Economic Impact Assessment in the Canadian Pharmaceutical Industry

The pharmaceutical industry's contribution to Canada is well documented in clinical terms, but the economic and societal dimensions of that contribution are becoming increasingly difficult to ignore. Statistics Canada data show that Canada's innovative pharmaceutical sector generated $18.4 billion in total economic activity in 2022 alone, supported more than 110,000 full-time jobs, and invested up to $3.2 billion in research and development that year (Innovative Medicines Canada, 2024a). Despite this scale, the frameworks used to evaluate and communicate the value generated by pharma partnerships across health systems, communities, and the broader economy remain inconsistent, underdeveloped, or too narrowly focused on clinical endpoints. As pressure mounts on industry to demonstrate broader value to policymakers, payers, and the public, Economic Impact Assessment (EIA) is emerging as a critical strategic capability. 

EIA is a systematic approach to quantifying the direct, indirect, and induced effects of an organization's activities on an economy. Direct impacts are the most visible: jobs created, research and development (R&D)investment, and revenue generated. Indirect impacts capture the additional economic activity generated through suppliers, service providers, and partner organizations that support the original investment or intervention. Induced impacts reflect the downstream spending of employees and suppliers (Oxford Brookes Business School, n.d.; Statistics Canada, 2026). When applied specifically to pharmaceutical partnerships, these three dimensions become more complex. The effects of health system partnerships extend well beyond the immediate intervention, touching care pathways, workforce productivity, and population health outcomes in ways that require more sophisticated analytical frameworks to capture fully. Methods such as cost-benefit analysis, budget impact modelling, and Social Return on Investment (SROI) have become central to this work. SROI, in particular, is gaining traction in healthcare contexts because it captures not only financial return but also the social, environmental, and broader wellbeing value created by an intervention, outcomes that traditional economic analyses tend to exclude (Ashton et al., 2024). Research has confirmed SROI as a suitable and increasingly well-developed framework for demonstrating the social value of health interventions, althoughmethodological consistency and transparency remain areas for improvement (Ashton et al., 2024). 

The growing integration of environmental, social, and governance (ESG) considerations into pharma strategy is reshaping expectations around impact measurement further still. Research on ESG maturity across the pharmaceutical sector finds that larger and publicly traded companies are advancing environmental and social target-setting, though cost pressures and regulatory complexity continue to constrain progress industry-wide (Bade et al., 2024). The EU's Corporate Sustainability Reporting Directive, in force since 2025, has accelerated uptake of standardized non-financial reporting across the sector globally, including for Canadian subsidiaries (Bade et al., 2024). This regulatory and reputational environment means that EIA frameworks can no longer treat economic, social, and sustainability outcomes as separate exercises. Credible impact assessment today integrates them into a unified, evidence-based narrative. Integrating lifecycle cost analysis, stakeholder engagement, and sustainability outcomes within a single EIA framework is not only methodologically robust but also increasingly aligned with the expectations of funders, governments, and health system partners.

For pharma companies operating in Canada, the practical challenge is designing EIA capabilities that are both rigorous and scalable across a diverse portfolio of partnership types, from screening and access programs to digital health collaborations and outcomes-based agreements. A phased approach grounded in data maturity enables organizations to produce defensible analyses at any stage: early-stage assessments can rely on published literature, administrative datasets, and stakeholder insights, while more established programs can incorporate longitudinal data, quasi-experimental methods, and portfolio-level benchmarking. Attribution, or distinguishing the contribution of a given partnership from concurrent system changes, remains the most technically demanding aspect of this work and requires transparency about counterfactual assumptions and sensitivity analyses that can withstand external scrutiny. When done well, a scalable EIA capability does more than justify past investment. It informs where resources should go next, strengthens policy dialogue, and builds the kind of durable evidence base that positions a company as a genuine partner in health system transformation rather than merely a vendor of products (Innovative Medicines Canada, 2024b). In a Canadian policy environment where drug access, system sustainability, and pharmaceutical sovereignty are all actively contested, that repositioning matters.

Ultimately, the most credible EIA frameworks for pharma partnerships will be those that account for the full triple bottom line: measuring not only economic returns such as jobs, R&D investment, and system cost-offsets, but also social value across health equity, patient outcomes, and community wellbeing, and environmental performance across emissions, resource stewardship, and supply chain sustainability. Anchoring EIA in these three interconnected domains transforms it from a retrospective accounting exercise into a forward-looking strategic tool, one that aligns pharma partnerships with the broader expectations of health systems, governments, and the communities they serve. 

The W&W Team 

References 

Ashton, K., Cotter-Roberts, A., Clemens, T., Green, L., & Dyakova, M. (2024). Advancing the social return on investment framework to capture the social value of public health interventions: Semistructured interviews and a review of scoping reviews. Public Health, 226, 122–127. https://doi.org/10.1016/j.puhe.2023.11.004 

Bade, C., Olsacher, A., Boehme, P., Truebel, H., Bürger, L., & Fehring, L. (2024). Sustainability in the pharmaceutical industry: An assessment of sustainability maturity and effects of sustainability measure implementation on supply chain security. Corporate Social Responsibility and Environmental Management, 31(1), 224–242. https://doi.org/10.1002/csr.2564 

Innovative Medicines Canada. (2024a, May 12). New Statistics Canada data reinforces life sciences as an economic engine. https://innovativemedicines.ca/newsroom/all-news/new-statistics-canada-data-reinforces-life-sciences-as-an-economic-engine/ 

Innovative Medicines Canada. (2024b, September 18). The prescription for Canada's health care future. https://innovativemedicines.ca/newsroom/all-news/the-prescription-for-canadas-health-care-future/ 

Oxford Brookes Business School. (n.d.). Economic impact assessment. https://www.brookes.ac.uk/about-brookes/structure-and-governance/faculties-and-schools/business/business-engagement/partner-with-experts/economic-impact-assessment 

Statistics Canada. (2026). The Canadian research and development pharmaceutical sector, 2023 (Catalogue No. 11-621-M). https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2026001-eng.htm