Healthcare Is a Cost. But It’s Also a Business Opportunity

Cell and gene therapies—treatments that can cure diseases instead of simply treating them—are expected to be the future of global healthcare. Canada should be using its research advantage to get a big slice of the growing market.
illustration: Monica Guan

We Canadians are fond of our healthcare system. The public benefit of universal access is a point of national pride.

But there’s at least one lesson from the U.S. system that Canada desperately needs to learn: that healthcare is a business, too—a very big business indeed. We’re accustomed to treating our system as a public service with costs to be managed. In doing so, we often forget that it’s also an economic opportunity to be leveraged. It doesn’t only have to cost us—it can also pay us back.

One of our big unrealized opportunities is in biotechnology. This country does great research in this area: it was Canadians James Till and Ernest McCulloch who first demonstrated the existence of stem cells in 1961. We graduate great talent from our publicly funded universities. We launch great start-ups. But our research, our talent and our start-ups have an alarming tendency to migrate abroad, especially to the United States, where the chances are better that money will get invested, products will get manufactured, and profits will get pocketed.

Our frequently cited biotech gap is in vaccine manufacturing. In the 1980s, we sold off Crown-owned Connaught Laboratories, which was then the world’s largest maker of flu vaccines, and the Canadian industry began to decline. By the time the pandemic arrived, Canada was at the mercy of foreign suppliers, waiting for vaccines that other countries were making and selling.

But that problem extends beyond vaccines to our entire biotech industry. A new Innovation Economy Council report titled Out of the Lab, Into the Patient: Canada’s Commercial Opportunity in Cell and Gene Therapy Manufacturing shows what’s missing. 

But the report also reminds us what’s possible.

Cell and gene therapies are expected to be the future of global healthcare in coming decades. These treatments can cure diseases instead of simply treating them. This could save costs in the long term, but they’re expensive up front—potentially running into the seven figures per patient. Taxpayers, insurers and patients will pay for it. That’s the line item that will turn up in budgets.

But the business of manufacturing these therapies and delivering them to patients around the world can offset those costs and generate big economic benefits for Canada. That’s the opportunity. 

The global market for cell and gene therapies is expected to reach $34 billion by 2030, and Canada should be using its research advantage to get a big part of it: investment in revolutionary start-ups, pharmaceutical exports, contract manufacturing fees, jobs, tax revenues and spinoff benefits.

As it stands today, we lack the infrastructure needed to capitalize. Canadian pension funds and other sources of domestic venture capital have largely ignored this space, for a variety of reasons. We haven’t trained enough scientists, technicians and executives to drive the business forward. And, critically, there’s an acute shortage of contract manufacturing capacity. Many promising young companies are trying to make do with small facilities carved out at hospitals and universities.

It’s as if we had an entire country’s worth of auto-part makers, but no available factory space—these companies either have to build a $150-million facility or go rent one abroad, which is not a choice we should be forcing Canadian companies to make. Instead, we need purpose-built laboratories and biomanufacturing facilities to give these companies the option of manufacturing their therapies at clinical and commercial scale—in Canada.

The IEC paper calls for a comprehensive manufacturing strategy, better supply chains, better domestic venture capital access and training for a next-generation workforce—as well as better contract manufacturing options.

Fortunately, there is already hope of making this future a reality. In the 2021 budget, the federal government allocated $2.2 billion for biomanufacturing and life sciences. This needs to be spent wisely.

Meanwhile, at the McMaster Innovation Park in Hamilton, Ont., a large piece of the manufacturing puzzle is already starting to come together: a new contract development and manufacturing facility called OmniaBio Inc., a CCRM subsidiary. The Ontario Government recently announced a loan to OmniaBio of up to $40 million to kick-start construction of the $580-million facility.

An exclusive economic analysis commissioned by CCRM shows that the project could add $4 billion a year to Ontario’s GDP and $450 million a year to provincial tax revenue. That’s a lot of business, and proof of the potential benefits from a robust biomanufacturing industry. 

Because we need to remember that healthcare isn’t just a public service we pay for. It’s an economic opportunity we need to seize.

Michael May is the president and CEO of the Centre for Commercialization of Regenerative Medicine. 

Michael May
Michael May