Chosen words turn pill-pushers into biotechnology partners

By Deborah Hill Cone

Friday 21st June 2002

Pete Hodgson

The pharmaceutical industry's softly, softly approach is paying off, with Research, Science and Technology Minister Pete Hodgson yesterday signalling drug companies were being rehabilitated from reviled pill-pushers to valued biotech partners.

"There is no advantage for the government to be nasty or gleeful in its relationship with pharmaceutical companies," Mr Hodgson said.

The government was looking favourably at drug companies' pitch for greater involvement in the biotech sector, the minister said.

That makes a change. The pharmaceutical industry was not even represented on the government's biotechnology taskforce until Researched Medicines Industry Association (RMI) chairman Richard Nottage quietly suggested Eli Lilly general manager Mike Harrington might be a useful addition.

And relations between the industry and government have been scratchy for years, with bitter fights over Pharmac's reference pricing and intellectual property protection. That is until this week when the pharmaceutical companies uttered the magic words "knowledge economy."

This week the RMI released a report, Bio-pharmaceuticals: a pathway to economic growth?, which found stronger long-term relationships between the industry and government would encourage R&D investment and the knowledge economy the government is trying to develop.

The local pharmaceutical market is a tiny 0.2% of the international market but, if New Zealand received an equivalent share of international R&D spending, about $120 million would be invested here, the RMI estimates.

The industry spend on R&D is estimated at only $18 million and declining.

Significantly, the RMI report does not dwell on the long-term cause of friction between the pharmaceutical industry and government, reference pricing - drug funding agency Pharmac's practice of benchmarking a price for a drug in a particular therapeutic group.

Instead, the report takes a conciliatory approach, focusing on how the industry can develop long-term relationships as well as suggestions such as better protection and management of intellectual property.

Pharmacia managing director Terrie Curran said that when investing $10 million in Liggins Institute venture Endocrinz her head office looked at issues including whether the local pharmaceutical market was commercially robust.

"If you look at the market here it is declining faster than other global markets," Ms Curran said.

She said research in New Zealand had declined over past decades and she hoped the RMI report would initiate a discussion between government, research clinicians and the industry.

Novartis managing director Andrew Moore said it was wise for the industry to move away from a focus on pricing as in the eyes of the government Pharmac was doing a good job.

'This is not saying we accept and are happy with what's happening [with pricing]," Mr Moore said.

Mr Moore said it was significant there had been changes in the management of pharmaceutical companies since the "original uproar" over pricing.

Meanwhile, the government's biotechnology taskforce had its second meeting in Wellington yesterday and Mr Hodgson said the taskforce might be the appropriate body to look at issues raised by the RMI report.

"The biotech taskforce has a very open agenda. It might be the way forward," he said.

Biotech taskforce chairman Bill Falconer said worldwide a large proportion of biotech research was funded by the pharmaceutical industry.

He was not clear whether the taskforce would be involved in the issues raised by the RMI report.

"We're still at the point of defining the scope of the [taskforce's] work," Mr Falconer said.

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