GUEST BLOG: Ian Powell – Let’s manufacture our own pharmaceuticals


An inadvertent consequence of recent a decision forced upon state drug purchasing agency Pharmac highlights the importance of New Zealand establishing the capacity and capability for producing its own drugs. The objective would be to diminish our dependence on the international pharmaceutical companies often referred to as ‘Big Pharma’.

Pharmac has been forced to switch funding the primidone anti-seizure drug currently supplied by Apotex. Consequently and appropriately it has opened up public consultation about its proposal to switch to a new supplier, Teva. Primidone is classified as a ‘category one’ drug. Around 800 patients are affected.

Switching suppliers for drugs in this category is considered to be high risk. This is different, however, from the controversy that arose out of Pharmac’s decision in 2019 to make a brand switch for an epilepsy drug. That was at Pharmac’s initiative.

Pharmac’s predicament

In this recent case, however, Pharmac had no choice because of a change of marketing direction by Apotex, a Canadian pharmaceutical company. Apotex decided that there was more profit maximisation opportunities from disinvesting in a small country like New Zealand and focusing on the much larger North American market.

Its decision to withdraw from New Zealand was made in June 2019 with Pharmac left to make alternative arrangements by the end of this year. From a business standpoint Apotex appears to have made a sensible decision. But for a public health system providing a universal public good it was bad.

In response Pharmac has reached a provisional agreement to supply primidone with Teva Pharmaceuticals whose global head office is in Israel but also has bases (and investment options) in the larger markets of the United States, Europe and South America.

The next step is for Teva to apply to the New Zealand Medicines and Medical Devices Safety Authority (Medsafe) for approval. Medsafe is the medical regulatory body run by the Health Ministry. It is responsible for administering the Medicines Act 1981 and Medicines Regulations 1984.

But, to ensure there isn’t a supply vacuum from December, Teva will supply primidone to Pharmac as an unapproved medicine in anticipation of Medsafe approval. This is all subject to what might arise out of the public consultation process.

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From predicament to opportunity

This is not a good situation to be in but it was forced upon Pharmac who have responded correctly. It is a supply issue caused by the environment Pharmac has to work in with drug supply dependent on ‘Big Pharma’.

But this experience raises the question of whether New Zealand should start to develop a long-term strategy to become independent of ‘Big Pharma’s’ control of drug production. Pharmac’s problem was the direct result of our vulnerability to shifting market priorities by overseas pharmaceutical companies.

In an article published by the Democracy Project earlier this month I advocated the value of New Zealand learning from Cuba’s success in manufacturing vaccines including recent encouraging developments in Covid-19 vaccination:

Cuba’s vaccine development has been achieved by investing in different state biotechnology institutions, including their scientists, working collaboratively together. It means that Cuba’s vaccine development can be achieved independent of ‘Big Pharma’s’ control and isn’t profit-driven.

The same argument applies to drugs which Cuba has also done well in. Although over twice the population as New Zealand, Cuba is still a small country. More significant is the fact that it has done so well this despite 60 years of economic warfare from its hostile neighbour, the United States, which has intensified since 2016.

As Medical Director of the Royal New Zealand College of General Practitioners Dr Bryan Betty has noted, New Zealand already manufactures animal vaccines so therefore should be able to progress to our own human vaccine production. New Zealand scientists are deservedly held in high regard including internationally.

I say this should extend to manufacturing pharmaceuticals for our health system. These drugs should be seen as a universal public good because they are critical to the treatment and well-being of so many patients. The quality and cost-effectiveness of our health system depends on them.

The Government should take the lead and develop a strategy for a state-led and provided pharmaceutical manufacturing sector that first reduces and then hopefully removes our vulnerability to shifting profit maximisation priorities of ‘Big Pharma’.

To enable this strategy let’s utilise the country’s quality scientists for this purpose and invest further in their capacity and capabilities. Cuba did; so should New Zealand.

Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand, for over 30 years, until December 2019. He is now a health systems, labour market, and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Otaihanga Second Opinion.


  1. In a way, I’m surprised that there hasn’t been any serious attempt to start manufacturing our own medicines long ago.. I understand that NZers keep electing governments that have dependence on imports as a central plank in their philosophical base, but eventually, we have to confront the truth that dependence on the largesse, or goodwill of overseas manufacturers is the equivalent of willingly allowing ourselves to be held hostage to someone elses agenda… That amounts to long term stupidity. no more, no less.. “We have the technology”, to quote Steve Austin…

  2. Thank you Ian for this article. I totally agree with your suggestion that we need to expand our capabilities for drug manufacture; this same philosophy should be applied to more than just drugs. Supply chain vulnerability should be one of the main lessons for us to learn from the Covid crisis. With reports saying we should close our only oil refinery it would seem we have learnt nothing in this respect. Remember how BP brought then closed down Supreme Oil, and McDonalds’ bought and closed down Georgie Pie. No overseas company is interested in anything but taking profits off-shore. We must however maintain a balance; we shouldn’t return to the days of assembling CKD cars or TVs.
    We have shown many times we have the capability and skills here but so often allow ourselves to be sold-out for a short term one-off quick profit.

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