Health Minister, Andrew Little has released an interim report by an independent panel reviewing the national pharmaceuticals-buying agency, Pharmac.
Pharmac was established in 1993 and is responsible for purchasing publicly funded medicines for New Zealanders, including those prescribed by GPs or administered in hospitals.
The review, chaired by former Consumer New Zealand chief executive, Sue Chetwin, has been asked to look at how well Pharmac performs against its objectives, and whether those objectives need changing.
It is also looking at how quickly Pharmac makes decisions (especially for new medicines), the transparency and accessibility of its decision-making process, and issues about equity, including access to medicines for Māori, Pacific and disabled peoples.
“Our report is not intended to undervalue the hard work that Pharmac’s staff do. However, Pharmac is coming under increasing challenges from consumer and patient advocates, clinicians and pharmaceutical companies who complain about the timeliness of decisions, the transparency of how it operates and equity issues. These are concerns the panel share,” said Chair, Ms Chetwin.
“While the interim report does not make recommendations, it signals the areas of main concern and where the panel is now doing more work.”
She said stakeholder engagement and an initial assessment of Pharmac decision-making processes had shown:
- Pharmac is underperforming in helping to remove inequitable health outcomes;
- Its prioritisation approach appears to disadvantage Māori, Pacific people, disabled people and those with rare disorders;
- Te Tiriti o Waitangi principles are largely unseen in decision-making processes;
- There may be an excessive focus on containing costs – and a concern the cost-saving model may not be the right one to meet future health needs;
- Decision making is opaque and is perceived as being slow;
- Engagement with consumers and patient advocacy groups needs to be more meaningful;
- Convoluted procurement processes put off pharmaceutical companies;
- A perception New Zealand is falling behind other developed countries.
“New Zealanders are among the only people in the world who have access to free medicines – in most countries, families have to spend hundreds or even thousands of dollars a year for even everyday medications,” Mr Little said.
“Our drug-buying system was set up nearly three decades ago and is the envy of the world, but it’s sensible to look at how well it is doing the job we want it to do.”
The interim report sets out what the review panel has seen and heard, and outlines some of the issues it has found.
“I particularly note the review panel’s comments about equity and transparency,” the Minister said.
“The final report, which I expect to receive by February 28, will include recommendations for addressing issues identified by the panel. The final report was initially expected by the end of the year, but I agreed to an extension requested by the panel to give it time to come up with workable recommendations.”
Ms Chetwin said that in the next phase the panel will:
- Make recommendations following the observations made in this report to support Pharmac to become more effective;
- Look at Pharmac’s legislative requirements in terms of the new health and disability system and the Pae Oranga Bill (Healthy Futures);
- Make recommendations on Pharmac’s governance arrangements;
- Address outstanding aspects of the terms of reference;
- Look further at funding for people with rare disorders.