Over the past few months, as a member of the Industry Strategy Council (ISC), I have with my colleagues been assessing the impact of COVID-19 on Canada’s economy and identifying the scope and depth of its impact on industry.
Our report, Restart, Recover, and Reimagine Prosperity for All Canadians, released December 11, 2020, is an ambitious growth plan for building a digital, sustainable and innovative economy.
The health/biosciences sector is one of the fastest-growing industries in the Canadian economy, accounting for 1.8% of GDP and 3% of employment. A sustained increase in investments in Canadian biotech and med-tech firms in recent years speaks to the growing momentum behind the sector’s innovation. As a result of some of that capacity, several Canadian teams are leading vaccine and therapeutic research efforts as government and private-sector players globally have been mobilizing to fund and research COVID-19 treatments and vaccines.
Notably, Canadian annual biotech equity financing activity rose to $1.6 billion in 2020’s first half. We have an opportunity to continue to leverage the strengths of Canada’s robust health and biosciences ecosystem and capitalize on advances in areas like big data, artificial intelligence, gene and cell therapies, regenerative medicine, vaccines and 3D printing to drive breakthroughs in life sciences and biotechnology.
It is important we take our biggest single investment and turn it into an economic engine. Health care should be a national priority.
Since the start of the pandemic, there has been a surge in demand for critical medical products, devices and essential drugs, revealing limitations in pharmaceutical supply chains as the world’s main suppliers experienced slowdowns and export restrictions were imposed in China and India. Governments have had to consider a range of measures for reshoring and stockpiling, including retooling of Canada’s manufacturing supply chains to produce high-demand personal protective equipment and devices.
Our report identified several pain points brought to the fore by the COVID-19 crisis. Chief among them is the lack of growth capital and commercialization incentives, which was already leading to an exodus of large biotech firms and top talent prior to COVID-19.
This lack of investment has also limited Canada’s ability to benefit from the injection of capital into pharma and biotech amid COVID-19.
It’s time to change that and address the challenges to scaling and commercializing intellectual property that prevent Canadian firms from growing into large, global-leading organizations.
To that end, the ISC report’s recommendations include:
Be nimble and adaptable: We need to address sourcing and procurement bottlenecks for active pharmaceutical ingredients (APIs), particularly those related to COVID-19 due to production stoppages in key countries.
Remove interprovincial trade barriers: Canada’s provinces and territories need to work together and leverage value-based procurement across Canada’s health systems and in federal areas of health responsibility.
Streamline regulatory processes: Regulatory agility is needed to secure access to essential devices and drugs. Government’s rapid adoption of flexible, interim approaches to health-care management has shown how quickly it can change its processes when necessary. This is the time to capitalize on and streamline the regulatory approval processes and benchmark progress against international best practices.
Focused funding: Targeted investment is needed to build world-class digital infrastructure to support the digital health strategy and enable data-driven advances in health care such as expanding access to tele-health.
Intentional investments: We need to consider COVID-19 interest-free loans and other bridge financing to support pre-commercial Canadian firms with a high degree of commercial potential. We also need to make investments to advance and anchor world-leading companies in Canada and accelerate economic benefit from the sector.
Market Canada on the global stage: We need to increase promotion of domestic and international private-sector investment in biotech and med-tech firms, including the development of later-stage venture and private equity capital funds in collaboration with provinces and territories.
Clinical trial network development needs to be strengthened to stimulate research co-ordination and attract new multinational corporation funding.
Ready for a bright future
The impact of the life sciences sector on Canada’s economy is clear: we are well positioned through our demonstrated strengths in science, discovery, innovation, entrepreneurship and a well-educated, diverse and talented workforce to turn this opportunity into an innovation-driven economic engine. •
Karimah Es Sabar is the chair of Canada’s Health and Biosciences Economic Strategy Table.
