Pharmacy plant closure cuts 170 jobs

One of New Zealand's largest pharmaceutical producers is to close its manufacturing arm, cutting 170 jobs.

Pacific Pharmaceuticals managing director Margaret Dixon said yesterday that "economic reasons" were behind the decision to cut the Mt Wellington-based operation, but she did not elaborate.

"If you want me to go into detail, I won't do it."

The company is owned by Merck Generics Group of the Netherlands, and the decision had been taken by local bosses in consultations with Merck bosses in Europe.

Ms Dixon said a decision on a new manufacturing location "is still being made", though a "large variety of sites" are being considered, she said.

About 30 employees will remain in "administration, logistics and storage" departments in Auckland.

Pacific Pharmaceuticals, a major supplier to Government drug agency Pharmac, employs nearly 200 staff.

Workers were told of the lay-offs in September and redundancy packages have been worked out.

The redundancies are likely to take effect next year.

Pharmac's acting chief executive Sarah Schmitt said the agency had been working with Pacific to establish "contract mechanisms" to ensure continuing supply of pharmaceuticals.

Pacific was a "significant generic supplier" of pharmaceuticals to Pharmac, but one of "very, very few" manufacturers in New Zealand.

The majority of pharmaceuticals used by Pharmac were manufactured abroad, she said.

Pacific Pharmaceuticals, first registered in 1977, made headlines in 2000 when it was fined more than $5000 after admitting charges related to the sale and marketing of Lyprinol, a greenshell mussel extract.

The company, and Lyprinol New Zealand, pleaded guilty to charges of selling the greenlipped-mussel extract as a medicine without official consent.

The companies also admitted publishing material that claimed Lyprinol would fight cancer or arthritis.

The fine was later raised by the High Court to $15,000.