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Realizing an ROI on our Investment in Healthcare The healthcare industry is made up of many sectors that play an important part in the economy and contribute significantly to a country’s GDP. Sectors include direct care providers, insurance, and medical device and pharmaceutical manufacturers. A strong healthcare industry can increase employment opportunities, capital investments, and importation of tax revenue from exports at all government levels. As a way to further grow our healthcare industry, overall economy, and to compete globally, Canada is realizing its strengths and capitalizing on its capacity to support a growing medical technology (medtech) sector. Canada has established strong resources to support domestic health innovation including federal tax incentives to support research and development (R&D), capacity for collaboration between entrepreneurs and post-secondary institutions, clinical trial capacity, and a highly-educated population. The federal government has billions of investment dollars available to the healthcare industry, but the majority of the funds and infrastructure target medtech companies in the incubation/ startup phase. According to Invest in Ontario, the province spends $665 million on R&D in the life sciences sector with almost 9,000 people employed within R&D. All of this has resulted in an extremely strong ecosystem for medtech startups, but a lack of resources and infrastructure for domestic innovators looking to scale, become anchor firms, and strong contributors to the economy. As a medtech company, hurdles to commercialization are much more significant than in other industries. They include access to more capital, commercial talent with industryspecific knowledge, approval by regulators, and product development under quality control. Without the support to scale, many medtech companies leave Canada to access funding and infrastructure in more established ecosystems south of the border, or accept mergers/acquisitions well before they reach their full potential. As an example, over the last 20 years, 11 Quebec-based life sciences companies have been acquired by mostly US foreign entities removing them from the succession of becoming Canadian medtech anchors that are essential in attracting capital, talent and keeping IP in the country. This is a blow to the investment that all levels of government made in the innovation and potential of each medtech company. So, how can we as a community, province, and country, begin to realize our return on investment (ROI) into medtech startups by having them stay and scale here in Canada?
As a member of Canada's Economic Strategy Tables: Health and Biosciences, we developed five areas that need to be addressed to begin to realize our ROI and for Canada to become a top global hub and competitor for life sciences. • Increase late-stage capital within Canada to stop the exodus of startups to the US or premature mergers/acquisitions • Expand the healthcare system’s outlook from short-term focus on cost, to broader considerations of value to increase domestic procurement • Break down the silos within the healthcare system to enable the collection, connection and analysis of data needed to inform innovative decision making • Increase the sector’s competitiveness with more executive level talent • Simplify complex regulatory, reimbursement and procurement processes At Intellijoint Surgical we believe that health care is more than just business. It is about enabling the best possible delivery of care and outcomes for a patient. As a company that evolved from a fourth year engineering design project at the University of Waterloo, we were determined to stay and grow in Canada despite the pressure to move to the US to access more funding and be closer to our customers. We believe that Canadian patients deserve to benefit from home-grown innovation. Innovation that their tax dollars helped fund. In response to managing this resource gap firsthand, and hearing from many medtech startups I mentor within Waterloo Region, Intellijoint Surgical spearheaded the creation of Medical Innovation Xchange (MIX) in 2019. MIX is Canada’s first industry-led innovation hub dedicated to providing a collaborative environment and infrastructure for Canadian medtech companies that support their individual growth and contribute to the overall success of the local ecosystem. We believe that this is the first of many steps to reduce the barriers and bridge the resource gap. We are excited for how the current conversations between public and private sectors will evolve and how Canada’s healthcare sector will grow and benefit everyone, especially patients. ABOUT THE AUTHOR
Armen Bakirtzian Armen Bakirtzian is CEO & co-founder of Intellijoint Surgical, a medtech company focused on improving patient outcomes in joint replacement surgery. Armen is passionate about influencing and growing the Canadian medtech industry and seeing Canadian patients benefit from made-inCanada innovation. advocate May | June 2020
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