CHAPTER 3
Criticisms and issues … an excessive focus on price and an inability to take advantage of the opportunities presented by new medicines can be costly to the health system. These effects are both attributable to the constrained budget under which Pharmac operates.74 Pharmac’s gatekeeper role is inherently controversial. To keep expenditure within a largely static budget constraint forces it to defer, or less commonly reject, subsidising many medicines which are therapeutically effective.75 Those can be tough calls – and may even be considered an affront to suppliers and prescribers (and their patients). Pharmac has been subject to strong criticism from the pharmaceutical industry, medical professionals and aggrieved consumers since its inception. This chapter focuses on criticisms of a professional nature. Appendix 1 identifies and comments on criticisms by medicine consumers and others.76 Professional concerns include: • an excessive focus on low cost medicines with a concomitant unduly limited range of subsidised medicines for treating specific conditions; • New Zealand falling behind the evolving technology frontier embodied in new, innovative medicines, with delays in listing decisions being an aggravating factor. An associated concern is reduced incentives to provide more than basic product support in New Zealand; • failure to subsidise deprives New Zealanders of access, reducing health wellbeing; and • the problematic basis for centralised health wellbeing assessments and, more
26 PHARMAC: THE RIGHT PRESCRIPTION?
importantly, the absence of a broader wellbeing focus for decisions.
The issues of lowest cost and narrow range Industry professionals criticise Pharmac for being overly focused on fiscal savings and achieving low prices at the expense of health outcomes. Those criticisms are largely continuing. Dr Pippa MacKay’s editorial in the New Zealand Medical Journal in 2005 illustrated these concerns. At the time, she was chair of the then-Research Medicines Industry Association of New Zealand, an interested party. Her editorial followed a 1999 letter in which she asserted Pharmac’s focus on achieving lower prices was at the expense of patient safety: “… consultation with the medical profession was cynical, and bureaucratic requirements were smothering prescribers.”77 Her subsequent 2005 editorial concluded that things were worse – Pharmac had become even more combative and aggressive in its cause of keeping prices and costs down.78 This had negative effects on industry participation and support services for New Zealand. She was particularly concerned that its ‘sole subsidy’ policy was making medicine supply chains vulnerable.79 That the range of subsidised medicines is more limited in New Zealand than in many other OECD member countries seems beyond dispute. A recent assessment by US health care multinational IQVIA compared the range of new medicines (excluding generics) listed in New Zealand for eight priority conditions, and a ninth ‘catch-all’ category, across 20 OECD member countries between 2011 and 2017.
