Welcome
to Ken Shirley
Welcome to Ken Shirley in his new
role as chief executive of the Researched Medicines Industry
Association (RMI) from early September.
“Ken has a variety
of attributes that will greatly assist the RMI to continue its
work on the variety of fronts. He has active and extensive
political networks as well as the administrative and advocacy
skills we were seeking.” Dr Pippa MacKay, the chair of the RMI
said on his appointment. |
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As well as his parliamentary career where he
held various associate ministerial and opposition spokesperson
roles in health, Ken has been executive director of two
membership/advocacy organisations; the NZ Forest Owners
Association and recently Organics Aotearoa.
Ken has had a
close relationship with the RMI as ACT health spokesperson and
therefore has an appreciation of the many issues confronting
the industry.
He says he has always had a keen interest in
the pharmaceutical industry and recognises the pivotal role it
plays within our national health system.
During his spell
as a list MP for ACT he was deputy leader, spokesperson on
health and spent some time as a member of the Health Select
Committee.
Ken was a Labour MP 1984 – 1991 with a variety
of roles, including chairing select committees, Minister of
Fisheries and Aquaculture and as also Associate Minister of
Health with responsibility for food and drugs.
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Medicines
funding slowly dips over 14 years
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This
graph shows PHARMAC’s actual expenditure on the community
pharmaceutical schedule since 1993 compared with the same
figures adjusted for inflation using the Reserve Bank’s CPI
inflation calculator.
Despite PHARMAC’s and DHBNZ’s media
releases claiming increased spending on the Pharmaceutical
Schedule, after 14 years PHARMAC is still only spending the
same amount on medicines in real terms (~$600M) in spite of
New Zealand’s population growth, a significant increase in the
number of susbidised prescriptions and the reduction in
patient co-payments following the roll out of the Primary
Health Strategy.
During this same period, expenditure on
the Pharmaceutical Schedule as a percentage of Vote Health
fell from 11% (1992/93) to only 5.9% in
2005/06.
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What price health and
life?
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What do the severely restricted medicines funding
budget and road safety have in common? Both have criteria that
measure and put a dollar value on health and life.
The
Land Transport Safety Authority, now Land Transport New
Zealand, updated its calculation of the value of a statistical
life to $3.05m in June 2006. This calculation is based on
research into what New Zealanders were willing to pay to buy
improvements in road safety for their families.
While it is
statistically difficult to translate this into the
pharmaceutical world, the principle can be compared with
valuation of improvements in health outcomes using QALYs
(Quality Adjusted Life Years).
QALYs are an
internationally agreed way to measure gains in the quality and
length of life. A year in perfect health is considered equal
to 1.0 QALY. The value of a year in ill health would be
discounted for the prevalence of limitations which reduce
quality of life. For example, a year bedridden might have a
value equal to 0.5 QALY.
So, what is considered ‘value for
money’ for a pharmaceutical, especially when we see the $3m+
for a life saved from a road smash? How much should we be
willing to spend to get improved health outcomes as measured
by QALY gains?
The World Health Organisation (WHO)
recommends that the value be set at up to 3xGDP per capita per
QALY gained.
New Zealand’s average expenditure per QALY on
new pharmaceuticals between 1998 and 2005 was only $6,685
while GDP per capita in 2004 was $NZ36,400.
So, if WHO is
heeded and the Pharmaceutical Industry Taskforce
recommendations to the consultation on the NZ Medicines
Strategy are listened to, the average expenditure per QALY
would be markedly increased from the current levels. But,
perhaps, given funding constraints, it might start at only
1xGDP per capita to begin with i.e. $36,400.
While not
published, the QALY “threshold’ our Australian counterparts
enjoy is generally considered to be about $NZ51,000, while for
our UK cousins NICE’s current cost effectiveness threshold is
between $NZ55,500- $NZ83,500*!
So, what price life and
health? It does seem that the value placed on a life lost in a
road crash is much higher than that for someone with a disease
or disability. The RMI believes consistency of public policy
applications, based on firm principles, is vital if good
social outcomes are to be acheived.
*BMJ 2007; 335:11 July 7, 2007 Currency
conversion calculations on Tuesday August 28, 2007
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