Pharmaceutical industry profile

Table of Contents

Canada's pharmaceutical sector

The pharmaceutical sector is one of the most innovative industries in Canada. It is composed of companies developing and manufacturing innovative medicines and generic pharmaceuticals, as well as over–the-counter drug products. The sector is made up of a number of sub-sectors that service different market segments. These include brand-name pharmaceuticals, generic pharmaceuticals, biopharmaceutical small and medium sized enterprises (biopharmaceutical SMEs), contract research organizations (CROs), and contract manufacturing organizations (CMOs).

Size and structure of the industry

  • Pharmaceutical sales in Canada have a 2.2% share of the global market, making Canada the 8th largest world market. Since 2017, compound annual growth has remained positive at 6.4% (IQVIA Pharmafocus 2027).
  • Companies undertake research and development (R&D) to develop new or improved patented therapies, while others develop bio-equivalent copies of innovative drugs once patents expire. Emerging fields of biopharmaceuticals include gene and cell therapies, and nanomedicines.
  • Brand-name products account for 80.5% of Canadian sales by value and 25.7% of prescriptions by quantity. Generics account for 19.5% of market sales by value and 74.3% of the market share by prescriptions (IQVIA Pharmafocus 2027).
  • In 2022, the manufacturing portion of the sector employed an average of approximately 33,000 people and over the last 5 years, employment has grown by approximately 11% (Statistics Canada; Table 14-10-0201-01).
  • The industry is clustered mainly in the metropolitan areas of Toronto, Montreal and Vancouver.
Yearly Employment in Manufacturing Portion of Pharmaceutical Sector from 2013-2022
Year Employment
2013 26,983
2014 25,934
2015 27,302
2016 28,494
2017 29,870
2018 29,804
2019 30,853
2020 31,531
2021 32,513
2022 33,128
Source: Statistics Canada. Table 14-10-0201-01 Employment by industry, monthly, unadjusted for seasonality, Yearly employment is 12 month average.

Canadian drug sales

According to the 2021 PMPRB Annual ReportFootnote 1, from 2012 to 2021, the value of total pharmaceutical sales (including non-patented and over the counter medicines) in Canada have increased by 56.4% to $34.1 billion. Sales of medicine are handled via different channels with 56.8% being sold through consolidated distributers, 35.5% sold through self-distributing pharmacy chains, and 7.7% being sold directly to pharmacies (IQVIA Pharmafocus 2027).

Canadian Manufacturer's Sales of Patented Drugs from 2013-2021 (Sales in $ billions)
Year Patented Medicine Sales Non-Patented Medicine Sales Total Sales Patented Medicine sales per GDP (%)
2012 12.9 8.9 21.8 0.708
2013 13.4 8.7 22.1 0.706
2014 13.8 9.2 23 0.696
2015 15.1 9.4 24.5 0.76
2016 15.6 10 25.5 0.77
2017 16.8 10.2 27 0.783
2018 16.7 11.6 28.3 0.751
2019 17.2 12.6 29.9 0.748
2020 17.7 14.5 32.2 0.801
2021 17.4 16.7 34.1 0.758
Source: 2021 PMPRB Annual Report

R&D activities

  • Total business expenditures on R&D by Canadian pharmaceutical companies selling patented medicines were reported to be $922.9 million and have decreased by 1% from 2012 to 2021 (2021 PMPRB Annual Report).
  • New medicines and drug candidates are increasingly being developed externally via partnerships with academia, small and medium sized enterprises (SMEs), government and research centres as well as contract research organizations (CROs).
  • Drug research and development is increasingly done via external partners, as over the past decade, 60% of innovator small molecules and 82% of innovator biologics have their roots outside of big pharmaceutical companies (source: Accenture). As a result, the innovation activities of large pharmaceutical firms have diversified, and Canadian CROs perform an increasingly important share of R&D.
  • According to Research InfosourceFootnote 3, thirty-one pharmaceutical and biotechnology companies are listed in the Top 100 Corporate R&D Spenders 2021 in Canada.
  • R&D costs per drug averaged US$1.4 billion over 12–13 years (Tufts Center for the Study of Drug Development). Full costing (including amortization of research failures and opportunity cost of capital) raised average costs significantly. A generic drug may take 2 to 3 years and requires $3 to $10 million of R&D to develop and prove equivalency with the original drug.
Total Canadian Pharmaceutical Business R&D Expenditure (2013 – 2021)Footnote 2
Year Expenditure (in $ millions)
2012 936.1
2013 798.3
2014 792.2
2015 869.1
2016 918.2
2017 871.4
2018 892.6
2019 893.2
2020 822.9
2021 922.9
Source: 2021 PMPRB Annual Report
2021 Distribution of Canadian Business R&D Expenditures By Region
Region R&D Distribution (%)
Ontario 52.3
Quebec 26.3
West 19.9
Atlantic 21.5
Territories 0
Source: 2021 PMPRB Annual Report

International trade

  • From 2018 to 2022, pharmaceutical exports and imports between Canada and the rest of the world increased by 38% and 55% respectively.
  • The United States is Canada's main trading partner, accounting for 64% of exports and 29% of imports in 2020. Another 48%of imports originate from the European Union.
Total Canadian Pharmaceutical Trade from 2013-2022 (in $ billions)
Year Domestic Exports Imports Trade Deficit
2013 6.1 13.7 7.7
2014 8.3 15.4 7.1
2015 10.5 16.9 6.4
2016 11.8 17.2 5.5
2017 8.9 17.6 8.7
2018 10.25 19.5 8.5
2019 11.23 21.5 9.4
2020 11.67 22.6 10.3
2021 10.71 26.63 13.4
2022 12.79 30.21 15.03
Source: Statistics Canada, Industry Canada Trade data online

Leading companies

  • In 2022, the top ten pharmaceutical companies accounted for over half of total Canadian pharmaceutical sales including both prescription and non-prescription medicines (IQVIA Pharmafocus 2027).
Leading Pharmaceutical Companies in Canada in 2022
Rank Leading Companies Total Sales
($ billions)
Market Share (%)
1 Johnson & Johnson 4.73 12.2
2 Merck 1.77 4.6
3 Novartis 1.75 4.5
4 AbbVie 1.71 4.4
5 Novo Nordisk 1.62 4.2
6 AstraZeneca 1.48 3.8
7 Pfizer 1.46 3.8
8 Bayer 1.36 3.5
8 Apotex 1.35 3.5
10 GlaxoSmithKline 1.31 3.4
Source: IQVIA Pharmafocus 2027

Leading products

  • The top ten pharmaceutical products sold in Canada account for 65% of 2022 industry sales for the top 20 brands. Leading therapeutic categories include medicines for glycemic control, arthritis, ophthalmology and autoimmune diseases (IQVIA Pharmafocus 2027)
Leading pharmaceutical products in Canada in 2022
Rank Leading products Therapeutic subclass Total sales ($ millions) 2022 Growth (%) Company
1 Ozempic Glycemic Control 1,044 84 Novo Nordisk
2 Remicade Anti-arthritic 920 -17.9 Janssen
3 Stelara Autoimmune 821 19.5 Janssen
4 Eylea Opthamology 706 5.2 Bayer
5 Keytruda Autoimmune 621 16.9 Merck
6 Humira Anti-arthritic 585 -36.9 AbbVie
7 Jardiance SGLT-2 Inhibitors 398 22.5 Boehringer Ingelheim
8 Imvruvica Autoimmune 376 -5 Janssen
9 Vyvanse ADHD 375 28.1 Takeda
10 Eliquis Blood thinner 358 -16.3 Bristol Myers Squibb
Source: IQVIA Pharmafocus 2027

Health expenditures on drugs

According to the Canadian Institute for Health Information's National Health Expenditure ReportFootnote 4:

  • In 2022, 52% of total health expenditures were directed to hospitals (25%), physicians (13%) and drugs (14%).
  • Pharmaceuticals are the second largest component of health care expenditures, representing approximately 14% of total expenditures.
Canada's Health Expenditure from 2016 – 2022 (in $ billions)
Year Total Health Expenditures ($billion) Growth Rate (%) Share of Total GDP (%)
2016 238 4.1 11.7
2017 248 4.2 11.6
2018 258 3.9 11.5
2019 269 4.6 11.7
2020 305 13.2 13.8
2021f 328 7.6 13.2
2022f 331 0.8 12.2
Source: Canadian Institute of Health Information (CIHI); f=forecasted