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Hospital Supply in Jeopardy as negotiations stall

AstraZeneca Media Statement

31 July 2007

Hospital Supply in Jeopardy as Betaloc® CR and Plendil® negotiations stall

PHARMAC’s decision to issue a media statement about the ongoing negotiations with AstraZeneca over Betaloc CR and Plendil ER has confirmed AstraZeneca’s fear that negotiations with PHARMAC have broken down.

Three years ago AstraZeneca negotiated fixed term supply agreements for Betaloc CR and Plendil ER at price levels that are significantly lower than those offered in other markets (40 to 70 percent lower than other established markets). The fixed terms for Plendil ER and Betaloc CR ended on 30 June this year.

For six months AstraZeneca has been trying to negotiate a new agreement that would ensure the long term supply of Betaloc CR and Plendil for New Zealand cardiovascular patients.

Throughout the process AstraZeneca has remained committed to negotiating a successful outcome for patients. As late as 28 June AstraZeneca made an alternative proposal for the supply of a bundle of products, including Betaloc CR and Plendil ER. This proposal:

• ensures PHARMAC makes savings equivalent to the savings it would make by introducing a generic version of Betaloc CR

• gives long term commercial certainty for AstraZeneca

• creates an environment where AstraZeneca and the supplier of the generic version of Betaloc can compete fairly for market share

• creates a more certain scenario for the patient, with certainty of the same medicine.

AstraZeneca’s first indication that negotiations had stalled came when PHARMAC chose not to formally respond to the latest bundled offer and instead sent a letter to doctors on 18 July stating that further negotiations are unlikely to achieve a result. This fear was confirmed last night when PHARMAC issued a media release accusing AstraZeneca of anti-competitive behaviour.

AstraZeneca remains happy to compete with generic suppliers of Pharmaceuticals on a level playing field and does so in a number of therapeutic areas. PHARMAC’s decision to offer a supplier of a generic version of Betaloc a long term agreement but not continue negotiations with AstraZeneca is not consistent with a competitive market.

Therefore, despite its commitment to continue negotiating, AstraZeneca has been forced to consider the commercial implications of PHARMAC’s decision.

A loss of ability to compete against a generic supplier for the majority of the Betaloc business – Betaloc CR – risks the supply of the low price/low volume service item Betaloc IV. PHARMAC has been repeatedly informed, as early as December 2003 and as recently as 23 May 2007, that loss of the Betaloc CR tablet business to a generic competitor would jeopardise supply of Betaloc IV. It is estimated that current stocks of Betaloc IV will be exhausted by the end of August 2007 at the latest.

AstraZeneca remains committed to a successful negotiated resolution to the current solution regarding Betaloc and Plendil ER.

Betaloc IV is used in the initial 24-48 hours post-heart attack period to stabilise the heart or to quickly bring down the heart rate in cases of arrhythmias (irregular heart beats). In an injectable form the medication penetrates quickly in the blood stream & produces its protective effect on the heart faster than with a tablet. This speed is critical in patients suffering from a heart attack. Approximately 3500 patients use Betaloc IV annually.

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For more information please contact Daniel Herd, 09 354 0577 or 027 694 3574

Summary of Products

Betaloc belongs to a group of medicines called beta-blockers. It works by affecting the body's response to some nerve impulses, especially in the heart. As a result, it decreases the heart's need for blood and oxygen and therefore reduces the amount of work the heart has to do. It also widens the blood vessels in the body, as well as helping the heart to beat more regularly.

Betaloc CR tablets1

(Metoprolol succinate controlled release tablets)

Betaloc CR is a controlled release tablet that releases its drug content in a time controlled manner. Controlled release tablets ensure a more even effect over 24 hours.

Betaloc CR tablets are used for:

• lowering high blood pressure, also called hypertension, and to reduce the risk of complications due to high blood pressure such as stroke, heart attack or early death.

• preventing angina (heart or chest pain brought on by stress or exercise in patients with coronary heart disease).

• treating or preventing heart attacks, or to reduce your risk of heart complications following a heart attack.

• treating heart failure (symptomatic mild to severe chronic heart failure in addition to other heart failure medicine), to help increase survival, reduce hospitalisation, improve symptoms, and Quality of Life.

• treating disturbances of heart rate in patients with heart disease, especially rapid heart beat.

• treating symptoms of rapid or irregular heart beat in patients without heart disease.

Betaloc IV2

(Metoprolol tartrate 1 mg/mL injection)

Betaloc IV is approved for use in:

• Cardiac arrhythmias, especially supraventricular tachycardia, reduction of ventricular rate in atrial fibrillation and ventricular extrasystoles.

• Suspected or definite myocardial infarction.

Plendil ER tablets3

(Felodipine tablets)

Plendil ER belongs to a family of medicines called calcium channel blockers. These medicines do not change the way that the body takes in calcium from food.

Plendil ER works by dilating (expanding) small blood vessels, so that blood can be pumped around the body more easily. It has no negative affect on heart function.

The ER in Plendil ER stands for Extended Release. This means that the tablets are designed to work over a 24 hour period

Plendil ER is used to treat high blood pressure (hypertension) and heart and chest pain brought on, for example, by exercise or stress (known as angina pectoris).

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