Shining a light on Pharmac

A California judge has ruled drug companies are not liable for creating a public nuisance. Photo:...
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It is encouraging to read the country’s drug buying agency Pharmac is already moving to improve its decision- making to make it faster, simpler and more understandable.

This comes in the wake of last week’s release of the highly critical interim review of the organisation which spoke of a fortress mentality, too much emphasis on cost control, and slow and opaque decision-making.

It is difficult to understand why it has taken until now to independently review an organisation set up in 1993, at a time when there was concern about the rising cost of medicines and, ironically, unfavourable comparisons were being made with the cost of drugs in Australia.

Since then, Pharmac has been lauded for its ability to buy medicines at lower prices through tough negotiating with pharmaceutical companies and the use of generic medicines no longer subject to patent (not always without controversy).

The panel acknowledged there was much for the agency to be proud about; that many New Zealanders benefitted from Pharmac’s work daily and that the 213 submissions it received may not necessarily reflect the agency’s overall impact on the lives of many.

But increasingly there have been questions about whether Pharmac is spending money on the right medicines, whether there is equitable access, and whether the process being used to fund medicines is fair.

Mostly, politicians have been wise enough to steer clear of intervening when there is clamour for particular drugs. National’s 2008 election promise to fund 52 weeks of Herceptin for breast cancer patients, rather than nine weeks, proved controversial. Drug decisions should not be made just on the basis of public noise, no matter how heart-wrenching.

However, various governments have also been reluctant to have a good look at how well the agency is operating. Even this review, led by former Consumer NZ chief executive Sue Chetwin, has terms of reference which ruled out several aspects including the size and fixed nature of Pharmac’s budget and the appropriateness of specific decisions made.

The panel said it was not able to make a meaningful comment about how well or otherwise Pharmac was performing because the agency ‘’ zealously guards information about a host of operational and financial matters’’.

Pharmac’s rationale for not providing much of the data involved concerns about inadvertent revelation of commercially sensitive information, but there must be ways to get around this.

Lack of information stymied the panel from being able to ‘‘identify the risks, systemic or otherwise, arising from the current and forecast schedule of publicly funded medicines’’.

Without more information the panel said it could not even assess the extent to which Pharmac actively looks for emerging trends that might influence investment decisions.

Understandably, the panel will be pressing for much more information on performance monitoring, and examining reporting and governance arrangements to see whether Pharmac is meeting its overall objective of getting the best possible health outcomes from its limited budget.

It will be taking a particularly close interest in how the Pharmac board and the Ministry of Health monitor its performance.

Equitable access for Maori, Pasifika, the disabled and those with rare disorders will also be further explored by the panel before its final report is due at the end of February.

It will be giving more consideration to the processes followed by other comparable countries, Australia, England, Canada and Norway. While the panel says there is much to be learned from them, it warns the comparisons have limitations and those systems are not always the panacea people believe them to be.

Any changes found to be necessary at the agency will need to be implemented in conjunction with the wider health system reforms and the panel makes the valid point that Pharmac’s success rests on it being an integrated part of that system. For those who have long been calling for reform, improvements cannot come too soon.

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