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Allergy Today: Interim Report on Pharmac

An Interim Report from the first independent review of Pharmac, since it was established more than 25 years ago, was released in early December 2021. The review panel had been asked to consider how well Pharmac performed against what it was asked to do and whether its performance could be improved.iStock-1035004756-968-491

It was also asked to look at timeliness of decision-making, transparency, and equity of outcomes, particularly for Māori, Pasifika people, disabled people, and those with rare disorders.

Allergy New Zealand made a submission to the Review Panel, and CEO Mark Dixon participated in a focused workshop with other NGO health sector representatives. The major issue expressed on behalf of our stakeholders was the ongoing lack of funding for adrenaline auto-injectors for those at risk of anaphylaxis. As shown in this tracker, Proposal: P-000623 (pharmac.govt.nz), the application process for an adrenaline auto-injector started in 1997, with Allergy New Zealand’s contribution including major submissions in 2010 and 2012.

Pharmac Review Chairperson Sue Chetwin says:

Pharmac is a relatively small agency staffed by highly-skilled people with a reputation for achieving cost reductions and maximising the value of the annual pharmaceutical budget. It also operates in an environment where it is a very small player on the world stage, and where there is increasing numbers of sophisticated new drugs hitting the market.

Our report is not intended to undervalue the hard work that Pharmac’s staff do. However, Pharmac is coming under increasing challenges from consumer and patient advocates, clinicians and pharmaceutical companies who complain about the timeliness of decisions, the transparency of how it operates and equity issues. These are concerns the panel share.

While the interim report does not make recommendations, it signals the areas of main concern and where the panel is now doing more work.

Over the period of the interim report, the panel has met many stakeholders and heard heartfelt stories. Sadly, during the time of the review some of those who shared their experience with us have passed away. In particular, the panel would like to acknowledge the contributions of Wiki Mulholland from Patient Voices Aotearoa and Neil Graham from Chronic Lymphocytic Leukaemia Advocates New Zealand.

Pleasingly, the observations noted in the report were reached with full agreement from panellists. Our challenge now is to make recommendations that will support Pharmac to become more effective at delivering equitable outcomes for all New Zealanders.
Stakeholder engagement and an initial assessment of Pharmac decision-making processes show:
  • Pharmac is underperforming in helping to remove inequitable health outcomes;
  • Its prioritisation approach appears to disadvantage Māori, Pacific people, disabled people and those with rare disorders;
  • Te Tiriti o Waitangi principles are largely unseen in decision-making processes;
  • There may be an excessive focus on containing costs - and a concern the cost-saving model may not be the right one to meet future health needs;
  • Decision making is opaque and is perceived as being slow;
  • Engagement with consumers and patient advocacy groups needs to be more meaningful;
  • Convoluted procurement processes put off pharmaceutical companies;
  • A perception New Zealand is falling behind other developed countries.
The panel notes the health and disability reforms provide an opportunity for Pharmac to work in a more integrated way to contribute to better health outcomes for all New Zealanders.
In the next phase the panel will:
  • Make recommendations following the observations made in this report to support Pharmac becoming more effective;
  • Look at Pharmac’s legislative requirements in terms of the new health and disability system and the Pae Oranga Bill (Healthy Futures);
  • Make recommendations on Pharmac’s governance arrangements;
  • Address outstanding aspects of the terms of reference;
  • Look further at funding for people with rare disorders.
The full report can be read here: Pharmac Review - interim report (health.govt.nz)


Allergy Today, December 2021