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In BMI's Business Environment Ratings (BERs) for Q410, Canada remains in second place in the expanded regional matrix, trailing the US by around eight points. Globally, Canada ranks third of the 83 markets surveyed, after the US and now behind Australia. Despite a tightening cost-containment environment, provincial variations regarding drug approvals and subsidies and the country's appearance on the Priority Watch List in the 2010 submission of Special 301 report, Canada will remain one of the most attractive pharmaceutical markets on a worldwide scale, in part due to its high per-capita spending on medicines, which topped US$629 in 2009, as well as population expansion and ageing. Having been valued at CAD24.2bn (US$21.2bn) at consumer prices in 2009 and accounting for around 12% of the country's GDP, the Canadian pharmaceutical market is forecast to post a compound annual growth rate (CAGR) of 4.34% in local currency terms, reaching CAD29.9bn (US$26.0bn) in value by 2014. Growth over the 2009-2019 period will slow to 3.09%, although in the latter parts of the forecast the patented medicines segment should be boosted by the use of more personalised therapies and novel medicines. Generics, however, will post the strongest five- and ten-year CAGRs, at 8.34% and 6.12% in local currency terms, respectively, to reach CAD14.9bn (US$13.0bn) in 2019 values. However, Canada's healthcare system is facing serious challenges in terms of affordability and accessibility, as well as failing to meet the medical needs of Canada's changing demographics, according to a report released by the Canadian Medical Association (CMA) in August 2010. The country's healthcare system is increasingly being recognised as inadequate for the long-term needs of the population, and extensive reforms are being proposed ahead of the renegotiation of the current Health Accord, which is set to expire on March 31 2014. First Ministers have described the current level of spending on prescription drugs in the National Pharmaceutical Strategy as 'catastrophic', which is expected to lead to some policy changes and further cost-containment initiatives. To this end, the British Columbia government recently announced that the prices of generic drugs covered by PharmaCare are to be reduced to 35% of the price of their branded counterparts. Market growth opportunities for the out-of-pocket segment will, however, remain limited, given the outlook for a modest growth in private consumption levels and the anticipated slowdown in GDP growth over the medium term. Despite having one of the strongest fiscal positions in the developed world, austerity has become the watchword across Canada, with Ottawa and the provinces cutting back spending. In line with a trend that is beginning to prevail across the developed world, Canadian Finance Minister Jim Flaherty reiterated during the G20 meetings in Toronto in June 2010 that the government remains set on eliminating the deficit by 2014 'or so'. In the meantime, as the Canadian consumer has proven extraordinarily resilient despite external headwinds emanating from the United States, we recently upgraded our 2010 real GDP growth forecast for 2010 from 3.1% to 3.3%, though we are still pencilling in a slowdown in 2011 to 2.4%, in line with our global outlook.