PHARMAC 2020/21 Quarter 1 Performance Report

PHARMAC had a busy first quarter. We are already delivering on most of the initiatives in the new strategic direction.

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Summary

It is a significant milestone that all our strategic priorities now have programme plans in place with a four-year planning horizon. Overall, PHARMAC has made good progress over the last quarter towards delivering our strategic direction. A lot of work has gone into programme and project planning, refining scope and detail of initiatives and better understanding resourcing needs. 

5 of the 6 strategic priorities on track, and performance has been good with most measures and work activity on track. 

We achieved some significant milestones over the first quarter. These included;

  • Securing a new responsible use contract provider, Matui
  • Launching our refreshed website,
  • Moving into Phase 2 of our Pacific Responsiveness strategy,
  • Launching Te Whaioranga (our Māori Responsiveness strategy) and
  • Recruiting into the new Chief Advisor Māori role. 

The impact of COVID-19 is still affecting PHARMAC but encouragingly, very few of our strategic projects were put on hold. There was additional pressure related to Exceptional Circumstances application (NPPA) volumes and supply chain issues which required staff from across the whole business to mobilise in support. But we also saw some positive impacts from working in different ways due to COVID-19. For example, we are using our expert advisory committees in new ways and this has resulted in a direct efficiency gain for timeliness of our PTAC (Pharmacology and Therapeutics Advisory Committee) processes and more flexibility for clinical advisors. 

Over the next quarter we are looking forward to:

  • Continuing to strengthen our advisory committees and using them in more effective ways (ensuring CAC – our Consumer Advisory Committee is involved in key strategic pieces of work, enabling more consumer input to PTAC and working with PTAC members to assess equity capability and what support is needed).
  • Greater opportunities to engage with the health sector on our strategic work as their capacity returns.

Strategic Priority: Enhance key functions

Aspects of this programme are progressing well and our focus over the quarter has been to identify resource for the workstreams and get planning underway for activity that is due to kick off later in the financial year. 

A milestone last quarter was confirmation of our new way of contracting for medicines through competitive procurement (a shift to Principal Supply Status) and notifying the sector. This change will be implemented in the 2020/21 Invitation to Tender and will enable alternative brand funding. 

In general, PHARMAC’s ability to engage with the Health Sector has become easier in the last month. But we anticipate that one of our workstreams within this programme (implement changes to dispensing arrangements to increase our resilience to supply chain shocks) will be slightly delayed until later in the financial year. This is due to availability of the sector to engage. 

Focus over the coming quarter: 

  • Developing a public preferences survey for funding new medicines.
  • Developing changes to create more consistent and appropriate use of Schedule restrictions, to ensure responsible use of medicines.

Overall progress: 

On track

Strategic Priority: Relationships and Partnerships

We are progressing well in this Strategic Priority and all work is on track for delivery.

Over the last quarter we gained a comprehensive understanding of our current / potential stakeholders and who we need to engage with to inform our (to be developed) Engagement Strategy. 

The next phase of this work requires gathering insights and needs from our stakeholders. We are keeping a watching brief on COVID-19 and developing a plan if this causes a disruption to this engagement.

Focus over the coming quarter:

  • Targeted in-depth interviews followed by a broad-based stakeholder survey over October and November.
  • Working with the Chief Advisor Māori on how to best engage with our Māori stakeholders.

Overall progress: 

On track

Strategic Priority: Equitable access and use

Overall, this programme is tracking well against the intended outcomes and deliverables. We have experienced minor delays in disseminating the findings of our medicine access equity projects (due to COVID-19) and in implementing our medicine access equity monitoring and outcomes framework (working through stakeholder feedback). However, these are on track for completion by the end of the financial year. 

Some key achievements over the last quarter were the external dissemination of the Arthritis NZ PHARMAC Gout management programme evaluation, and the introduction of Matui as PHARMAC’s new responsible use provider, with a new focus on equity. 

Focus over the coming quarter:

  • Completing validation of the draft Baseline Measures Report taking into account stakeholder feedback.
  • Working with the Ministry of Health in relation to national gout management programmes.
  • Engaging with our PTAC and our clinical advisors on equity capability assessment.
  • Working with our new responsible use contract provider, Matui to produce resources for primary health care professionals with a focus on equity.
  • Re-engaging with the health providers who participated in the medicines access equity (Whakakotahi) projects to explore new opportunities to continue PHARMAC’s relationship with them.

Pacific Responsiveness Strategy

An outline plan for stage 2 of the Pacific Responsiveness Strategy has been completed. This stage will build on and expand relationships established in the first stage and leverage their influence in the sector and community. Over the last quarter staff have been working to embed Pacific Responsiveness across our strategic work programme.

Overall progress: 

On track

Strategic Priority: Medical devices

Overall progress is on track for this programme of work. Our focus over the last quarter has been building the list of products under contract for DHBs. We have also been developing draft operational detail, which we will look to gain feedback on with focussed engagement with sector stakeholders. 

A significant achievement over the last quarter was reaching $318m under agreement with another $60m in progress (we aim to get to $400m of DHB spend under national contract by end of 2020/21 financial year). 

Focus over the coming quarter:

  • Senior Leadership participation (through governance roles) in Health FPIM System work.
  • Establishing the DHB advisory group to support next steps for the programme
  • Developing an approach to focussed external engagement on the operational detail for fairer access to medical devices (engagement to begin in Q1/Q2 2021).

Completion of the Q1 market share activity report (focused on wound care products and cardiac drug eluting stents for 2020).

Overall progress: 

On track

Strategic Priority: Data and analytics

While none of the initiatives set out in the SPE are off track for this programme, it has been rated Amber to reflect our desire to make greater progress in the Data and Analytics space   As a result, key work programmes have been brought forward. 

To date we have made several enhancements to our system for calculating pharmaceutical expenditure forecasts. We have focused on streamlining inputs to the forecast and they are now in test phase. 

Focus over the coming quarter: 

  • Bring resource on board to plan and deliver a more ambitious work programme for this strategic priority (including a plan for designing a methodology for measuring Health Outcomes).
  • Continue to enhance and streamline the CPB forecasting system (coming focus on incorporating hospital data).
  • Build modules in Qlik to enable staff to access key data sets directly and enable greater exploration and analysis.

Overall progress: 

Issues identified but under management

Strategic Priority: Public Understanding, Trust and Confidence

Progress is going well for our Public Understanding, Trust and Confidence programme. 

Our focus over the quarter has been redesigning PHARMAC’s website to improve user-experience – and the redesigned website was launched on 20 October. We have also begun developing our social media strategy based on the needs of our audiences and what our customers expect. 

Our new Consumer Advisory Committee (CAC) members have been appointed but their induction was delayed due to COVID-19. We held a mihi whakatau via Zoom in September. 

Focus over the coming quarter is on strengthening the role of CAC by: 

  • Ensuring PHARMAC engages appropriately with CAC as part of planning and delivering key strategic pieces of work.
  • Holding an initial induction session for new members on 6 November.
  • Updating CAC terms of reference to include a greater focus on consumer input into our decision-making (note: we are also updating PTAC ToR to achieve the same outcome). 

Overall progress: 

On track

Performance against Treaty obligations: Te Whaioranga

A significant step forward for PHARMAC in this space over the quarter was the appointment of our first Chief Advisor Māori and the soft launch of our (updated) Te Whaioranga. 

This programme has been rated Amber as there are some issues under active management. Te Whaioranga is an ambitious programme of work and while progress has been made this quarter, a number of pieces of work will benefit from waiting for input from the Chief Advisor Māori. 

The capability building work in Te Whaioranga was envisaged as being aligned with and incorporated into a wider organisational development programme led out of the People and Capability strategy. However, while it would be desirable to have an integrated programme, the timing may be such that development needs to be separate. This will be further explored, and the requirements scoped in the next quarter. 

This quarter we received a draft report reviewing a selection of PHARMAC’s internal processes and reporting on whether these align with and reflect Te Tiriti o Waitangi.   

Focus over the coming quarter: 

  • Develop and assign respective Te Tiriti o Waitangi accountabilities (due Q3).
  • Scope and commission Māori capability programme for staff.
  • Consider recommendations from the Te Tiriti Report and plan work programme for updating key policies and processes to reflect Te Tiriti.
  • Scope the Māori Advisory rōpū and develop recommendations for Terms of Reference.

Overall progress: 

Issues identified but under management

Key performance indicators

All but one of our external quarterly measures are on track for meeting targets by the end of the year. This shows good performance across our strategic and operational work demands. Further commentary is provided in the performance dashboard. 

  • External measures on track: 8
  • External measures off track: 0
  • Watching brief: 1 measure
  • Quarterly measures under development: 2 measures 

Note: two measures are still under development and progress will be reported in our next quarterly performance update in January 2021, along with an update on our progress towards our external measures that are reported on a six-monthly frequency. 

In July and August, we experienced a large spike in the volume of Exceptional Circumstances (NPPA )applications. This has caused our upward trend in terms of the timeliness of decisions made within 10 days to reverse this quarter and we have rated this area as amber to keep a watching brief on performance. Staff report that volumes appear to be returning to almost normal and additional resource has helped to clear the spike in demand. 

We have maintained our downward trend in time taken to publish PTAC and sub-committee records which has seen significant improvement over the past six-months.   

Over half of our performance measures (23/43) are new this year and require a methodology to be developed during the year. This is a consequence of being in the first year of our new Statement of Intent where we introduced a new Performance Framework. At the end of quarter one, new methodologies have been developed for 10 new measures. We are on track for all measures to be ready for reporting purposes at the end of this financial year.

System-wide working

One of PHARMAC’s three impact areas is that ‘we play a key role in an effective and equitable health system’. We indicated in our approach to delivering on the Minister’s expectations for 2020/2021 that we would provide quarterly updates on system-wide issues affecting PHARMAC.

New Zealand Cancer Action Plan 2019-2029

PHARMAC introduced a parallel assessment process for cancer medicines that came into effect from 1 January 2020. This initiative was part of the New Zealand Cancer Action Plan. 

Since 1 January 2020, PHARMAC has considered three funding applications for cancer medicines in conjunction with Medsafe’s evaluation of the medicines, through this new parallel assessment process. We will be reviewing the effectiveness of the parallel assessment process in quarter four of the 2020/21 financial year. 

Health and Disability System Review

We intend to engage with the unit leading the Government’s response to the Review, to explore opportunities for PHARMAC engagement and involvement. The themes from the report that we consider most relevant to PHARMAC are: 

  • Strengthening Māori leadership and participation;
  • Governance and funding issues, including a focus on integrated, long-term planning; and
  • A focus on population health as a system driver.

The Health Finance, Procurement and Information Management System (FPIM)

An update was provided to the Minister of Health in the July 2020 (quarter four) report. A copy of this can be provided on request.

Vaccine responses to local and national outbreaks of disease

Measles campaign

At the request and determination of the Ministry of Health, PHARMAC has ordered 350,000 doses of MMR vaccine (funded by the Ministry of Health) to support their one-off campaign, and all have been received from the supplier. This means that there are over 540,000 doses of the MMR in the national vaccine store at present, including all the stock for the usual childhood immunisation programme.

COVID-19 Vaccine Strategy

PHARMAC staff are actively contributing to the All of Government COVID-19 Strategy. PHARMAC’s role on the Working Group is effectively focused on the procurement pillar, while, as a member of the Taskforce our contributions are focused on governance and decision-making.