After steel, aluminum, automotive and timber, it is the tour of the pharmaceutical industry to prepare for the taxation of new customs duties by Donald Trump. A possibility which has become a certainty for the actors of this sector of activity already counted by the pandemic of Covid 19 and which reminds us how much Quebec and Canada must work hard to rebuild their medical sovereignty.
It was a Donald Trump statement at the start of the week that rekindled the certainty that customs duties would soon be imposed on imports of pharmaceutical products in the United States. In an interview with a television network, Trump warned that he planned to announce these new rights over the next two weeks.
Rights that will be low at the start, according to him, to 25 % perhaps, but which will significantly increase next year to 150 % to possibly reach 250 %, all that, he justifies, because he wants to force pharmaceutical companies to make their products on American soil.
This possibility had already been mentioned two weeks ago at the conclusion of the customs duties with the European Union when Donald Trump had said that separate agreements were going to be announced for the pharmaceutical sector.
“In this regard, Donald Trump is not wrong,” is forced to admit Éric Gervais, the CEO of pharmaceutical group Duchesnay (GPD), a Blainville company specializing in the design and distribution of drugs intended for women’s health, drugs for rare diseases and generic drugs for orphans.
Trump is not wrong, because the United States only manufactures 10 % of the drugs they consume and 90 % of all antibiotics that are prescribed in the United States are manufactured in India or China.
“It has become a national security element and that’s what Trump will invoke. The worst part is that it is substantially the same situation that is observed in Canada, where we only make 11 % of the drugs that we consume, while it was 34 % before the pandemic, “said the CEO of GPD.
Photo provided by the pharmaceutical group Duchesnay
The CEO of pharmaceutical group Duchesnay, Éric Gervais
Pharmaceutical group Duchesnay has three separate entities in Canada: Duchesnay, Médunik Canada and Analog Pharma Canada, which manufacture drugs that are distributed by three American entities in the United States.
“From the Trump election in November, our stocks in the United States have been preventing preventively from 3 to 12 months. Since January, they have been increased at 18 months not to penalize American patients who use our products and who will have to bear prices increases, ”explains Éric Gervais.
Diversify the markets
The Canadian pharmaceutical sector experienced a golden age in the 1990s when the duration of new drugs was extended at 20 years, but everything collapsed at the turn of the 2010s, when the industry was rationalized and that the closure of the large Merckst, Pfizer, Astrazeneca and Boehringer’s research laboratories are closed.
In recent years, the life sciences sector has taken over tone with the emergence of manufacturers of generic products, Jamp Pharma, Pharmmascience, Apotex and Groupe Duchesnay.
The sector today brings together 37,000 jobs, mainly in the Greater Region of Montreal, Quebec and Sherbrooke.
The life sciences sector has the same economic weight significantly as that of aeronautics. It brings together more than 700 companies, including beyond 200 in the biopharmaceutical sector, both innovative and generic companies.
For several years, Duchesnay pharmaceutical group has worked to diversify its markets and reduce its exposure to the United States. The company exports its products to 47 countries and has a third of its income in Canada, a third in the United States and a third in the rest of the world.
“The taxation of customs duties will lead us to further develop our other markets. We take risks to accumulate 18 months’ stocks in the United States. It is possible that our products reach the expiration date before they can be sold and that monopolizes our liquidity, ”agrees Éric Gervais.
Reality would be much simpler for Canadian drug manufacturers if their country of origin favored the purchase of local products to that of products imported mainly from India and China.
This dependence on foreign producers gave cold sweats during the second wave of COVI-19, which started in August 2020, during which the shortage of certain Indian molecules compromised the manufacture of drugs here.
This also partly explains the decline in the market share of Canadian manufacturers. However, it is drug reimbursement programs that promote Chinese and Indian products, because they cost eight times to produce than Canadian generic drugs, which accentuate local producers, which means only 11 % of drugs consumed in the country are of Canadian origin.
We are no longer able to ensure our medical sovereignty, so we face the same reality as the one to which Trump decided to tackle at home, which is not encouraging.