pharma2-1201

Quebec subsidies have drawn pharmaceutical companies to the province, but the industry has been losing jobs. ((Associated Press))

Quebec's heavily subsidized brand-name pharmaceutical industry is shedding research and development jobs by the hundreds, a CBC investigation has found.

Quebec has lost 1,200 pharmaceutical research jobs since 2008, when the booming sector peaked at 2,300 jobs.

Experts point to loss of venture capital due to the economic slowdown for slowing the flow of money to the biotech sector.

The most high-profile blow to Quebec's pharma strategy is the shuttering this fall of the Merck Frosst Centre for Therapeutic Research in Kirkland, in the city's West Island, where the company made some of its most successful products.

Forty researchers accepted transfers to Merck labs in the U.S., and another 140 researchers lost their jobs.

Former Merck researcher Carl Berthelette took a termination package to set up his own company in 2009, a year before Merck announced the closure.

Berthelette said that when he got his master's degree in science a decade ago, he sent his resumé to just four drug companies in Montreal.

"I get four interviews, I get four job offers," Berthelette recalls. "But it is not the same game anymore."

Quebec continues to invest millions

Despite the loss in jobs, Quebec's Minister of Economic Development Clément Gignac said the province's investment in "big pharma" is still paying off, and Quebec could even increase grants and subsidies in the near future.

The province has introduced an array of incentives to keep the Canadian headquarters of most research-based pharmaceutical companies in Montreal and attract new research and development.

Quebec is the only province to operate under a 15-year rule committing to avoid lower-cost generics until a brand-name drug has been on the market for 15 years.

By Gignac's own admission, that incentive alone costs the province $165 million a year in higher drug prices.

In addition, for every dollar a Quebec-based pharmaceutical company spends on research and development, provincial taxpayers pay about two-thirds as a result of tax subsidies.

"We are a little bit more open-minded, or generous. Call it what you want," said Gignac. "But, if you go to the five biggest research centres in Canada, four of them are located in Quebec. I think our business model is working pretty well."

Times have changed: former Merck researcher

While Berthelette said other former co-workers have started up their own bio-pharmaceutical startups, an expert in Canadian pharmaceutical policy said overall employment in the sector has declined significantly.

Carleton University professor Marc-André Gagnon said the recession and the flight of venture capital are to blame. 

A $135 million direct subsidy program over three years put in place by Quebec earlier this year to boost new biopharm research has not turned that around, he said.

Gagnon said the provincial government's generosity toward the industry doesn't make any sense.

"If we do not have this R&D investment, there is no reason we should continue to provide these generous policies, artificially increasing the cost of the drugs," said Gagnon.

Gagnon said Quebecers already pay more for drugs than anywhere else in Canada, and Canada is ranked third for drug prices worldwide, after the U.S. and Germany.

With files from the CBC's Loreen Pindera