Ottawa banks on Big Pharma making Canada pandemic-proof

Liberal fireball François-Philippe Champagne may be brand new to his portfolio as innovation minister, but already he says he will stop at nothing until he “onshores” enough pharmaceutical know-how and investment to make sure Canadians are pandemic-proof from now on.

There’s an urgency in his pitch, tight timelines in his mind and a calendar jammed full of virtual meetings with CEOs around the world.

But while Champagne’s energy is formidable, so are the challenges he faces.

The federal government’s history with the pharmaceutical industry has been anything but smooth. Plus, onshoring, by definition, involves a large amount of government participation and he doesn’t have a budget set aside specifically for what he calls his “mission.” And on top of all that, the political optics of cozying up to big pharmaceutical companies are just plain uncomfortable.

In an interview last week, Champagne admits readily that “onshoring” is about resiliency, and not about efficiency. He wants to persuade and entice companies involved in making vaccines, therapeutic drugs and biomanufacturing more generally to set up shop in Canada, with the goal of making sure the supply of anything Canadians need to fight a future pandemic are made readily, right here at home.

It’s the opposite of globalization, the mantra of the past few decades that has led companies to source their materials all over the world for the lowest price and most efficient production.

“I think there’s been a rethinking, that we need to put more emphasis on resiliency. I think people demand that our supply chains be more resilient. And I think companies feel the benefit of having supply chains that are more resilient,” Champagne says.

The thing is, there are hundreds of ingredients and parts involved in making each vaccine, therapeutic medicine or even syringes and gloves. And Canada has not been a major player in that global industry for years and years.

Champagne wants to change that by March 12 – the end date for his consultations with industry players so that his officials can compile the sector’s commitments to move to Canada, send it to the Department of Finance and nail down some funding in time for the mid-April budget.

For sure, Champagne isn’t starting from nothing. He highlights dozens of research and development initiatives the federal government has helped fund during the pandemic, and points to Novavax’s recent commitment to produce its COVID-19 vaccine in Montreal starting later this year as just a sign of what’s to come.

“You’ll see in the coming months, a number of deals coming,” he says.

The biomanufacturing firms are drawn to Canada, he argues, because we are smart, skilled, hard-working, diverse and stable.

But he does start with some serious baggage.

For decades, the federal government has had a bitter relationship with Big Pharma, urging the industry to increase its R&D in Canada while at the same time resisting demands for better patent protection, quicker approvals for new products and better market access.

In the never-ending tug-of-war for market share between generic and brand-name companies, Big Pharma believed the federal government too often took the side of the generics, and would only listen to the demands of multinational companies under duress – in a lawsuit or a trade negotiation.

Two recent developments entrenched their suspicions: a Trudeau government decision to change the way pharmaceutical prices are controlled, and a Liberal election commitment to embrace pharmacare.

Health Canada has been trying for years now to change the formula for the board that controls maximum drug prices in Canada so that Canadians won’t have to pay so much in the future. Those changes are on hold, again, because of the pandemic. But they’re due to come into force this summer.

And if full-fledged pharmacare is ever to become a reality, federal and provincial governments will need those lower drug prices to be able to afford a national plan.

Still, that’s a big “if” right now. The federal NDP put forward a private member’s bill to move forward on pharmacare only to see it defeated by the Liberals and other parties. NDP Leader Jagmeet Singh told the Star last week that he has no intention of giving up that fight. But with the Liberals focusing their budget on the pandemic and immediate economic recovery, it’s becoming clear that any intentions on rolling out pharmacare are a long way off.

Does a short delay in drug price changes and an indefinite delay in pharmacare amount to a signal to global manufacturers that they should feel compelled to do business here in Canada?

Champagne recognizes that despite all his urgency, the March 12 deadlines and his commitment to announce new deals in the next few months, he has a long game to play here too. Firms may persuaded by the “health emergency” to manufacture in Canada right now, Champagne said, but larger discussions about how life sciences, patents, research and development and drugs are treated in Canada will have to take place eventually.

“The focus is clearly now on the health emergency, certainly as far as I’m concerned,” he said. “At the same time that you do that, you can have these discussions with respect to long-term policy.”

History has shown that even a high-energy minister with a sense of urgency will also need a deep pool of fortitude to make a success of that.

Heather Scoffield is a National Affairs writer.

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