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Pharmaceutical Policy Highlights in the Canadian Federal Budget
Judith Glennie
JL Glennie Consulting Inc.

n addition to obvious investments to support various sectors suffering as a result of the pandemic, Canada’s 2021 Federal budget continues its support of previous initiatives related to pharmaceutical policy.

The October 2019 federal election resulted in a minority government for the incumbent Liberal Party. The budget put forth in March 2019 served as the basis of the government’s platform for that election, and the pharmaceutical policy components of that platform (i.e., patented medicines pricing regulations, National Pharmacare, and a rare disease strategy) were highlighted in the October 2019 edition of Global Forum.
As with most countries, the COVID-19 pandemic has fully occupied all levels of government since early 2020. Thus, the federal budget tabled on April 19, 2021 was the government’s first full budget in almost two years. It was a critical document, both in terms of its content as well as in the context of a minority government. In a parliamentary system, budget votes are considered “confidence votes” and–if voted down–can result in the fall of a minority government. The plan that was tabled represents—for all intents and purposes—the governing Liberal party’s election platform for the foreseeable future. (Note: The budget was passed by parliament on April 26, 2021.)

With the view towards rebuilding, the budget also touches on investments in innovation and improving domestic capacity that may benefit the pharmaceutical sector in the long run.

Strengthening Canada’s Bio-Manufacturing and Life Sciences Sector

The pandemic has very much exposed Canada’s vulnerability in domestic drug manufacturing capacity, particularly the kind needed to produce high tech products such as the vaccines developed to prevent or mitigate the effects of COVID-19. Policy decisions of previous governments created a significant gap in domestic vaccine manufacturing capability which the current government has been forced to address.

The budget proposes “foundational investments” of $2.2 billion over seven years intended to grow Canada’s domestic life sciences sector, targeting research systems development, expansion of human resources capacity, and supporting the growth of Canadian life sciences firms. The funding will flow through five entities, with specific purposes for each stream:

  1. Funding to the Canada Foundation for Innovation to support the bio-science capital and infrastructure needs of post-secondary institutions and research hospitals.
  2. Creating a new tri-council biomedical research fund by the existing federal research granting councils.
  3. Funding to adMare to support company creation, scale up, and training activities in the life sciences sector.
  4. Funding to the Vaccine and Infectious Disease Organization to support the development of its vaccine candidates and expand its facility in Saskatchewan.
  5. Funding to the Stem Cell Network to support stem cell and regenerative medicine research.

Of note in this budget is the government’s recognition of the important role of Canadian scientists and clinical trials in the broader health and innovation ecosystem. Being able to attract clinical trials to Canada supports the training and education of researchers and provides access to cutting-edge therapies for Canadian patients. The budget has earmarked $250 million over three years to increase clinical research capacity through a new Canadian Institutes of Health Research (CIHR) Clinical Trials Fund.

In addition to the CIHR announcement, additional targeted funding is proposed to support the life sciences and bio-manufacturing, representing direct government investments in the sector.  Examples include $1 billion over seven years through the Strategic Innovation Fund, targeted toward promising domestic life sciences and bio-manufacturing firms; and $50 million over five years to create a life sciences stream in the Venture Capital Catalyst Initiative, as part of a larger venture capital investment initiative proposed in the budget.

These investments are intended to be complementary to and integrated with other budget measures seeking to ensure that research and development efforts are more closely connected to commercialization and business development supports (e.g., the Pan-Canadian Genomics Strategy, the Pan-Canadian Artificial Intelligence Strategy, and the Industrial Research Assistance Program).

Action to Address Antimicrobial Resistance

Unlike efforts underway in the UK, the issue of antimicrobial resistance (AMR) has not received a great deal of public policy attention in Canada, despite projections of 396,000 lives lost by 2050 due to AMR if it is not addressed proactively. The 2021 Canadian federal budget earmarks new funding for the Public Health Agency of Canada, Health Canada, and the Canadian Food Inspection Agency to address this issue, with a focus on preventing inappropriate antimicrobial use and monitoring the emergence of AMR in Canada. This first foray into this policy space will increase decision-maker awareness regarding the need for pharmaceutical research, development, and reimbursement policies to ensure timely access to future products targeted to AMR.

Moving Forward on National Universal Pharmacare

National Pharmacare (NP) has been a focus of the Liberal government since their election in 2015. Various committees, reports, and previous budgets have flagged issues, but a path forward for NP has yet to be articulated. While the April 2021 budget reiterated the government’s commitment to working with provinces, territories, and stakeholders to build on the work done to date, there were no new initiatives announced.

The federal government’s focus appears to be on the national rare disease strategy, with confirmation of its intention to move forward with its announced plan to provide funding for that program. The rare disease strategy is seen as a “foundational element” in the move toward a universal national drug program, but timing of the latter is likely at least five years in the future.


Challenges created by the COVID pandemic have also revealed opportunities to improve the Canadian pharmaceutical policy and innovation environment. The investments outlined in the budget signal that—at least from a research, development, and manufacturing capacity perspective—the federal government seems to have learned crucial lessons on how critically important strong domestic capacity in these areas is to the integrity of Canada’s health system and broader economy.

The remaining challenge is for the federal government to realize that there must be much better alignment of these innovation investments with pharmaceutical policies such as those related to patented drug pricing regulations. It is important to acknowledge that the latter, in fact, undercut the intended benefits of the broad life sciences investments outlined in the 2021 budget. This should prompt the federal government to reassess the scope of the proposed regulations. But it is not clear that such a re-evaluation is underway.