AFT to re-apply for heart medicine contract after shortages

AFT Pharmaceuticals, the Auckland-based drug-maker, will have to re-apply to Pharmac for a heart medicine supply contract it won in July 2015 after suffering disrupted supply over the past year.

In 2015, AFT was awarded the sole supply contract for metoprolol succinate, a beta-blocker used to treat angina, high blood pressure and heart failure, with the deal set to run from July 2016 until June 30, 2018. Today, Pharmac put out a request for proposals (RFP) for sole and dual supply of four strengths of the tablets for community pharmacies and district health board hospitals.

"Disruption to the continuity of supply of Metoprolol-AFT CR has occurred over the past six to 12 months, causing significant inconvenience to patients and pharmacies," Pharmac's RFP says. "Pharmac has been working with AFT and other suppliers to organise additional stocks of metoprolol succinate to ensure continuity of supply.

"Notwithstanding the outcome of the request for tender issued in April 2015, Pharmac is now in a position to open a new competitive process to seek bids for sole and dual supply of metoprolol succinate tablets in both the community and DHB hospitals; so that Pharmac may assess the options available to secure continuity of supply for metoprolol succinate in New Zealand."

AFT said it supports Pharmac's decision after international shortages of the drug were experienced this year and will lodge a proposal. Metoprolol represents 4% of AFT's revenues, it said. In the six months to September 30, AFT reported operating revenue rose 1% to $29.8 million, led by sales in Australia while New Zealand sales dropped 10% due to timing issues and product supply shortages.

"This is a really important drug for people's health, so it makes sense for Pharmac to review its supply arrangement given the global supply problems, possibly with a view to having more than one supplier in future," AFT's managing director, Hartley Atkinson, said.

AFT said that even if its current supply arrangements stay in place, the 4% figure "would likely drop as the company's income from other products and markets increases."

Pharmac said submitters must include proposals for sole and dual supply to run until June 30, 2020. With submissions due on January 27, 2017, it anticipates negotiating in February and its board considering a provisional agreement in or after March next year. It said timing around a change in supply was yet to be confirmed but suppliers should note it could be before the end of AFT's sole supply deal in 2018.

"In any event, the timing of any proposed change will be clearly communicated to the market with reasonable notice," Pharmac said.

AFT's shares dropped 1.1% to $2.75, and have fallen 12% this year.

(BusinessDesk)