Newshub understands a decision on whether to pump hundreds of millions of dollars into Pharmac to fix the Government's broken promise of funding 13 cancer drugs is set to go to Cabinet on Monday.
The three options ministers have been mulling over are:
- instructing Pharmac to purchase the specific 13 drugs campaigned on by National
- setting up a separate agency to fulfil the promise
- giving Pharmac a pool of money to work through its wishlist until the drugs are funded.
The National Party promised the drugs in its election campaign, leading to widespread heartbreak and condemnation when the Government failed to fulfil that promise in last month's Budget.
The major complicating factor of implementing the policy is that Pharmac - New Zealand's drug-buying agency - operates independently and is deliberately kept at arm's length from the Government to ensure funding decisions are not made for political purposes.
That means option one would be difficult to reconcile and all public statements from Pharmac Minister David Seymour indicate this option is a no-go.
On Wednesday Seymour told a select committee he was "wholly committed to the neutrality of Pharmac's decision-making".
As for option two, setting up a different mechanism was used for COVID-19 vaccines; however, doing this for 13 drugs would set an extreme precedent and Newshub understands this is not the favoured option.
That leaves option three: funding the drugs through the normal process.
Pharmac operates within a set budget, leaving it with a list of drugs it would like to fund if it had the money. This is called the 'options for investment list'.
It currently has 140 applications on it.
These applications are ranked in order of what Pharmac would like to fund first, but the ranking is kept secret so as not to undermine Pharmac's negotiating ability with pharmaceutical companies.
Of the 13 drugs National promised, seven are on Pharmac's options for investment list; three are still under assessment or awaiting clinical advice; no application has been lodged for two of them; and one has been declined.
While the seven on the list are sitting there waiting for the money, the ranking of drugs is even kept secret from the Government.
Therefore, if the Government wished to progress with funding the drugs through the normal channel, it would need to go back and forth with Pharmac to determine how much money would be required until the specific drugs they want to fund would be reached in the rankings - funding all those ranked ahead of them in the process. This is likely to run up a bill into the hundreds of millions over the usual four-year funding period.
Back in 2021 when Pharmac revealed the drugs on its wishlist for the first time, there were 102 applications - which came in at a cost of $418 million a year.
Jenna Lynch is Newshub's Political Editor.
