Wayne McNee: Checks and balances the main priority for Pharmac

Wayne McNee

Fiona McQueen raised some excellent points in promoting the cause of access to the new-generation arthritis drugs known as TNF-inhibitors. These provide benefits for some people with arthritis but, as she notes, they come at a cost.

Pharmac has looked closely at the drugs. It has examined the clinical evidence and assessed the cost of any benefit they provide. It has looked at such information as the potential for these drugs to prevent people needing expensive hospital treatment, and considered their side-effects and ability to cause severe reactions.

The clinical evidence suggests they provide a benefit for some patients, but they do not work in all patients. Further, as Fiona McQueen commented, they are expensive.

Even taking into account the TNF-inhibitors' clinical benefits for some patients, when compared on a cost-effectiveness basis they do not fare as well to treatments awaiting funding for arthritis and other diseases.

For example, over the past year Pharmac has funded new treatments for such conditions as depression, chronic obstructive pulmonary disease, diabetes, raised cholesterol and hepatitis C.

All these decisions came after considerable work looking at the clinical evidence supporting these drugs, pricing negotiations with suppliers, and an economic assessment of the drugs' costs and the impact funding them might have on other areas of health spending.

That is not to say the TNF-inhibitors won't be funded. Indeed, one of them (etanercept) is already funded for children with arthritis. Pharmac is also talking to suppliers about finding a way to fund TNF-inhibitors further.

Pharmac wants patients to have access to new treatments that work. But it must be careful to balance that against the inevitable increase in spending that will be involved.

Arthritis patients have been benefiting from new spending in recent years. The range of subsidised products has been expanding, with significant new investments such as leflunomide (Arava), which has been funded since May 2002.

This drug is considered a step forward over previous treatments, and now accounts for some $2.6 million of the pharmaceutical budget. And etanercept was first funded last year for children with rheumatoid arthritis.

In response to Fiona McQueen, we need to note that access to etanercept does not halt when patients reach 18 - all the access criteria specify is that patients need to be under 18 when they first apply for the drug.

Not all new and exciting drugs shape up when subjected to close examination. For example, arthritis advocates also lobbied hard for the class of painkillers known as Cox-2 inhibitors to be funded.

Indeed, Arthritis New Zealand is still advocating these drugs, despite evidence that questions their significant cardiovascular risks and marginal benefits.

Pharmac's decision to decline funding for Cox-2 inhibitors is in many ways vindicated by the withdrawal of Vioxx, and new evidence emerging on the risks of Celebrex and Bextra.

The cost of the TNF drugs is certainly high, and Fiona McQueen has commented on the status of the companies that make and market them. Drug firms often claim prices need to be high to justify high costs of research and development. Yet they spend much more on marketing and promotion than on research.

The influential French clinical journal Prescrire has commented that high prices largely reflect political decisions rather than research costs.

Pharmaceutical companies are certainly extremely profitable enterprises. Wyeth, which markets etanercept (Enbrel) in New Zealand, reported a full-year profit of US$1.23 billion ($1.67 billion) last year.

Schering, which supplies another TNF-inhibitor, infliximab, reported 2004 profits of €500 million ($904 million).

It is true that if the cost of the drugs was reduced, this would help to make them more cost-effective.

New Zealand differs from many countries in the way it funds and manages spending on prescription medicines. No other countries have taken the step it has in defining an annual pharmaceutical budget and establishing an agency to manage spending within that budget.

New Zealand did this because of the high and rapidly rising costs of medicines through the 1980s and early 1990s. If the experiences of other countries, including Australia and Britain, are an indication, this rapid increase in spending would still be continuing.

Without the existence of Pharmac, New Zealanders would have had to face very difficult questions about the affordability of medicines. However, they now have access to a greater range of subsidised prescription medicines than ever before, and that list continues to expand while spending is managed within budget.

Pharmac must remember that every dollar spent on pharmaceuticals is potentially a dollar that cannot be spent elsewhere in the health sector.

Funding is limited, so it must be careful how it allocates spending. This is why Pharmac puts so much effort into detailed costings and analyses of new funding applications.

We often hear claims that other countries take a different approach. We look at these other countries and see them struggling to cope with ballooning bills for pharmaceuticals. Pharmac is confident that it has the balance right in the interests of New Zealanders.

* Wayne McNee is the chief executive of Pharmac, the Government's drug-buying agency. He is responding to Fiona McQueen, who said the treatment of severe arthritis had been revolutionised by TNF-inhibitors, and they should be available here.