Pills medication

In defence of Pharmac

Pharmac has allocated a ‘low priority’ to Keytruda, a new drug for people with advanced melanoma. They say the drug is promising, but with a price tag of $30Mn per annum, the evidence of effectiveness isn’t good enough. In order to get a higher priority for funding it would need to have more evidence of effectiveness or cost less.

Predictably, the decision has been greeted with dismay by people with melanoma, those who care for them and, probably, the general public.

We’ve heard from people who took the drug as part of a trial and are now cured of melanoma. We’ve heard from people with advanced melanoma who have essentially no other treatment options. The drug would save people’s lives – surely Pharmac should fund it!?

Well, except that the budget for medicines is a fixed level, and Pharmac is charged with the job of getting the most health gain (both quantity and quality of life) possible for that budget. If $30Mn is spent every year on Keytruda, it won’t be available for other people with different conditions, on drugs for which it says it has better evidence of health gain. One of the missing parts of the debate is the voice of those whose lives will be saved, extended or otherwise improved because the medicines they need can be funded.

The other big missing piece is acknowledgment of the point I have been making for some years: the pharmaceutical budget simply isn’t big enough, and is declining in real terms because of the underfunding of DHBs. Pharmac works as a buying agent for DHBs, using a topslice from DHBs’ budgets. Usually Pharmac gets less money than it says is necessary because DHBs naturally instead favour non-pharmaceutical services that they also provide as well as fund, an influence which has become much stronger since Government funding for health has declined substantially, forcing DHBs to cut expenditure wherever they can. The proportion of Vote:Health going to pharmaceuticals has been declining and there is no rational way of knowing whether, overall, this is resulting in better or worse health gain. I strongly suspect worse. I’m open to the Pharmac budget being set independently, to avoid the conflict of interest DHBs inevitably have, but more importantly I’m committed to the balance between funding pharmaceuticals and non-pharmaceutical interventions being set based on evidence.

And so the pressure is now coming on politicians to ensure Keytruda is funded. We have been there before. I was a DHB Chief Executive when Pharmac declined funding for long courses of Herceptin. As chief executives we were under political pressure to fund it anyway, but said no. National campaigned on funding Herceptin, and did so, without knowing whether or not that was the best use of the dollars used for that purpose.

There is always more demand on the health dollar than there is dollars to spend. That is why we have a system, reasonably free of political interference, that buys the most drugs at the best price to provide to the most number of New Zealanders. It is a system that by and large works and we support keeping it that way.  If a government has more money to put into pharmaceuticals, why on earth wouldn’t it spend that on agents that have good evidence of effectiveness?

I’m not saying Pharmac is perfect. I have previously voiced some particular critiques of its decision-making processes. But the health improvement it has achieved for the funding it has available is better than the other countries we have been compared with in the wake of the Keytruda decision. There are some new classes of drugs becoming available that work differently, and some of these sound very promising. Pharmac needs to ensure that its processes are as fast as is consistent with making thorough decisions, and also needs to be open to new ways of establishing effectiveness, provided that they are robust.

I’m surprised Keytruda didn’t rate better, and disappointed that people who might have benefited from it probably won’t do. But I’m strongly committed to decision-making to maximise cost effectiveness, and political interference almost always ends up in less health gain, not more.

3 thoughts on “In defence of Pharmac

  1. Against the pharmaceutical market consolidation, Pharmac’s failure is a least bad performance. Kevin makes good points, and uses diplomatic language. In less diplomatic language:

    Cesium Chloride may be one place to start. But that’s not so popular as there is no patent 🙂 Energy field treatments continue to advance, but good luck getting that stuff scientifically published. Oh, cancer patents do eat organic, right?

    eg. Pharmacy Consolidation: Merck was going bankrupt in 2008 and consumed by the capital markets when Mr Merck(le) died in 2008 (suicide says Wiki). Merck was private and medium massive company, now it belongs to the capital market cartels.

    eg. Control of Science Publication: Why is it that in this day-in-age of internet publication, science publication is still controlled by 6 publishers? Why isn’t science independently published?

    So the world’s scientific-body-of-knowledge needs the rubber stamp of the capital market owned publishes. Wander how many geo-engineering research documents didn’t make the cut?

    Are we ready to talk about re-capture of the capital markets yet? Or do we need to hear more depressing examples of market power? Perhaps we’re busy being scared for our lives and distracted by cow farting and fights over oily sand? The family of JFK can be proud that he died an honourable death; as he truly tried to de-privatise the money markets. (There hasn’t been a US President since, with the balls to take action) . Did our Rod Donald not also die as a martyr? Where is our action? Here it comes.

    Back to the basics, with local economies. What’s stopping the health system from participating better in the local economy?

  2. I just wonder where you would stand if you were the one that needed it.so much money is allocated for things that dont stop suffering and save lives.

  3. Well said, Kevin.

    The other thing that hasn’t been made clear in this debate is that if Pharmac were bunged another, say, $100m to buy drugs, they still wouldn’t be funding Keytruda (Pembrolizumab) because they could spend that dosh delivering better outcomes for more people without even breaking a sweat.

    It seems in this case that some sort of an unholy alliance has been formed between Merck and melanoma folks here in NZ to push for this drug using every means possible, other than fixing either of the two things that prevent it being funded today, namely price and efficacy.

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