Demand for pharmaceuticals is set to increase, but the economic downturn could have an impact on future healthcare expenditure.
The Canadian pharmaceutical market is projected to grow at a relatively fast rate in the coming years, strengthened by an increasing demand for pharmaceuticals, due to an ageing population and a commitment to a high standard of healthcare provision. However, due to the economic recession, public finances are set to deteriorate for the first time in a decade, and spending constraints could affect future expenditure on healthcare. In addition, since Canadians’ private health insurance tends to be through their employment, redundancies caused by the global economic downturn may mean a reduction in private healthcare insurance.
The future of parallel trade between Canada and the USA is uncertain. As patented drug prices in Canada are controlled by the government, they tend to be considerably lower than in the USA, which has led to a burgeoning parallel trade between the two countries. The US has taken no clear position on the issue, but in 2005 the Canadian government indicated that it would legislate to severely restrict parallel trade. As yet, this has not happened, however.
Further reading - A in-depth review of the Canadian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Canada (published January 2010)