Law Change Boosts Export Of Clinical Research

MEDIACOM-RELEASE - MERCK-SHARP-&-DOHME

Law Change To Boost Export Of Clinical Research Services

Pharmaceutical company Merck Sharp & Dohme (NZ Ltd) has welcomed a proposed GST law amendment, saying the change will remove a significant disincentive to the development of a valuable export market for New Zealand clinical research services.

The change - the zero rating of GST on clinical research services which are exported - is included in the Taxation (Annual Rates, GST and Miscellaneous Provisions) Bill, currently before the Finance & Expenditure Select Committee.

"This GST change is a small example of the leadership role politicians and policy advisors can play in building the knowledge economy we all want in New Zealand," Merck Sharp & Dohme managing director Alister Brown said in an oral submission to the committee today (4pm, Wednesday 2 August, 2000).

"It is a useful step in the right direction - and we would like to thank those officials and MPs who have played a part in its inclusion in the Bill."

Merck Sharp & Dohme currently spends in excess of $2.5 million researching new medicines in New Zealand - about 20% of the pharmaceutical researchin this country.

"The product is data. It is produced using the intellectual services of highly qualified New Zealanders and exported to our company's research division," Mr Brown said.

"The removal of GST on the export of clinical research services is essentially the removal of an export disincentive. It has significance for our company, our sector and we believe New Zealand's future economic health in a global knowledge economy."

Mr Brown said the change will boost Merck Sharp & Dohme's NZ research budget by an additional 12.5%, roughly $300,000, which the company would reinvest in further research in New Zealand.

An additional tertiary-qualified research administrator would be hired, and new money spent employing the services of health sector professionals in the field.

"Perhaps more significantly, the removal of this disincentive will make our subsidiary more competitive as we bid for new research contracts from our parent company. The market is increasingly competitive, however, and we are now bidding against formidable new entrants, from South America and Asia in particular."

Mr Brown said new medicine research created employment in the regions as well as major cities - with current MSD research spread across study sites in Timaru, Rotorua, Tauranga, Hamilton, Nelson, Christchurch, Wellington and Auckland. Twenty one studies are currently taking place at 37 sites, employing 191 people (such as physicians, co-investigators, study nurses and pharmacy technicians) in some capacity.

"It's our view that a sound strategic ten year view for New Zealand's success as a knowledge-based innovative economy should include targeting medical research as a growth industry," Mr Brown concluded.

(please note Mr Brown and MSD's Medical Director Dr David Woolner are due to address the Finance & Expenditure Select Committee at 4pm today)

Background information:

Current areas under research in New Zealand by Merck Sharp & Dohme include medicines for arthritis, cholesterol in adults and children, heart failure, unstable angina, osteoporosis, pneumonia and HIV/AIDS.

Likely future areas for research here include treatments for diabetes, Alzheimers, colon cancer, depression and anxiety, obesity and possibly an HIV/AIDS vaccine, amongst other conditions.

Merck Sharp & Dohme (MSD) is the NZ subsidiary of Merck & Co., a global, research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products. MSD was established in New Zealand in 1962, and has been in its current headquarters in Wiri, Manukau City since 1971. The company employs more than 90 New Zealanders in a variety of sales and marketing, clinical research, regulatory, policy, customers services and administration roles.

Merck & Co. employs 5,500 scientists worldwide and has discovered and developed more breakthrough medicines than any other institution - public or private - in the last 50 years.

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