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A technician prepares a prescription at a Quebec pharmacy. The federal Pharmaceutical and Life Sciences Sector Task Force, created to “identify made-in-Canada solutions” in the life sciences sector, issued a report last month with 39 recommendations.Jacques Boissinot/The Canadian Press
E. Richard Gold is a Distinguished James McGill Professor at McGill University and chief policy and partnerships officer at Conscience.
In March, Ottawa created the Pharmaceutical and Life Sciences Sector Task Force to “identify made-in-Canada solutions” in the life sciences sector. Four months later, the task force’s co-chairs issued a final report with 39 recommendations encapsulating longstanding global pharma asks. These included reduced regulation, easing of protections over pharmaceutical pricing, and collecting data to better justify those prices.
None focused, however, on creating the pipeline of ideas needed to generate a made-in-Canada pharmaceutical industry. That pipeline runs through a Canadian strength that the task force ignored: open-science partnerships designed to leverage Canadian research through rapid and unrestricted sharing with Canadian firms.
Given the brief timeline and membership, the task force’s recommendations are unsurprising. At least 19 of the task force’s 27 members run Canadian subsidiaries of multinationals or their trade associations. There were no generic companies represented, nor any universities or research hospitals. The report’s recommendations benefit this membership: strict deadlines to ease regulations and soften price protection for multinationals while only asking Ottawa to “consider” progress that supports smaller, domestic firms.
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Without a strong idea-generation apparatus and a way to feed those ideas into domestic firms, Canada will remain dependent on foreign actors. Building Canadian strength in innovation starts from the ground up.
The task force described the situation: Foreign buyers acquired 21 Canadian life sciences companies over the past 15 years while pharmaceutical imports have risen from 74 per cent to 93 per cent of domestic drug expenditure in a decade. A recent Globe and Mail article notes that, while larger Canadian firms are doing well, there is an “absence of Canadian capital to back Canadian medical developers.”
While the task force acknowledges that Canada “performs well in early-stage discovery, clinical research and company creation,” it largely assumes that generating these discoveries requires no further assistance. This misses the mark.
The economics of the pharmaceutical industry underscore a division of labour: Universities conduct research, small firms turn that research into innovations and large firms commercialize them. Innovators at universities and small biotechs accounted for approximately half of the scientifically innovative drugs approved between 1998 and 2007 while large firms focused on the last stage of commercialization, particularly when they had strong links with outside organizations.
Unlike competitor countries, Canada is unusually dependent on public institutions. A 2025 study by the Council of Canadian Academies concluded that higher education performs 35 per cent of Canadian research and development compared with an Organisation for Economic Co-operation and Development (OECD) average of 16 per cent. University research output has been steady at about 1.5 times the OECD average as a share of GDP while business R&D intensity fell from 77 per cent of the OECD average in 2000 to 57 per cent in 2023. According to the report, Canada’s overall R&D intensity fell from 1.9 per cent of GDP to 1.8 percent during that period while it increased in every other G7 country.
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We cannot build a stronger domestic pharmaceutical industry without moving discoveries from public institutions into companies capable of developing them. In the U.S., all 210 drugs approved from 2010-2016 depended, in part, on U.S. federal funding and each additional $10-million in public funding generated roughly 2.3 additional private-sector patents. With its weaker innovation system, this would be even more true in Canada.
Canada has developed a world-leading model that bridges the gap between universities, small- and medium-sized enterprises, and large firms: open-science partnerships. These bring universities, hospitals and firms together to quickly share knowledge that accelerates drug development, which the firms can protect and advance through to the clinic. With our limited resources and firms, open-science partnerships provide a mechanism for Canada to do more with less. And we have done exactly that.
The Structural Genomics Consortium, and its laboratory at the University of Toronto, created an open-science partnership to advance drug discovery in 2003. McGill University’s Montreal Neurological Institute joined the movement in 2016, with an $84-million investment by the federal government and a $20-million gift from Larry Tanenbaum. The Canadian government later invested $49-million in Conscience to support open-science drug discovery by Canadian SMEs and research laboratories, and $24-million in TRIDENT, an open-science drug discovery platform. These investments are now paying off, with firms such as M4K Pharma entering into clinical trials.
Current government investments in open-science partnerships have a shelf life, and, if not renewed, the country will weaken its chances of translating university and hospital research into the next generation of health innovations. Canada must not only invest in the companies at the end of the pipeline but in the Canadian institutions that feed it.