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Source: New Zealand Parliament – Hansard

Question No. 2—Health

2. BROOKE VAN VELDEN (Deputy Leader—ACT) to the Minister of Health: Why is the fixed nature of the pharmaceutical budget and total amount of funding allocated for pharmaceuticals out of scope of the announced review into Pharmac?

Hon ANDREW LITTLE (Minister of Health): Pharmac has been an ongoing success story for New Zealand, with millions of New Zealanders benefiting from its ability to negotiate access to pharmaceuticals. It’s the only agency in the world that both decides what medicines to fund and manages a fixed budget for those medicines. In the 27 years since Pharmac was established, there have been various reviews of aspects of its operations, but none of those reviews has focused directly on the agency’s performance or its role as part of the wider health and disability system. The budget of Pharmac does not lend itself to a technical review. Budgets are finite by nature and are decisions for the Government of the day. They are based on a range of factors, including trade-offs across the whole of the health system and across the whole of Government.

Brooke van Velden: Why was funding ruled out of scope of the review into Pharmac but was considered within the scope of the mental health inquiry?

Hon ANDREW LITTLE: I’m not sure the two are comparable. The mental health and addiction review that took place that led to the He Ara Oranga report was about the gap in unmet need in that particular sector. In relation to Pharmac, the challenge there is making sure that the decision making by Pharmac fits with the objectives, the statutory objectives, that are set for Pharmac and is transparent for those who are looking closely at the decisions that it makes.

Brooke van Velden: Will the review compare New Zealand’s access to medicines with Australia’s; if not, why not?

Hon ANDREW LITTLE: The review will look at Pharmac’s decision making, and I expect as part of that it is likely that the review panel will look at comparable decision-making processes by comparable bodies in other countries.

Dr Shane Reti: How does he respond to statements at annual review that the Pharmac review is toothless and a whitewash?

Hon ANDREW LITTLE: I’d say that those statements are ridiculous.

Brooke van Velden: Will the Minister consider changing the terms of reference to allow for funding options to be considered, and, if not, why not?

Hon ANDREW LITTLE: I refer the member to the answer to the primary question, which is that the budget of Pharmac does not lend itself to a technical, objective review. The budget for Pharmac is the product of decisions by the Government of the day as it puts together its total Budget and its total funding for the whole of Government. Trade-offs are needed, and we wind up where we do with Pharmac. I might add, however, that in terms of Pharmac’s budget, in the period from 2014 to 2017, the Pharmac budget increased 6.9 percent; in the period 2018 to 2021, it increased 30.9 percent, because this is a Government that takes seriously the need for our population to have access to the best available medicines.

Brooke van Velden: Does he expect the review to deliver results for many desperate New Zealanders currently having to crowdfund for lifesaving medicines due to the current funding model of Pharmac?

Hon ANDREW LITTLE: I expect the product of the review to shine a light on the decision making by Pharmac: the way it makes it decisions, the information that it obtains to make those decisions, the agility of its decision making, and its responsiveness to new medical technologies and to the differing and changing needs of the New Zealand public. Those are the objectives we’ve set for the review. I eagerly await its report.

Debbie Ngarewa-Packer: How is the Minister reducing inequities in pharmaceutical funding and access for iwi, w’ānau, and hapū Māori?

Hon ANDREW LITTLE: The basis on which Pharmac makes its decisions has to take into account a range of factors, including the very issues that the member raises. Equity of access to therapeutic treatments through the Pharmac budget is a critical objective that Pharmac has to meet.

Debbie Ngarewa-Packer: Will the Minister support increasing the Pharmac budget for life-changing pharmaceuticals that Māori overwhelmingly have to attain through the private market?

Hon ANDREW LITTLE: I’m confident that Pharmac is constantly abreast the challenge that we have to make sure that suitable medicines for a whole range of conditions that New Zealanders suffer, including conditions that have a higher incidence in some population groups than others—that is part of the juggling act that it must meet. I’ve indicated to the House already in an earlier answer that this Government has substantially increased the funding of Pharmac to date. We do so because we want Pharmac to do the best it can. But in the end, budgets are limited; not just the budget for Pharmac but the health budget and the overall Government Budget from one year to the next.