Independent Panel appointed to review Pharmac efficacy

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Wellington, March 3, 2021

Jacinda Ardern with Andrew Little (File Photo)

The New Zealand government has appointed an Independent Panel to review the working of the Pharmaceutical Management Agency, better known as Pharmac.

The Panel will also suggest changes required including the decision-making process.

Pharmac is a New Zealand Crown entity that decides on the medicines and pharmaceutical products to be subsidised for use in community and public hospitals.

The Agency determines these on behalf of District Health Boards.

Prime Minister Jacinda Ardern and Health Minister Andrew Little said that the Review follows an election promise made by Labour Party to conduct an independent review into Pharmac.

Focus areas and factors

It will focus on two areas: (1) How well Pharmac performs against its current objectives and whether and how its performance against these could be improved and (2) Whether Pharmac’s current objectives maximise its potential to improve health outcomes for all New Zealanders as part of the wider health system, and whether and how these objectives should be changed.

The Review will also a range of factors, including (1) The timeliness of Pharmac’s decision making (in particular for new medicines) (2) The transparency and accessibility of decision-making processes and (3) Equity, including access to medicines and devices for Maori and Pacific peoples.

Scope for improvement

Ms Ardern said that broadly, the Pharmac model works well and gives New Zealanders access to the medicines and products they need to live healthy lives, but the government has heard people’s concerns about the model and there is scope for improvement.

“Pharmac is a model that has been critically important to the health sector, and viewed as world-leading, but let’s make it better if we can,” she said.

Image from Pharmac Website

Mr Little said that concerns raised about Pharmac include access to new medicines, timeliness of decision making, and the application of criteria that inform Pharmac’s prioritisation and funding decisions.

“The review will look at these matters. In addition, there have been concerns about the safety of substituting medicines due to cost and availability, and access to products that are funded in other countries but not here in New Zealand,” he said.

Ms Ardern said that the review is aimed at making a good system better and more responsive to key challenges facing our health system.

Mr Little said that it is vital that the public have trust and confidence in the Pharmac model, including the way it considers new medicines, identifies and addresses safety concerns and the way it makes its decisions.

“In scope will be how Pharmac uses its budget to achieve the best possible outcomes.  Out of scope will be the fixed nature of the budget and the total amount allocated to Pharmaceuticals as these are rightly for the government to determine,” Mr Little said.

The Independent Panel

The Independent Panel will be chaired by consumer advocate Sue Chetwin and its members will be Corporate Governance and Public Law Consultant Frank McLaughlin, experienced Health Economist and Governance Expert Heather Simpson, Pharmacist Prescriber Leanne Te Karu, Otago University Department of Preventative and Social Medicine Associate Professor Sue Crengle and Disability Advocate Dr Tristram Ingham.

The Review is intended to run until the end of the year with an interim report in August and a final report in December 2021.

“I expect that the Review Committee will decide its own consultation process but that it will include at a minimum the appropriate input from consumers, Maori, Pacific peoples, clinicians and industry,” Mr Little said.

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