Focus on Pharmac

Rarely are so few asked to do so much with so little for the benefit of so many, who are ungrateful. That’s how I would describe Pharmac’s calling. Today’s Sunday Star Times spends an inordinate amount of column inches discussing the challenges Pharmac faces. Or does it?

The unattributed comment piece on A11, “Pharmac’s $635 million bitter pill” does a reasonable job of pointing out the crap position Pharmac will always be in and a few of the challenges that the National government faces. However, it only slaps National’s hand in passing for their blatant election pandering:

Women with early stage breast cancer who stand to benefit from the more expensive treatment will be delighted, but this piecemeal political intervention is not the best basis for consistent or rational health policy.

The cynical herceptin intervention cuts into Pharmac’s core reason for being. Such a precedent undermines the entire point of having an independent body such as Pharmac and leaves one questioning whether or not National cares at all and whether it would be willing to trade away Pharmac in an effort to secure a trade deal with the US. This is one of the key US demands.

In the Focus section, two whole pages are dedicated to discussing Pharmac, or so it appears. What we really have is one big pharmaceutical advertisement entitled “10 drugs you can’t have“.  We have 8 column inches setting up the info-mercial and then a further 48 column inches advertising drugs that the big pharma companies really want the National government to fund. It’s disgusting.

I cynically searched the rest of the paper for the drug company adverts that would pay for such a plum bit of lobbying, but could find none. My conspiratorial nose then thought that a deal could have been struck to advertise later in exchange for the plum article. But I’m not much for conspiracies. I find that people are far too lazy in general to plot and hatch conspiracies. It then became obvious. The article itself was an infomercial. I know that Adam Dudding is a long standing journalist who has done the rounds, but I have to ask Adam; Did some nice PR company write the last 48 column inches for you? You failed Adam, you failed to ask the really important questions of anyone.

The folks at Pharmac do a thankless job. No doubt they make decisions and yes, make mistakes, that cost people their hope of a longer life. One cannot say that Pharmac’s decisions cost lives. They are in the business of postponing death at least cost to the taxpayer, not causing it.

One could argue that New Zealand should fund it’s drugs at the same level as our nearest neighbours, that is at 18% of the health budget rather than 12%. One could argue that big pharma should not be allowed to advertise to the public, which is the norm in every other country in the world except the USA and NZ.  Finally, one could argue that a separate slush fund should be created for the bleeding heart cases and yes, even for the kind of blatant political interference that National promised during the election. But who would argue that Pharmac, in principle, is a bad idea? Who would trade it away for ideological reasons?

37 Comments Posted

  1. (My apologies to Russell Brown, as I’ve made this comment on Public Address System, where a debate worth reading is going on.)

    On Herceptin, the Pharmac document (PDF) James Green linked to is worth reading.

    PTAC considered that data for Herceptin in HER2 positive early breast cancer has been,
    and continues to be, subject to unacceptable publication bias. Given this unacceptable
    publication bias PTAC felt compelled to consider all relevant data sources regardless of
    format or detail.

    Pharmac then quotes Metcalf, from the Lancet

    The effect of publication bias is outlined in the recent Lancet article (Metcalfe et al.
    Lancet 2008;371:1646-8.) which expressed concerns about Herceptin publication bias.
    ‘Failing to publish inconclusive results can mean wide (and wasteful) use of
    ineffective treatments, or even unnecessary illness and death if the reported risks
    of harms are underestimated. Clearly adjuvant trastuzumab is effective but how
    best to use it appears to have been hampered by some publication choices that
    presently are unclear. There is a duty of care to trial participants, sponsors,
    regulators, and the public good to promptly publish outcomes in all exposure

    There are some highly positive studies showing significant improvement in survival rates (~6/100 after 3 years), and no doubt this is what the breast cancer groups and the drug lobbyists have been highlighting. And with that kind of improvement, they might expect to be indignant or even outraged about its non-funding. But Pharmac has a duty to be rigorous and prudent* and has reason to be cautious about these results.

    They then go on to state that

    no new information had been
    presented that has demonstrated any additional health benefit for 12 months treatment
    (sequential or concurrent) over the currently funded concurrent 9 week regimen.

    and that more evidence would be required that demonstrated such an improvement before funding a 12 month course should be considered.

    To state that not funding Herceptin simply “means we are lagging” is to ignore the body of evidence that Pharmac considered.

    It’s an indictment of the quality of this Government, that they’re going expressly against high quality advice this early. It should concern every thinking person in New Zealand.

    *If only all Government departments had such a grounding in evidence based research.

  2. There was a very interesting report on direct to consumer advertising of pharmaceuticals prepared in 2003 by Professor Les Toop, Dr Dee Richards, Professor Tony Dowell, Professor Murray Tilyard, Tony Fraser, and Assoc. Professor Bruce Arroll from the Departments of General Practice at Christchurch, Dunedin, Wellington and Auckland Schools of Medicine.

    It recommended:

    That the New Zealand government introduce regulations and /or legislation to prohibit the advertising of prescription medicines directly to the public, through print and broadcast media or any other means.

    That the Government establishes an independent medicine and health information service free of commercial interest.

    It is rather long, but I have blogged about some of its key findings and observations here.

  3. ‘it would be willing to trade away Pharmac in an effort to secure a trade deal with the US. This is one of the key US demands.’
    I don’t know why we need a trade deal with the US, that country is nearly finished economically. We should be looking at trade deals with other Asian countries like the China deal.
    Anyway the last thing we want is US big pharma getting a bigger foothold over here, check out this book.
    and this article
    If we want a reasonable health care system we don’t need big pharma.

  4. Amazing that so many love the Pharmac model yet, try and suggest a return to the HFA and its centralised buying model and often the same people rail against it. Seems to me a great solution for standard items.

  5. Pharmac, its importance to our health system, is a story of power. Like so many other stories in economics.

    Drug companies get 20 year monopolies on their products and utilise those monopolies to gain *huge* revenues.

    Most of that money goes into marketing and dividends, about 10% goes into product development. Do not believe them when they say they need the profits to do research. They lie.

    What Pharmac does is marshal all the economic power available in the NZ public health sector and concentrate it in one point of contact with pharmaceutical companies. This saves the NZ health system huge amounts of money. Money is a finite resource that is used to save lives. Pharmac saves NZ lives.

    But to do this Pharmac has to make decisions that weigh benefits to one group against benefits to another. For instance Herceptin could treat H2 breast cancer, giving, maybe, a 20% chance of 2 years more life, maybe more (80% of people who take it have no improvement). The cost of funding Herceptin would fund (from memory) 300,000 courses of low dose aspirin. Saving thousands of lives. In a situation of limited funds, what do you do? A tough decision but made properly lives are saved and lives are sacrificed. Do we really want politicians making those decisions?

    In the face of the enormous marketing and PR clout of the drug companies politicians have no chance. That is why we have bureaucrats!

    I know that if I had H2 positive breast cancer I would be thinking differently, of course I would. That is the point, these are hard tough decisions but leaving them to politicians and/or pharmaceutical companies costs more lives than necessary.

    Lastly: Lets give Pharmac more money to spend. Lets allow Pharmac to trade off money spent on therapies against money spent on drugs. Lets allow Pharmac to be much more holistic. But undermining Pharmac, as those economically illiterate fools in the National party want to do is bad bad bad!


  6. “If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence.”

    Presumably we have free speech in order to spread power around. The problem with the above quote is that it takes no account of who has power. If the powerful (largely meaning the rich) are spreading falsehoods and fallacies in order to serve their own interests, what means can the rest of us use to keep them in control?

    Personally, I’d say the solution is to deal with the inequality in power, not to restrict speech.

  7. frog – It is likely that you have never had anyone close to you at the mercy of receiving expensive treatment from the local health monopoly. Otherwise you would not have seen that article as a drug company ad. The thread of arguments about free speech is somewhat irrelevant.

    I saw that article as a decent summary of some of the major health issues for New Zealanders and a fair comparison with the situation in Australia.

    Pharmac does an excellent job with limited resources. They spend the money they receive wisely. It is up to the politicians to increase the amount of money available for drugs overall. The comparisons in the article with funding in Australia is the real price of falling behind in our economic position. I think the 40% funding for MS vs 10% in NZ is indicative and untenable. If Pharmac had more money it could fund and approve more drugs more quickly based on best European & Australian medical practice.

    For National to have campaigned on getting Herceptin funded is simply to recognise that we have been lagging. Evidently Arts funding is a higher priority.

    The most expensive drugs will always be leading edge. They are the ones that desperate people surfing the net for cures for themselves or the loved ones will focus on. A bit of advertising is neither here nor there. It has no clinical impact.

  8. Important point Sir Chip!
    There is no obligation for big parma or GP’s to warn of negative side effects of Medicine – I have known two young men to die from improper Meds in the last few years – terminal ineptitude; a breach in the basic Duty of Care of Govt….the sort of thing Governments are paid to sort out.
    Our Health system is simply not geared for 21st century medicine.
    Somehow there’s a paradox where the patient comes last.
    (if you are in that 25% of real carer’s; ily) mark

  9. Wat

    You either accept limitations on advertisements and money spent on electioneering


    You ultimately accept that people who are wealthy own the country and can do whatever the fnck they please with the slaves who used to be citizens.


    You accept that the slaves will revolt and KILL the people who tried to become owners of all they survey.

    Every democracy that has remained so (and the US is no longer a real democracy at this point), has restrictions on campaign finance. Many have restrictions on media usage or simply provide media access to the parties as part of the political process.

    The problem for democracy is real. You can’t hand over control of hours of media access to one party and a couple of minutes to the other, and expect a reasoned or accurate debate to occur. Money MATTERS, and its use in advertising matters. To say that in the election period the folks with piles of money can make all the advertisements they like, outspending both political parties and the rest of the citizenry altogether is a nonsense.

    “Or perhaps we should add to your list by asking other people what restrictions on free speech they would like to see? Wouldn’t that be fair? I’m sure it would be quite a long list by the time we’re finished, and every entry would be justified with the same sanctimony you employ for yours.”

    Sorry Wat… I don’t “pretend” to be good, I am the real thing.

    What “list” was that again? There wasn’t one… so maybe you can come up with something more substantial when you clarify that paragraph. What restriction on FREE speech was that. Advertising isn’t free. It never has been. Ask any Newspaper for a price list.

    I am telling you who I THINK should be allowed to ADVERTISE in the last 45 days… you seem to have a problem with that. Both understanding it and accepting. You lie at every opportunity. Tough…

    All that means is that for 45 days the signal to noise ratio favors ALL PARTIES being able to make their policies clear so the voter’s are able to know something other than what big-money thinks. You want to argue about the length of time? Fine.

    Now you are attacking the existence of all political parties. This is good. I like it when unreason finally hits the wall of reality. Political parties are a natural extension of the way humans self-organize. They have faults as you point out, but they have one significant advantage. They work better than the alternatives.

    Propose an alternative construct that is not anarchy and which can be implemented by humans without resulting in tyranny. I am quite certain that you will fail. It will be amusing to observe your attempt.

    You know all about ideology, but very little about human behavior.


  10. # Dave S Says:
    November 30th, 2008 at 3:33 pm

    > Two people arrive in the ER at the same time. One has collapsed and needs a 30 day series of a drug that costs $1,500 per dose and is not approved by pharmac to be cured, the other has been in a gun fight, been shot in the chest, and needs a $45,000 operation to save their life. Which one should the health system treat, and why?

    for whatever amount of money Pharmac is given to work with, if there is no direct-to-consumer advertising, they won’t have to spend as much money on medicines that people are only on because they pestered their doctors for them after seeing the ad, and therefore be more likely to be able to afford to fund medicines like the one in your example.

    Your example also brings up 2 questions that have nothing to do with the advertising of medicines – namely: (1) what proportion of funding should go to medicine vis-a-vis surgery? and (2) can and should we identify cases of people having medical problems caused by their own foolishness and avoid spending money on them?

  11. bjchip,


    You people always become so angry when you believe others have misunderstood some minor technicality in your great schemes for restricting their freedoms.

    These are your words: “Speech is not advertising. Advertising costs money…To equate paid for speech with free speech is a mistake.”

    It’s very obvious you favour restrictions on people’s freedom to publish as they wish, on the entirely spurious grounds that they might have to pay some money to have their ideas disseminated.

    You have no right to do any such thing. End of story.

    Or perhaps we should add to your list by asking other people what restrictions on free speech they would like to see? Wouldn’t that be fair? I’m sure it would be quite a long list by the time we’re finished, and every entry would be justified with the same sanctimony you employ for yours. Would you favour that, or is just your own particular censorship you want to see imposed on everybody?

    – “I said, not just now but on many occasions, that in a 45-50 day run-up to the election NOBODY who is not a political party or involved in the election or the media can buy advertising.”

    So now you are telling me and the rest of the electorate who we shall be allowed to hear and who we shall not be allowed to hear. And all for our own good, naturally. Perhaps you’d like to confiscate our radios as well, in case we listen to unapproved broadcasts?

    Political parties are the most insidious and corrupting influence in all politics. Virtually every decision made by the government is taken with a view to what is good for the party rather than what is good for the country. They are leeches on the political process; entirely self-serving groups that deserve no special privileges whatsoever. Yet, surprise surprise, here you are advocating thuggery to restrict the freedom of everyone except political parties.

  12. The only problem with letting big pharma have a free run is that they aren’t going to tell the whole truth.

    On the whole I would prefer not to restrain them from advertising, but I would regulate that the claims be true and the costs be shown, and possibly a little statement like the warning on the cigarettes, that individual results can vary and the value of this treatment must be weighed against the benefits of spending limited health dollars on other treatments and other illnesses.

    The issue is that their advertising plays directly against the intent of creating pharmac and prioritizing spending on pharmaceuticals and treatments. Rather than requiring Pharmac and the government to continually advertise to explain the ethical issue, forcing that message to be included in the advertisements should suffice.


  13. For the record, here is the quotation in question.

    . If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence. – Justice Louis D. Brandeis, in Whitney v. California (1927)

    IMHO the run-up to an election makes the time factor a problem. It is a unique problem in human affairs as arranging the methods elections tests the limits of democracy.

    I may not expect the best from this government but I do hope for it.



  14. BJ On a later point. You seem to have taken my desire for a country in which speech, including advertising by Large Pharma companies, is free and muddled it with the Electoral Finance Act and its restrictions on advertising in the year of an election. Sorry, it was not meant that way, perhaps I said something to misdirect you. I think my second para above expresses my main point, which is that I am opposed to speech restriction on ANY level at all.

  15. bj
    Sorry if I mistook your quote. When all I had to go on was “The free market response to bad speech is more speech according to a former justice of the US Supreme Court.” I dealt with the statement as shown.

    On the point of “Speech is not advertising” I can concur, because while advertising IS speech, it is not the only form, and so your statement is correct. 😉

    Happy daze

  16. Uh-Huh ; Well I would like to se us recycle or produce, much more stuff of our own, from pioneering electric cars, ethanol -a viable rail network – right thru the spectrum – we can feed and shelter 4,000,000 like real, real well BJ;
    instead of taking cargo – bring factories.

  17. Froggit: Readily concede that the new financial base will be in asia. No we cannot outprice beggars, what we can do is make sure the profiteers
    Don’t make 300%, untaxed; its why I’m against ‘Three Strikes Tolerance ‘, Zero Tolerance’ It’s aimed at; hits the poor, whereby the wealthy crims stride by in sly pretended ingnorance – we are bound for REAL equality in this country.

  18. Wat

    Based on your present diatribes I could easily imagine that you might be locked up for incompetence. You can’t put words in my mouth. I’m sorry.

    In any more formal medium I would have the right to haul you into court and take it out of your hide. Here you can get away with it. Except for the fact that I call you on it.

    You lie about what I say. You have to lie in order to have an argument at all.

  19. Wat…
    Since you have a HABIT and it is a horrible one, of putting words in people’s mouths I am not surprised that you spent the time to make up things to put in mine.

    Not having said the things that you say I am saying, I reckon that answering those accusations is useless but here we go again.

    I said, not just now but on many occasions, that in a 45-50 day run-up to the election NOBODY who is not a political party or involved in the election or the media can buy advertising. This isn’t the same as a general ban.

    The media and the parties are subject to the rule of law regarding claims about what a policy is, and should be able to be sued on an URGENT basis should they claim (as they did about our population policy) something that is not part of a party’s policy.

    They can analyze all they like about the effects of a proposed policy, but the words of the policy itself can only be the words of the party itself.

    Books printed and purchased aren’t paid advertisements.

    Newspapers are not paid advertisements.

    Magazines are not paid advertisements.

    None of these would be restricted even in the run-up period to the election.

    Protest brochures ARE paid advertisements and as every protest brochure I have ever seen (including those from the left) has misrepresented some part of the thing/organization/policy protested, I have no hesitation in restricting them for the period before the election.

    The object is to make the signal to noise ratio favor the signal. The paid advertisements from third parties are almost entirely noise.

    The deleterious effect of open-slather spending on elections has been noted by all manner of organizations, including the Human Rights Commission. I don’t think you have a leg to stand on at this point.

    My idea of free is that every citizen has an equal opportunity to be heard. Not the citizens with the most money get the loudest voice.

    I know that you don’t LIKE that Wat, but that’s the way it has to be or in a decade or so you don’t have anything that resembles a democracy anymore. Money is poisonous to political freedom.


    IIRC Brazil went head-to-head with big pharma. They said in effect, give us the price or we will build our own plant to make the meds. Big pharma backed down. It is one thing to threaten a company. It is another to sue a sovereign state and lose (quite conceivably) the income of an entire continent.


  20. frog,

    If you believe his entirely spurious justification for attacking free speech, then my examples must stand.

    And no, you do not have the right to ban me from seeing stuff simply because, in your opinion, “it does more harm than good.” Who do you think you are adjudicating on what I can and cannot see, read and hear?

  21. mark52 – We’ll never compete with the likes of India, who do generics cheap and who do them well. They are under a lot of pressure from the US to scrap their generics industry, but until then there is no point in NZ trying to compete with those wages!

  22. Copyright on meds lasts only a limited amount of time (3or4 years, in some cases 7); which is why NZ should have a healthy(!) Phrarmaceutical Industry of our own. There is no need to be held ransom by overseas conglomerates – if the new Govt. is worth it’s salt they’ll recognise this and fund accordingly.

  23. – “Speech is not advertising. Advertising costs money.”

    Completely and dangerously wrong.

    You’re saying that the state can prevent protest pamphlets from being printed “because it costs money.”

    Your’re saying the state can close down any and all newspapers, “because they cost money.”

    You’re saying the state can ban any books it likes, “because they cost money.”

    – “I’d really rather have a free country. ”

    That’s “free” as in “the state can put you in prison for disseminating your opinion.” Thank goodness we’ve got a few years with you people far removed from power.

  24. Is there any OECD country that has free speech? They all have approximately free speech, as do we.

    I think Key was wrong to override Pharmac. Still, its time he did something stupid, he’s been doing really well so far.

  25. Moreover, you took the wrong lesson from that Supreme Court Justice. He didn’t tell anyone what “bad” speech was. He was discussing “what you think is bad speech” and telling us that the answer is not censorship but more and more information.


  26. DaveS

    Speech is not advertising. Advertising costs money.

    This conversation has no cost except for the time taken to participate in it.

    Attempting to reproduce it in a public media like Newspaper, Radio or TV would cost tens of thousands of dollars. More if we wanted it to reach more people.

    To equate paid for speech with free speech is a mistake. I have seen the price paid. I’d really rather have a free country.


  27. Point taken Dave S, but it is still not Pharmac which makes the rules about what doctors can prescribe. Perhaps it’s the DHB’s trying to control ER costs? I don’t know. But I do know that Pharmac isn’t in that loop.

    I don’t know how we devolved into a debate of good or bad speech. What I will say is that advertisements are subject to the law in a way that my speaking to my neighbour is not, and we all accept that, with good reason. To put it all into one basket is a denial of reality. They are not the same thing! Advertisement is a much more complex thing, of which ‘speech’ is but a part.

  28. Frog

    An ER doctor is not allowed to prescribe outside the Pharmac approved list, so I think it does apply.

    Let’s forget the medical ethics for a moment and just make it a societal ethics question. Which one should the public hospital ‘cure’?

    If you want the same question outside a purely medical situation, but still in the health service domain, let me know.

    While I will fight to the death for you to be able to say that, I don’t agree with you 🙂
    The problem with the statement that “The free market response to bad speech is more speech” is defining the word ‘bad’. Whose choice? When papers were written, peer reviewed, presented to and accepted by scientific bodies as right and proper, while all the time expressing the ‘fact’ that using leaches to bleed someone would reduce mental and physical ailments, was the speech good or bad? When a politician, in an election speech says that global warming is a myth, is the speech good or bad? When a manufacturer of treated bee pollen says in an advertisement or an interview that it will make you healthier, is the speech good or bad?

    Speech is speech. Sometimes it is called advertising, sometimes it is called blogging, sometimes it is called campaigning, in all cases people in a free country should be free to say anything they want to. If they want to pay for the privilege that’s OK with me too, I recently paid for a statement, that I welcomed my daughter’s Fijian fiancee into our family and expected him to treat her in the manner with which she would like to become reacquainted, to be printed in a newspaper – was that an advertisement?

    Who is the arbiter of ‘good speech’ and who pays them?

  29. Pharmac does not tell them what they can and cannot prescribe, so your point is moot. It does tell them which drugs they will fund, as any self-respecting government department/entity should do. I don’t get your point beyond a rant and the exposition of a normal medical ethics dilemma. The dilemma is a great ethics exercise but has little to do with the points I raise in the thread.

  30. I’m not sure I agree with the “we accept” comment, because I for one have railed against it for years. However, I do concede the point that we are not a country of free speech – I had forgotten my own example of our failure. I apologise unreservedly.

    Let’s address the issue from another perspective then, as I have 2 kinds in the medical profession who are outraged that ‘bureaucrats’ tell them what they can and can’t prescribe for their patients (and they are not referring to ‘generics’ which they agree on.

    Two people arrive in the ER at the same time. One has collapsed and needs a 30 day series of a drug that costs $1,500 per dose and is not approved by pharmac to be cured, the other has been in a gun fight, been shot in the chest, and needs a $45,000 operation to save their life. Which one should the health system treat, and why?

  31. Dave S.

    That’s exactly the free market answer I expect. The free market response to bad speech is more speech according to a former justice of the US Supreme Court… but speech is different from advertisement. To counter complete freedom of advertisements for these drugs with truth about outcomes and expenditures would be ridiculously costly.

    It is all well and good that this is the most perfect answer. The amount of money available to implement it would be better used buying the medicines that get us the best possible set of outcomes at the least cost.

    That makes an arrangement like Pharmac the best answer and regulation of drug companies advertisements to the public a part of the answer. The drug companies do not state the cost of the drug or the statistically expected outcomes in their advertisements, and the cost of the drug is part of the problem.

    We can do better than unrestricted advertisements. Which have nothing much in common with unrestricted speech.


  32. I disagree Dave S. We accept in this society limits/restrictions on cigarette and alcohol advertising, etc, because we recognise that it does more harm than good. This has nothing to do with free speech, as anyone is free to debate, talk about or write about cigarettes. Conflating free speech and paid advertisement is a mistake often made, and yes, even in the election advertising issue, which I don’t want to debate here as we already have a thread brewing that one.

    There is a good reason why advertisement of pharmaceuticals is banned (except to the medical profession) in all countries except US and NZ. Because health is such an emotive issue, the targets of the adverts in general do not have the wherewithal to properly evaluate the adverts and the adverts themselves either cannot or don’t want to give the proper information.

  33. >
    One could argue that big pharma should not be allowed to advertise to the public, which is the norm in every other country in the world except the USA and NZ.

    Interesting perspective Frog. It’s a little like the Election advertising issue.

    Free speech is free speech, either you have it or you don’t. In the same way NZ gave women the vote despite NO OTHER COUNTRY IN THE WORLD doing it, we allow free speech (except for the last 11 months of course!)

    Who speaks, and what they say, should not be restricted other than by elimination of crude and objectionable material (though Gaia knows we have enough of both these days delivered into our living rooms).

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