Consumer rights advocate Sue Chetwin will lead an independent review into the Government's drug-buying agency Pharmac over "concerns" around funding, equity and timeliness of decision-making.
Prime Minister Jacinda Ardern and National leader Judith Collins were asked during the Newshub Leaders Debate in September if they would support an investigation into Pharmac's funding model - and both committed to it.
Announcing the review on Tuesday, Ardern said Pharmac's model "works well", but the Government has heard concerns about the timeliness and transparency of decision-making, as well as equity, and believes there is room for improvement.
The review will focus on:
- How well the drug-buying agency performs against its current objectives and whether 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 how these objectives should be changed.
- The timeliness and transparency of Pharmac’s decision-making of new medicines.
- Equity, including access to medicines and devices for Māori and Pacific peoples.
The review will cost between $1.5 million to $2 million.
The independent panel will be chaired by former Consumer NZ chief Sue Chetwin and members will include experienced health economist and governance expert Heather Simpson, who led the recent review of the Government's COVID-19 response.
The other members include pharmacist prescriber Leanne Te Karu, Otago University's Department of Preventative and Social Medicine Associate Professor Sue Crengle and disability advocate Dr Tristram Ingham.
"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.
"Pharmac is a model that's critically important to the health sector, and viewed as world-leading, but let's make it better if we can."
Health Minister Andrew Little said concerns raised about Pharmac include access to new medicines, timeliness of decision making, and the application of criteria that inform Pharmac's prioritisation and funding decisions.
"In addition there have been concerns about 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."
Around 12,000 patients with epilepsy or mental health issues were switched to a different bran in 2019 in order for Pharmac to save $6 million a year. This is despite Medsafe, New Zealand's medical regulatory body, advising that such changes go against the "international consensus" and citing data that up to 25 percent of epilepsy patients could be at risk.
New Zealand's Chief Coroner is now holding an inquest into the death of six epilepsy patients whose medicines were switched.
"It is vitally important that the public have trust and confidence in the Pharmac model, including the way it considers new medicines, identifies and addresses safety concerns and the way it makes its decisions," Little said.
"I expect that the review committee will decide its own consultation process but that it will include at a minimum the appropriate input from consumers, Māori, Pacific peoples, clinicians and industry."
Māori Council executive director Matthew Tukaki welcomed the review.
"The problem we have is that Māori life expectancy is much lower than non-Māori and often the sorts of illness we are diagnosed with come towards the mid to tail end of the disease."
The review is intended to run until the end of the year with an interim report in August and a final report in December.
How much money does Pharmac get?
The Government announced an extra $60 million in funding for Pharmac in September 2019 - $20 million in 2019-2020 and $40 million in 2020-2021.
The Government announced in May an increase of $160 million over four years for Pharmac in Budget 2020, bringing its budget to more than $1 billion for 2020/2021.
In July Pharmac got $150 million over two years to secure the ongoing supply of medicines and medical devices in the face of global supply challenges, thanks to COVID-19.
It also got $35 million to purchase and install equipment to supply oxygen to patients to support the use of more ventilators and respiratory equipment.
Patient Voice Aotearoa founder Malcolm Mulholland says it's not enough.
"We need to at least double the Pharmac budget, so that our medicines spend is comparable to other OECD countries. This must happen immediately to lift thousands of people out of a life of illness or no life at all," he said.
Mulholland says if medicine funding for New Zealand was in keeping with the OECD average, the agency would be receiving close to $3 billion.
"It's simply devastating to hear stories every day of kiwis who are essentially being picked to die or live hugely compromised lives because medicines that are considered routine in other countries are out of reach to all but the wealthiest New Zealanders," he said.
"Give-a-little should not be the only avenue for hope. But that's all that many people have left."
Mulholland says there are currently in excess of 100 medicines sitting on the wait list that have been recommended for funding. Some of those assessed as a high priority have been waiting for close to six years.
