Dr Bryce Edwards is Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington.
OPINION
A new announcement of the Government’s funding and delivery of promised new cancer drugs is suddenly imminent. Prime Minister Christopher Luxon has yielded to cancer patient advocates and declared on RNZ this morning that an announcement would be made “very shortly” about when new cancer drugs will be made freely available.
National had campaigned upon delivering 13 new cancer drugs, to be paid for by the reimposition of $5 prescription charges. But when the Government’s first Budget was announced on Thursday, the promised drugs weren’t included, yet the increased prescription fees were. Furious protests about National’s “broken promise” have since taken over the post-Budget commentary.
Luxon’s statements today explaining why the promised cancer drugs were missing from the Budget suggests the problem was simply down to governmental administrative problems: “It has required more time than we anticipated and we’re just working out the best way to procure those treatments… We’re working really hard to make sure when we put the process together to secure those drugs and treatments, that we’ve actually got it set up on a sustainable ongoing basis, that it actually works” – see RNZ’s New cancer drug funding to be announced this year, Christopher Luxon
Finance Minister Nicola Willis also went on RNZ this morning to say, “We understand the urgency and our message to them [advocates] is we’re working on it with the urgency it deserves.” She has also said that the Government’s new announcement on delivery and funding will occur “very soon”.
Patient advocate Malcolm Mulholland is also quoted by RNZ saying the Government’s latest message on the drugs sounds like a “backflip”. This is correct. The reality is that the Budget was missing the promised funding for cancer pharmaceuticals because the Minister of Finance decided not to fund them for the next financial year. Luxon also told Newstalk ZB’s Mike Hosking today that the decision not to fund the drugs this year was made by the “Budget Finance Ministers Group” in Cabinet.
With the Government now doing a backflip on the issue, Mulholland identified on RNZ today what has occurred: “I think the government didn’t expect there to be as much backlash about the lack of funding as there has been.” He says that in making its new announcement on drug funding, the Government will have to be “crystal clear” about the timeframes for delivery.
Luxon also went on Newshub’s AM Show this morning, suggesting that the Government hadn’t deliberately left the funding out of the Budget, but it was just due to the complexities of the drug-buying process. He told the broadcaster, “it is taking a little bit more time than we wanted”, and he was reported believing that “it was the procurement process that was holding up the funding” – see: Prime Minister Christopher Luxon pledges National will deliver on its cancer drug promise
In terms of the timing of the Government’s coming announcement, the Prime Minister gave a different message on TVNZ Breakfast, saying that “New Zealanders can expect an announcement on funding for 13 new cancer drugs by Christmas” – see 1News’ Luxon promises cancer drug announcement ‘before Christmas’
Again, Luxon suggested that the hold-up was more administrative than deliberate, saying, “We just couldn’t get it together in time for that Budget.”
Health Minister Shane Reti has explained the missing cancer drugs differently. He told the Herald’s Adam Pearse at the weekend that the funding couldn’t be allocated from the money saved from reimposing prescription charges until that money was actually collected by the government – see: ‘Unnecessary suffering’: Promised cancer drugs won’t be funded for at least a year
Another explanation is that the estimated $70 million couldn’t be afforded, as the total health budget had already increased significantly to about $17 billion. On top of this, some in National argue that the last government didn’t make clear that Pharmac was underfunded. Either the Fiscal Responsibility Act is no longer fit for purpose, or National hadn’t adequately examined the books during the election campaign last year. Hence, National’s Liam Hehir says the Government couldn’t afford the $70m cost of the drugs due to Labour’s management of Pharmac – see: The Bitterest Pill
The National Government has, therefore, been sending several contradictory and mixed messages about the cancer drug funding issue.
Prime Minister Christopher Luxon and Finance Minister Nicola Willis. Photo / Mark Mitchell
The strong criticisms of the Government
One of the first to criticise the Government was former Finance Minister Steven Joyce, who National can usually rely upon to back the Government. But in his Saturday column for the Herald, he predicted that a U-turn would be coming very soon – see: Pharmac blunder, tax cuts and debt: the hits and misses of Budget 2024 (paywalled)
Here’s Joyce’s key criticism: “The one significant blemish that may dog the Government is its inexplicable failure to make good on its cancer drugs promise. It seems weird that you can trumpet a massive $17b increase in health spending across three Budgets and yet not dedicate any of it to meeting the most public health pledge of your recent election campaign. Worryingly, it suggests a lack of political savvy in a crucial area of Government policy.”
Various newspaper editors have expressed strong criticisms of the decision. The Herald’s editorial yesterday condemned it, saying, “Cancer patients who were promised access to those drugs shouldn’t have to wait that long. Some may have altered their plans (and sold their homes, moved overseas, started a Givealittle) if not for the pre-election promise” – see: Editorial: Cancer patients promised access to medicines shouldn’t have to wait (paywalled)
The Otago Daily Times has been even harsher on the Government, publishing an editorial today arguing that National has unnecessarily created a real mess, making them “look at best inept, and at worst uncaring and cynical” – see: Editorial – Cancer drug funding debacle (paywalled)
The newspaper says that patients don’t want to hear an array of excuses, but expect the Government to deliver on what they said they would. The editorial also questions National’s wisdom in making this sort of promise about drug buying in the first place, as it interferes with the Pharmac model.
Here’s their argument: “Is it fair to allocate funding on whoever can capture the ear of politicians? Apart from anything else drug companies, knowing the government has decreed certain drugs must be bought, undermines Pharmac’s negotiating power… Members of the public, with the help of ‘Big Pharma’, may be persuaded every new drug funded elsewhere is a magic bullet when the evidence of efficacy might be scant.”
But the harshest of all newspaper editorials was in the Sunday Star Times yesterday. Editor Tracy Watkins sums up the broken promise with these phrases: “Betrayal. Cruel. A lie”, and adds, “Of all the promises National might have chosen not to keep, abandoning the promise to fund life-prolonging cancer drugs is inexplicable” – see: A cruel lie: How else do we judge National’s broken promise on cancer drugs?
Watkins also questions National’s motivations in making the promise in the first place: “We can now be quite clear about what lay behind that promise. It was cynical electioneering, nothing more. Because it turns out the promise was easily expendable.” According to Watkins, even if the policy is delivered in 2025, this isn’t acceptable: “Promising to do it next year isn’t good enough. When you have cancer, the clock is always ticking. A year can literally be a lifetime.”
When the Government’s first Budget was announced on Thursday, the promised drugs weren’t included. Photo / 123RF
A flawed pharmaceutical and Budget process
Government Budgets are supposed to show the funding decisions for the next year or more. Yet National now appear to be saying they are about to announce significant changes to the Budget. While this is certainly possible, using supplementary bills, it’s not a good process. If National was committed to buying the cancer drugs, but this was held up by trying to find the proper procurement process, as indicated by Luxon today, they should still have been able to include the funding in the Budget. Luxon can’t seem to explain why they haven’t.
Other problems with National’s pharmaceutical-buying process are also examined today by journalist Imogen Wells in her interview with the University of Otago’s cancer medicine expert Chris Jackson – see: The problem with National’s cancer drug promise
In this, Jackson says that an election announcement of which drugs would be funded puts the government procurement fund at a disadvantage: “They announced in advance what the drugs would be, which means that no drug company is going to give you a good deal if they already know they have the guaranteed funding.”
Jackson also says that National’s list of 13 cancer drugs is outdated: “[The list] absolutely and utterly must be [updated]. It’s bonkers to use that list when it’s three years out of date already, because the world has moved on in the last six months, let alone the last three years”.
A very different issue with the process is put today by political commentator Matthew Hooton, who writes on his Patreon blog that by doing a backflip, National is seriously jeopardising anyone’s belief that Willis will be able to keep to her Budget principles and spending allowances – see: Why National’s cancer-drug calamity is worse than you think (paywalled)
Here’s Hooton’s critical point, which is worth quoting at length: “After increasing spending and borrowing above that forecast under the previous Government, the new Government’s only hope of avoiding a credit-ratings downgrade later this year or next, and thus higher debt-servicing costs and probably a further increase in the OCR, is by convincing everyone it really will stick to the net $2.4b operating allowances for the next three Budgets, including the 2026 election-year Budget, down from this year’s net $3.2b. Even before the cancer story broke, no one really believed they would, including the Treasury, not least because of the ageing population and the need to keep soldiers, police, doctors, teachers and nurses in New Zealand rather than taking the job offers flowing in from Australia in particular. Well, no one at all will believe them if, within days or weeks of making those new solemn promises to the bond markets, they suddenly decide to keep their solemn promise to cancer sufferers after all.”
Once no one has faith that Willis will be able to keep to her future spending allowances, the result, according to Hooton, is that the Reserve Bank is likely to keep interest rates high, and credit rating agencies will downgrade the Government. Everyone then suffers in the pocket. National would, therefore, have just been better to include the cancer drug buying in the Budget in the first place.
