Patients to 'lose out' under transtasman drug body

By KEVIN TAYLOR, political reporter

The Government's drug-buying agency warns that a new transtasman regulatory body will favour the industry at the expense of New Zealanders' access to medicines and "to the detriment of patient safety".

The January memo to Pharmac's board also warned of a "massive escalation" in the cost of registering generic or cheap drugs - from $8000 to more than $100,000 an approval.

Cost increases by the new joint therapeutics agency would be passed on to consumers or limit the range of medicines that companies would be prepared to register in New Zealand, the memo said.

The warnings have horrified Green and National MPs.

The memo, obtained by the Greens under the Official Information Act, has reinforced concerns about the impact of the new agency.

In December, concern was raised about how it would hit the $200 million-a-year supplements and alternatives industry.

That month the New Zealand and Australian Governments agreed to establish the agency from July 1 next year, although legislation is also required.

Yesterday, the health select committee finalised a report examining the agreement.

It will be tabled in Parliament today.

All other political parties have expressed concern about the matter, potentially embarrassing the Government as it tries to get the numbers to pass the legislation.

The memo said the "massive escalation" in the cost of registration could result in a "dramatic change in the viability of some products, resulting ultimately in companies not bringing them into the market".

The risk of a user-pays agency was that regulatory decisions would favour the drug industry "at the expense of New Zealanders' access to medicines, and to the detriment of patient safety".

Health Minister Annette King referred the Herald's questions to the Ministry of Health.

The agency project team leader, Susan Martindale, rejected Pharmac's claims.

"I don't see that we are talking about a risk of detriment to New Zealanders' access to medicines."

A properly resourced agency, she said, could provide quicker access to innovative new medicines than now.

Dr Martindale said drug registration fees would rise even without the new agency, as they were set in 1991 and no longer covered costs.

She said Pharmac was wrong in saying generic drug approvals in Australia cost more than $100,000. The cost was about $65,000.

Green MP Sue Kedgley said the memo proved everything the Greens had been saying.

"It calls into question why on earth we would consider going into this joint agency," she said.

"Serious questions need to be asked about why the Government seems hellbent on joining the agency when it is clearly not in the national interest of New Zealand to do so.

"Is there some hidden agenda here, or have officials advising the Government failed to properly inform the Government about the real risks of joining an agency?"

National's associate health spokesman, Paul Hutchison, said he was surprised and worried by the memo's tone and content.

State of play

Transtasman drug regulation agency:

* Is being formed next July to regulate drugs and health supplements, after the New Zealand and Australian Governments signed a treaty last December, worrying the $200 million-a-year supplements and alternative medicines industry.

* Pharmac has now joined the chorus of warnings about the agency's impact on mainstream drug approvals - just as a parliamentary select committee finishes a report on the treaty and political support for legislation looks shaky.