think canada think medical device industry think investment march 2001
TRANSCRIPT
Think Canada
Think Medical Device Industry
Think Investment
March 2001
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A snapshot of Canada's dynamic Medical Device Industry
18,000 Employees
Production estimated at $3B
One National & Six Regional
Associations
800 Manufacturers
$1.57B in Exports in 2000
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• Cardiovascular (e.g. heart valves, electronic cardiography)
• Radiation therapy and therapy-planning software
• Medical imaging (e.g. 3-D imaging, ultrasound scanners)
• In vitro diagnostics (e.g. cancer, hepatitis)
• Dental implants and materials
• Assistive devices/home care, mobility aids
Canada's Medical Device Industry has a number of recognized strengths
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The presence of large multinationals and growing Canadian firms demonstrates the breadth of the Canadian Medical Device Industry
Company Annual Sales TotalEmployees
Baxter Corporation over $50 M 700
Mallinckrodt Medical Inc. over $50 M 175
Medtronic of Canada Inc. $25 - $50 M 103
Cedara Software Corp. $25 - $50 M 450
Unitron Industries $25 - $50 M 275
ALI Technologies Inc. $25 - $50 M 174
Electromed International $10 - $25M 72
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Companies in Canada's Medical Device Industry are supported by a number of national and regional associations
• National Medical Devices Canada
• Regional Association québécoise des fabricants de l’industrie médicale
Association of Ontario Medical Manufacturers
Health Care Products Association of Manitoba
Calgary Association for Medical Products
Metro-Edmonton Health Industry Association
B.C. Medical Device Industry Association
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The strength of associated Canadian industries advances thecompetitive position of Medical Device companies in Canada
Software and Informatics
Medical Devices
Microelectronics
Biotechnology Advanced Materials
Telecommunications
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Canada offers lower R&D costs
• Canada's R&D tax treatment is
very generous — immediate and full write-off for all expenditures in R&D capital equipment, and appreciable tax credits.
• Because of this, firms can significantly reduce R&D costs through direct investment or sub-contracting in Canada.
• Provincial tax credits augment federal credits and are unique for each jurisdiction.
Relative Competitiveness ofR&D Tax System
Canada 0.70
Korea
U.S.
France
U.-K.
Japan
Mexico
Italy
Germany
0.88
0.89
0.91
0.92
0.97
1.00
1.01
1.02
1.03
Australia
Sweden
The B-index represents a ratio of the after-tax cost of a $1 expenditure on R&D divided by 1 less the corporate tax rate. A lower B-index indicates a more competitive R&D tax system Source: Conference Board of Canada, June 1999.
1.05
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0 20 40 60 80 100 120
Japan
Germany
Austria
Italy
France
United States
United Kingdom
Canada
… lower manufacturing costs
Comparison of Total Annual Costs for a Model
Medical Device Manufacturing Facility
(Index: US=100)• As a location for medical device manufacturing, Canada has the lowest overall annual costs (all annual operating costs and taxes) when compared to all other G-7 countries and Austria.
Source: KPMG The Competitive Alternatives, 1999
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… and access to capital
• Canada’s world-class financial services industry provides a competitive advantage to life sciences companies through ready access to capital.
• Canadian financial institutions provide focused account management and products and services specifically designed for the health care and life sciences industries.
• Canada’s venture capital industry continues to generate active and growing funds investing in life sciences, for example, Canadian Medical Discoveries Fund, MDS Capital Corporation and SOFINOV. Investments in the Life Sciences sector totalled $1.8 billion in 1997, a 64% increase over 1996.
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Canada's regulatory process increasingly emphasizes harmonization and reciprocity
• Medical device products manufactured in Canada specifically for export do not require Canadian regulatory approval.
• Risk-based regulation in keeping with international trends.
• Signature of Mutual Recognition Agreements (MRAs) with the EU, Switzerland, Iceland, Liechtenstein and Norway for conformity assessment of regulated products.
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Canada provides an entry to NAFTA, the largest Medical Device market in the world
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1993 1994 1995 1996
North AmericaWestern EuropeJapan
Global Consumption of Medical Devices
• Through NAFTA, Canada’s market is the huge North American market of almost 400 million consumers.
• At US$58 billion, North America represents 45% of the US$130 billion global medical device market.
Source: Health Industry Manufacturers Association, The 1997 Global Medical Technology Update
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• The Canadian Institutes for Health Research support basic, applied and clinical research
Research training and development support for up to 10,000 highly-skilled people each year
Research partnerships with industry and other organizations
Linkage of MNEs to excellent Canadian science through the Life Science Research Investments Initiative
• Networks of Centres of Excellence provide industry access to Canada’s leading researchers. Health-related Networks include:
The Canadian Bacterial Diseases Network
The Canadian Genetic Diseases Network
The Protein Engineering Network of Centres of Excellence
The Health Evidence Application and Linkage Network (HEALNET)
Canadian Arthritis Network
Canadian Stroke Network
Canadian Network for Vaccines & Immunotherapeutics of Cancer & Chronic Viral Diseases
Stem Cell Genomics and Therapeutics Network
Canada offers Federally-funded research support programs
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• National Research Council
Innovation and collaboration through key research institutes:
Institute for Biological Sciences, Ottawa
Biotechnology Research Institute, Montreal
Institute for Biodiagnostics, Winnipeg
Steacie Institute for Molecular Sciences, Ottawa
Industrial Materials Institute, Boucherville, Quebec
Integrated Manufacturing Technologies Institute, London
Support to SME innovation through Industrial Research Assistance Program (IRAP)
• Natural Sciences and Engineering Research Council
Supports basic university research and project research through partnerships
Federally-funded research support programs (continued)
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In recent budgets, the federal government has shown its commitment to research and innovation
• Establishment of Canadian Institutes for Health Research: $477 million in 2001-2002
• Canada Foundation for Innovation: $3.15 billion over 13 years
• Networks of Centres of Excellence: $77 million in 2001-2002
• Genome Canada: $300 million for establishment of 5 genome science centres across Canada
• Canada Research Chairs: $900 million over 5 years for the establishment of 2000 Canada Research Chairs by 2004-05
The Government of Canada is committed to doubling its investment in research and development by 2010 and making Canada one of the five most research-intensive nations in the world.
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• Canada's growing medical device industry creates an increasing number of innovative business opportunities. The industry is supported by strong associated Canadian industries such as biotechnology and telecommunications.
• Canada maintains and continues to invest in a world class research infrastructure, creating a strong knowledge base which has contributed to international recognition in a number of segments of the medical device industry.
• Canada’s excellent social and economic environment, combined with its advantageous trading arrangements, make it an ideal site for medical device manufacturing.
Why Invest in Canadian Medical Devices?
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Key websites for further information on federally-supported innovation
• Canadian Institutes of Health Research - http://www.cihr.ca
• National Research Council - http://www.nrc.ca
• Networks of Centres of Excellence - http://www.nce.gc.ca
• Natural Sciences and Engineering Research Council - http://www.nserc.ca
• Canada Foundation for Innovation - http://www.innovation.ca
• Technology Partnerships Canada - http://tpc.ic.gc.ca
• Scientific Research & Experimental Development Tax Credits - http://www.rc.gc.ca/sred
• Canadian Biotechnology Strategy - http://strategis.ic.gc.ca/cbs
• 2000 Federal Budget - http://canada.gc.ca
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For more information:
http://investincanada.ic.gc.ca
http://strategis.ic.gc.ca/lsb
Contact:
Linda Leinan
Life Sciences Branch
Tel: (613) 954-3068
Fax: (613) 952-4209
e-mail: [email protected]