Is timeliness an issue with Pharmac’s cost-driven-decision-making process?

Written by Tom Varghese

Medicines are a vital part of modern health care. Medicines make a significant contribution to health outcomes. The question of how to give patients access to them in a way that the health system can afford has exercised policy-makers and politicians for many years.

Pharmac was established in June 1993. It is a unique agency. It is the only organisation in the world that manages a fixed budget set by the government and decides which medicines will be funded.

Earlier this year, the government announced in Budget 2022 that Pharmac would be given an additional $191 million over the next two years to buy much-needed drugs for people with debilitating and life-threatening illnesses. Pharmac's total funding will now be $1.2 billion.

Unlike other OECD nations, NZ has never had a medicines policy written. In other words, the NZ Government has neither an active guiding strategy nor has it ever had a medicines policy from which Pharmac can determine its own strategic and operational directions.

Pharmac's operations have been under question in recent years and led to a major review of the way it purchased medicines in March 2021. NZ funds between two and 10 times fewer modern medicines than those peers. These are medicines for which full information packages and clinical effectiveness data have been accepted internationally.

Pharmac operates in a challenging space where staff have to consider highly technical material and make recommendations that have far-reaching impacts. Investment in medicines in a publicly funded health system is highly contested by those who manufacture the medicines and those who need them, which means Pharmac is often criticised. There are internal waiting lists within Pharmac for med­icines to be funded, but the number of medicines on these lists is not transparently reported.

Earlier this year, a review panel made 33 recommendations with a focus on Pharmac’s governance and accountability, its decision-making and the spread of its functions and responsibilities. The government welcomed the Panel’s report and accepts its findings that Pharmac is performing an important role and that, to achieve its current objectives, its performance, especially on equitable outcomes for Māori and Pacific peoples, needs to improve.

The hope is that, in the years to come, our health system does not see a continuation of the same issues around public medicines procure­ment, prescribing systems and patient outcomes

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