Speaking Notes
Mike Cloutier
President & CEO
AstraZeneca Canada Inc.
Board of Trade of Metropolitan Montreal
June 2, 2005
Check against delivery
Mike Cloutier
June 2, 2005
Bon matin tout le monde.
[Good morning everybody.]
Thank you for that kind introduction.
First off, I would like to congratulate Isabelle Hudon on her appointment as President and CEO, earlier this year.
The Board of Trade is an important voice for all industries that contribute the economy of Metropolitan Montreal, including ours.
I've read the document that Isabelle sent to the National Assembly regarding the government's proposed pharmaceutical policy.
She made a strong case for continuing the investment policies that have made Quebec an attractive location for science investments.
And she explained why it is necessary to review the government's pricing policies.
So I'm pleased to see that you have chosen such an articulate leader.
The Chamber understands the value that our industry brings to the Quebec economy. And, in turn, we are pleased to support the Chamber in its important work to bring more economic growth to Metropolitan Montreal.
C'est pourquoi je suis content d'être parmi vous ce matin au nom d'AstraZeneca Canada.
À titre d'entreprise, nous sommes fiers de notre histoire au Québéc.
[That's why I'm so excited to be with you this morning, on behalf of AstraZeneca Canada . As a company, we're proud of our history in Quebec .]
AstraZeneca Canada Inc. employs over 300 people in Quebec . About half of them are at our world-class discovery centre, with a global mandate, in the Saint-Laurent Technoparc, on the West Island .
That centre has state-of-the-art chemistry, molecular biology and pharmacology laboratories.
More than 125 scientists focus their efforts, each and every day, on alleviating chronic pain looking specifically at the mechanisms involved in inflammatory and neuropathic pains.
This basic research involves using new technology to discover and design new molecules for new drugs.
One reason why we are so proud of our work in Quebec is that we are part of a thriving research community here.
And we support that research infrastructure with funding to university and hospitals.
Our partnerships include sponsorship of the AstraZeneca Chair in Respiratory Disease Management at the University of Montreal , the Canadian Council for Research in Disease Management at the U of M, and an Asthma study at McGill to name just a few.
We sponsor neuroscience programs not just at U of M, and not just at McGill, but at both schools.
In particular, our R&D facility has built strong ties with the McGill Centre for Research on Pain.
And, I look forward to more exciting news about our partnerships with that centre in the weeks to come.
Montreal is a famous hotbed for science. The universities present a great infrastructure for research. And government policies have built on that base.
With such a strong medical research sector here, you can see why pharmaceutical companies are engaged in so many partnerships in Quebec .
Our industry employs more than 10,000 people in Quebec . And we inject $2.2 billion dollars per year into the province's economy.
According to the federal government, in 2003 Canada 's Research-Based Pharmaceutical Companies directly invested $462 million in R&D in Quebec . That is a disproportionately large share.
What makes that figure particularly exciting is that they aren't all our own internal investments.
One-third of the pharmaceutical industry's R&D investments here in Quebec have been important partnerships with universities, with teaching hospitals, with biotechs and others.
There is a real direct link between the success of our industry and our ability to support broader health research in Quebec .
As an industry, and as a company, we believe in partnerships. Quebec 's economy is stronger because of them. And, most importantly, at the end of the day, patients are the real winners.
In many ways, Quebec had traditionally understood the value of cooperation better than other provinces particularly at the political level.
It's no accident that Quebec became a leader in pharmaceuticals that so much research is being conducted here today, into the medicines of tomorrow.
This is the result of many years worth of government policies that encouraged research.
For one thing, under the current provincial drug plan, Quebec patients have unrestricted access to more of the latest medicines than people in any other province.
That makes a difference in so many ways. First, obviously, it means that doctors here are in a better position to prescribe the right medicine than your colleagues in other provinces. That means better outcomes for the patients.
C'est pourquoi le Québec est un marché idéal pour la nouvelle technologie. Et, cela a aussi rendu le Québec un centre de recherche global.
[That's why Quebec is a great market for new technology. And, in turn, that has made Quebec a global research centre.]
We hope this tradition will continue for many years to come. But Quebec is at a crossroads.
The government has launched a review of its drug policies. Its public consultations are ongoing.
These hearing represent a valuable process that will allow many groups to share their views on the important role that medicines play throughout our entire health care system not to mention the economic value that the research-based pharmaceutical industry brings to Quebec .
Our industry is supportive of many of the government's 34 recommendations, though some may need further discussion.
We are participating in these consultations, because we believe that public debate is essential to maintaining a drug plan that is great for patients.
It's a pivotal time, because this is the first review of the drug plan since it was introduced in 1997; and health ministers in other provinces are considering a range of cost containment policies that limit physician-patient choice.
For example, the British Columbia government has adopted a therapeutic substitution policy. It's gone so far as to move patients away from proton pump inhibitor regimes that had been successful for years; forcing them on to the least expensive drug in the class regardless of the therapeutics. The result has been more emergency room visits.
We can't let this happen in Quebec .
But there are some warning signs.
We've seen a decline in the percentage of new drugs that are added to the RAMQ formulary.
Patients' access to new medicines is being reduced.
A few years ago, 71 per cent of new drugs had full listing on the drug plan. A patient could access them without any interference from the government.
Now it's down to 13 per cent
A change that is significantly impacting on the relationship between physician and patient.
This means that people are less likely to receive the one medicine that best meets their individual needs.
This is not a good thing for patients. And it hurts Quebec 's reputation as a market for innovative technology. For R&D investments.
Pricing is another issue that impacts the investment climate. Our prices are regulated by both levels of government.
First they are reviewed by the federal government, which allows modest price increases for inflation. But, through the drug plan, the provincial government also imposes a price freeze.
Isabel, not many of your members work in businesses that would accept that kind of red tape. It's a problem for us; one that makes it more difficult to convince global decision-makers to invest here.
We hope these issues can be addressed through the drug policy consultations.
The challenge in times like these is to do our work to help politicians to see new medical technology as an investment in a knowledge-based economy.
Le Québec a toujours été en tête. Mais le travail n'est pas terminé.
[ Quebec has always been a leader in this respect. But there is more to do.]
As a company, AstraZeneca Canada has always been inspired by the vision of Dr. Henry Friesen. He is the Chairman of Genome Canada , and one of our country's most distinguished researchers. His opinions are held in very high esteem.
That makes him a perfect person to explain how health and economic policies are inter-related.
He has a vision of Canada as a country that could win substantial economic benefits for the billions of dollars that governments put into health care. But first, politicians have to stop thinking of the health budget as a financial drain
And more as a valuable contribution that driving a prosperous economy.
He said: There is an alternative. It is to see Canada 's publicly funded health system not as a cost to be endured, but as an opportunity to be explored
To align more effectively our social and economic policy directions; to put in place the right incentives; to reward entrepreneurship and innovation
To ensure that investment and regulatory regimes facilitate access to capital and markets; and to celebrate success.
That vision is essential to our future because Canada is much better at inventing new medical technology than bringing that technology to market. And that's not good for Canada .
Both levels of government have done a great job of supporting primary research. But, little has been done to ensure that we get some economic benefit from that
Right here in our own backyard.
As a result, the level of government research funding is growing, while the amount of funding from the private sector is shrinking.
Canada ranks first among G-8 countries in the percentage of R&D performed by higher education. Across Canada , governments give a lot of money to university research.
But, among OECD countries, we were in 21 st place for proportion of R&D performed by business. Twenty-first!
Imagine how many new research jobs we could create if we closed that gap. This gap between public and private research funding is most surprising when you consider that the biotech industry has a solid beachhead in this country and in this city.
Canada has the third-largest biotech base in the world, with more than 375 companies. 90 per cent of them are formed by universities and health research centres a real tribute to the quality of our academic research.
Government funding has helped these companies make significant discoveries, discoveries that can prevent, diagnose and treat the diseases that affect Canadians each and every day.
However, without private-sector investment, these companies cannot develop commercialize their discoveries in Canada .
The sad reality is that though they were developed and marketed outside Canada many of these products were actually discovered here. And that's an historic fact, going back to the invention of the first pacemaker at the University of Toronto before it was commercialized in the US .
As Doctor Friesen likes to say, the model is that we invent, they exploit and we buy it back.
My friends, it's time to change that.
Our leaders can start by acknowledging the links between academic research, pharmaceutical companies, biotech start-ups, medical device companies, government programs, physicians with an interest in research, and other interdependent stakeholders that make-up our health sciences R&D infrastructure.
We're all connected. And governments must appreciate all the different links between the various types of health research organizations.
Given the right investment conditions, and the right strategy, all of these players can collectively advance science in Canada reinforcing each other's efforts, every step of the way.
Before we reach that point, we have to first shatter a myth the taboo that says you can't talk about health care and economic development in the same sentence.
That means taking a look at federal patent laws, at the availability of new medicines under provincial drug plans, and other policies that influence the research investment climate.
These issues have to be re-examined with an eye towards making sure that Canada is globally competitive
That we have an investment climate capable of attracting global research dollars.
Then we can leverage the excellence of our health care system to strengthen our economy. To drive growth. And ultimately create new jobs.
That's an ambitious goal.
And it's a goal that Canada 's global competitors are already working towards.
In 2002, a joint study of the World Health Organization and the World Trade Organization concluded that and I quote there is much common ground between trade and health.
It went on to say, health and trade policy-makers can benefit from closer collaboration.
In other words, when you encourage health industries you can grow the economy and improve the quality of care at the same time.
Many of Canada 's international competitors already understand this.
Take the United States for example. A decade ago, American politicians launched a strategy to lead the world in biopharma R&D, manufacturing and sales.
They began with stronger patent laws. And, they reduced delays in the F-D-A approval process for new medicines.
The results were dramatic. Almost overnight, the US share of global pharma R&D investments went from 40 to 52 per cent.
Once the United Kingdom saw that it was losing investments to the US , Prime Minister Tony Blair launched the Pharmaceutical Competitiveness Task Force. It was collaborative partnership between government and industry to strengthen global competitiveness of the UK pharmaceutical sector.
Then, late last year, he introduced a strategy to make the UK the world's capital in scientific innovation and to strengthen British industrial commercialization capabilities. This is leading to the creation of hundreds of new science-related jobs.
To give you one more example, Singapore has introduced a strategy to make the city-state a world hothouse in health innovation. Its government is investing nearly $2 billion to make Singapore a global centre of excellence.
The goal now is to upgrade Singapore 's role from merely making drugs to inventing and testing them.
Around the world, political leaders are plotting strategies to make their countries leaders in medical technology.
Obviously, they're doing this because they want the research jobs. They want the spin-off industries. They want access to experimental drug trials. They want the next big discovery to be made in their labs.
So, as a country w e need to act now. It begins with a culture shift, as we align health and economy policies.
But how do we do that?
First, we had to get all the right people in the same room, sharing the same vision.
And finally, just a month ago, that actually happened, a short drive from here, up in Gatineau .
Working with the Public Policy Forum and other partners, AstraZeneca co-sponsored a conference that faced this challenge head on.
The meeting brought together pharmaceutical companies, biotechs, medical device manufacturers, the federal government, several provincial health and economic development ministries, the Canadian Medical Association, and other stakeholders.
It was important to get all the stakeholders into one room, because we are all inter-related.
In many ways, we all have the same issues; patent laws that are weak by international standards, delays in the Health Canada approval process; cost-cutting plans that block patients' access to the best new medical technologies, and the list goes on.
But we weren't there to address common complaints: we were there to propose common solutions.
So, I can tell you that there was a real spirit of cooperation in the room; a genuine willingness to work together and make Canada a world leader in human life sciences research.
Your Board of Trade understands the importance of cooperation. By bringing different businesses together you create synergies. You have found that everyone benefits. And we took a similar approach.
That's important because research-based companies are interdependent. Strong universities create a base. They attract industry. As industries grow, they support the universities. That expands the base and attracts more investment. And the cycle continues.
This is how science moves forward. How new medicines are discovered that make a difference in patients' lives. How the foundation is set for breakthroughs.
That kind of growing research infrastructure is especially important for biotech. It's a competitive field, and we've already discussed how governments are aggressively fighting to attract those investments. But it's the investment conditions that can really make a difference.
For example, many biotech start-ups depend on the pharmaceutical industry. They come to us for advice, for investments, for marketing support. If our industry is thriving in a particular location, it's easier to offer that kind of help.
We like that partnership approach. There are good business reasons for us to work with biotechs.
My point is that this is as good for our Canadian economy as it is for patients. That link makes our country more competitive.
And, as the Canadian that has to sell these investments plans to our global head office it's probably the biggest part of my job I can tell you that it's a lot easier to make that case when we can point to government decisions that are headed in the right direction.
That's why the provincial drug policy consultations are critical. That's why our industry is concerned about the price freeze. And, that's why the Public Policy Forum conference in Gatineau was so important.
All of us that attended knew that we couldn't change the world in two days. But we did something that generated a lot of excitement.
Together, we created the Canadian Health Industries Partnership; CHIP for short.
Think of it as a Board of Trade for Canada 's life sciences sector.
It's a permanent organization that will provide a forum for cooperation between the innovative health industries and government in its many forms; federal and provincial; health ministries and economic development ministries.
We know that governments have the right intentions. They want to create more research opportunities in Canada . They want to reverse the brain drain. They want to put Canada at the leading-edge of global science. But they need direction.
And, this new body will give them the means to write the plan to actually reach their goals in a spirit of cooperation with research-based companies.
In the end, this partnership of equals will help Canada become a world leader in researching, developing and commercializing industrial health innovations.
This is the vision that will help us to address the gap I spoke of earlier, that gap between Canada 's best-in-the-world government funding of health research, and 21 st place for industrial support.
Imagine what it would mean if Canada could attract enough global human life sciences investments to begin closing that gap. Can you see the opportunities for Quebec students in science programs at Montreal 's great universities?
It would mean more partnerships with universities, with local doctors, with biotechs, and with teaching hospitals.
It would make Canada and Quebec in particular an even stronger force in the world of science.
So to sum up, I started out by letting you know how deeply committed innovative pharmaceutical companies are to research in Canada and particularly in Quebec .
Nous sommes inquiets que le gel des prix puisse rendre difficile l'investissement dans ces partenariats.
[We do have some concerns that the price freeze may make it more difficult to invest in these partnerships.]
As drug policy consultations continue, Quebec has a real opportunity to secure a greater share of global research investments. But the politicians have to understand that the competition for those research dollars is greater than ever before.
At the CHIP conference, we saw a real interest from Ottawa and several provinces in working together not just with pharma, but with the entire human life sciences sector to make Canada a leader in health research.
That, in turn, means better access to the latest health technology for patients. And I hope that Quebec will reaffirm its leadership in this kind of partnership.
Thank you. I look forward to your questions. Merci beaucoup.