PHARMAC 2020/21 Quarter 2 Performance Report

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Summary

PHARMAC is halfway through the first year of delivery of our new strategic direction and despite the challenge of an ambitious work programme we are doing well achieving our goals.

5 of the 6 strategic priorities are on track, and performance has been good with most measures and work activity on track. However, some pockets of work have taken longer to deliver than anticipated as new considerations are brought to light through engagement and review points. This has led to a few initiatives being delayed but overall, we are confident that with a concerted effort we can get these initiatives back on track. 

To ensure we lift our organisational excellence, we need to address our capability gaps and better resource our supporting strategies (Te Whaioranga and People and Capability). During the quarter we have developed a clear view on our resourcing needs and are focused on addressing these as quickly as possible so we can start to see real momentum, particularly in upholding our Te Tiriti obligations.

We achieved some significant milestones over the second quarter. These included:

Priority: Equitable Access and Use

Milestone: Re-establishing our Responsible Use Advisory Group with new members and mandate, to support PHARMAC’s strong focus on medicines access equity.

Milestone: Producing insights on medicine use for the arthritis condition Gout and what equity gaps exist for Māori and Pacific Peoples.

Priority: Relationship & Partnerships

Milestone: Releasing a stakeholder engagement survey to better understand the needs of our partners and their perceptions of PHARMAC.

Priority: Te Whaioranga

Milestone: Completing an initial review of PHARMAC’s policies, practices, systems, and processes to ensure they align and reflect Te Tiriti.

Priority: Public Understanding, Trust and Confidence

Milestone: Releasing draft terms of reference for our primary advisory committees (PTAC and CAC) for public feedback to help PHARMAC better incorporate consumer voices into our decision-making.

Note: PTAC stands for Pharmacology and Therapeutics Advisory Committee. CAC stands for Consumer Advisory Committee.

The impact of COVID-19 is still affecting aspects of our core business, but even so we are still managing to successfully balance this along with our core medicines assessment and decision-making work and with delivery of our strategic initiatives. As PHARMAC works through the delivery of our strategic direction over the next four years, we also require improvements to our core systems. Management is keeping a watching brief on progress to improve our processes and systems to ensure they are fit-for-purpose and keep pace with the needs of our future business. 

Over the next quarter we are looking forward to:

  • Undertaking work to better understand public preferences for pharmaceutical spending.
  • Supporting the health sector as we work together to build the IT infrastructure required to achieve wide-scale procurement savings for DHBs in medical devices (FPIM or Finance, Procurement, and Information Management System).
  • Beginning engagement with the health sector on fairer access to medical devices.
  • Working with the PHARMAC Board and Senior Leadership Team to develop their Te Tiriti o Waitangi accountabilities.

Priority: Enhance key functions

We continuously improve the way we work to deliver maximum value to New Zealanders.

A key focus for this programme over the last quarter has been to identify resource needs and bring additional support on board. Most aspects of this programme are tracking well and as long as we continue to secure the resourcing needed for the workstreams coming online in Q3 and Q4, then we are on track to meet our milestones.

During the last quarter PHARMAC has been planning for public engagement to better understand public preferences for pharmaceutical spending (a key milestone for this year).

Focus over the coming quarter:

  • Engagement with the public to better understand public preferences for pharmaceutical spending.
  • Shaping up a programme of work to improve planning and implementation practices for our commercial activities.
  • Starting work on an Emergency Management Plan to support PHARMAC’s operational response to support the health sector in a civil defence or public health emergency.
  • Gathering data on PHARMAC’s efficiency across key processes core to our daily operations. The first of these measures became available this quarter for our Time to Rank Applications.

Overall Progress:

Green: On track

Priority: Equitable access and use

We enable equitable access to medicines and related products by influencing availability, accessibility, acceptability, and appropriateness.

The majority of initiatives within this programme are tracking well however it has been given an Amber rating as a significant part of this programme (the Outcomes Framework) will require a concerted effort over the next six months to ensure success. Next steps involve further iteration of the methodology and our focus will be on ensuring the output is robust, is valuable for DHBs and influences change. A detailed plan is currently being put together on how we will achieve this.

Some key achievements over the last quarter in this programme were engaging with the Health Quality & Safety Commission and Arthritis New Zealand to strengthen our partnerships and progress a MoU, and appointing advisors for the newly reconfigured Responsible Use Advisory Group (first meeting held on 2 December 2020).

Focus over the coming quarter:

  • Undertake a cultural capability needs assessment with our clinical advisory network and identify potential gaps.
  • Continue the implementation of our medicine access equity monitoring and outcomes framework, ensuring a plan is in place to mitigate the challenges associated with the next phase of this work.

Pacific Responsiveness Strategy

Due to staff vacancies last quarter, we had not made as much progress initiating Stage 2 of the Strategy as we had intended for the first half of 2020/21. This work is now back on track with resourcing issues resolved. Our focus for the rest of the year is to continue detailed planning of the programme for Stage 2 and start implementation.

Overall Progress:

Amber: Issues identified but under management

Priority: Medical devices

We drive better value and more consistent access to hospital medical devices.

Overall progress is on track for this programme of work although preparing for focussed engagement has taken longer than we had originally anticipated. We are still on track to begin sector engagement on fairer access to medical devices during the second half of 2020/21.

A significant achievement to date is reaching $330 million under agreement with another $75 million in progress (our target is $400 million of DHB spend under national contract by end of 2020/21). We have also identified members for a new DHB Strategic Medical Devices Advisory Group and should have this running by the end of Q3.

Focus over the coming quarter:

  • External engagement on fairer access to medical devices (engagement to begin in Q3/Q4).
  • Completion of the market share activity report (focused on wound care).

Overall Progress:

Green: On track

Priority: Data and analytics

We measure health outcomes and make evidence-informed decisions, using and making available data and insights from a wide range of sources.

Last quarter this programme was rated Amber due to our increased emphasis on Data and Analytics, particularly in health outcome measurement. Workstreams have been bought forward and additional resource secured to increase our pace of delivery. We are now on track to achieve against these new targets.

Our most important progress has occurred in the area of developing a methodology to measure health outcomes.  During the quarter, we engaged external consultants (Sapere) to provide advice on the scope, approach, and resourcing for progressing this work, and the Senior Leadership Team approved a pathway forward for this work.  Securing additional resource to support this work also commenced during the quarter.

Other key achievements over Q2 involved moving into Phase 3 of the Combined Pharmaceutical Budget Forecast Refresh project which sees us bring onboard additional data sets to our system and streamline existing processes. The visual analytics tool Qlik, implemented in 2019/20, is now in wider use with good staff uptake.

Focus over the coming quarter:

  • Work on assessing the post-implementation health outcomes for 4 medicines.
  • Continue to enhance and streamline the CPB forecasting system.
  • Work to better understand our Māori data sovereignty obligations as we gather and report data on medicine access equity gaps.
  • Supporting the health sector’s work on FPIM.

Overall Progress:

Green: On track

Priority: Public Understanding, Trust and Confidence

We listen to the views of New Zealanders and we communicate clearly and simply

We are tracking well against deliverables for this programme. During Q2 we developed new guidelines for translating publications to continue our journey to better connect with New Zealanders and ensure our communications are easy to understand. We also finalised our Social Media Strategy to engage directly with New Zealanders on our work. As part of implementation of that strategy, we plan to better understand the needs of our audiences and what our consumers expect. This will be a significant piece of work over the medium term and should help us lift our media sentiment score.

A key milestone for PHARMAC this quarter was sharing the draft Pharmacology and Therapeutics Advisory Committee and Consumer Advisory Committee terms of reference for public feedback. Consultation is open until March 2021. This is a key step in our work to develop a new expert advice policy to increase opportunities for consumer input into our work.

Over the quarter we continued to strengthen the role of our Consumer Advisory Committee, for example we sought their advice on both our diabetes treatments funding work and the planned Enhance Key Functions public preferences survey. A 2021 engagement calendar is under development which will ensure the Consumer Advisory Committee is involved at the early stages of our strategic work so we can better incorporate consumer voices in our decision making.

Focus over the coming quarter:

  • Continuing to improve the content on our website to make our information simple for our various audiences to understand. This should contribute to lifting performance for our measure on increased website engagement and visits.
  • Continue to focus on increasing our transparency and simplicity through the stories and messages we communicate to our audiences.
  • Consulting with interested groups on the Pharmacology and Therapeutics Advisory Committee and the Consumer Advisory Committee Terms of Reference.

Overall Progress:

Green: On track

Priority: Relationships and Partnerships

We are progressing well in this Strategic Priority and all work is on track for delivery. During November, our first stakeholder survey was released and to date approximately 300 people have completed it. Results from this survey will give PHARMAC important insights on external perceptions and views of us, as well as feeding into several measures for our performance framework. We intend to use these insights to help us form better relationships and expand our influence to achieve health outcomes for New Zealanders.

The response rate for the survey was lower than anticipated and may mean we need to aggregate results to a general level rather than being able to break results down by stakeholder group for targeted insights. We will look to achieve a higher response rate that will enable this when the next survey is run in six months’ time.

Focus over the coming quarter:

Working with the Chief Advisor Māori on how to best engage with our Māori stakeholders for a greater level of insight on their experiences with PHARMAC.

Overall Progress:

Green: On track

Progress against Treaty obligations

Te Whaioranga 

We understand and support whānau Māori to achieve best health and wellbeing through access to, and optimal use of, medicines and medical devices; and we uphold Te Tiriti o Waitangi

This programme has been rated Amber to acknowledge that we are not making enough progress to meet the expectations we set ourselves in Te Whaioranga. It will take some time to get this programme back on track as the capacity and capability requirements to deliver on the plan are significant. This programme also requires significant support from our HR team who are still in the process of building their capacity as well. During the quarter we have developed a clear view on our resourcing needs and are developing a proposal for how PHARMAC will resource this programme of work.

Despite these challenges we have achieved a positive milestone over the quarter with a final Te Tiriti Report completed. The Report provides initial insights on how PHARMAC’s policies, practices, systems, and processes can better align and reflect Te Tiriti o Waitangi. The Report also provides us with standards to measure Te Tiriti compliance which we can provide as a practical tool to staff to help them better uphold Tiriti in all their work.

Focus over the coming quarter:

  • Work with the Board and Senior Leadership Team to develop and assign Te Tiriti o Waitangi accountabilities.
  • Consider recommendations from the Te Tiriti Report and plan work programme for implementing these.
  • Scope the Māori Advisory rōpū and develop recommendations for ToR, operation, and membership.
  • Getting our workstream of building internal Māori capability underway with urgency.

Overall Progress:

Amber: Issues identified but under management

Key Performance Indicators

SOI and SPE measures 

We have a watching brief on three of our external measures, and the remaining measures are on track for meeting targets by the end of the year. This shows good performance across our strategic and operational work demands.

  • External measures on track: 5
  • External measures off track: 0
  • Watching brief: 3 measures (see below for commentary)
  • Quarterly / Six monthly measures under development or data not yet available: 4

Over half of our performance measures (23/43) are new this year and require a methodology to be developed. 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 two, new methodologies have been developed for 12/23 of our new measures. We are on track for the remaining 11 measures to be ready for reporting purposes at the end of this financial year. 

We are maintaining a watching brief on the following measures:

Average time to rank new applications

This is a new measure which seeks a downward trend, and during this year the baseline is being established. The calculation for this measure is the average time taken to rank (prioritise) applications received in the last 5 years (excluding the current financial year). Our performance average of 15.6 months is not where we would like it to be. PHARMAC staff are assessing and developing options for improving timeliness including resourcing and process changes for improved efficiency. 

Website traffic and engagement

Following the launch of PHARMAC’s new website we have been able to report website traffic and engagement for the first time this quarter. Baseline is being established for this new measure and we are keeping a watching brief on performance, as visits to the website are lower than expected. We anticipate this is due to the time of year (Christmas and Holiday season) and were encouraged to see a halving in volume of ‘bounce backs’ this quarter.

Media sentiment

Baseline is being established for this new measure and the target is to achieve an upward trend over the year. Our scores over the past two quarters are classified as within the range of neutral and we have seen only a very slight reduction in performance, despite events such as lamotrigine.

Overall Progress:

Green: On track

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.

PHARMAC has recently engaged with Te Aho o Te Kahu, Cancer Control Agency over its response to the Māori Affairs Inquiry into Māori Health Inequities. In principle we agree that PHARMAC could comply with the recommendation that PHARMAC conducts a five-yearly review of its “variation in medicines use by ethnicity” analysis.  We have advised that our compliance will require support from other agencies, including updated data from the Ministry of Health.

Health and Disability System Review

PHARMAC will be involved in a paper to be sent in March 2021.

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

PHARMAC staff continue to be involved in FPIM sector-wide governance arrangements.  In addition, PHARMAC has provided input into the detailed design based on PHARMAC business requirements for the Health Sector Catalogue.

Vaccine responses to local and national outbreaks of disease

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.

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