In the late 80's and early 90's Canadian Governments undertook a grand bargain with Canada's innovative pharmaceutical sector that had a profound and positive impact on Canadian society.Bills C-22 (1987) and Bill C-91 (1993) saw innovative patent drug manufactures receive world class patent protections and business certainty in exchange for investing in Canada.This approach was successful for over 25 years ‒ the billions of investment dollars helped develop vibrant life science clusters in Montreal and Toronto and later in Western Canada. As a result, pharmaceutical companies introduced hundreds of medicines to Canada that have saved and improved millions of lives, reduced hospitalizations and the need for many costly medical interventions.Over the past few years it has become apparent that rapid demographic and technological change coupled with smart and aggressive international competition have overtaken the regulatory and policy framework, and that it needs a rethink.We need to build on the success of the past and forge a new agreement – one that will provide Canadians with timely access to new, affordable innovative treatments, address health system sustainability for governments, provide price and market predictability for the industry, and contribute to the country's emerging life sciences sector and, by extension, our economic growth.The main driver for a new deal is the growing utilization of personalized medicines in our health care. These medicines leverage genetic discoveries to create targeted treatments on rare and hard-to-treat diseases and will improve health care outcomes by leaps and bounds. They now make up about a quarter of new drugs being introduced and the percentage will only increase in the years to come. The Tufts Center for the Study of Drug Development estimates that more than 70 percent of cancer drugs now in development are personalized medicines.This is personally exciting for me, as someone who spent most of her career in patient-centered health care organizations, most recently as CEO and president of the Canadian Cancer Society, to see the how a focus on personalized medicine is revolutionizing care.  If you go back sixty years ago, we characterized blood cancers as “a disease of the blood”. We subsequently divided this one disease into leukemia and lymphoma. Today we have identified approximately 40 different types of leukemia and around 50 different lymphomas.There are now 250 medicines in development for blood cancers alone and we have seen 5-year survival rates grow to 70 percent in large part due to our greater understanding of the molecular basis of these diseases.However, these medicines are more expensive to produce, presenting a challenge to both developers and purchasers. On top of these higher fixed research costs, they are designed to treat much smaller patient populations than traditional pharmaceuticals making it more difficult to recoup the development costs over a larger group of patients. The challenging economies of scale result in the expensive drug costs for certain medicines we have all seen in media reports.Additionally, an aging population will generate greater overall demand for health services and taxpayers to support health and social services, raising the stress levels of health and finance ministers across Canada.Both public and private insurers see the looming pipeline of expensive drugs as budget busters and pursue cost containment strategies that ultimately delay patient access to the latest medical innovations. IMC has also heard the concerns raised from our government partners about the need for a national approach to drug purchasing. We are prepared to work together to develop an approach that works for Canadian patients and our health care system.The health community is increasingly focussed on measuring the downstream value a medicine can bring by reducing hospital visits and improving workplace productivity. The research needed to assess this “value” takes many years to generate results- which doesn't help today's decision-makers.  Moving forward we need to figure out how best to leverage “big data” and analytics to measure the positive impact new medicines have to improve health outcomes and sustain our public health care systems.Despite these on-going challenges, the member companies of Innovative Medicines Canada play an important role in the knowledge economy ranking first in growth and intensity for R&D investment.  According to EY, it amounts to approximately 9.97% of total revenue providing $1.2 billion annually in R&D funding in Canada, adding over $19.2B to the Canadian economy and supporting 30,000 jobs.As the global market place has become more challenging to attract investment, we have responded with flexible collaborative research partnerships with academic/clinical research institutes, commercialization centres and virtual research centres, and expanding our capacity to conduct R&D work in Canada.It won't be enough on the longer term. Information technology and globalization are making it more cost effective to do research in other countries, and their governments are introducing attractive incentive investment programs. Within Canada, tightening reimbursement practices, the effect of expiring “blockbuster” patents and uncertain investment environment are making it difficult for our Canadian executives to win in-company investment competitions.Dominic Barton, chair of the Canadian Minister of Finance's Advisory Council on Economic Growth has identified the strong potential for the life sciences sector to drive strategic economic growth in Canada.Working with Minister of Innovation, Science and Economic Development Navdeep Bains and Health Minister Ginette Petitpas Taylor we hope to build a better, more innovative and sustainable healthcare system for the future through an approach that integrates the research community, governments, insurers, the pharmaceutical industry and patients.Let us be the first to admit that the 30-year-old government-industry agreement, established to provide a framework for pharmaceutical price stability, R&D investment and intellectual property protection, needs to be modernized.When it comes to investing in the potential of personalized medicine and other health research initiatives, our industry is engaged, focused and excited by the potential to attract global investments in research and development.  The research pipeline is very promising- with over 7,000 new medicines currently in development.

Pamela Fralick is an experienced leader who has been fostering positive change in Canada's health sector for decades. As the President of Innovative Medicines Canada, Ms. Fralick leads the industry association for Canada's innovative pharmaceutical companies, working with its members and communities to ensure Canadians have access to the medicines they need, when they need them.  Prior to joining Innovative Medicines Canada, Ms. Fralick was President and CEO of the Canadian Cancer Society, Canada's largest health charity.