Fears for patients as Glaxo eyes staff cuts

Patients' access to new drugs and clinical trials might be reduced if pharmaceutical giant GlaxoSmithKline again slashes staff in New Zealand, as expected.

The prescription-drugs side of the company is considering cutting its Kiwi operation to just 18 jobs from 50, an industry source said yesterday.

The remaining business would be run largely from Australia.

The latest rumoured cut follows the halving of the headcount in 2003.

Some in the industry argue that disinvestment in New Zealand can leave companies unwilling to introduce new medicines and finance trials, but Pharmac questions this.

Glaxo spends $6.7 million annually on New Zealand research and trials. It also gives Youthline about 10 per cent of the support service's annual budget of just over $2 million.

Glaxo would confirm only that it was restructuring its New Zealand prescription-drugs business, but acknowledged it was working through a "difficult period" with staff. Its over-the-counter medicines business is unaffected.

"GSK Pharmaceuticals is committed to retaining a presence in New Zealand and ... to help meet the twin challenges of increasing access to important medicines, while recognising the need for cost containment," the company said.

Youthline's director, Stephen Bell, said he was anxious about the future of Glaxo funding of his organisation. "I know they are in a challenging position at the moment."

Glaxo is one of the world's leading pharmaceutical companies, with drug sales of more than 17 billion ($44 billion) last year.

But its New Zealand subsidiary has fared badly in the fight for Pharmac subsidies.

It has lost or missed out on contracts covering drugs for asthma, type-2 diabetes and the flu vaccine, although it has helped prop up the state-paid flu-jab scheme anyway after Pharmac's chosen vaccine was initially considered too weak.

The likely shrinking of Glaxo's New Zealand presence mirrors the path of several other international drug firms after losing Pharmac funding to generic drugs or failing to secure it for new medicines.

The number of staff employed by firms that develop medicines fell to 596 last year, from 1017 in 1990, said Researched Medicines Industry Association chief executive Lesley Clarke.

The industry's disinvestment might reduce the number of new medicines marketed in New Zealand long term, but she was not aware of Glaxo's plans.

The New Zealand managing director of drug company Merck Sharp & Dohme, Alistair Brown, said he was saddened by the potential disinvestment "of yet another major international pharma company".

"If these changes result in the reduction of GSK's workforce it will further impact the shrinking pool of clinical research and industry experienced professionals."

Pharmac chief executive Wayne McNee said Glaxo's changes could be driven by its parent company's desire to cut jobs rather than its New Zealand taxpayer drug subsidies.

He was unaware of shrinking access to new medicines from companies that cut their staff numbers in this country.

Brain drain

Drug company staff working on new medicines in New Zealand:

1990: 1017.
2004: 596.
Source: Researched Medicines Industry Association