This chapter provides an overview of innovations in the development of pharmaceutical drugs and medical devices, as well as particular challenges facing innovation in these areas. It also examines more specifically how developments in nanotechnology and genomics are leading to the development of new drugs and medical devices and how innovation in these areas will lead to new ways of diagnosing and treating different diseases and disorders, as well as improve our understanding of them. The chapter concludes with the Committee’s observations and recommendations about fostering further innovation in these areas.

A. Medical Devices

Medical devices are used in the diagnosis, treatment, mitigation or prevention of a medical condition. They include a vast range of equipment from thermometer or tongue depressors, to MRI machines or robotically assisted surgical equipment.[103] The Food and Drugs Act, which authorizes Health Canada to regulate the safety, efficacy and quality of these products, defines a medical device as, “any article, instrument, apparatus or contrivance, including any component, part or accessory thereof, manufactured, sold or represented for use” in the medical treatment of human beings.[104] The Committee heard from witnesses that the medical device industry in Canada consists of approximately 1000 companies, employing about 35,000 people in Canada and has sales between $6 and $7 billion.[105] The majority of these companies are small- and medium-sized Canadian-owned companies.[106]

Witnesses highlighted examples of innovative medical devices developed and utilized in Canada, which were leading to improvements in the understanding and treatment of different diseases. The Committee heard from Dr. Ravi Menon, Canada Research Chair at the Robarts Research Institute at the University of Western Ontario, who was conducting research that employs an ultra-high magnetic field MRI machine to study brain structure and function, which is leading to greater understandings of Alzheimer’s disease, multiple sclerosis, brain cancer and Lou Gehrig’s disease.[107]

The Committee also heard about how the Juvenile Diabetes Research Foundation Canada had received $20 million in 2009 from the Government of Canada’s Federal Economic Development Agency for Southern Ontario to support the development of a clinical trial network that will examine, among other things, the development of an artificial pancreas, a closed-loop system that connects information from continuous glucose monitors with insulin pump delivery systems.[108] Computer programs will automatically digest all the information and give the correct signal to deliver proper amounts of insulin, depending on the circumstances of the individual. The Committee heard that three clinical trials involving the artificial pancreas were currently taking place focusing on children and adolescents with type 1 diabetes, as well as pregnant women with type 1 diabetes.

Witnesses identified several obstacles related to the adoption of innovative medical devices into Canadian health care systems. One obstacle identified by some witnesses was the regulatory system. Mr. Brian Lewis, President of Canada’s Medical Technology Companies (MEDEC) articulated that though he recognized the need for strict regulatory requirements, he believed that Health Canada’s many regulations are difficult to navigate, particularly for small businesses.[109] Furthermore, Health Canada’s cost-recovery system also poses challenges to small businesses. He suggested that this could be an area where the federal government could take action.[110] He, as well as Dr. David Jaffray, Head of the Radiation Physics Department at Princess Margaret Cancer Centre, also said that the regulatory process is slow, though they recognized that Health Canada is making its best efforts in this area.[111] These witnesses also highlighted the need to ensure that Health Canada’s regulatory processes are harmonized with other jurisdictions, including the United States and Europe, as Canadian companies often seek market approval in those jurisdictions before they do so in Canada because those jurisdictions represent larger markets for their products.[112]

Witnesses also outlined the challenges that Canadian medical technology companies face at the provincial and regional level in having their devices adopted by health care organizations.[113] The Committee heard that provinces and health care organizations rely on HTAs in determining which medical devices will be adopted by health care systems. However, HTAs, which evaluate the clinical and cost-effectiveness of health technologies, are being carried out by different organizations in different jurisdictions without common pan-Canadian recommendations. As a result, companies have to go through different HTA processes with local health organizations across the country. Furthermore, companies face challenges generating the necessary data to support evaluations of the cost effectiveness of their products. The Committee heard that organizations, such as MaRS Discovery District, are now helping companies evaluate the cost-effectiveness of their products during their development to promote their adoption by health care organizations. However, witnesses suggested that CADTH could focus on coordinating HTAs across the country and sharing best practices in this area.[114]

Finally, some witnesses indicated that local hospitals and health care organizations lack resources and incentives to adopt Canadian-developed medical technologies. They therefore recommended that the federal government provide grants, either through federal government regional economic development agencies or the Canada Foundation for Innovation, to health care organizations to adopt clinically and cost effective technologies that had been developed in Canada, or examine ways that it could adopt these technologies within its jurisdiction.[115]

B. Pharmaceutical Drugs

Health Canada defines pharmaceutical drugs, as synthetic products made from chemicals that include prescription and non-prescription drugs; disinfectants; and products such as sunscreens and antiperspirants.[116] Like medical devices, pharmaceutical drugs are regulated by Health Canada under the Food and Drugs Act.[117] During the course of its study, the Committee heard about innovations in the development of pharmaceuticals that were leading to improvements in the treatment and understanding of various diseases and disorders. For example, the Committee heard from representatives from the Canadian Light Source (CLS), a facility that conducts research using a synchrotron, an electronic accelerator that produces light at an extremely high X-ray intensity allowing for penetration of materials at the molecular level.[118] The Committee heard that synchrotron radiation has various applications for drug development because it allows for a better understanding of the molecular structure of viruses, which then allows scientists to develop drugs and treatments that target diseases caused by viruses at the molecular level rather than the patient’s whole body, leading to fewer side effects. One of the CLS’s facilities allow users to conduct macromolecular crystallography, which detects the three-dimensional structure of biological molecules such as viruses and proteins, including those related to cancer, parasitic diseases, Crohn’s disease, and cardiovascular diseases. This knowledge is then used by pharmaceutical companies to develop drugs based upon the three dimensional structure of these molecules. In addition, the Committee heard that the CLS’s facilities are also being used to enhance the detection of diseases such as breast cancer, which are currently detected not at the molecular level, but rather through secondary processes such as the detection of calcifications. According to representatives of the CLS, research being conducted at the facility is being used to develop techniques to detect cancerous tissue at the molecular level, which would allow for earlier diagnosis and treatment of the disease.

However, witnesses also explained that innovation in both the Canadian and global pharmaceutical industry was stalling, as fewer new innovative drugs are being developed. In a brief submitted to the Committee, Dr. Marc-André Gagnon from Carleton University provided a graph that showed that the introduction of new molecular entities globally declined from approximately 225 in the period from 1996 to 2000 to approximately 150 between 2001 and 2010.[119] His brief further explained that according to the French journal Préscrire, of the 82 new pharmaceutical drugs approved for sale in France in 2012, only 5% of these drugs were considered to bring therapeutic advances. The remaining drugs were considered to be “me too” drugs, which are reformulations of existing drugs.[120] The Committee also heard from Dr. Weaver, who explained that fewer drugs are being discovered in Canada than should be expected given its investments in research and human capital.[121] According to his calculations, Canada should have discovered 16 new drugs from 1990 to 2010, but only discovered 6 new drugs during this period.

Witnesses offered different explanations for the lack of innovation in the pharmaceutical industry. Dr. Gagnon pointed to a reduction in investments in research and development by pharmaceutical companies, despite incentives provided by the Government of Canada through patent protection and tax credits.[122] Dr. Weaver explained that there are no major multi-national drug companies doing industrial research in Canada.[123] Consequently, he suggested that there is a need for a new model of drug development called “micro-pharma,” which is academia-originated biotech start-up companies that are efficient, innovative, product-focused and small.[124] However, he explained that “micro-pharma” companies would also face challenges in relation to accessing both venture capital and appropriate business expertise. Dr. Aled Edwards from the Structural Genomics Consortium attributed the problem to a lack of basic understanding of human biology and the need for scientists in academia and pharmaceutical companies to research genes that are currently not the focus of scientific research.[125] He also advocated for a new model of drug development, which will be discussed in detail in the genomics section below.

C. Genomics

Genomics is defined by the World Health Organization as the study of genes and their function, as well as their inter-relationships in order to identify their influence on the growth and development of living organisms.[126] The Committee heard that the federal government funds research in genomics through Genome Canada, a not-for-profit corporation dedicated to developing and applying genomics science and technology to create economic wealth and social benefit for Canadians. The Committee heard that since its inception in 2001, Genome Canada has received $1 billion in federal funding, which has been leveraged to secure an additional billion dollars in co-funding from other partners. The Committee heard that 60% of this funding has been invested in health-related genomics research and applications.[127] Dr. Pierre Meulien, President and Chief Executive Officer for Genome Canada, highlighted the organization’s most recent $150 million research initiative in personalized medicine, which is being conducted in partnership with CIHR, provincial governments and pharmaceutical companies. Personalized medicine focuses on the customization of health care to the unique needs of an individual based upon an understanding of his or her genetic profile.[128] Dr. Meulien explained that personalized medicine had many benefits for health care delivery, such as helping physicians determine which medications are appropriate for patients based upon an understanding of their genetic profile, as well as avoid prescribing medications that could cause adverse reactions in certain individuals, as a result of the presence of particular genetic markers.[129]

The Committee also heard from other witnesses about the different health applications of genomic research and genomic sequencing. In particular, witnesses highlighted how the Genome Sciences Centre’s DNA sequencer at the British Columbia Cancer Agency is leading to new treatments in cancer and the development of new vaccines for communicable diseases.[130] Funded by Genome Canada, Genome British Columbia, CIHR, the U.S. National Institutes of Health and the Canada Foundation for Innovation, the Genome Sciences Centre is one of four international early access sites for a new brand of DNA sequencer machine, which is capable of reading all the letters in the human genome at vastly increased rates. It has reduced the cost of genome sequencing from $50 million to $5,000.[131] According to Dr. Marra, Director of the Genome Sciences Centre, this DNA sequencer machine has the capacity to sequence accurately 3,000 human genomes annually.

The Committee heard that the use of this rapid DNA sequencer has led to the development of possible new treatments and diagnostic techniques for cancer. For example, Dr. Janessa Lakstin and Dr. David Huntsman from the B.C. Cancer Agency are using the sequencing of the genetic code of a rare cancer to evaluate which existing drugs, new drugs or new drug combinations could be used to treat the patient.[132] The Committee also heard that Centre for Translational and Applied Genomics, OvCaRe at the University of British Columbia is also using the rapid DNA sequencer to find mutations that drive and underpin several types of ovarian cancer, which has led to the development of new diagnostic strategies and will also lead to new treatments for this disease in the near future.[133]

In addition, the Committee learned that rapid DNA sequencing machines are also being used to understand the genetics of viruses and bacteria and their hosts to help create vaccines and treatments for communicable diseases, as well as understand why some people are susceptible to certain viruses and others are not.[134] According to Dr. Frank Plummer from the National Microbiology Laboratory at the Public Health Agency (PHAC) of Canada, collaboration with the Genome Sciences Centre and the B.C. Centre for Disease Control resulted in the genetic sequencing of the SARS coronavirus in 2003 and the H1N1 virus in 2009, as well as the sequencing of E. coli and listeriosis strains involved in certain disease outbreaks. Dr. Plummer also explained that other genetic engineering technologies are being used by the National Microbiology Laboratory to create new ways of developing vaccines for HIV, influenza and Ebola by genetically modifying harmless viruses in order to give them the properties of these diseases to elicit stronger immune responses. He further noted that the National Microbiology Laboratory is working with the private sector to commercialize these types of vaccines.

Finally, Dr. Aled Edwards from the Structural Genomic Consortium highlighted how genomic research is leading to the development of new pharmaceuticals.[135] Dr. Edwards explained to the Committee that one of the reasons why there is limited innovation occurring in the pharmaceutical industry in Canada and globally is because scientists do not have enough knowledge of basic human biology, as researchers in academia and pharmaceutical companies tend to focus their research on the same genes rather than focusing on those genes that are less known. In order to address this issue, the Committee heard that Dr. Edwards has developed a new model for drug research called the Structural Genomics Consortium, which is a public-private partnership that focuses on genetic research and, in particular, genes that have not been studied yet. The Structural Genomics Consortium has two academic centres at the University of Toronto and the University of Oxford, and receives funding from the Canada Foundation for Innovation, CIHR, Genome Canada, the Government of Ontario, and pharmaceutical companies.

The Committee learned that the research produced by the Structural Genomics Consortium is not patented and could be used by pharmaceutical companies and other researchers to develop new drugs. The Committee heard that the Structural Genomics Consortium is responsible for producing over 25% of the world’s whole domain of protein crystal structures.[136] Dr. Edwards explained to the Committee that the discoveries made by the Structural Genomics Consortium have led to the development of a drug called Gleevec, a drug that is effective in the treatment of chronic myelogeneous leukemia. He further explained that the Structural Genomics Consortium’s open research model accelerates the development of drugs because it promotes collaboration between pharmaceutical companies and researchers and avoids the legal and financial hurdles associated with patent protection. Dr. Edwards explained that Canada could be a leader in this area by continuing to support and develop this new open access model for biomedical research, which would in turn attract increased investments by pharmaceutical companies in Canada.

Witnesses also identified ways in which further advancements in genomics research and personalized medicine could be realized. The Committee heard that that on-going access to large scale funding for research infrastructure through the Canada Foundation for Innovation is necessary, as it provides researchers with access to leading-edge technology that allows for further innovation in genomic sequencing.[137] Furthermore, on-going and more frequent investments in this area from the Canada Foundation for Innovation are necessary to ensure that the rapid DNA sequencer at the Genome Sciences Centre remains current.[138]

In addition, witnesses explained that Health Canada’s regulatory system needs to be adapted in order for Canadians to realize the full benefits of personalized medicine. Witnesses said that physicians sometimes lack access to new drugs or combinations of drugs to be used in personalized medicine because they had not been approved by Health Canada for the specific purposes that physicians are seeking.[139] These witnesses noted that large scale phase III clinical trials currently used by the Department as the basis of its approvals would not work for approvals for drugs for personalized medicine, because personalized medicine focuses on the effectiveness of a drug in only one individual rather than the general population. According to these witnesses, the Department should begin brainstorming around how to address this issue, which will pose regulatory challenges in the future.[140]

D. Nanotechnology[141]

Finally, the Committee also heard about the application of nanotechnology to detect and treat diseases. According to witnesses, nanotechnology refers to the intentional design, synthesis, characterization, application of structures, devices and systems by controlling size and shape in the 1 to 100 nanometre range, which has a broad range of applications from computers to health. In particular, the Committee heard about how nanotechnology is being applied to the detection and treatment of cancer. For example, the Committee heard from Dr. Normand Voyer from the Université Laval, who is conducting research in the area of nanochemotherapeutics, which uses nanoscale toxins and proteins to puncture the membrane of cancer cells causing them to die. According to Dr. Voyer, the next phase of research is to focus on improving the selectivity of the killing of cells to ensure that the nanoscale toxins kill only cancer cells and not healthy cells. With respect to diagnostics, the Committee heard from Dr. Warren Chan, a Professor at the University of Toronto, that nanomaterials are being used to develop molecular scale barcodes that will be able to scan different kinds of proteins associated with diseases. According to Dr. Chan, efforts now were focusing on converting this technology into hand-held devices that would allow for diagnosis at the point of care.

Despite the potential of nanotechnology research for innovation in health care delivery, the Committee heard that there are some obstacles to realizing its benefits. Dr. Chan explained that there are challenges surrounding Health Canada’s regulation of nanotechnology, including determining whether it should be regulated as a drug or a medical device. The Committee heard that the Department is currently regulating health-related applications of nanotechnology on a case-by-case basis. In addition, the Committee heard from Dr. Chan that nanotechnology research is not a priority in Canada in comparison to other countries such as the United States, South Korea and China. Dr. Normand Voyer explained that it is necessary for the Government of Canada to prioritize nanotechnology research because industry is less willing to fund this type of research, since discoveries in this area would only be able to be commercialized in the next 10 to 20 years. Prioritization of nanotechnology research would also help attract researchers into this field and build up Canadian capacity in this area. Dr. Chan and Dr. Voyer therefore recommended that the federal government establish a research funding agency, similar to Genome Canada, which would focus on supporting nanotechnology research and its applications in a broad range of areas, including health.

E. Committee Observations and Recommendations

The Committee’s study revealed that discoveries resulting from genomics and nanotechnogy research are leading to innovation in the diagnosis, treatment and understanding of diseases and disorders. Similarly, the Committee learned that medical devices are being used to treat type 1 diabetes and gain insight into the function of the brain. The Committee also heard how the Canadian Light Source’s synchrotron is helping to detect the three-dimensional structure of viruses and proteins related to various diseases, leading to the development of new drugs and vaccines. However, witnesses also highlighted some of the obstacles preventing Canada from fully realizing the benefits of innovations in medical devices, pharmaceuticals, genomics and nanotechnology. With respect to medical devices, the Committee heard from witnesses that Health Canada’s regulatory system needs to be more responsive to the needs of small medical technology businesses, as well as ensure that its system is in line with those in other jurisdictions. Furthermore, the CADTH could also facilitate the adoption of medical devices into health care systems by coordinating HTAs across Canada, as well as sharing best practices in this area. Witnesses explained that the pharmaceutical industry in Canada and globally is not as innovative as it could be. They suggested that new models of drug development should be promoted and supported to drive innovation in this area. To ensure that Canada remains at the leading edge of advances in genomics, the Committee heard that on-going investments in genomic sequencing infrastructure is necessary, as well as ensuring that Health Canada’s regulatory system is responsive to developments in personalized medicine and nanotechnology. Finally, the Committee heard that the federal government needs to continue to support nanotechnology research in order to both build capacity in this area, as well as to be able to realize the benefits of this technology in Canadian health care systems.

Reflecting these findings, the Committee therefore recommends that:

7.     Health Canada continue to identify efficiencies to reduce the burden that the regulatory system places on small- and medium-sized enterprises producing medical devices.

8.     Health Canada continue its efforts to harmonize the regulatory system for pharmaceutical drugs and medical devices with those of other jurisdictions.

9.     Health Canada ensure that its regulatory framework for pharmaceuticals and medical devices is responsive to developments in genomics, personalized medicine and nanotechnology.

10. The Canadian Agency for Drugs and Technologies in Health work with health technology assessment organizations across Canada to coordinate their activities and share best practices.

11. The Government of Canada continue to provide support for new models of drug development, such as the Structural Genomics Consortium.

12. The Government of Canada maintain its support for genomic sequencing infrastructure in Canada through the Canada Foundation for Innovation.

13. The Government of Canada continue to support nanotechnology research.