Higher education and industry sectors fuel major increases in health R&D spending

Health R&D is growing at a much faster rate than total R&D in Canada due in large part to spectacular increases in spending by the nation’s medical schools and health research institutions. Health gross expenditures on R&D (GERD) increased by an estimated 11.2% in 2001 to $4.237 billion. In contrast, overall GERD grew 9.1% in 2001 to $20.7 billion. Health GERD now accounts for 20.5% of overall GERD, compared to just 13.5% in 1988.

The previous year (2000) saw even more impressive growth in health R&D outlays, when it rose 16.8% to $3.811 billion, while total GERD grew10.9% to $19.0 billion. The data was contained in the latest bulletin on R&D spending in the health field by Statistics Canada.

Although health R&D spending in the higher education sector is responsible for much of the growth in recent years, its share of the total has declined over the past 14 years — the period covered by the report.

Higher education nearly tripled from $895 million in 1988 to an estimated $2.527 last year, giving universities and their affiliated health research hospitals and institutions a 56.6% share of total health R&D spending. That’s down from a 73.3% share in 1988 when the sector spent $895 million out of a total of $1,221 billion.

But the real success story in the same 14-year period is the performance of industry. Industrial R&D spending increased nearly seven-fold during that time, increasing from a meagre $196 million in 1988 to $1.366 billion in 2001. Industry’s share of the total during that period increased from 16% to 32.2%. Much of that increase is attributable to changes to Canada’s patent legislation, attracting R&D operations of foreign multinationals to Canada.

The higher education and business sectors are also the largest funders of health R&D. In 2001, higher education was the source of $1.233 billion in funding, closely followed by industry, which provided $1.149 billion. The federal government contributed $674 million, followed by foreign sources ($507 million), private, non-profit organizations ($395 million) and provincial governments ($27 million).

Industry spending was largely in-house ($887 million) but it also accounted for nearly 10% of the total spent by the higher education sector ($237 million). Business also provided $25 million to private non-profit groups.

Statistics Canada’s data do not give regional breakdowns for health R&D spending except for spending in the higher education sector, and the information dates from 1999. In that year, Ontario institutions accounted for $708.1 million or 39.7% of the $1.785 billion total for that year. It was followed by Quebec ($552.7 million), Alberta ($199.9 million), British Columbia ($127.4 million) and Nova Scotia ($71.8 million), Manitoba ($53.8 million) and Saskatchewan ($43.5 million).

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