Canada’s Investment in Health Innovation: The Need for a Balanced Portfolio

Innovation is considered a crucial enabler to enhance healthcare performance and quality for Canadians while supporting health system sustainability and driving economic growth. Canada has many assets that can be leveraged to advance the innovation agenda in health systems, including a highly educated population and being a top knowledge producer worldwide. Yet, Canada ranks in the bottom quartile of developed countries for adopting innovation to support health system performance and economic growth compared to other OECD countries. Accelerating the adoption and scale of Canadian products, technologies, and innovations hold the potential to not only strengthen healthcare delivery, but also spur economic growth through job creation, as product sales increase and companies expand into global markets. Highly successful Canadian companies in the health sector drive wealth creation that supports publicly funded health systems, and positively positions the Canadian economy in global health system markets worldwide. So how is it possible that Canada is a top knowledge and innovation producer, yet our companies remain challenged to get their innovations adopted by Canadian health systems to achieve market growth?

This project reviewed Canadian investments in innovation to better understand Canada’s lack of progress in commercializing and bringing health innovations to domestic and global markets. The project team reviewed all programs and organizations, with online presence, identified as supporting health innovation through various mechanisms such as funding, research, capacity building, relationship brokering, and policy analysis. This study analyzed the mandate and distribution of innovation programs and investments across provincial and federal jurisdictions in Canada. The analysis strategy was to review all publicly available information on innovation organizations in the country to determine what innovation organizations exist, where and how they are funded, and what the innovation mandate is for each organization. The data was then mapped along the Innovation Adoption Journey (Ontario Health Innovation Council, 2016) to examine where investments are being made along this continuum from early discovery to dissemination and scalability of innovation across health systems. Each organization identified was placed on the continuum based on the best alignment of the organization’s mandate to the specific phases of the innovation journey. For example, organizations that invested in discovering new knowledge were placed at the earliest part of the innovation journey – discovery of new ideas and identifying health system needs and priorities, which includes discovery-focused initiatives to solve or address health system priorities and needs.

The following key findings can be used to inform and support future investments to accelerate health innovation in Canada. A review of federally funded programs revealed that less than 20% ($1.32B) of total federal innovation program funding identified through public sources was focused on health sector innovation. Federal funding across all innovation programs and all sectors totalled approximately $6.75B. Approximately 95% ($1.3 billion) of this funding was allocated to programs supporting research and development focused on the discovery phase of innovation, such as new therapies, new treatments or new technologies, and while only ~3% ($42 million) was focused on pilot testing, commercialization and early adoption of new innovations. Approximately two percent of federal funding was allocated to programs focused on partnership and capacity building to stimulate adoption of innovative products. There were no federal programs identified that focused on diffusing, scaling, and widespread adoption of innovation.

From a provincial and territorial funding perspective, British Columbia and Ontario demonstrated the highest level of investment into the research and development phase of the innovation journey. In Ontario, the majority of programs identified were focused on research and development, followed by pilot testing and commercialization and significantly less funding was allocated to other phases of the innovation adoption journey. Saskatchewan and the Northwest Territories were the only two jurisdictions identified with a funding focus on dissemination and scalability of innovations. Innovation programs and organizations in smaller provinces and territories (Newfoundland, Prince Edward Island, New Brunswick, Nunavut, and Yukon) tended to have a more dominant focus on programs that funded capacity building and strategic partnerships in health system innovation.

These findings offer insights into where Canada is investing in innovation – primarily the discovery and development of new technologies, new products and new approaches to managing disease. There are significant gaps in funding to get innovative products adopted and scaled across health systems. These findings also provide information and evidence to decision-makers and program leaders who are making investment decisions. A more “balanced portfolio” of investment by Canadian government’s focussed on supporting implementation, adoption and scaling of innovative products and technologies emerging from the programs funding development and commercialization would support Canadian companies to accelerate their market growth strategies and more rapidly achieve economic value. A balanced investment of funding throughout the continuum of innovation from idea to adoption and scalability across health systems could overcome the Canadian challenge of getting innovative products to market and improve economic growth.