zoladex.jpegAstraZeneca New Zealand announced that it has reached an oral agreement with the New Zealand government drug-buying agency to continue supplying its prostate and breast cancer medicine Zoladex to the New Zealand market, ending a bad public relations nightmare for both the company and the New Zealand government.

AstraZeneca earlier made the decision to withdraw Zoladex followed a subsidy cut by the Pharmaceutical Management Agency of New Zealand (Pharmac), making the supply of the drug to New Zealand no longer commercially viable.

Pharmac was set up by the New Zealand government to improve the management of expenditure on pharmaceuticals. Pharmac also has a function to promote the responsible use of pharmaceuticals, which includes encouraging optimal prescribing and health outcomes for patients and running patient information campaigns. In this regard, Pharmac manages a list of subsidized pharmaceuticals, the Pharmaceutical Schedule, on behalf of the government.

Pharmac decided to cut by 20% its subsidy on the 10.8 mg three-month dose, which is currently being used by just over half of the country’s estimated 2,000 late-stage prostate cancer patients. In New Zealand, Zoladex and Lucrin are the two drugs available for late-stage prostate cancer patients.

Goserelin (‘Zoladex’) belongs to a group of drugs known as LH-RH analogues, which reduce production of the sex hormones in both men and women. It is a treatment for late-stage prostate cancer and some types of breast cancer. It is the only option currently available in New Zealand that has data from independent clinical trials showing prostate cancer sufferers lives can be extended. The other drug available for late-stage prostate cancer patients in this country was Lucrin, made by Abbott Laboratories.

Abbott Laboratories agreed to the 20% cut for Lucrin as part of a deal where in exchange, Pharmac is to fund Abbott Laboratories’ rheumatoid arthritis drug Humira, and to guarantee security of supply for Lucrin at the reduced price until January 2008.

Critics charged that drug companies just want to extract too much money for their drugs. Drug companies claim that they are just recovering their R&D expenses and that, ultimately, the drug wouldn’t even exist without the ability to sell it for a profit in the end.

Third party insurers (governments, private insurance companies, etc.) always try to get out of paying for expensive treatments. But this is a game of chicken where governments and insurance companies threaten to not pay for certain drugs and manufacturers threaten to withdraw products from the market if they don’t agree with the price. The patients, however, are always caught in the middle without much leverage to intercede.

New Zealand’s market-size is too small to justify efficient production at home, which reduces the threat of a compulsory license for local manufacturing. Also, New Zealand is one of the countries that have “opted-out” of the recent WTO agreement which could have been used to make it easier to import generic drugs manufactured under a compulsory license.

The current mechanisms of drug pricing and payment of new medicines are a global crisis. But it’s really just a question of who’s going to foot the bill? I think it’s wrong to say that pharmaceutical companies should be responsible for shouldering the burden for drug costs in every country just because their “in the business.” It is a burden that must be borne by every citizen and every corporate entity equally to ensure equal access and availability.

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