. Canada played a major role in advancing COVID-19 innovations, including monoclonal antibody therapies and lipid nanoparticle technology developed at the University of British Columbia (Government of Canada, 2021; UBC, 2020). While these breakthroughs were rooted in publicly funded research and supported by additional public investment, the financial benefits largely flowed to private companies, while Canada still paid significant amounts to access the resulting treatments (Standing Committee on Industry and Technology, 2022).

Proposed solutions include streamlining Health Canada’s approval processes, increasing investment incentives for domestic manufacturing, and enhancing agility in drug development (Health Canada, 2022; Innovation, Science and Economic Development Canada, 2021). A strategic approach to domestic production would prioritize the most prescribed and essential medicines, as well as treatments for prevalent conditions, while also expanding capacity for innovative therapies targeting rare diseases (Council of Canadian Academies, 2022). While Canada is unlikely to manufacture all pharmaceuticals, it should focus on producing those critical to national security and reassessing its reliance on key international suppliers (Council of Canadian Academies, 2022).

The W&W Team

Sources:

• Council of Canadian Academies. (2022). Building on Canada’s strengths in the life sciences sector.

• Fraser Institute. (2023). Drug approval timelines in Canada.

• Government of Canada. (2021). Canada’s biomanufacturing and life sciences strategy.

• Health Canada. (2022). Regulatory review of drugs and devices.

• Health Canada. (2023). Drug shortages in Canada.

• House of Commons Standing Committee on Health (HESA). (2026). Study on Pharmaceutical Sovereignty.

• Innovation, Science and Economic Development Canada. (2021). Biomanufacturing and Life Sciences Strategy.

• IQVIA. (2024). Canadian Pharmaceutical Market Report (Pharmafocus).

• Patented Medicine Prices Review Board (PMPRB). (2023). Annual Report.

• Standing Committee on Industry and Technology. (2022). Domestic manufacturing capacity for pharmaceuticals.

• Statistics Canada. (2024). Canada’s international trade in pharmaceutical products.

• University of British Columbia (UBC). (2020). COVID-19 research and innovation contributions.