The new U.S. drug pricing approach forces a choice, but it doesn’t limit our ambition. We need a new, coordinated solution for pharmaceutical innovation— one that’s made by Canadians for Canadians.
By Dr. Bettina Hamelin
Article originally published in the Hill Times Health Policy Briefing, page 17, February 11, 2026.
Middle powers don’t become leaders by standing still—they lead by taking charge of their own destiny.
That was the clear message Prime Minister Carney delivered on the world stage in Davos, where he argued that countries like Canada don’t have to accept terms set by others. We can chart our own path, shape our future, and compete with confidence if we make deliberate choices. That same leadership is urgently needed at home—particularly in pharmaceutical innovation.
Canada’s access to new medicines is under serious threat. Canadians already wait longer than patients in other G7 countries to access innovative medicines. Now, the Trump administration’s new drug pricing approach, known as most-favoured nation (MFN) pricing, risks widening that gap even further.
For Canadians waiting for a new cancer therapy, a treatment for a rare disease, or a first-in-class medicine, this isn’t an abstract policy debate—it’s personal. Delayed access can mean prolonged illness, more hospital stays, reduced quality of life—or worse. Medicines aren’t optional add-ons to care. They’re an essential pillar of a healthcare system that fuels a strong economy.
President Trump’s new approach requires pharmaceutical companies to align U.S. drug prices with lower prices in a group of reference countries, including Canada. The U.S. contends that its higher prices unjustly subsidize global pharmaceutical innovation and enable countries like Canada to pay less. By some measures, U.S. per capita contributions toward new medicines are more than double Canada’s. That imbalance has now become a line in the sand.
The intended effect is for Americans to pay less for new medicines, and for Canada and others to pay more for pharmaceutical innovation. So far, it’s working. Major industry players have already pledged more than $200 billion in pharmaceutical investments to expand domestic U.S. drug manufacturing and R&D, signaling a massive shift toward reshoring pharmaceutical supply chains south of the border.
At this pivotal moment, Canada faces a choice. We can continue to undervalue and underinvest in pharmaceutical innovation, while hoping global conditions bend in our favour. Or we can act decisively— on our own terms—to build a resilient, highly competitive life sciences ecosystem that delivers both health security, investments, and economic security.
For too long, Canada has taken pharmaceutical innovation for granted, rather than treating it as a strategic asset. Compared to peer countries, we invest less and take longer to approve and reimburse new medicines. Only 18 per cent of new medicines launched globally are available through Canada’s public drug plans, compared to the OECD average of 28 per cent. Once available, Canadians wait an average of two years to access new medicines through public drug plans, following Health Canada approval, with wide inequities across provinces and territories.
That vulnerability is now being exposed. Today, it’s the Trump administration’s drug pricing approach. Tomorrow, it could be something else—another global policy shift, another economic shock, another reordering of investment priorities. Until Canada strengthens its own foundations—until our drug prices, access timelines, and investment environment are globally competitive—we will remain exposed to forces beyond our control.
The consequences of inaction are stark. Canada becomes a lower priority market for new medicines. Launches are delayed. Patients wait longer. Overburdened physicians and hospitals shoulder even more strain as preventable complications increase. People stay sick longer, struggle to return to work, and are forced to place greater pressure on the primary care and hospital systems.
This scenario is neither acceptable nor inevitable. A 2025 study by Dr. Frank Lichtenberg at Columbia University found that sustained investment in innovative medicines reduced hospital days in Canada by 55 per cent in 2022—saving close to $80 billion in hospital costs. Innovation doesn’t just improve health outcomes; it makes the entiresystem more sustainable.
There is also a significant economic dimension. Canada’s innovative pharmaceutical sector is an economic engine that supports more than 110,000 jobs across the country and contributes $18.4 billion annually to the economy. Decisions about where to conduct clinical trials, where to invest in research and development, and where to launch new medicines are global and highly strategic. Companies look for markets that are predictable, timely, fair, and committed to innovation.
Canada has what it takes to be competitive. We have world-renowned scientific expertise, strong academic institutions, and ideal conditions for clinical trials. What we lack is a bold, coordinated, and forwardlooking strategy that matches our potential.
Other countries are moving decisively in response to the new U.S. drug pricing approach. The U.K. has already reached a bilateral agreement with the U.S. Others are actively strengthening their life sciences ecosystems, modernizing access pathways, and signaling thatinnovation is welcome.
Canada cannot afford to “wait and see” what happens south of the border. Global drug pricing pressures are here to stay. The only durable solution is a made-in-Canada approach—one that protects patients, safeguards innovation, and positions us as a trusted partner in global health.
Collaboration between governments and industry is key. We must come together and act—now. Innovation Medicines Canada (IMC) calls on the federal government to:
• Commit to incremental increases in federal funding for new medicines;
• Provide incentives that accelerate access to new therapies across all provinces and territories; and
• Ensure the life sciences sector has a seat at the table during the upcoming review of the Canada-United States-Mexico Agreement (CUSMA) and parallel bilateral discussions.
Industry stands ready to co-create and support these government solutions. The decisions we make in the coming months will shape our ability to care for Canadians—and compete globally—for years to come.
Prime Minister Carney has shown that Canada can lead with confidence on the global stage. We now need to replicate that leadership at home. Pharmaceutical innovation isn’t a cost to be minimized; it’s an investment in Canada’s health security, economic resilience, and global competitiveness.
Middle powers don’t become leaders by default. They become leaders by choosing to be. Canada has that choice—right now.
Dr. Bettina Hamelin is the President and CEO of Innovative Medicines Canada, the national association representing Canada’s innovative pharmaceutical industry.
