The Government will boost Pharmac’s budget by more than $1.7 billion over the next four years.
Video / NZ Herald
The Government will boost Pharmac’s budget by more than $1.7 billion over the next four years, increasing the national drug purchasing entity’s overall budget to almost $6.3b.
Associate Health Minister David Seymour made the announcement while opening the country’s first national medicines summit, hosted by Patient Voice Aotearoa and Medicines New Zealand at Parliament today.
In an earlier statement, Seymour said he’d received advice that Pharmac required more than $400 million a year on top of existing $1.1b annual funding to ensure medicines already funded could continue to be provided.
He then went on to criticise the previous Labour Government for not allocating more funding to Pharmac. Labour’s election policy was to increase Pharmac’s budget by roughly $250m annually over four years.
“This lack of funding jeopardised New Zealanders by potentially causing Pharmac to delist medicines, thereby reducing access to vital healthcare.
“The Government is committed to providing New Zealanders with greater access to the medicines they need. Pseudoephedrine cold and flu medicines will be on shelves within weeks, we’ve streamlined Pharmac’s approval processes so it can assess a funding application at the same time Medsafe is assessing the application for regulatory approval, and we’re committed to faster approvals within Medsafe for products already approved by at least two overseas regulatory agencies recognised by New Zealand.”
Labour health spokeswoman Dr Ayesha Verrall called for Seymour to release the advice he cited, saying Labour’s policy had been informed by Treasury’s assessment last year that Pharmac needed $724m over the four-year forecast period to meet cost pressures.
During the election, National promised to roll back Labour’s policy for universal free prescriptions and use the money from reinstating the prescription fees to fund 13 new cancer drugs, at a cost of $280m.
The coalition agreement between National and New Zealand First promised to give Kiwis “access to 13 more cancer treatments”.
Pharmac has independence from the Government in selecting which drugs to fund. Seymour defended the policy to fund the new treatments, given they’d been recommended by the Cancer Control Agency.
Associate Health Minister David Seymour wants to see Pharmac become more responsive. Photo / Alex Burton
Today’s increase of roughly $450m more per year would enable Pharmac to continue access to the drugs it currently funded but did not extend to the 13 new treatments.
This was pointed out by Breast Cancer Foundation chief executive Ah-Leen Rayner, who said there was an “urgent need” to further increase Pharmac funding.
“Because right now, there are breast cancer patients who are having to fundraise tens of thousands of dollars for drugs to save and extend their lives, or go simply go without.”
Seymour couldn’t give a commitment all 13 would be funded in the upcoming Budget, to be released on May 30.
“That’s going be a Cabinet decision and a Budget decision, it’s not something that I personally choose.
“My commitment is to make sure that Pharmac is properly funded and has increasing funding each year. When we get more fiscal headroom, I’m sure there’ll be more discussions about how we can manage to fund more cancer of drugs.”
Seymour, whose associate health role included overseeing Pharmac, said the drug-buying entity suffered from not articulating how short-term investment could save the Government money in the long-term.
He used the funding of Trikafta - a treatment for those with cystic fibrosis - as an example, saying the frequency of lung transplant operations had “fallen off a cliff” as a result.
“That can have major savings for the Government, and I don’t think that we actively think about how funding pharmaceuticals can actually save the Government money.
“Overall, we tend to discover these things almost by accident.”
Adopting new medical technology was also a priority for Seymour, who said the “revolution” occurring in that sector could make New Zealand healthcare less productive if the country didn’t engage.
Patient Voice Aotearoa chairman Malcolm Mulholland highlighted how New Zealand fell below the OECD average on its level of funding for drug-buying agencies. Photo / Mike Scott
In a speech to summit attendees, Patient Voice Aotearoa chairman Malcolm Mulholland highlighted how New Zealand’s funding for Pharmac was well below the average of other OECD countries, which was about 1.5 per cent of GDP. New Zealand’s spend was closer to 0.4 per cent of GDP.
Seymour, who spoke after Mulholland, confirmed those figures were true but told the audience New Zealand could go from the “back of the pack to the front of the world” with how it helped Kiwis with illnesses and disorders.
Seymour later told reporters bringing New Zealand up to the OECD average would cost almost $3b.
“We’re not going to do that in the immediate future.
“It’s always going to be the case that New Zealand is going to have smaller budgets than other countries that are larger and richer.”
However, Seymour claimed there were other ways New Zealand could be a world leader, namely how responsive the country was to new disorders and advancements in technology.
Seymour said Bennett “will lead the Pharmac board in managing the pharmaceutical schedule and driving greater efficiencies and access to medicine for New Zealanders.
“Globally, changes in medicine are making them more useful and presenting new opportunities for our health, while at the same time presenting new challenges that need to be navigated,” Seymour said.
“I’m confident that Paula has the leadership qualities that will make her the best person to make the decisions needed to ensure that Pharmac is world leading.”
During her 15-year career in politics, Bennett served as Deputy Prime Minister and a Cabinet minister, with portfolios that included social development, associate finance, state services, social housing, police, local government, and tourism.
Since she retired from national politics in 2020, Bennett has been working in an advisory role for Bayleys’ senior management team, as a strategic advisory director for Bayleys commercial and industrial division.
This year, she said she had been considering running for mayor of Auckland.
“I’m kind of keeping my powder dry, sure people are talking about it, but I’m just saying ‘I don’t know’,” said Bennett.
Two senior political sources initially told the Herald they had heard Bennett was planning to run for the chains of the Super City.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.
