A very small step on a very long journey
“While we support Peter Dunne’s genuine efforts and ongoing commitment to develop a New Zealand medicines strategy we are disappointed with Government’s meagre response and apparent reluctance to seize the opportunity to invest in new innovative medicines,” Dr Pippa MacKay, the Chairman of the Researched Medicines Industry Association (RMI) said.
“The pharmaceutical industry is pleased that after many years of inertia and denial the need for reform is now recognised and has been placed on the Government’s agenda. We are hopeful that those and further reforms will be developed in the near future to build on the action plan announced last week.
“We strongly support measures to improve the optimal use of existing medicines and this is a welcome focus of the adopted strategy. However it is new innovative medicines that offer a real opportunity to improve efficacy, reduce adverse reactions, curtail waste and improve health outcomes generally.
“Regrettably this strategy pays inadequate attention to the severe funding constraint that is driven by a cost cutting fixation inherent within the PHARMAC procurement model. This model fails to recognise that better and more modern medicines are part and parcel of investing to improve health outcomes.
“The planned additional transparency for PHARMAC’s assessment and approvals process is also welcomed, although it does not go anywhere near the much-hoped-for full separation of clinical and funding decisions. We also believe some of the performance measures set out in the strategy are lightweight, and too loose.
“The harsh reality is that New Zealand has not been investing in new innovative medicines to the same extent as other OECD countries. Sadly this initiative not only fails to address the shortfalls of the past, but in PHARMAC’s own words, the current budget has limited scope for new investments and new innovative medicines. Over the past ten years our expenditure on pharmaceutical products has reduced, after adjustment for inflation, in spite of increased demands created by a larger and ageing population together with expanding technological capacities. We are spreading less money more thinly. |
Vote Health up - medicines budget down
Vote Health trends strongly upward while funding for medicines tracks dramatically downward when both are adjusted for inflation.
This graph shows Total Vote Health (when adjusted for inflation using the Reserve Bank’s CPI inflation calculator at end of June 2007) compared with the PHARMAC’s Community Schedule adjusted at the same time using the same calculator. |
PHARMAC working on its stakeholder relations
PHARMAC’s inaugural stakeholders meeting held on December 3 was a useful exercise with over 100 participants. The RMI welcomes this initiative but like all relationships it will require ongoing commitment by all parties.
“The prospect of working in a more constructive environment is enormously attractive to industry. The past combative and aggressive approach has been unbelievably unpleasant to deal with over many years,” Dr Pippa MacKay said.
A common and persistent irritant identified by many of the stakeholder groups was PHARMAC’s propensity to ‘gild the lily’ with ‘spin’.
Dr MacKay said the RMI hopes that claims in the recently published Annual Report are merely a last shot at spin. The Chairman of PHARMAC trumpeted 39 new medicine investments and claimed that 11 of these are ‘new medicines’.
Of the so-called ‘new medicines’, only six were new chemical entities (NCEs). Two were re-listings, and the remaining three were combinations of already funded medicines.
This is not good enough PHARMAC. You tried this on last year too when you claimed 17 new medicines, but a closer look showed there were only eight.
Dr MacKay said the RMI was looking forward to being part of a new and more cooperative operating environment.
“We are more than happy to support such a move and believe that in the longer term the winners will be both those people who need medicines and the funders of the process, the taxpayer.” |
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| A clinician’s point of view |
“The funding of pharmaceuticals in New Zealand is unlike any other OECD country and is not clearly adjusted to any certain criteria. Between 1998 and 2005 there was a 3% increase in expenditure on drugs compared to a 17% increase in inflation and a population increase of 11%.
“PHARMAC has been seen as the means whereby politicians can control the drug budget solely based on monetary criteria rather than being based on any clinically logical process.”
Chris Ellis, Auckland cardiologist, New Zealand Investor Monthly, January 2008. |
PHARMAC and DHBNZ media release, July 2007, commenting on an increase to this year’s pharmaceutical budget.
“The number of prescriptions written by doctors continues to grow and this in turn drives a rise in pharmaceutical spending. We need to plan for this each year, and in addition to the increase in the budget, keep our eye on the opportunities to improve the value for money we get from older medicines.
The increase will also give some limited scope for new investments,” the media statement said.
The RMI’s Dr Pippa MacKay commented that there is little joy for patients and clinicians looking for new and modern medicines in this statement when it is patently clear the extra funding will be largely soaked up by the increase in prescriptions filled.
“It is time for Government to provide some real money so that PHARMAC can do the job it is supposed to do,” she said.
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