Drug firms' research spending falls short

Here's an article that's a bit old, but it's interesting. I didn't realize that there are specific amounts that the brand name drug companies are supposed to spend on research in Canada. They seem to be having trouble reaching it over the last five years.

If the drug companies met this pledge, they would have a good statement to make in negotiations with governments when it comes to changes to formularies and patent laws (like the recent Ontario drug bill). They could say that they have held up their end of the negotiated bargain. Instead, I think they've left themselves open to criticism that is hard to deflect.

At least the stats are improving, up from 8.5% in 2004 to 8.8% last year.

From the Ottawa Citizen:
While seeing rising sales, Canada's big drug companies again failed to hit their promised target for spending on research and development of new medicines last year.

Brand-name drugmakers spent $1.2 billion or 8.7 per cent of their sales on research and development, marking the fifth consecutive year that the industry has failed to meet the 10-per-cent-of-sales ratio pledged when patent rules were strengthened in 1987. ...more