Lyprinol firms admit guilt

The two companies that launched Lyprinol in New Zealand last year, amid claims that it was a possible cure for cancer, have been successfully prosecuted.

Drug manufacturer Pacific Pharmaceuticals and Lyprinol New Zealand have both pleaded guilty to charges of selling the green-lipped-mussel extract as a medicine without official consent.

The companies have also also admitted publishing material that claimed Lyprinol would fight cancer or arthritis.

"This is an industry message we're hoping to send that companies need to be careful how they position their products," a Ministry of Health spokesman, Steve Anthony, said after Lyprinol NZ appeared in the North Shore District Court yesterday.

"Here we have two companies who positioned Lyprinol in the market as a possible cure for cancer and the consumer was led to buy it for that purpose."

News of Lyprinol's potential to fight cancer was revealed by an Australian hospital days before the two companies launched the product on to the New Zealand market in July last year.

Reports on One News and in the Herald about Lyprinol's lifesaving potential led to a sales bonanza, with consumers spending an estimated $1 million in one day on the $49.95 packets of 50 capsules, manufactured in Australia.

The ministry investigated the launch by Pacific Pharmaceuticals, the Lyprinol distributor, and Lyprinol NZ, the product's importer.

It described it as a cynical marketing ploy.

It found that the companies had breached the Medicines Act by making medicinal claims about Lyprinol on an information website without proof.

The companies had also been aware of the media release by Queen Elizabeth Hospital in Adelaide before the launch, and that the publicity was likely to generate high sales.

"The weight of support from Queen Elizabeth Hospital will be quite remarkable and there will be plenty of meat for the press to get their teeth into," Lyprinol NZ director Kennedy Westland Garland said in a fax to Pacific before the launch.

In the district court yesterday, Lyprinol NZ pleaded guilty to one charge of illegally selling and advertising the product - an offence which carries a maximum fine of $100,000. The company also admitted one charge relating to the illegal publication of material, which has a maximum penalty of $500.

Ten other charges laid against the company, Mr Garland and joint director Richard Frank Waitzer were dropped.

The company is yet to be sentenced because the ministry is appealing against a $5150 fine, relating to two similar charges, imposed on Pacific Pharmaceuticals last month in the North Shore court.

Mr Anthony said Pacific's fine was "manifestly inadequate" and the ministry, represented by crown prosecutor Morag McDowell, would appeal against it in the High Court. Lyprinol NZ's penalty would depend on the outcome.

Although Lyprinol NZ entered a guilty plea yesterday, lawyer Frank Hogan said outside the court that the company did not accept any direct responsibility for the website material as it had been developed by Lyprinol's parent distributor, Pharmalink, based in Australia.

"Unfortunately, they've had to wear the shortcomings of the parent company," he said.

Pacific Pharmaceuticals' sales manager, David Willis, later said that, while the company had referred consumers to the website, it had no responsibility for it or knowledge of the information linking Lyprinol to cancer or arthritis.

"If you could take us back in time when Lyprinol approached us to distribute it, I would have sent them packing," he said.

Pacific is still distributing the product under a new brand name, HPME (Highly Purified Marine Extract), with Lyprinol NZ no longer involved.

Mr Willis said around 300 packets of HPME were sold in New Zealand each month.

Queen Elizabeth Hospital is continuing to test Lyprinol as a treatment for prostate and breast cancer. The trials, due to be completed within the next three years, are expected to involve 100 cancer sufferers.

Scientist Dr Henry Betts, who made the original claim that Lyprinol was a possible cancer treatment, said no conclusive evidence had come from the 10-month trial so far. However, he said, there was plenty of anecdotal evidence that Lyprinol was an effective treatment for cancer.

The backlash following the publicity had been "extraordinarily difficult." The hospital had received 20,000 phone calls in two weeks and a South Australian Government inquiry was still under way.