PHARMAC considers action over contract breach

PHARMAC Media Release

PHARMAC looks at legal action over drug company contract breach

PHARMAC says it is consulting its lawyers over a drug company’s decision to breach its contract and withdraw its antidepressant citalopram (Cipramil) from the New Zealand market.

PHARMAC General Manager Wayne McNee says while there are relatively few patients involved – approximately 2,500 out of a total of a quarter of a million people taking antidepressants each year – the company’s announcement that it is withdrawing the drug is just not on.

“We have a signed contract with the company, Lundbeck, and expect them to honour that contract.”

He says Cipramil has only been here for under a year. Lundbeck, a multinational company, set itself up in New Zealand at that time to market the drug that is one of the newer antidepressants and in the same therapeutic sub-group as drugs such as fluoxetine.

Late last year PHARMAC announced changes to the pricing of drugs in this group following an agreement with Douglas Pharmaceuticals to provide a generic fluoxetine, which will cost the taxpayer 60 percent less than what they are currently paying.

The new pricing begins taking effect from February 1.

“PHARMAC has a contract with Lundbeck to supply citalopram (Cipramil) which includes an agreement to accept this price drop. In fact, in November they gave a public undertaking that they would accept the price change.

“It seems that Lundbeck has been wrong-footed by the market leader deciding to top up the subsidy for patients on its two drugs so there will be no surcharge which means that citalopram will not now reap more sales.”

Wayne McNee says PHARMAC is naturally very disappointed that an international company such as Lundbeck has decided that it will turn its back on its contractual obligations to New Zealanders – “we are therefore considering our legal options.”

“Allegations may be made that PHARMAC’s policies are too tough. We are proud to be tough – our job is to get the best deals possible for New Zealand patients and taxpayers.”

He says companies make their own commercial decisions. For example, international mergers of drug companies have brought closures and rationalisations in many countries in the past.

Wayne McNee says the Lundbeck u-turn is unacceptable. “The company has decided it doesn’t like the game any more and is taking its ball and going home, but that is not how we think suppliers of medicines should behave.”

Ends

For further information contact: Wayne McNee 021 436 429

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