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Government confusion forces $10 million loss

The only New Zealand owned and operated pharmaceutical manufacturer, Douglas Pharmaceuticals, late last week closed its distribution centre in Christchurch resulting in four workers being laid off.

The redundancies, the first in the company’s 32 year history are, says Jeffrey Douglas, director of Douglas Pharmaceuticals, “a direct result of the government meddling in business and confusion stemming from clearly contradictory policies.”

On the one hand, says Douglas, government is actively encouraging regional investment and New Zealand enterprise via the Ministry of Economic Development. On the other, he says, the proposed decision to continue to make the government’s drug negotiating agency, Pharmac, exempt from the Commerce Act is clearly “sending mixed messages and causing, in our case, which is unique, more than just concern.”

“It’s a tragedy to have to do this to loyal staff, two of whom had been with us for 14 years. It’s a tragedy, also, that after years of being able to develop and market our own brands of pharmaceuticals to the New Zealand medical industry, this opportunity and all the intellectual property developed is now lost,” he said.

Decisions such as this, says Douglas, always come down to commercial realities.

“Thanks to the government’s move to grant major pharmaceutical product-supply tenders for three-year terms to offshore interests, our local business operation has been directly affected,” he said.

Sadder than the closure of his company’s Christchurch operation, says Douglas, is the continuation of policy “plunging New Zealand into the status of a ‘third world nation’ with regard to medicine availability.

“Competition is one thing and something we’ll always support. But how can you compete fairly when the government drug buying agency is exempt from the Commerce Act and yet rewriting commerce rules,” questioned Mr Douglas.

“The facts are that because of this untenable situation the New Zealand consumer is the ultimate loser—despite what some might say about the benefits of Pharmac’s ‘lowest price wins’ philosophy.

“There is now an economic and social cost being paid by confused policy. The question has to be asked as to how long this method of commercial decision making is sustainable and what the true cost will be as a result on secondary medical care in New Zealand,” he said.

Douglas Pharmaceuticals is the only New Zealand pharmaceuticals manufacturer owned and operated by local interests. As well as producing medicines under its own label, Douglas Pharmaceuticals acts as a distribution and marketing agent for international pharmaceuticals companies.

For further information please contact:
Jeffrey Douglas Penelope Barr
Director General Manager
Douglas Pharmaceuticals Beyond Public Relations
Telephone: (09) 835 0660 Telephone: (09) 306 1804
Facsimile: (09) 835 0665 Facsimile: (09) 302 7169
Mobile: 021 302 700 Mobile: 025 835 383
Email: jeffd@douglas.co.nz Email: peneb@beyondpr.co.nz

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