New Zealand\u2019s supply of generic medicines is vulnerable to disruption as a result of shipping restrictions through the Strait of Hormuz, according to a new report.<\/p>\n
The report from BMI, a unit of international ratings agency Fitch, analyses the outlook for New Zealand\u2019s pharmaceutical sector. On supply factors and risks it says: \u201cOngoing geopolitical tensions between the US and Iran will likely disrupt New Zealand\u2019s pharmaceutical imports.\u201d<\/p>\n
New Zealand relies on international markets for a majority of its medicines, with India producing about 60 percent of its supply. An extended conflict in the Middle East, which India relies on as a transport route, would likely increase freight costs and slow shipments.<\/p>\n
BMI pharmaceuticals & healthcare analyst Sakshi Sikka, who wrote the report, says the inputs at risk are raw pharmaceutical ingredients.\u00a0<\/p>\n
\u201cCost pressures could also intensify given New Zealand\u2019s reliance on pharmaceuticals from India, which depends on the Strait of Hormuz for petroleum-based inputs used in drug manufacturing,\u201d her report says.<\/p>\n
\u201cFor now, supply conditions remain stable and to mitigate near-term risks New Zealand\u2019s drug buying agency, Pharmaceutical Management Agency (Pharmac) is working closely with the health ministry, suppliers, wholesalers and distributors to identify any emerging risks early and ensure consistency of supply of medicines to New Zealand.\u201d<\/p>\n
Associate Health Minister David Seymour says it\u2019s business as usual for Pharmac: \u201cAt any given time, there will be around 100 medicine and medical device supplies that are at risk of disruption, and Pharmac\u00a0has to\u00a0hustle to keep supplies going. <\/p>\n
\u201cPharmac\u00a0generally does\u00a0a very good\u00a0job of this, so Kiwis often have no idea\u00a0there\u2019s\u00a0a problem. Since the conflict began on February 28, the challenge of\u00a0maintains\u00a0supply has not been significantly more difficult than business as usual, but of course we are keeping a watchful eye, and Pharmac is regularly reporting to the Ministerial oversight group on the Middle East.\u201d<\/p>\n
Government agency Pharmac received a $54 million budget uplift over the next four years in the coalition Government\u2019s Budget.\u00a0<\/p>\n
Pharmac\u2019s chief advisor of pharmaceuticals Adrienne Martin says this funding will help support the agency to manage global disruptions to supply chains and costs, so patients can continue to access medicines they rely on. <\/p>\n
\u201cWhere funding allows, it may also support access to new medicines or widen access to existing funded medicines.\u201d<\/p>\n
However in a briefing about the ways in which this funding \u201cfalls short\u201d, the Public Health Communication Centre pointed out that the $13.5m per annum is less than 1 percent of their $1.76 billion 2025\/26 budget.<\/p>\n
BMI\u2019s report also notes: \u201cWhile recent government healthcare funding \u2026 may support access to medicines, it does little to address structural constraints in domestic manufacturing capacity.\u201d<\/p>\n
The report also flags a widening pharmaceutical trade deficit, meaning we are increasingly reliant on imports. Medicines NZ chief executive Graeme Jarvis says this shows we would benefit from greater Government investment in local pharmaceutical production.<\/p>\n
\u201cI think the fact that we invest a third less than the rest of the OECD probably is an indication that we need to pull our socks up a little bit more and get the mix slightly better than we currently have, in terms of our health investments overall,\u201d Jarvis says.<\/p>\n
\u201cFor now everything is moving along smoothly \u2026 New Zealand is getting the supply of medicine that it needs as a country, but the longer the war goes on, the bigger the issues are going to be.\u00a0<\/p>\n
\u201cLogistics costs will go up, because the fuel issue will become an issue for air freight as well and you\u2019ve seen that already with airlines putting up their flight costs.\u201d\u00a0<\/p>\n
Jarvis says the only solution is working proactively with medicine suppliers to ensure continuous supply \u2013 whether it be generic painkillers or innovative cancer products.<\/p>\n
Alongside its trade partner India, New Zealand imports 15.3 percent of its pharmaceuticals from Australia, another 15.3 percent from the US and 11.4 percent from Germany.\u00a0<\/p>\n
Trade data from UN Comtrade shows pharmaceutical imports grew 7 percent year-on-year to $2.2b in 2025. This exceeds BMI\u2019s initial forecasts of 6.2 percent.<\/p>\n
\u201cThe upward revision to imports reflects strong underlying demand, driven by an ageing population, a rising chronic disease burden and the continued uptake of high-value innovative therapies,\u201d the report says.<\/p>\n
Meanwhile, pharmaceutical exports grew 2.1 percent to $616m, slightly below forecasting.<\/p>\n
The trade deficit widened to $1.6b over the year.\u00a0<\/p>\n
\u201cBy 2030, we forecast pharmaceutical imports to total $3.3b (US$2.1b) and pharmaceutical exports to reach $700m (US$455m) yielding a trade deficit of $2.6b (US$1.7b).\u201d<\/p>\n
The report notes that domestic manufacturing capacity is limited, which constrains local production of innovative pharmaceuticals\u00a0<\/p>\n
Sikka says the main factor behind this is New Zealand\u2019s relatively low level of outlay into the area. Our 1.5 percent of GDP is lower than Australia\u2019s for example, which is 1.7 percent.<\/p>\n
\u201cThis weaker investment base constrains the growth of a broader pharmaceutical and biotech manufacturing ecosystem, particularly for large-scale commercial production.\u00a0<\/p>\n
\u201cAs a result, New Zealand has found it more difficult to translate clinical trial activity into commercial manufacturing and remains reliant on imported innovative medicines rather than domestically produced patented products.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"New Zealand\u2019s supply of generic medicines is vulnerable to disruption as a result of shipping restrictions through the…\n","protected":false},"author":2,"featured_media":469576,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[138,134,1184,527,111,43,7439,139,69,584],"class_list":["post-469575","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-business","tag-health","tag-health-science","tag-healthcare","tag-new-zealand","tag-news","tag-newsroom-pro","tag-newzealand","tag-nz","tag-trade"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/469575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=469575"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/469575\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/469576"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=469575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=469575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=469575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}