Putting the Factors to work

The four Factors for Consideration are:

1. Need 2. Health Benefits 3. Costs and Savings 4. Suitability

Each factor has 3 different aspects:

• the individual • the family, [whanau] and society • the health system.

Putting the Factors to work

The factors help PHARMAC assess each funding application against its statutory objective. They help answer the question:

Does the proposal or decision help PHARMAC to secure for eligible people in need of pharmaceuticals the best health outcomes that are reasonably achievable from pharmaceuticals treatment and from within the amount of funding provided?

PHARMAC will mainly use the Factors for Consideration when making funding decisions, both decisions relating to treatments being listed on the Pharmaceutical Schedule, and also for decisions for individual patients through PHARMAC’S Named Patient Pharmaceutical Assessment Policy. When relevant, they also endeavour to use these Factors when making other decisions that relate to their statutory functions set out in the New Zealand Public Health and Disability Act 2000. This could include making decisions to support the responsible use of medicines.

Not every factor may be relevant to every funding decision PHARMAC makes

Some factors may be more or less relevant (or may not be relevant at all) depending on the type and nature of the decision being made and, therefore, judgement is always required. Having the ability to exercise this judgement is critical to PHARMAC’S role as it enables them to respond appropriately to a broad range of situations.

Every funding decision must be considered in relation to the amount of funding available

PHARMAC considers every funding decision in relation to how funding the given treatment may impact on the Combined Pharmaceutical Budget, District Health Board (DHB) hospital budgets and the overall Vote Health budget as applicable, for both the current financial year and over future years.

Source: [3] PHARMAC

The Combined Pharmaceutical Budget is a fixed annual budget determined by the Minister of Health. Funding proposals for pharmaceuticals will be compared against one another using the Factors for Consideration, to determine which investments would result in the best health outcomes. Each funding proposal will then be ranked against all other funding proposals based on the results of this assessment. This is called the prioritisation process and the ranking helps PHARMAC decide which investments to progress within the fixed annual budget.

Tip: Detailed notes on how to make a funding application, available in chapter no. 5, on PHARMAC