Investment in Canada as viewed from a U.S. boardroom

Although firm in its belief that Canada provides a very favorable business environment, Warner-Lambert Co. balks at investing in research and development because of Canada's compulsory patent licensing laws. Warner-Lambert Canada is the parent company's largest international affiliate, with 1,400 employees and 1984 sales of $200 million. Since 1980, Warner-Lambert Co. has made substantial capital investments in the United Kingdom, Germany, Japan, and the U.S., but plans to invest in Canada have been continually put off, in spite of cost advantages and tax incentives. Researching a new drug can take ten years and cost $90 million, so foreign investment in research in Canada will only expand when conditions are changed so that costs can be recovered.