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CANADA’S ECONOMIC STRATEGY TABLES
Health and
BiosciencesH E A LT H A N D B I O S C I E N C E S
From the discovery of insulin to the invention of the pacemaker, Canada has had a
strong record of health innovation. In a time of rapid technological change and
global interconnectedness, we have an opportunity to leverage our health-care
system and to achieve even greater impact through our advances in the life sciences.
With commitment and bold action, Canada can be a destination for investment
and talent, growing our health and biosciences firms to support a more sustainable
health system while advancing Canada’s prosperity.
“
VISION
Canada needs to unlock the
full potential of its innovations By 2025, Canada will double
and accelerate the pace of the size of the health and
commercialization to ensure a biosciences sector and become
sustainable, globally competitive a top-three global hub by:
health ecosystem with a robust
leveraging and advancing
innovation economy and
improved health outcomes.
Karimah Es Sabar
” innovative technologies;
attracting and retaining capital,
Chair, Health and Biosciences skills and talent; and ensuring
Economic Strategy Table
a vibrant ecosystem that will
unleash the full potential of
the sector and lead to
improved health outcomes.
AIMING FOR THE TOP THREE
Canada ranks fourth in global health and biosciences hubs, according to measures identified by the U.K.
BioIndustry Association. That puts Canada behind the U.S., U.K. and Germany. To double the sector and
break into the top three, we’ll need strategic action to strengthen every facet of the sector.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
2 Report of Canada’s Economic Strategy Tables: Health and BiosciencesTARGETS The Canadian health and biosciences sector’s
historical growth rate of 4% leads us to predict
that business as usual will lead to annual exports
of approximately $17 billion by 2025. However, we
Double health and biosciences believe that by rejecting the status quo and taking
exports to ambitious steps, we can change our trajectory and
double our exports to $26 billion by 2025, which
$26B is equivalent to a 9% annual growth rate.
The ecosystem currently consists of some 900 firms.
This encompasses pharmaceutical multinational
Double the number of enterprises, generics firms, biopharmaceutical SMEs,
contract research and manufacturing organizations
health and bioscience and medical technology manufacturers. With bold
firms to actions that eliminate barriers and drive growth, our
2025 target is to double this number to 1,800 firms,
1,800 with each creating knowledge-intensive jobs. Within
this total, we have a particular focus on high-growth
firms. Canada currently boasts 40 such firms, and we
Double the number of believe that the proposals in these pages will enable
us to create twice as many. These high-growth firms
health and bioscience will commercialize innovations, penetrate new mar-
high-growth firms to kets and serve as regional leaders.
80
Total Exports
Increase Health and Biosciences goods and service
exports to $26 billion by 2025
Baseline
Target
$13 billion in 2017
25
Pharmaceuticals Medical Technologies Health and Biosciences sector
20
Historical
Long
Billions
15 Run Trend
10
5
0
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Source: Statistics Canada
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 3❚❚ WHAT WE NEED ❚❚ WHAT WE NEED
TO OVERCOME TO BECOME
Addressing processes that stifle innovation Bold ambitions have to be supported by
and hinder the adoption of promising more than just good intentions. A number
innovations in the health-care system of structural and cultural conditions must
is key to advancing Canada’s global be in place to enable the transformative
competitiveness and meeting our growth growth we are seeking:
targets. The following barriers stand in
A health policy environment that sees the health-care
the way of us achieving our health and
of Canadians and economic growth of the health
biosciences goals: and biosciences sector as mutually reinforcing
Complex regulatory, reimbursement and A public health-care system that is an early adopter
procurement processes impede the and is incentivized to support innovation adoption
adoption of innovations
Agile and streamlined regulatory and procurement
A risk-averse procurement culture prioritizes approaches to support access to value-based
short-term focus on cost rather than broader innovations
considerations of value
Nationally robust, digitalized, interconnected and
Disconnected digital health systems inhibit patient-centred health data infrastructure
the collection, connection and analysis of data
A large and vibrant life sciences capital market that
needed to inform innovation decision making
invests significantly in Canadian companies
Skills shortages and lack of access to executive-
A knowledge-intensive sector that fosters future-
level talent hinder the sector’s competitiveness
oriented skill development and delivers world-class
Limited access to capital leads many Canadian research and development (R&D)
firms to exit the market through mergers or
acquisitions rather than accrue value domestically
“We need to strengthen the entire ecosystem to get Canada on the
trajectory to become a world leader.”
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
4 Report of Canada’s Economic Strategy Tables: Health and Biosciences“Economic growth and improved health outcomes are not mutually
exclusive. They should go hand in hand.”
❚❚ THE ACTIONS WE PROPOSE
We propose sector-wide actions that will unleash Canadian innovation and place our
health and biosciences firms on a higher trajectory. Based on research, global best
practices and insights from Table members and our industry peers, we propose five
areas of focus to transform the life science ecosystem in Canada:
Accelerate Design Harness Develop & Create
Innovation Agile Digital Attract Anchor
Adoption Regulations Technology Talent Firms
By employing By adopting By creating a By equipping By mobilizing late
value-based international best national digital health Canadians for highly stage capital, scaling
procurement across practices, eliminating strategy featuring an skilled jobs, eliminating up high-potential
Canada’s health duplication across interoperable digital hiring barriers firms, and broadening
systems and establish- jurisdictions health platform and streamlining research and
ing a procurement and decreasing government development
innovation agency review times skills programs tax incentives
❚❚ PROPOSAL
Accelerate innovation adoption by employing
value-based procurement within Canada’s
health systems and establishing a procurement
innovation agency
A primary barrier to the adoption of innovative products and services is the traditional
cost-focused bulk-buy procurement approach favoured by health systems in Canada.
For the best health innovations to gain adoption in our health system, we need a systemic
shift to a procurement approach that moves beyond price to value. Purchasers must be
empowered to consider price alongside other critical factors such as improved patient
outcomes, reduced demand for more expensive health services, increased quality of life and
economic benefits. A health procurement innovation agency would help facilitate this approach
by de-risking adoption of breakthrough Canadian health products and building
the evidence base for translating innovative products for use within health systems.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 5WHY THIS MATTERS WHAT WE RECOMMEND
Health-care procurement decisions Value-based procurement
in Canada hinder innovation We recommend the use of
adoption by emphasizing price value-based procurement
over other measures of value across Canada’s health sys-
VALUE-BASED such as improved outcomes and
PROCUREMENT tems to increase innovation
reduced demand for additional uptake and foster a more
ABROAD
medical services. As a result, efficient health-care system.
EUROPEAN UNION firms that have developed innov-
The EU developed the “most We call on the federal government
economically advantageous
ative products with a strong value
to begin work immediately with
tender” (MEAT) model to maximize proposition may find it exceedingly
the provinces and territories and
value to systems and patients, difficult to have their products
rather than only seeking the
with the private sector and others
adopted by Canadian health sys-
lowest price. The model is to develop the tools needed to
tems if they have higher upfront
now being used to inform support the use of value-based
costs. Purchasing in Canada tends
procurement practices: procurement. We recommend that
to be driven by minimizing cost
Stockholm County Council the Government of Canada lead
for each silo that delivers health
tendered for wound-care a joint federal/provincial/territorial
products by examining both care rather than the value realized
effort to implement value-based
the care delivery costs and by delivering an outcome over an
procurement approaches for con-
price of products episode of care—which means
ditions that pose a high disease
hospitals view new innovative
A regional health authority in burden for Canadians (e.g., cancer,
products as a cost driver rather
Norway focused on purchase heart disease, chronic obstructive
price along with failure rates than taking a more holistic view
pulmonary disease, diabetes)
and patient-reported pain in its of potential value and impact. In
by 2025.
procurement of IV catheters. contrast, value-based procure-
ment models have the potential to We recommend that the federal
NETHERLANDS
simultaneously drive improvements government demonstrate
The Netherlands established
a foundation for value-based to health quality and outcomes leadership by adopting value-
procurement in the form of a while supporting economic growth based procurement for its
network of hospitals that is and accelerating Canadian-made areas of health responsibility.
measuring patient outcomes, solutions within the health system.
as well as a national registries In particular, one or more federal
This would also align with leading departments with a direct role in
platform for patient-reported
outcomes. The Ministry of Health jurisdictions around the world health services should immediately
recently announced that they will that are rapidly transitioning to develop and pilot value-based
procure 50% of the disease value-based health-care models. procurement models that improve
burden by value-based health-care
Here at home, Ontario, Quebec and care and support economic
by 2021.
Alberta have begun a shift toward growth, with a view to spreading
value-based procurement, but the and scaling successes to other
majority of health procurement departments and jurisdictions
groups lack the holistic picture of by 2025. The pilot should:
the clinical environment necessary Design value-based procurement
to employ this approach. Devel- approaches and models, with
oping the frameworks to support a view to demonstrating how these
value-based procurement will models could be effectively applied
enable Canadian innovators to get to the federal procurement context
their products adopted in the mar-
ket and enable the Canadian health
system to assess and procure
valuable products.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
6 Report of Canada’s Economic Strategy Tables: Health and Biosciences Provide procurement Supporting innovation pull
professionals with training through pre-market engagement
and education to ensure that that enables SMEs to under-
they are well-equipped to apply stand needs within health
value-based procurement systems and participate in
Build and collect data/evidence health-care procurement by
developing solutions to fit MISSED OPPORTUNITIES
on the effectiveness and impact IN CANADIAN
of different approaches to these needs
HEALTH-CARE
value-based health care Building evidence for high-value PROCUREMENT
innovations through technology Intellijoint Surgical of Waterloo,
Procurement innovation
demonstration projects, includ- Ontario, has commercialized
agency
ing potentially providing funding Intellijoint HIP, which gives
We recommend that a new or
in partnership with industry surgeons real-time, intraoperative
existing health organization measurements to precisely select
and the health sector to
be given a joint health and and position orthopaedic implants
enable testing
economic mandate and estab- during total hip arthroplasty.
lished as a health procurement Measuring outcomes, including Despite improved patient out-
innovation agency. patient-reported outcomes, and comes that have reduced cost
and post-operative complications,
disseminating scalable insights
The new or existing entity, the company has struggled for
based on real-world evidence Canadian hospitals to adopt
potentially one or more of the
pan-Canadian health organiza- Working with provincial and their technology, leading to
minimal sales in Canada. In
tions, would be responsible for territorial organizations on a
contrast, hospitals abroad have
bringing together relevant partners clear deadline for making been quick to adopt the new
across Canada to tackle persis- decisions about adoption technology, recognizing the
tent procurement challenges. The once regulatory and health potential to improve quality and
agency should be given dedicated technology assessments reduce the overall cost of care.
funding in line with international have been completed
examples and approaches to
supporting procurement and adop-
tion (i.e., U.K.’s NHS Innovation TRACKING SUCCESS
Accelerator).
Canada placed ninth out of
The agency would lead a network 11 peer countries in the 2017
of partners that includes represent- Commonwealth Fund ranking U.K. NATIONAL HEALTH
atives from provincial and territorial of health-care system SERVICE INNOVATION
health departments, pan-Canadian performance. We are aiming
ACCELERATOR
health organizations, health-care for a top-five spot by 2025. This entity works in partnership
providers, academic institutions, with the U.K.’s Academic Health
the private sector and the public. Science Networks to support the
adoption and promotion of
The agency would change the cul- proven, value-based innovations,
ture of health-based procurement aligning goals with NHS national
in Canada by identifying innova- priorities and local needs. Since
tions that strongly demonstrate its inception in 2015, it has
immediate and significant value to supported the scale up of dozens
of innovations into use in over
the health-care system and building
1000 NHS organizations. Each
the real-world evidence to support of these innovations has demon-
their procurement and adoption. strated greater quality outcomes
Specific actions would include: at lower health system costs—
and many are now marketed
internationally.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 7❚❚PROPOSAL
Create a modern, agile regulatory
system by adopting international best
REGULATORY AGILITY
IN PRACTICE
practices, eliminating duplication
SUBSTANTIAL EQUIVALENCE across jurisdictions and decreasing
The U.S. Food and Drug
Administration oversees a review times
submission process called
the Pre-market Notification An effective regulatory environment ensures patient safety
where, in lieu of an approval
process, a class of new devices
and well-being while encouraging the development and
may be cleared for commercial adoption of innovative new products and services. The
distribution if the device is regulatory system must be modernized, with the objective of
demonstrated to be at least ensuring that it serves as a catalyst for new products. A high-
as safe and effective as (i.e.,
substantially equivalent to)
performing regulatory system should be predictable, efficient,
a legally marketed device. consistent and transparent, so as not to present barriers to
This allows for a lighter business investment, innovation and ultimately, economic
regulatory burden. growth and improved patient outcomes.
In a 2017 Business Council of Specifically, many commentators
Canada survey, only 13% of exec- have noted that Canada’s complex
WHY THIS MATTERS
utives felt the Canadian regulatory regulatory environment and frag-
Today, Canada’s regulatory pro- environment was efficient and did mented procurement processes
cesses present significant hurdles not impose substantial costs to across and within Canada’s health
for the rapid adoption of Canadian their companies. Small businesses systems pose unique challenges
innovations. This may reduce in particular struggle with the cost and adoption at scale across
patient access to leading-edge burden of regulations. There is an Canada. For instance, the 2015
therapeutic products and harm opportunity to produce immediate Advisory Panel on Healthcare
the international competitiveness gains for health and biosciences Innovation highlighted concerns
of Canadian health and biosci- enterprises by streamlining about “the efficiency and dupli-
ences firms. An agile regulatory regulatory processes and cation of regulatory processes
system is the fundamental back- reducing red tape. governing healthcare products
bone to reaching our growth targets. and services” and noted that
MEDICAL DEVICE ADOPTION PATHWAY
Regulatory approvals
(Health Canada)
Health technology assessment
(CADTH and PT HTA bodies)
Reimbursement decision
(Hospitals and
Regional Health Authorities)
This graphic represents an overview of the most
Procurement common pathway faced by medical devices. It
(Hospital/RHA/group illustrates how inefficiencies at any or all of the
purchasing organizations) successive steps can prevent timely marketplace
adoption for innovations.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
8 Report of Canada’s Economic Strategy Tables: Health and Biosciences“innovators are frustrated by a place before permitting a health Greater transparency around the
multi-tiered system for regulatory product to receive approval in their timeline and decision to adopt
approval and fragmented purchas- jurisdiction. Modernized regula- following regulatory and health
ing, forcing them to seek adoption tion and adoption processes in technology assessment approval
by individual healthcare institutions Canada’s health sector at all levels for drugs and medical devices or
and providers.” Similarly, Table will improve the country’s com- technologies
members repeatedly raised the petitiveness and strengthen the
Council of Innovative
challenge and frustration with perception of Canada as a place and Competitive Health
navigating the complex innova- for innovative businesses. Regulations
tion-adoption pathway. We recommend the creation
The federal government has WHAT WE RECOMMEND of a regulatory council to seek
acknowledged that work needs to harmonization and reduced
Regulatory modernization
be done. A significant moderniza- red tape across federal, provin-
We call on the federal
tion initiative is underway through cial and territorial systems
government to accelerate
Health Canada’s Regulatory and facilitate easier entry of
and expand its efforts to
Review of Drugs and Devices, and innovative products into the
increase regulatory agility.
in 2018 the government commit- domestic market.
ted to pursue reforms to make the The modernization process
The council would immediately
Canadian regulatory system more underway should result in
seek to:
agile, transparent and responsive, increased international collabor-
ation, reduced duplication and Identify international best
with a focus on supporting innov-
shortened review times, and practices with an aim to
ation and business investment.
enable Canada’s regulatory recommend specific actions
Table members felt that these fed-
outcomes to surpass leading to decrease health product
eral initiatives are going in the right
international jurisdictions such review times
direction to supporting a regulatory
system that better enables access as Japan, the U.S., the European Select pilots for end-to-end
to needed therapeutic products Union and Australia on a mapping of the innovation
based on health-care system product basis. adoption pathway for drugs
needs. A policy reform associated Specifically, we call on the and devices—with an aim to
with the Patented Medicines Price government to include the examine the cumulative impact of
Review Board is also underway. following objectives: regulations on firm competitive-
Table members acknowledged the ness and propose action on
Greater use of joint reviews specific regulatory barriers that
importance of ensuring that the
as well as foreign reviews are inhibiting growth in the sector
proposed drug pricing changes
and decisions for approval of
are not a barrier to growth and that Select pilots to assess regulatory
drugs and medical devices
industry concerns are addressed pathways for emerging technol-
through a separate process. Adoption of international best ogies with an aim to recommend
practices, consistent implemen- actions to improve the adaptabil-
In addition to federal regulatory
tation of international guidelines ity of regulatory regimes for
processes, there are layers of
and converging review practices emerging technologies
provincial/territorial, regional and
local regulations, policies and pro- Collaboration with provinces, Select pilots to adapt regulatory
cedures that impact the adoption territories and the private sector pathways for health products
of innovative products. Efforts to to coordinate health technology that already have approval in
improve these processes have an assessments and streamline peer jurisdictions with an aim
impact on export growth, as many health product decisions on to reduce overall time to market
international jurisdictions require reimbursement, drug listing
country-of-origin regulatory and and procurement
reimbursement approvals to be in
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 9❚❚ PROPOSAL
Harness the potential of digital technology by
creating a national digital health strategy featuring
an interoperable digital health platform
Patient-centred information and digital services, artificial intelligence, big data analytics and
disruptive digital technologies are upending markets and economic sectors and opening
the door to new possibilities. A national strategy is needed to guide federal investments
in digital health and unify provincial and territorial partners around the common goal of
leveraging digital technology to improve care and advance economic growth. We propose
a strategy that will provide a framework for privacy and data security, data governance
and data sharing, and increase the information available to patients so they can make
decisions about their own health outcomes. The key to success is adoption of a plan to
implement a fully interoperable digital health platform across two or more jurisdictions
to demonstrate what success looks like and pave the way for a national roll-out.
WHY THIS MATTERS services that facilitates
High-performing interoperable,
digital systems are seen as a
critical enabler of data-driven
information sharing
A high standard of care delivery
with centres of excellence in
“People
not have
should
advances in health. Artificial intel- different disease areas (often
ligence is already being used to associated with major
more health
create patient-centric treatment academic centres) information
plans based on a combination of The ability to collect patient
data analytics and the most recent outcome data across a range on their wrist
scientific studies. Digital and data
transformation will increasingly play
of disease types
than they can
A diverse population that
a role in finding active therapies
for incurable or difficult-to-cure
enables improvements learned access walking
diseases as well as greater
success in targeting specific
treatments to individual patients.
here to be adapted to almost
anywhere in the world
into a clinic.
”
Yet, Canada faces significant
The result is a more personalized challenges in implementing and
approach to health care through using digital health systems.
customized treatment plans, organizations. As a result, the
Variations in the implementation
enabled by a strong digital health system still remains largely
of digital standards, inconsistent
technology ecosystem. paper-based, with doctors’ offices
interpretation and application of
relying on the fax machine for infor-
Canada has a number of privacy frameworks and legislation,
mation sharing. In response to a
strengths that it should leverage and the lack of a modern data
2015 Commonwealth Fund survey,
to seize the digital and data governance framework across
only 19% of Canadian doctors
opportunity, including: siloed systems pose significant
reported being able to electronic-
barriers to unlocking and lever-
A single-payer health system ally exchange patient files.
aging data held in jurisdictional
for hospital and physician
repositories and health delivery
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
10 Report of Canada’s Economic Strategy Tables: Health and BiosciencesWhile Canada has invested in could be an important element for We recommend that the strategy
infrastructure and developed some economic growth and Canada can provide clear national guidance on
electronic health-record systems, move beyond having only one firm privacy, data governance, sharing
three elements are still missing: in the list of Global Digital Health and security frameworks harmon-
an interoperable set of systems, 100 companies. ized across federal, provincial and
a harmonized data and privacy territorial governments to eliminate
framework, and a “single” access- the barriers to interoperability of
ible electronic record for every health-care digital systems. Ser-
Canadian patient. A 2016 Com- WHAT WE RECOMMEND ious consideration should be given
monwealth Fund study found that Digital health strategy to using the European Union’s
not only is Canada lagging behind To become a global leader in General Data Protection Regulation
its peers in the adoption of digital health digitization, we rec- as a starting point. In particular, the
tools but that there is considerable ommend that the federal strategy should chart a clear path
variation across the provinces government work with the towards the goal of 100% of
and territories. provinces and territories Canadians having digital access
to develop and implement to a 360° view of their patient
Digital Health Adoption
a comprehensive digital records. We believe that patient
Missing Elements
health strategy. engagement and health outcomes
will be advanced by patients hav-
To achieve this, the government
ing unrestricted rights to access
should leverage the expertise
their own health records. Moreover,
H
Da arm and relationships of existing
t o
Fraa & P nize organizations such as the feder-
me riv d
wo acy
rk or
Rf n
ally funded pan-Canadian health Denmark already has 100% access
EH adia
g l e a n organizations. The strategy should to electronic health records by
Sinery C
Interoperable
ev operationalize six guiding principles citizens, and the Netherlands has
systems
committed to ensuring 100%
for investments in digital health
patient access to their own
and health data: medical records by 2020.
1. Common data and agreed-on
technical and formatting standards
2. A patient-centric approach
that ensures health information
In addition, a critical element is follows the patient regardless
the need to establish universal, of geographic location, provider
next-generation internet access or organization, and ensures
PRIVACY
for all Canadians so the benefits patients retain the right to
HARMONIZATION
of digital health and data can unencumbered access to
their own health data Toronto’s Dot Health is commercial-
reach everyone—especially those
izing a first-of-its-kind platform to
in hard-to-reach, remote and rural 3. Interoperability across points resolve digital interoperability prob-
communities where traditional of care, including common lems in health data. Patient privacy
health services are often lacking. facilitating platforms/interfaces is fundamental to the model. The
company has had to meet five sep-
In short, without reliable data, the 4. Open architecture systems that arate privacy standards: PIPEDA
digital services that facilitate its enable rapid modification to and those of British Columbia,
collection, sharing and analysis, accommodate future states Alberta, Ontario and Quebec.
and access to quality, affordable Before Dot Health can integrate its
5. Private–public partnerships platform with a hospital database,
internet, Canada will not be in a
with well-defined roles for each hospital and health institution
position to fully reap the benefits of must complete its own privacy
government and industry
digital transformation. With chan- impact assessment, which can
ges to the regulatory frameworks 6. Common privacy, data and take up to a year.
that block innovation, digital health security frameworks
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 11laying this foundation will provide Digital infrastructure
opportunities for entrepreneurs We recommend that the
to develop a range of innovative federal government work
digital health solutions. with provinces and territories
The Table considers the privacy to build world-leading digital
ACCESS ATLANTIC of Canadians to be paramount infrastructure to support the
ACCESS Atlantic is a major digital and believes that this must be digital health strategy and
health project being led by the safeguarded throughout efforts enable data-driven advances
Atlantic provinces and supported in health care.
to advance digital health technology
by federal funding through Canada
Health Infoway. This initiative will adoption. Specifically, the strategy In particular, the Table calls for:
support patient-centred care by should offer a way forward that puts
Establishing universal, high-
modernizing the infrastructure patient privacy first while fostering
used to manage information and
speed internet access to
national health data interoperability
empowering patients with access prevent a digital divide in
and reducing red tape for firms that
to their own health information. Canada, including by improving
It will also embed PrescribeIT, develop digital health technologies.
internet access in rural, remote
an electronic service that sends and Indigenous communities
Digital health pilot
prescriptions directly from a
Consistent with the digital and providing low-cost options
doctor’s office to the patient’s
pharmacy. This project aligns health strategy, we recom- for those in economic need
with the Table’s digital strategy mend that a pilot project Creating repositories to store,
and may serve as a launch point be launched to implement retrieve and process data and
for the digital health pilot. a fully interoperable digital better enable use of the latest
platform regionally across advances in big data analytics,
two or more jurisdictions. artificial intelligence and the
This platform should enable Internet of Things
patients to have electronic access
to their personal health informa-
TRACKING SUCCESS
tion. Once the pilot’s foundational
infrastructure is in place, it should
connect with the work of the digital In 2017, only one of the Global
health supercluster. It should be Digital Health 100 Companies
specifically mandated to draw was Canadian. We are aiming
lessons learned that can inform to claim 10 spots on that list
alignment between governments by 2025.
on privacy, data sharing and
security frameworks. The pilot
should also include a plan to
iteratively scale to other Canadian
jurisdictions by 2025.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
12 Report of Canada’s Economic Strategy Tables: Health and Biosciences“There are no big solutions to develop talent. It takes a long-term
commitment that’s shared by everyone involved.”
❚❚ PROPOSAL
Develop and attract world class talent by equipping
Canadians for highly skilled jobs, eliminating hiring
barriers and streamlining government skills programs
Skills and talent are vital to the sector’s growth, but there are serious shortages across all
levels of the health and biosciences landscape. With rapid technological developments and
exciting new research promising advances in the life sciences, we need new skills—and
we need them quickly—to advance our sector. From bright young graduates to seasoned
executives, the sector needs to engage top talent from home and abroad so it can compete
globally over the next several years and fuel our country’s economy.
WHY THIS MATTERS innovative and career-ready
Digitization, emerging new tech- graduates; and government must
nologies and the convergence of simplify access to skills develop-
technologies will demand new skills ment programs and reduce
of health and biosciences workers, barriers to hiring foreign talent.
transforming the ways medicine is Canada has significant oppor- ACADEMIC/INDUSTRY
delivered. Robots will do remote tunities to change the way it PARTNERSHIP IN
surgeries, diagnoses will be made prepares students and workers PRACTICE
by wearable devices and precision for the future. Today, there is a Recognizing that many graduates
medicine will become the norm. widening gap between the highly with advanced health science
Health and biosciences companies skilled and innovative workforce degrees lack the training and
needed for Canadian firms to be experience to enter the private
consistently indicate that they suf-
global leaders and the experience sector, Queen’s Medical School
fer from skills shortages that hurt partnered with the pharmaceutical
their firms. Yet job openings for life and training of today’s graduates.
industry to develop the Graduate
science professionals are projected Many international jurisdictions Diploma in Pharmaceutical
to exceed the labour supply at have experienced success with Management and Healthcare
least up to 2024. If this gap is to vocational schools, technical Innovation. It offers a unique train-
colleges and industry-focused ing experience to recent MD, PhD
be closed, we need a concerted and PharmD graduates from across
effort on all fronts: industry must university programs that produce
Canada to support industry needs
collaborate to identify and articu- graduates with the knowledge and by helping participants gain the
late the current and future needs of experience to make an immediate necessary training and experience
the sector; post-secondary impact. Canada must adopt this to transition to the private sector.
institutions must rapidly produce approach or risk falling behind our
a generation of highly skilled, peer countries.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 13Coordinated effort needs to take Updating K-12 and post-sec- part-time or short-term basis—that
place to better match skilled ondary curricula to emphasize are in limited supply. This would
workers with unmet job needs. The future-focused competencies help them grow into successful,
Government of Canada supports a Driving the expansion of work- innovative firms. It could also
range of career development, skills integrated learning opportunities, facilitate opportunities for workers
and training programs, and recent including by promoting the who wish to expand their skillsets
developments indicate the time development of vocational in different company settings, tap
is ideal to streamline and simplify programs and the establishment into retired talent and create flex-
these programs so that employers of industry-focused education ible work opportunities that foster
can easily access them. Attention streams, including at the greater workforce participation
will also need to be paid to the graduate level among underrepresented groups
requirements of businesses, par- such as women and older workers.
ticularly SMEs that require different Promoting mid-career inter- A sector-wide talent repository
skillsets and talents at different change opportunities across would become a one-stop shop
phases of product lifecycles. major sectors to strengthen the that brings together supply and
connections between industry, demand to better calibrate hiring
academia and public service processes. The digital repository
WHAT WE RECOMMEND
Creating and subsidizing could be hosted by the skills hub
Skills hub reskilling programs that enable and harmonize the ongoing efforts
We recommend that the technology adoption of organizations such as BioTalent
Government of Canada, the Canada, which hosts the PetriDish,
Promoting careers in the
health and biosciences sector, a national bilingual bio-economy
sector and conducting
academia and provincial/ job board.
targeted outreach to
territorial governments
underrepresented groups Optimize immigration
together establish an empow-
ered and accountable hub to As an early action, the hub would We recommend the
drive the necessary changes spearhead a redesigned curricu- reduction of barriers to
to skills and talent programs, lum pilot between industry and a hiring highly skilled foreign
and to equip Canadians for group of up to five post-secondary talent and enhancements
highly skilled jobs in the sector. institutions, based around robust to the system for foreign
work-integrated learning and the credential recognition.
Key performance indicators
attainment of in-demand skills in Immigration is a valuable tool for
and relevant metrics will ensure
the sector. The skills hub would addressing skills shortages but
accountability and ongoing evalu-
also help ensure that STEM (sci- more needs to be done to better
ation of the success of the hub’s
ence, technology, engineering employ the skills of newcomers to
activities and programs. The hub
and mathematics) and digital Canada and reduce administrative
should focus on:
skills are emphasized more at the barriers to hiring them. In many
Developing a roadmap for pre-college stage, recognizing cases, immigrants have in-de-
the jobs of the future and the that these competencies are mand skills but struggle to find
skills and competencies they foundational to building the employment commensurate with
will require innovative workforce of the future. their training. At the same time, in
Creating an evergreen data Talent repository a globally competitive landscape,
collection strategy, including We recommend the creation streamlined immigration processes
research and industry surveys, of a digital repository of are an essential element of acquir-
to act as a focal point for skilled workers. ing top global talent. Progress
gathering and disseminating has been made, including efforts
labour market information This would benefit SMEs by giving through the federal government’s
them flexible and timely access to Foreign Credential Recognition Pro-
workers with various skills—on a gram and initiatives to accelerate
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
14 Report of Canada’s Economic Strategy Tables: Health and Biosciencesprocessing of work-permit appli- Federal skills programs
cations through the Global Skills We recommend streamlining
Strategy. Nonetheless, given the federally funded programs for
importance of the issue to access- skills development and train-
ing critical talent, these efforts must ing through a single body to
EXECUTIVE TALENT be strengthened and enhanced. For manage outcomes and reduce
PROGRAMS IN CANADA example, initiatives that assist with duplication and overlap.
ONTARIO EXPORTERS FUND job placement for accompanying
This helps SMEs cover the The wide range of federally-funded
spouses would address a common
cost of hiring an experienced initiatives demonstrates the gov-
challenge and enhance Canada’s
export manager. ernment’s commitment to career
reputation as a destination for
and skills development, including
QUEBEC TAX HOLIDAYS FOR top talent.
in the health and biosciences
FOREIGN EXPERTS
This helps firms recruit candidates Access to C-suite talent sector. Unfortunately, the various
who are highly qualified to carry We recommend the offerings have differing processes
out innovation projects. Eligible development of initiatives and eligibility criteria, making them
foreign experts or researchers are to improve the affordability confusing to navigate. Consolida-
granted a reduction in Quebec
of C-suite or other senior tion would improve data collection
income tax over 60 months.
executive talent for SMEs. and facilitate strategic interventions
MARS EMBEDDED to improve access. This includes
Canadian firms are at a
EXECUTIVE FUNDS creating one source of information
This helps place a C-level or other disadvantage in the global
on program availability and helping
senior-level executive with an marketplace for C-suite talent due
ensure benefits are well known
Ontario-based technology venture to our relatively low levels of com-
for six months to support achiev- throughout the sector. As part of
pensation. A relatively small sector
ing their next growth milestone. these efforts, programs could be
coupled with lower compensation
revised to improve alignment with
and a high cost of living poses sig-
current and upcoming industry
nificant challenges for global talent
needs. Program outcomes could
acquisition and retention. This chal-
be assessed to ensure they are
lenge is particularly stark for health
supporting skills development
and biosciences SMEs as they
that truly helps the sector and
have difficulty accessing capital.
align with efforts to advance the
Without mechanisms to increase
inclusion of women and other
the affordability of executive talent,
underrepresented groups in the
businesses can’t attract and retain
health and biosciences sector.
the top global business leaders who
might drive their firms to scale.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 15“ We need to reorient and incentivize companies to build to scale,
not build to flip.”
❚❚ PROPOSAL
Drive the creation of anchor firms Since 2001, in Quebec alone, a
by mobilizing late-stage capital, total of 11 life sciences companies
with market values in excess of
scaling-up high potential firms, $250 million have been acquired
by foreign entities—mostly from
and broadening research and the U.S.—for an aggregate value
of $15.2 billion.
development tax incentives
Canada’s innovative life sciences industry has the essential
components to compete globally and has achieved a
successful track record of fostering start-up health and
biosciences firms. Yet in spite of this potential, Canada does not
currently have any homegrown global anchor firms in the health
and biosciences sector. This must be tackled head on. With SPOTLIGHT ON THE U.S.
supportive scale-up programs, we can stem the tide of foreign The top four U.S. biotech
acquisitions within the sector and allow Canadian life sciences companies are Amgen,
companies to grow into globally competitive anchor firms. Celgene, Gilead and Biogen:
They have a collective
valuation of $378 billion
(larger than the collective
WHY THIS MATTERS growth capital presents a missing valuation of Canada’s
Access to capital and industry link in the life science innovation Big Six banks)
expertise from specialized venture ecosystem and creates negative
They each employ an average
capital (VC) and private equity feedback loops that stifle innovation
of 10,000 people
funds is an essential prerequisite and growth potential.
for entrepreneurs and life sci- Consolidation through mergers They generate strong economic
growth by each investing an
ences companies to maximize and acquisitions is a global reality average of $4 billion per year
their business and growth poten- within health and biosciences, and (20% of their annual revenues)
tial at all stages of development, it is not about to change. Scaling in private sector R&D
from start-up through later stage up Canadian firms would help
development and commercialisa- stem their acquisition by foreign
tion. However, the vast majority entities, instead allowing scaled-up
of Canadian life science venture Canadian firms to become the life sciences companies so they
capital funds are concentrated anchors that acquire firms within can fill their innovation pipeline
on early-stage financing rounds. Canada. This shift in the sector with new assets and technologies,
Canada also suffers from the lack of would be a game changer, as thereby building their own capacity
a robust Canadian stock-exchange anchor firms attract, recruit and while providing a strong source of
on which life science companies develop talented managers who funding for the domestic innovation
can raise growth capital by becom- often become entrepreneurs of ecosystem. Jobs, innovation, intel-
ing publicly traded in Canada. The spinoff biotech start-ups. They lectual property and other benefits
lack of local access to later-stage also acquire small and mid-sized would remain in the country.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
16 Report of Canada’s Economic Strategy Tables: Health and BiosciencesInitiative (VCCI), available through funds to help them successfully
the Business Development Bank compete against foreign multi-
of Canada (BDC), has become national companies and financial
an important vehicle to secure investors in such acquisition
early-stage VC funding for high- processes. Metrics for evaluating
SPOTLIGHT ON QUEBEC growth firms, but its mandate which firms would qualify for con-
must be expanded. centrated support could include:
Quebec’s Biomed Propulsion
Program provides financial We recommend the creation Three-year compound annual
support for Quebec life sciences within the VCCI of a dedicated growth rate
companies with strong growth
envelope that would support Number of international and/or
potential to help them commer-
cialize the results of their research and invest in the creation and domestic partnerships
while encouraging private investors development of later-stage
to actively contribute. venture and private equity cap- Demonstrated pipeline of
ital funds that are specifically innovations in development
focused on life sciences. Amount of revenue
ISED and VCCI should encourage Amount or number of VC-private
large Canadian institutional and equity investments
pension funds to invest as limited
partners in these dedicated later- Toronto Stock
stage venture capital and private Exchange listings
equity funds and also to more We recommend the
SPOTLIGHT ON
actively co-invest with these Government of Canada
DENMARK
Canadian-based funds on lar- work with securities
Denmark reserves 20% of its
ger rounds of financing of more administrators to develop
health-care budget for investment in
information, communication and advanced Canadian companies (in policies and mechanisms
medical technologies, including particular when being targeted for that reduce barriers and
medical devices. The goal is to acquisition by foreign multinationals). increase incentives for
create an environment that helps Canadian life sciences firms
companies thrive and produce the Own the Podium
to pursue dual listing on
best value-for-money technolo- We recommend the
gies. They are home to numerous the TSX and U.S. exchanges.
Government of Canada
global health-care anchor firms, enhance its existing support Access to U.S. public markets,
including Novo Nordisk, Coloplast
for firm scale-up by identifying especially the NASDAQ, is recog-
and Leo Pharma.
high-potential health and nized worldwide to be a key factor
biosciences firms, keeping for growth, providing a wide range
them based in Canada and of new and deeper sources of cap-
giving them opportunities ital. Often, Canadian firms focus
WHAT WE RECOMMEND to grow into anchor firms only on listing in the U.S., as listing
for the sector. on both U.S. and Canadian stock
Late-stage capital
exchanges demands time and
The relative lack of Canadian ISED’s Accelerated Growth Service
resources and introduces com-
late-stage funds results in earlier initiative provides a strong founda-
plexity. Barriers must be reduced
exits to foreign investors, ultimately tion upon which to build an “Own
so Canadian firms can more easily
resulting in fewer self-sustaining the Podium” approach. When a
list on the TSX—leading to new
Canadian anchor companies. We Canadian high-potential firm is tar-
capital opportunities, increased
must stem the loss of potential geted for acquisition by a foreign
public investor familiarity with
multi-billion-dollar firms due to entity, the program should include
life sciences companies in Can-
insufficient access to local sources mechanisms for the government to
ada and improved domestic and
of VC and private equity fund- provide strategic financial support
international visibility of Canadian
ing. The Venture Capital Catalyst to Canadian late-stage capital
firms. This would foster greater
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 17liquidity, enhanced Canadian retail SR&ED benefits would provide
investment and analyst coverage a greater incentive for health
for publicly-traded Canadian life and biosciences firms to fast-
sciences firms. track technology development,
expand their innovation pipelines
SR&ED review
and grow into anchors that will SPOTLIGHT ON
We recommend a review of AUSTRALIA
strengthen the Canadian innova-
Canada’s Scientific Research &
tion ecosystem. Canada should The Australian research and
Experimental Development Tax development tax incentive aims
make every effort to relax eligibility
Incentives (SR&ED) to allow to boost competitiveness and
for SR&ED instead of seeking to
full SR&ED access for eligible improve productivity across
restrict its availability.
Canadian-based companies the economy by providing
regardless of whether such Technology in-licensing refundable tax offsets on R&D
activities undertaken in Australia.
companies are controlled by We recommend that the
Corporations that are incorporated
Canadian investors or traded Government of Canada under an Australian law or that
in public or private markets. provide support for in-licensing are incorporated under a foreign
SR&ED is globally recognized as of domestic technologies by law but are an Australian resident
creating a fund that would pro- for income tax purposes are
a highly effective lever for promo- eligible for the R&D tax incentives.
ting private sector R&D activity vide matching investment
There are no eligibility restrictions
as well as early-stage VC invest- to any Canadian firm willing based on the level of Australian
ment and company growth in the to grant an in-licence for ownership of the corporation or
life sciences industry. However, further development of a on whether the corporation is
Canadian-invented discovery. privately held or publicly traded.
current eligibility criteria, including
a narrow interpretation of R&D, Venture investment in the health
make the benefits inaccessible to and biosciences sector has a
many health and bioscience com- higher inherent risk relative to further diversification and enhance
panies that are based in Canada. other industrial sectors given sub- their scale up potential as well as
For example, Canadian-based stantially longer times for certain to promote commercialization of
companies that have greater than products to reach the market, Canadian-invented discoveries.
50% ownership by non-Canadian increasing regulatory complexity
investors or are listed on a public and global pricing pressures. As
stock exchange are ineligible for a result, investors have tended to TRACKING SUCCESS
the SR&ED reimbursable credit. prioritize lower-risk investments
The current system cuts off R&D with earlier exit opportunities,
typically businesses developing By 2025, we are aiming for
support at the exact instant when
a single asset. This approach doubling of the total annual
Canadian firms are demonstrating
imposes constraints on the amount of equity capital
the greatest growth potential by
longer-term development, risk invested in the Canadian
going public or attracting foreign
diversification and scale-up health and biosciences sector
direct investment. It also removes
potential of SMEs, and on their from $1 billion to $2 billion.
a highly effective lever for retaining
R&D activities in Canada once a ability to access growth capital.
Canadian SME becomes publicly Instead, Canadian life sciences
traded or controlled by foreign firms should be encouraged to
investors and further accentu- in-license Canadian technologies
ates gravitational forces to move (sourced from early-stage assets
head offices and R&D activities developed by academia and Can-
outside of Canada. Expanding adian SMEs) in order to provide
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
18 Report of Canada’s Economic Strategy Tables: Health and BiosciencesThe Canadian health and biosciences brand
Canada’s universal health-care system is a source of national pride, and the Canadian health and biosciences
sector is a key source of high-paying, quality jobs, employing more than 91,000 people directly and some
2.1 million within the broader health system. Health and biosciences is also a significant contributor to
Canada’s economy. The industry contributed $7.8 billion to Canada’s GDP in 2016 and has tremendous
growth potential. Areas poised for growth include digital health, which is due to be a $233-billion global
market by 2020, and precision medicine, which is set to be an $88-billion market by 2023. Our Canadian
health and bioscience companies are well aware of the brimming opportunities in the sector, and have
world-class solutions.
All over the country, Canadians are leveraging cutting-edge technologies to bring about the health solutions
of tomorrow. Our researchers, inventors and entrepreneurs are following our strong tradition of innovation
and developing breakthrough products—but we don’t do enough to shine a spotlight on our successes.
Here at home, the public needs to be more aware of the brilliant innovations being developed right here in
Canada. Our public health systems need to have the confidence to back Canadian innovations, as well as
the capacity to reach out to our innovators for Canadian-based solutions to issues related to services delivery
and care. We need to let our homegrown talent shine and grow, knowing that once we give them the scope
to expand in Canada, they can then succeed globally.
Further afield, attracting skilled talent from around the world would be expedited if we did more to ensure
that Canada is rightfully recognized abroad as an economic powerhouse and a place to contribute to health
solutions with global impact. We recommend that industry collaborate with federal, provincial and
territorial governments to raise the profile of the health and biosciences sector among the
Canadian public, governments and institutional investors, as well as the global marketplace.
The Innovation and Competitiveness Imperative: Seizing Opportunities for Growth
Report of Canada’s Economic Strategy Tables: Health and Biosciences 19You can also read
