The independent Pharmac inquiry will investigate bringing drug-buying decisions into line with national health priorities – but it's not allowed to increase the drug budget.
Kelly McQuinlan has the rare hypermobile Ehlers-Danlos Syndrome. She calls it "an invisible illness"; she is often told her dislocations and other symptoms are all in her head. She is one of many New Zealanders with rare diseases, chronic disorders or cancer who have been pleading for better treatment, and often better drugs.
This week she has publicly released a letter to the Prime Minister from Dr Durhane Wong-Reiger, the chair of Rare Disorders International, endorsing her call for better pathways of care. It's the sort of call that governments can't ignore.
A review of Pharmac drug funding, announced by the Prime Minister today, will investigate how the government drug-buying agency can better respond to specific government health priorities around emerging drugs and more.
The review was a cornerstone of Labour's last election campaign; it answered demands from opposition parties for big budget increases and ringfenced funding for cancer drugs and drugs for rare diseases. It comes after headline calls to fund cystic fibrosis drug trikafta; it comes after inflammatory bowel disease sufferers marched on Pharmac and Parliament seeking funding for their drug ustekinumab.
Pharmac's political independence has been its greatest strength, when multinational pharmaceutical companies mount emotive campaigns for public funding for their latest drug. But that same independence has also caused frustration for successive governments, constraining their ability to respond to public demand for expensive but potentially transformative drugs like Herceptin and Keytruda.
The independent review panel will be chaired by consumer advocate Sue Chetwin, who is a former Sunday newspapers editor, and its members will be corporate governance consultant Frank McLaughlin, health economist Heather Simpson, pharmacist Leanne Te Karu, Otago University medical school associate professor Sue Crengle, and disability advocate Dr Tristram Ingham.
It is intended to run until the end of the year, with an interim report in August and a final report in December.
Ministers and officials were frustrated last year at how hard it was to direct funding to specific new drugs. Pharmac went to ministers seeking money to fund medicines including three new cancer drugs and cystic fibrosis medicine ivacaftor; but neither the agency nor ministers was able to ringfence the money. They were forced to essentially reverse-engineer the funding, working out how much the new drugs should cost then boosting Pharmac's budget by $60 million ahead of the Budget. Then in the Budget, the government announced another $160 million pharmaceutical funding over four years.
New Zealand has some of the more affordable drugs in the OECD. Jacinda Ardern indicated she was not seeking wholesale change to the agency's "world-leading" system – it is understood the Government doesn't want to throw out the baby with the bathwater.
“Broadly, the Pharmac model works well, and gives New Zealanders access to the medicines and products they need to live healthy lives, but we have heard people’s concerns about the model, and we believe there is scope for improving it,” Ardern said. “This review is about making a good system better and more responsive to key challenges facing our health system."
Health Minister Andrew Little said concerns raised about Pharmac included access to new medicines, timeliness of decision making, the way it applied its funding criteria, the safety of substituting medicines due to cost and availability, and access to products that are funded in other countries but not here in New Zealand.
“It is vitally important that the public have trust and confidence in the Pharmac model," he said. "Out of scope will be the fixed nature of the budget and the total amount allocated to pharmaceuticals as these quite rightly are for the Government of the day to determine.”
The terms of reference ask how Pharmac's drug-buying can be better aligned with government health objectives, for instance to fund important new and emerging drugs more quickly. It is understood ministers would like the agency to be more responsive to their priorities.
At the same time, they won't want to hand the big pharmaceutical companies carte blanche to turn up to ministerial offices and name their price. There has been criticism of the companies' willingness to exploit sick and vulnerable New Zealanders, to front public campaigns to fund expensive new drugs – the Government won't want to reward cynical behaviour of that sort.
Pharmac chief executive Sarah Fitt said the review was important to helping the public understand and trust Pharmac's work. "I want to emphasis that we take our decision-making responsibility seriously and the wellbeing of New Zealanders is at the heart of our work," she told Newsroom.
"We want everyone to understand what we do – but we know there is more we can do to explain why we make the decisions we do; that’s why increasing public understanding, trust and confidence in our work is so important to us. Because of this, we welcome a review."
Kelly McQuinlan, too, hopes to see changes to the healthcare for sick New Zealanders like her. "Our community, and others like ours, have suffered for way too long, and this has to change," she says. "Our community suffers from a lack of care, not only for our physical ailments, but also mentally as we often have to fight the fight ourselves by advocating, made worse by having no support from medical professionals when our physical ailments are too much for us to cope with ourselves.
"We deserve better and we deserve to have fair health care in New Zealand.
"The lives of 300,000 Kiwis could be vastly improved with better healthcare and with more awareness of how rare disorders are seen within the medical community. With more awareness change will be able to happen."
Pharmac review terms of reference
The Review will focus on two areas:
- How well PHARMAC performs against its current objectives and whether and how its performance against these could be improved.
- Whether PHARMAC’s current objectives maximise its potential to improve health outcomes for all New Zealanders as part of the wider health system, and whether and how these objectives should be changed.
It will consider a range of factors, including:
- The timeliness of PHARMAC’s decision making (in particular for new medicines).
- The transparency and accessibility of decision-making processes.
- Equity, including access to medicines and devices for Māori and Pacific peoples.
