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Pharmaceutical industry profile

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 2.1% share of the global market, making Canada the 9th largest world market. Since 2015, compound annual growth has remained positive at 5.1% (IQVIA Pharmafocus 2024).
  • 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 81.3% of Canadian sales by value and 27.1% of prescriptions by quantity. Generics account for the rest (IQVIA Pharmafocus 2024).
  • In 2020, the manufacturing portion of the sector employed an average of approximately 31,500 people and over the last 5 years, employment has grown by 15.5% (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 2011-2020
Year Employment
Source: Statistics Canada. Table 14-10-0201-01 Employment by industry, monthly, unadjusted for seasonality, Yearly employment is 12 month average.
201126,710
201226,979
201326,983
201425,934
201527,302
201628,494
201729,870
201829,804
201930,853
202031,521

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Canadian drug sales

According to the 2019 PMPRB Annual ReportFootnote 1, from 2011 to 2019, the value of total pharmaceutical sales (including non-patented over the counter medicines) in Canada have increased by 35.3% to $29.9 billion, with 86.7% sold to retail drug stores and 13.3% sold to hospitals. Governments account for 37.2% of drug expenditures and private payers account for the remaining 62.8% (private coverage and individuals) (IQVIA Pharmafocus 2024).
Canadian Manufacturer's Sales of Patented and Non-Patented Drugs from 2011-2019 (Sales in $ billions)
Year Patented Non-Patented Total
Source: 2019 PMPRB Annual Report
2011 12.9 9.2 22.1
2012 12.9 8.9 21.8
2013 13.4 8.7 22.1
2014 13.8 9.2 23.0
2015 15.1 9.4 24.5
2016 15.5 10.0 25.5
2017 16.8 10.2 27.0
2018 16.7 11.6 28.3
2019 17.2 12.7 29.9

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R&D activities

  • Total business expenditures on R&D by Canadian pharmaceutical companies have fallen below $1 billion since 2011. From 2011 to 2019, industry R&D spending fell by 9.9%Footnote 2 (2019 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, the pharmaceutical industry is first ahead of the Software and Computer Services and Energy/Oil and Gas sectors in R&D intensity. Twenty-seven pharmaceutical and biotechnology companies are listed in the Top 100 Corporate R&D Spenders 2019 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 (2011 - 2019)Footnote 2
Year Expenditure (in $ billions)
Source: 2019 PMPRB Annual Report
20110.99
20120.94
20130.80
20140.79
20150.87
20160.92
20170.87
20180.89
20190.89
2019 Distribution of Canadian Business R&D Expenditures By Region
Region R&D Distribution (%)
Source: 2019 PMPRB Annual Report
Ontario 50.9
Quebec 28.3
West 18.3
Maritimes 2.4

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International trade

  • From 2011 to 2020, pharmaceutical exports and imports between Canada and the rest of the world increased by 143% and 58% 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 2011-2020 (in $ billions)
Year Domestic Exports Imports Trade Deficit
Source: Statistics Canada, Industry Canada Trade data online
2011 5.2 13.6 8.4
2012 5.5 13.5 8.0
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 11.0 19.5 8.5
2019 12.2 21.5 9.4
2020 12.7 22.6 9.9

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Leading companies

  • In 2020, the top ten pharmaceutical companies accounted for over half of total Canadian pharmaceutical sales including both prescription and non-prescription medicines (IQVIA Pharmafocus 2024).
Leading Pharmaceutical Companies in Canada in 2020
Rank Leading Companies Total Sales
($ billions)
Market Share (%)
Source: IQVIA Pharmafocus 2024

1

Johnson & Johnson/Actelion

4.19

13.3

2

AbbVie

1.62

5.10

3

Novartis

1.60

5.10

4

Merck/Cubist

1.59

5.00

5

Pfizer/Hospira

1.35

4.30

6

Apotex

1.22

3.90

7

Bayer

1.20

3.80

8

Roche

1.17

3.70

8

AstraZeneca

1.13

3.60

10

GlaxoSmithKline

1.07

3.40

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Leading products

  • The top ten pharmaceutical products sold in Canada account for 16% of 2020 industry sales. Leading therapeutic categories include medicines for arthritis, ophthalmology and autoimmune diseases (IQVIA Pharmafocus 2024)
Leading pharmaceutical products in Canada in 2020
Rank Leading products Therapeutic subclass Total sales ($ millions) 2020 Growth (%) Company
Source: Source: IQVIA Pharmafocus 2024
1 Remicade Anti-arthritic 1,153.0 2.0 Merck
2 Humira Anti-arthritic 931.0 8.5 AbbVie
3 Eylea Ophtalmology 560.0 3.3 Bayer/Regeneron
4 Stelara Autoimmune 476.0 24.0 Bayer/Regeneron
5 Epclusa Liver health 385.0 -40.1 Gilead
6 Elquis Blood Thinner 331.0 20.8 Pfizer/Bristol-Myers
7 Imbruvica Autoimmune 323.0 31.8 AbbVie
8 Lucentis Ophthalmology 318.0 -4.5 Novartis
9 Keytruda Autoimmune 308.0 19.6 Merck
10 Xarelto Blood Thinner 269.0 9.0 Bayer

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Health expenditures on drugs

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

  • In 2019, 56% of total health expenditures were directed to hospitals, physicians and drugs.
  • Pharmaceuticals are the second largest component of health care expenditures, representing 15% of total expenditures.
  • Although spending on pharmaceutical continued to grow, the pace has slowed in recent years across provinces and territories.
Canada's Health Expenditure from 2011 - 2019 (in $ billions)
Expenditure ($ billions)
Year Total Health Expenditures On Drugs Share of Total (%)
Source: Canadian Institute of Health Information (CIHI); f=forecasted
2011 199.3 33.0 16.5%
2012 207.4 33.4 16.1%
2013 212.2 33.6 15.8%
2014 218.4 33.9 15.5%
2015 227.9 35.6 15.6%
2016 237.2 37.0 15.6%
2017 245.6 38.2 15.5%
2018 254.6 38.9 15.3%
2019f 265.5 40.3 15.2%

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For More Information Contact:

Manufacturing and Life Science Branch
Innovation, Science and Economic Development
235 Queen Street
Ottawa ON, K1A 0H5
Telephone: 613-954-3077
Fax: 613-952-4209
Website: Canadian life science industries

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Footnotes

Footnote 1

The Patented Medicines Prices Review Board (PMPRB) protects and informs Canadians by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends. To learn more visit Patented Medicine Prices Review Board

Return to footnote 1 referrer

Footnote 2

R&D refers to Scientific Research and Experimental Development (SR&ED) expenditures outlined in Income Tax Regulation. For more information please visit A brief history of the definition of SR&ED

Return to footnote 2 referrer

Footnote 3

Research Infosource publishes a list of the top 100 corporate R&D spenders in Canada annually. The most recent version can be viewed here: The survey was published by Innovative Medicines Canada, and can be viewed at http://www.researchinfosource.com/top100_corp.php

Return to footnote 3 referrer

Footnote 4

This annual report published by CIHI tracks and reports health care spending across Canada. To learn more visit Canadian Institute for Health Information

Return to footnote 4 referrer

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