7.0 Findings

Was PHARMAC’s decision making process in relation to the sole supply of lamotrigine appropriate?

1. In this section I will set out my findings on the appropriateness of the decision making process leading up to, and including, PHARMAC’s Sole Supply Decision made by its Board on 29 March 2019. My findings on this issue are structured as follows:
   1. PHARMAC’s consideration of the issues relating to sole supply leading up to the June 2018 RFP;
   2. The RFP and subsequent consultation process (including the communications with Medsafe) (i.e. June - December 2018);
   3. The joint Subcommittees’ meeting and the Board’s decision (i.e. January – March 2019).

PHARMAC’s consideration of issues leading up to June 2018

2. PHARMAC’s consideration of moving to one brand of lamotrigine can be readily traced to the 2007 meeting of PTAC’s Neurological Subcommittee. The assessment at that time was that patients stabilised on one brand of lamotrigine should not change brands.
3. The question of moving to one brand of AEDs was considered further by the Neurological Subcommittee in 2009, 2010, and 2012. The relevant Subcommittee Minutes demonstrate a gradual, but clear, change in position by the Neurological Subcommittee over these years. By 2010, the Subcommittee was expressing its concern about the high cost of another AED, sodium valproate; and was at least open to the possibility of moving to one funded brand for new patients, provided safeguards were in place (including existing seizure-free patients accessing their current brand). By 2012, the Subcommittee considered the risk of switching brands to be low; but considered insufficient evidence had been reviewed to establish the safety of brand switching for patients with epilepsy.
4. The Neurological Subcommittee’s meeting in November 2015 was a defining moment in PHARMAC’s decision making process. There was a detailed discussion and review of the medical literature. Despite the lack of consensus on which category in the UK MHRA categorisation system lamotrigine is in, the Subcommittee reached the clear conclusion that a managed brand switch to one brand of lamotrigine was preferable to having multiple brands listed; and that provided there was a suitable transition period, and good implementation strategies, a competitive process for one brand of lamotrigine would be appropriate.
5. The Neurological Subcommittee then gave the matter further consideration in November 2016; when it considered PHARMAC’s plan to run a commercial process for one supplier of lamotrigine. Appropriately, the Mental Health Subcommittee also considered the matter and lent its support to the proposal.
6. I am satisfied that the Neurological Subcommittee was the proper body, under the broader PHARMAC umbrella, to be carefully scrutinising the medical literature, the international approaches, and giving clear advice to PHARMAC on the issue of AEDs. This is a multi-disciplinary committee of independent medical specialists, comprising a majority of neurologists, which is well-placed to provide advice to PHARMAC on issues arising from the prescribing of AEDs. It is clear that, over a number of years, the Neurological Subcommittee’s position changed – and when the Subcommittee was opposed to any brand switch, the matter was left until there was further reason for it to be reconsidered.
7. In my view, PHARMAC’s engagement of the Neurological Subcommittee was appropriate and good practice. Further, the decision-making by the Subcommittee itself was evidence-based and appropriate.
8. I note that, from his perspective, A/Prof Doogue considered that the Neurological Subcommittee had sufficient evidence to conclude that moving to one brand of lamotrigine was appropriate. I note, too, that A/Prof Doogue did not see the lack of consensus amongst the Subcommittee as to the UK MHRA categorisation of lamotrigine as being significant.
9. PHARMAC’s decision to put the matter before the Mental Health Subcommittee in November 2016 was also good practice. This meant that another specialist committee, comprising a majority of psychiatrists, also considered the issues insofar as they related to people who use lamotrigine for the treatment of mood disorders.
10. As set out earlier, PTAC is the statutory committee whose role is to provide objective advice to PHARMAC on pharmaceuticals and their benefits. Over the relevant period, there was one PTAC meeting (in 2013) where the Minutes record a detailed discussion, including traversing the medical literature and international standards, on the issues relevant to brand switching of AEDs. However, importantly, the Neurological and Mental Health Subcommittees are subcommittees of PTAC, and all the Minutes of the subcommittees are received and considered by PTAC. It is clear that PTAC was fully appraised of the position taken by the Neurological Subcommittee over the years – including the substantive recommendation made by the Neurological Subcommittee in November 2015 and the further consideration by that Subcommittee, and the Mental Health Subcommittee, in November 2016.
11. I am satisfied that PTAC maintained an appropriate role over this period, consistent with its statutory purpose.
12. The regular and substantive input of PTAC, largely but not only through the Neurological Subcommittee, can be contrasted with the lack of any input from the CAC in the preliminary consideration of the issues leading up to the June 2018 RFP. I have seen no record of the CAC being either informed about, or asked to consider, issues relating to the possibility of moving to one brand of lamotrigine.
13. Given the CAC’s statutory role is to provide input to PHARMAC from a consumer or patient point of view, and noting the significance of a brand switch of an AED to patients who suffer from epilepsy and mental health conditions, the lack of any input of CAC is surprising.
14. I would not have expected to see CAC’s involvement going back as far as the involvement of PTAC and its subcommittees. But, I would have expected to see consultation with the CAC at least at some point following the Neurological Subcommittee’s November 2015 meeting, and before the June 2018 RFP process. In my view, the CAC should have been asked to contribute to the discussion points that flowed from the recommendations made by the Neurological Subcommittee in November 2015 – such as, for example, the steps to be taken to ensure patients’ general aversion to change was well managed; the best means to provide support and reassurance; and the issues relating to NZTA and possible implications for driving.
15. Given the clear recommendations made by the Neurological Subcommittee, including the apparently careful consideration given by that Subcommittee to the impact of the proposed move to one brand on consumers, it seems unlikely that the CAC would have taken a position that was substantively inconsistent with the position taken by the Neurological and Mental Health Subcommittees (and PTAC). But that does not mean there was no need to seek the input of CAC before proceeding with the RFP.
16. The failure to consult CAC is the principal exception to my finding that PHARMAC’s process leading up to the RFP in June 2018 was appropriate.
17. There is a second, but less significant, exception. By the time the RFP was issued in June 2018, it was over 2 ½ years since the Neurological Subcommittee had considered, in detail, the medical literature relevant to the proposal to move to one brand of lamotrigine. The Neurological Subcommittee (and the Mental Health Subcommittee) did consider the issue in November 2016, which was an opportunity for members to note any substantive changes in the literature; but that meeting was 20 months prior to the issuing of the RFP. There is no record, after November 2016, of the Neurological Subcommittee members being given an opportunity to note any changes in the literature. In my view it would have been preferable for the Subcommittee members to have been given an opportunity to provide an updated view (and, possibly, to consider an up-to-date literature review) in closer proximity to the issuing of the RFP. I note that Medsafe raised this point with PHARMAC as part of the consultation process (and this, in due course, led to an updated literature review). An up-to-date analysis of the literature closer to June 2018 might have helped satisfy Medsafe, in late 2018, that the proposal was supported by the current evidence.
18. Therefore in summary, my findings in relation to PHARMAC’s consideration of issues leading up to June 2018 are as follows:
    1. PHARMAC’s process in the period leading up to the RFP in June 2018 was appropriate – and indeed evidence based and robust – with two exceptions;
    2. PHARMAC ought to have involved CAC at some point over this period, and in particular at some point after the November 2015 Neurological Subcommittee meeting. However, it is unlikely that involvement of the CAC over this period would have led to a substantive change in what was proposed.
    3. It would have been preferable if PHARMAC had sought further input from PTAC, most likely through its Subcommittee(s), at a time closer to the issuing of the RFP in June 2018.

The RFP and subsequent consultation process

19. As discussed earlier, PHARMAC issued the RFP for the supply of lamotrigine on 18 June 2018. Following consideration by the RFP Evaluation Committee, Mylan’s proposal was selected as the preferred proposal and PHARMAC moved to negotiating a provisional agreement with Mylan. The documentation suggests that this was an efficient and proper process. From what I have reviewed, I am confident that the RFP process was appropriate.
20. I am also satisfied that PHARMAC’s consultation process was appropriate. I note the following:
    1. The consultation document was a succinct and easy to read summary of the key points. It included a hyperlink to the advice PHARMAC had received from the Neurological and Mental Health Subcommittees.
    2. The consultation document was available, and circulated, widely. A good number of substantive and thoughtful submissions were received from a cross-section of stakeholders and interested parties.
    3. PHARMAC properly analysed the feedback received and took notice of it. The clearest example of this is that in October 2018 PHARMAC announced that it was putting its proposal on hold while it considered the submissions and sought further advice. In my view, this was the right step for PHARMAC to take at that time, and demonstrates the preparedness of PHARMAC to keep an open mind and properly consider the feedback it had received. This was good, administrative decision making.
    4. Medsafe’s submission, rightly, attracted significant attention within PHARMAC. In my view, PHARMAC responded appropriately. Having made the decision to put the proposal on hold, PHARMAC representatives engaged with Medsafe. Medsafe’s recommendation that a further, updated literature search be undertaken was accepted – and this led to the joint meeting of the Neurological and Mental Health Subcommittees in February 2019. PHARMAC continued to keep Medsafe informed of developments as matters progressed.
    5. In due course, changes were made to PHARMAC’s final decision that can be traced to the consultation feedback. By way of examples, in the consultation document PHARMAC proposed a three month transition period, with PHARMAC stating that during this period, people using the out-going brands would need to pay a surcharge if the supplier did not reduce their price. The final transition period was five months; during which PHARMAC continued to fully-fund the other brands. Again, these changes demonstrate good, administrative decision making.

The joint Subcommittees’ meeting and the Board’s decision

21. PHARMAC’s decision to convene a joint meeting of the Neurological and Mental Health Subcommittees in February was good practice. The two Subcommittees were the right groups to consider carefully the updated literature, the concerns raised by Medsafe and other submitters, and to advise PHARMAC whether the proposal to move to one funded brand of lamotrigine should proceed.
22. The two Subcommittees were comprehensively briefed in advance of the meeting – including being provided with an extensive body of literature (including the publications identified by Medsafe). The questions put to the Subcommittees were the right questions – including the ultimate question as to whether the Subcommittees were still comfortable with PHARMAC progressing with a move to one funded brand of lamotrigine. PHARMAC was clearly prepared to be told by the Subcommittees that the proposal should not proceed.
23. The Minutes of the meeting were comprehensive and substantive. The recommendations were clear – including that the Subcommittees were supportive of the proposal to move to one funded brand of lamotrigine, with appropriate implementation support.
24. In my view, this aspect of PHARMAC’s decision making process was appropriate.
25. As I have mentioned earlier, if a meeting of the kind held in February 2019 (including an analysis of the up to date literature) had been held just prior to the issuing of the RFP in June 2018, it may be that some of the concerns identified by Medsafe in September 2018 might have already been addressed, with Medsafe’s feedback being different to that which it submitted. But, given where matters stood in December 2018, PHARMAC’s decision to seek advice from the two Subcommittees was the right the course of action to take.
26. The joint Subcommittee meeting was on 7 February 2019. The Board met on 29 March 2019. Relevantly, the CAC held a meeting on 6 March 2019. In my view, this was a missed opportunity for the CAC to have been involved in the decision making process and to have provided input to PHARMAC from a consumer or patient point of view prior to the Board making its decision on 29 March 2019.
27. The Board’s decision making process itself on 29 March 2019 was sound and appropriate. The Board was well briefed, with all relevant information before it. The Board had before it PHARMAC’s Factors for Consideration framework; and this framework was considered in the context of the lamotrigine decision. The concerns raised by Medsafe and other submitters were set out, and the Board had all the relevant information from the Subcommittees and PTAC. The Board had before it the comprehensive Implementation Plan.
28. The decision was referred to the Board due to the contentious nature of it; rather than being made by the Chief Executive under delegation. That was the correct approach to take here.
29. In my view, PHARMAC’s Board had sufficient evidence to make the decision to move to one brand of lamotrigine; and this decision was appropriate. I note that my conclusion on this is consistent with the advice that I have received from A/Prof Doogue.

Was the design and execution of PHARMAC’s implementation process for the Sole Supply Decision appropriate?

30. I accept the advice received from A/Prof Doogue that there were no material pharmacological risks associated with the decision to move to one brand of lamotrigine. That is consistent with the position taken by the Subcommittees that there was no pharmacological reason to suggest there would be a clinical problem. It also appears to be consistent with Medsafe’s view that all generic brands of lamotrigine approved in New Zealand are considered bioequivalent to the innovator brand.
31. I also accept A/Prof Doogue’s advice that this means that implementation planning, and risk mitigation strategies, are therefore directed at the management/social risks associated with the brand change. Again, this seems to be consistent with the approach taken by PHARMAC in its development of its Implementation Plan and mitigation strategies. In my view, that was appropriate.
32. As discussed above, PHARMAC’s Board had an Implementation Plan before it when it made its decision on 29 March 2019. The genesis of that Plan, and in particular the significant non-pharmacological challenges associated with AED brand changes, can be traced back to the early Neurological Subcommittee meetings referred to in this report. The Neurological Subcommittee’s Minutes from its November 2015 meeting, in particular, record in some detail the steps that needed to be taken to manage any change in brand of lamotrigine, and the risk mitigation strategies. Implementation activities were raised during the consultation process, with feedback carefully considered by PHARMAC. The joint Subcommittees’ meeting in February 2019 addressed the issue.
33. In my view, PHARMAC’s recognition of the importance of robust implementation activities is evident throughout the entire decision making process.
34. PHARMAC’s four ‘key mitigation strategies’ in its Implementation Plan were borne out of the decision making process. The focus was on strengthening positive relationships with PHARMAC’s sector partners; supporting health professionals to change their patients’ brand of lamotrigine; supporting patients through the brand change; and supporting consumer organisations to support their members through the brand change.
35. I have set out above the specific steps that PHARMAC took to execute the Implementation Plan; and it is not necessary to repeat all the details here. However, I note the communications with health professionals; the preparation of a patient information leaflet; the engagement of BPAC; the hosting of a Facebook live session; and the efforts put in to presenting to Epilepsy NZ field support officers (including the funding provided to Epilepsy NZ for this).
36. I accept A/Prof Doogue’s advice that the guidance offered by PHARMAC around switching brands was sufficient to inform good medicines counselling by doctors, pharmacists and nurses. I also accept, with two qualifications, A/Prof Doogue’s opinion that PHARMAC’s implementation and risk mitigation were of a high standard.
37. My first, and principal, qualification to this conclusion relates, again, to the CAC. A/Prof Doogue was not asked to comment on the role of the CAC.
38. In my view, the CAC’s input on the Implementation Plan should have been sought by PHARMAC well before it was sought on 12 June 2019 as part of a general briefing and presentation on PHARMAC’s management of brand changes. While there was still time, in June 2019, for the CAC to make useful contributions relevant to implementation of the Sole Supply Decision, by then it was almost three months since the Board had made the decision, and the execution of the Implementation Plan was well advanced. As I mentioned earlier, it is revealing that the Minutes of CAC’s 12 June 2019 meeting record the CAC members suggesting an action that does not appear to have been considered, to that point, by PHARMAC – that being, whether support information had been provided to health helplines and practice nurses, with these tending to be first points of contact for patients.
39. In my view, PHARMAC’s design and execution of the implementation process was appropriate. But, PHARMAC ought to have involved its CAC in the development of its Implementation Plan prior to the Board’s decision on 29 March 2019. Given the depth and robust nature of the Implementation Plan, it may be that earlier involvement of the CAC would not have resulted in any significant changes to the Implementation Plan. However, the consumer voice needs to be heard earlier in the process.
40. The second qualification to the conclusion that PHARMAC’s implementation and risk mitigation were of a high standard relates to the patient information leaflet mentioned earlier. I understand that PHARMAC had not developed the reimbursement process at the time the leaflet was commissioned. But, it would have been preferable if the sequence of events had allowed for the leaflet to mention PHARMAC’s preparedness to pay the GP’s co-payment for patients who wanted to consult their doctor about the change. While that was mentioned in other places, the patient information leaflet would have been a good place to include this important information for patients.
41. The matters that arose between September and December 2019, including the media enquiries and reports, were clearly challenging for PHARMAC. My view is that PHARMAC appropriately managed this difficult period. It was open and transparent with the media – and continued to emphasise the key messages around the need for patients to continue to take medication and seek advice from health professionals. There was continuing dialogue with Medsafe, NZTA, Epilepsy NZ and others. PHARMAC initiated contact with the Office of the Chief Coroner to offer its full cooperation in any inquiries.
42. There is one specific matter that warrants further comment. As described earlier, on 14 November 2019 PHARMAC decided to broaden its ‘exceptional circumstances’ criteria for accessing funding for other brands of lamotrigine. That was a decision that needs to be reviewed in the context in which it was made. The context being, there were increasing media reports about adverse reactions, which in turn were leading to significant alarm amongst consumers; as well as NZTA’s advice around driving which was causing concern. Whether evidence-based or not, there was a real likelihood that patients would stop taking Logem, which would likely have severe implications for the patients. Rightly or wrongly, consumer confidence in Logem was diminishing. In my view, PHARMAC made the right decision by broadening the exceptional circumstances criteria.
43. I acknowledge A/Prof Doogue’s comments that such broad criteria might not be appropriate in future, similar circumstances. There may well be work that PHARMAC can do to ensure that, if similar circumstances arise in the future, there is less likely to be the need to broaden the exceptional circumstances criteria. However, I do not regard the decision in November 2019 as setting any sort of precedent for future decisions. The November 2019 decision to broaden the exceptional circumstances criteria was unique. It was particular to its own set of facts and the context in which the need to make the decision arose.

Given PHARMAC’s role in the health sector, are there areas in which PHARMAC could improve its decision making and implementation processes for future brand changes?

44. It will be clear from the findings set out above that, in the main, I have reached the view that PHARMAC’s decision making and implementation processes were appropriate. In fact, other than in respect of the matters I have mentioned, my view is that PHARMAC’s decision making and implementation processes were of a high standard.
45. I have set out my findings in relation to the minimal involvement of the CAC and I do not need to repeat those findings. It will be clear that, in my view, PHARMAC’s decision making could be improved by much earlier involvement of its CAC.
46. I do want to emphasise the point that involvement of consumers in decision making of the kind PHARMAC is routinely undertaking must not be token. I am not suggesting, here, that PHARMAC’s approach to involving consumers is token. In fact, to the contrary, I was reassured to hear that PHARMAC’s Board is particularly encouraging of consumer involvement; and I was also reassured to hear that there is active consideration being given to the best way to utilise the CAC in decision making.
47. Consumer involvement in health sector decision making is now commonplace. Consumers play an active role in decision making on matters relating to regulation of health professionals, complaint investigations, credentialing, ethical decisions, and DHB decision making (amongst other things). There are many examples of consumer representatives sitting alongside health professionals and contributing, substantively, to decision making.
48. Consumers have a particular voice in PHARMAC’s decision making through the statutory CAC. It is beyond the scope of this review to undertake a detailed analysis of the role of the CAC. However, it has attracted my attention that the CAC’s Terms of Reference state that the CAC “does not have a role in pharmaceutical decision making”; and that CAC’s role is to provide advice to PHARMAC on how it can “best access the diversity of consumer views” (my emphasis). As part of its review of the role of CAC, I recommend that PHARMAC gives some thought as to how these descriptions fit with the CAC statutory role (as set out in s 50(1)(b) NZPHDA); and whether PHARMAC’s decision making might be improved by encouraging the CAC to play a more substantive role in decision making.
49. Therefore my principal recommendation is that PHARMAC continues with the current process of reviewing the CAC and its role; and in doing so takes into account the matters referred to in this report. In particular, I recommend that PHARMAC considers involving the CAC earlier in the decision making process and encouraging the CAC to play a more substantive role in decision making (albeit, like PTAC, as an advisory committee).
50. This decision making process, and its implementation, has highlighted the particular sensitivities around brand changes for AEDs. As I have said, my view is that PHARMAC’s implementation activities and risk mitigation strategies were generally of a high standard. However, it is clear that PHARMAC will need to be hyper-vigilant in any future, proposed, AED brand switches – including working as closely as possible with key stakeholders, other agencies, and consumer groups. The role played by the media in reporting on such brand switches is significant, and it may be that there is work PHARMAC can do with the media to ensure there is good understanding of the basis for decision making.