Drug row threatens research

By SIMON COLLINS science reporter

Some of New Zealand's brightest scientists may be forced to leave the country after a shock decision by drug company Pfizer to cancel a $40 million research contract with the Auckland Cancer Research Centre.

Sixteen cancer researchers at the centre and two at Auckland University's School of Biological Sciences, all with doctorates, face the chop unless the university can find new funders to replace Pfizer before the end of the year.

Three-quarters of the researchers are New Zealanders who went overseas for post-doctoral work and were recruited by the centre to bring their skills home.

The team makes the unit among the world's top 10 academic cancer research centres in terms of producing potential anti-cancer drugs, with seven drugs that have gone into clinical trials.

Pfizer and its predecessors have been the centre's biggest commercial partner for 25 years. Its research contract, worth $4 million a year for 10 years, paid between a quarter and a third of the centre's total budget, funding work on both anti-cancer and anti-bacterial drugs.

Centre director Professor Bill Denny said yesterday that he was determined to keep the team together, but it would be "a tall order" to achieve that.

"We have so far never let anyone go that we didn't want to, and I don't want to start now," he said.

"If New Zealand is ever going to have a biotechnology industry, you have to have a number of centres of skills. While we have specialised drug design skills, they are skills of benefit to a burgeoning biotech industry."

The president of industry group New Zealand Bio, Jim McLean, said the research centre and the biotech industry had been "caught in the middle" of a dispute between drug companies and the Government over something completely different - the price of drugs.

Pfizer's New Zealand manager, Mark Crotty, said the company did not want to punish the cancer researchers for the Government's drug pricing policy.

"We are not trying to punish anyone," he said.

"We are looking from a business perspective - how can we continue to support this research investment in New Zealand without an improvement in the overall operating environment?"

Pfizer and other "big pharma" companies have threatened for years to pull out of New Zealand because of drug-buying agency Pharmac's policy of setting a standard price for all drugs in each group based on the price of the cheapest drug available.

Two years ago, Pharmac said it would set prices for "statins", which lower cholesterol levels in people at risk of heart attacks, at the price of a drug called Lipex, or Zocor, when its contract for Pfizer's statin drug Lipitor ended on the first of next month.

Lipex's patent expired in 2002, allowing anyone to make it without paying royalties to the company that developed it. Merck Sharp and Dohme now makes the drug.

Pharmac spokesman Simon England said the decision would cut the price Pharmac paid the drug companies for a basic statin prescription from $19.21 for 10mg of Lipitor to $13.50 for the equivalent 20mg of Lipex, saving taxpayers $18 million over five years.

But the decision would force 23,000 of the 40,000 New Zealanders taking Lipitor to either switch to Lipex or pay the price difference out of their own pockets for Lipitor from June 1.

The other 17,000 people will stay on Lipitor. They will not pay any extra initially, but Pharmac has told doctors it may review this in August if Pfizer raises its wholesale price.

Auckland cardiologist Dr Harvey White said that on past experience, 64 New Zealanders would have a heart attack, suffer a stroke or die as a result of the decision.

That happened when Pharmac forced people on to another cheap drug, fluvostatin, in the late 1990s.

"They made a mistake with fluvostatin. New Zealanders had strokes and heart attacks because of it.

"I am calling on them to lay out who is responsible for these events. Will Pharmac be responsible? What are their plans for audit?"

But Pharmac medical director Dr Peter Moodie said there would be no audit because Lipex was "an internationally recognised drug which has more evidence around it than any other statin".

National Heart Foundation medical director Dr Norman Sharpe said he accepted that the health budget had to be "rationed".

"We are settling for a very good drug, perhaps not a gold-plated standard," he said. "We may be missing out one little bit at the end, but it's a reality when we can't fund a whole lot of other things."

Professor Denny said the Cancer Research Centre would look for other funders to fill the gap left by Pfizer.

"We have a number of options. We have options with granting agencies in New Zealand and overseas - we have a significant contract with the National Institutes of Health National Cancer Institute in the US," he said.

"There are global alliances which set research in different areas, we'll be looking at those. There are small biotechs which need medicinal chemistry. And we don't rule out looking at a major pharma."

Pfizer's reach

* Pfizer is the world's biggest drug company and the fourth-largest company of any kind.

* Its cholesterol-lowering drug Lipitor is the world's top-selling drug. Other products include cortizone and Viagra.

* Pfizer employs 130,000 people worldwide, equivalent to 6 per cent of New Zealand's workforce of just under 2 million.

* Its worldwide revenue in NZ dollars last year was $74 billion, almost twice as much as New Zealand's total exports of goods and services ($40 billion).

* The company spent $12 billion on research and development, more than eight times the $1.4 billion spent on R&D by New Zealand's public and private sectors combined.

* Its contract with the Auckland Cancer Research Centre was Auckland University's biggest research contract, worth US$40 million ($66 million) over the next 10 years.