The Problem with Privatising Penicillin

Crikey

A LEADING medical expert has claimed the privatisation of drug company CSL contributed to the rationing of benzylpenicillin, an important antibiotic for public health.

Professor Peter Collignon, an infectious diseases specialist at the Australian National University in Canberra, told Crikey the supply of important antibiotics should not be entrusted to a single for-profit company.

“I think there is an issue about when you privatise a company and it’s supplying essential drugs to the community,” Professor Collignon said.

The claims come after CSL, the country’s sole provider of benzylpenicillin (known as BenPen), advised hospitals of a shortage due to a delay with its Austrian supplier.

Formally the Commonwealth Serum Laboratories, CSL was set up during World War I for the express purpose of reducing dependence on overseas supplies of drugs and vaccines. Penicillin production began in 1944, making Australia the first country to supply the drug freely to civilians.

CSL was privatised in the early ’90s, and now the company is mired in the very situation it was set up to prevent — complete reliance on overseas supplies of an essential drug.

“The whole point of CSL when it was government run was so that we would have a pharmaceutical manufacturer that we weren’t dependent on outside supply lines,” Professor Collignon told Crikey.

This isn’t the first time CSL has been criticised for putting profit before public health. Before the 1994 sale, venom toxicologist Dr Struan Sutherland argued a private enterprise would have little interest in developing “unprofitable” treatments such as snake antivenoms. A parliamentary submission later suggested the privatisation of CSL had resulted in significantly reduced venom and antivenom research funding.

In 2005 CSL announced it would no longer produce the vaccine for Q fever — a disease that affects abattoir workers — for financial reasons, forcing the government to intervene to ensure supply.

A spokesperson for the Department of Health and Ageing says the shortage of benzylpenicillin was “a totally different situation” because there are other suppliers, but in the case of Q fever no one wanted to manufacture the vaccine.

However, Professor Collignon told Crikey low-cost drugs such as benzylpenicillin were “not highly profitable” so they run of risk of being ditched in favour of more lucrative lines. Benzyl penicillin costs consumers about $3.50 a vial.

A publicly owned pharmaceutical provider might not have had such a conflict. “If it [CSL] was still government-owned I think less likely this would have occurred,” Professor Collignon explained.

Another leading infectious diseases expert, who asked not to be named, said the privatisation of penicillin supply was an important issue and that “CSL deserves any bad publicity it gets on this”.

A spokesperson for CSL, Sharon McHale, told Crikey the current shortage of benzylpenicillin had nothing to do with financial considerations: “It is primarily due to unprecedented supply delays from the manufacturer, Sandoz GMBH.”

She also responded to claims CSL had an effective monopoly over benzylpenicillin supply, saying the Australian arm of the group, CSL Biotherapies, had no contractual agreement with government preventing any other companies from importing and distributing the drug in Australia.

A spokesperson for the Department of Health and Ageing said Australia’s medicines regulator, the Therapeutic Goods Administration, routinely deals with these sorts of supply issues, meaning “Australia enjoys better access to medicines than most countries in the developed world”.

Last week the TGA said it had found alternative benzylpenicillin supplies and that new stock could be in Australia this week.