December 9, 2015 12:00pm by David Farrar

How Pharmac works

A very useful post on Facebook by Pharmac build members Jens Mueller:

Let me see if I can help with some of the background to the discussion of whether PHARMAC should make its own decisions as to the funding of new, expensive and largely unproven-but-promising medicines, or be overridden by political agendas. Firstly, everyone at Pharmac wants to do the right thing. The more than 150 people working there, supported by more than 100 specialist clinicians in NZ and overseas, and the community advisory members throughout this country, ALL want to see New Zealanders have access to the best medicines.

Secondly, the money Pharmac spends comes from the DHBs, not from some slush fund politicians have available to shower over the country in momentary benevolence, and so the $900 Million Pharmac spends each year to buy medicines that would otherwise cost us more than $7 Billion on the open market, comes from the same fund that serves all DHB patients nationwide. If Pharmac spends more money that it has been allocated (a sum that increased well over the past 8 years), it comes from the money DHBs have for their patient care work. Note that this is an environment where No One, Never has All the money they would want to cure All ills.

Thirdly, decisions made by Pharmac are not made by administrators, but based on expert advise by highly esteemed clinicians in their field, who give time, in many cases a lot of time, to evaluate research submitted by drug makers, to review patient histories and to determine which medicine offers better outcomes than those we might already have, or other competing ones. When I contrast these serious efforts with the hype from commercial marketing firms working on behalf of the pharmaceutical makers of new drugs, I know where I would place my trust!

Fourthly, once Pharmac makes a decision to fund a medicine for a specific illness, it must make the same medicine available for all patients of the same illness, and it cannot withdraw after a year or so ‘because it hasn’t worked’. Anything else would simply not be fair and just. That means a decision to fund a $150,000 medicine for one patient for one year, means that the other 200+ patients with the same illness, and then for the lifespan of the patients, possible a decade or more, get the same access. This means a $150,000/patient/year decisions means that there is a flow-on effect of more than $100 Million, which is money otherwise used for new investments for thousands of New Zealanders for other medicines. To put this in perspective, Pharmac, in the 5 years I have served on the Board, has never made a decision to not fund a medicine solely on fiscal grounds. The primary reason to decline funding for the few exceptionally costly applications we get each year has always been based on expert advise that the benefits are either overstated by the pharmaceutical marketing firms, or not yet proven to the point of being expected as a standard, or that an equivalently effective medicine is already available.

Fifth and last, we do not make decisions to decline funding lightly. Board meetings are intense, and decisions are based on substantial submissions from the medical expert advisors. We read every line of the hundreds of pages of submissions for each meeting, and we understand the suffering of some, when their lives are affected by illnesses for which there is no conventional treatment. It has happened that our CEO and staff have travelled to the home of a patient’s family to explain personally how the process works, and why we have declined to fund. It has happened that we have referred our decision-making process to an external independent arbitrator to make sure we have a pathway in place that is transparent and fair.

This is a country where we stand together often. We have a high rate of volunteers who support thousands of causes. In health, we have thens of thousands of non-profit staff supporting our patients. Pharmac is all about doing the best job, a world class job, for ALL New Zealanders, including but-not-only those few who might be struck by a devastating illness and believe only a newly advertised medicine might help. When the TPPA opponents made Pharmac an ill-informed argument for their cries, doctors, patients, and many others rallied to support Pharmac. When the TPPA trade negotiators pushed the whole agreement to the wire for not agreeing to any degradation of the Pharmac operation, the country as a whole was relieved. It is this spirit of community that helps Pharmac do its job, free from the momentary swings of opinion, but rooted firmly on an impartial assessment of clinical science, need and outcomes.

It is an organization I believe in full-heartedly, and I have great admiration for our outstanding staff, who make incredibly challenging decisions every day – knowing that they affect the well-being of nearly 5 Million New Zealanders.

Thank you.
Prof Dr Dr Jens Mueller, MNZM, Pharmac Board Member since 2010
(and this is not an official communication from Pharmac, it is my personal view).