Pharmac commits to being more transparent

For the first time, Pharmac is sharing its priority lists for all funding applications for medicines it has assessed but not yet funded.

Pharmac’s Chief Executive Sarah Fitt explains, “Until now, we have not shared what applications were on which list, as we thought it could make it harder for us to negotiate with suppliers for the best deals. But we know people are interested in what applications we are actively considering and we want to be more transparent.

“As a government entity, it’s important that we are as open as we can be. This includes letting people know where funding applications are at in the Pharmac process.”

To provide a complete view of the applications Pharmac has completed its assessment of but not yet funded, the agency is sharing its three priority lists.

The options for investment list includes all the applications that would be funded if Pharmac had the budget for them. At the time of release, there are 102 applications on this list covering 71 medicines and related products.

Some applications on this list are for new medicines and some are for medicines already funded that Pharmac would like to fund for wider use for more patients. The preferential ranking Pharmac gives to applications on this list is determined using Pharmac’s decision-making framework, the Factors for Consideration.

“We think more widely than just the individual patient and the cost of the medicine,” says Sarah.

“We need to understand the full effect our decisions would have. Our expert advisers help us with the clinical aspects and our health economists identify the benefits and costs to the whole health system, patients, and their whānau.

“Our options for investment list is published in alphabetical order to keep the preferential rankings of individual funding applications confidential. This will ensure we can continue to negotiate the best prices we can for the medicines we can afford.

“If pharmaceutical companies knew how much we wanted to fund a medicine, it could make it harder for us to negotiate the best deal possible.”

The only if cost neutral or cost saving list includes applications that may get funded if Pharmac can negotiate a deal that saves money, or at least doesn't cost more.

“Our clinical experts help us assess whether an application delivers more benefits than treatments we already fund. If they think a treatment would not deliver better health outcomes than those already available, it is generally placed on our cost neutral or cost saving list.”

Pharmac doesn’t rank applications on this list in preferential order. It will consider negotiations with any supplier who offers cost neutral or cost saving pricing.

The recommended for decline list generally includes applications that Pharmac’s expert clinical advisors have suggested Pharmac turns down. Often this is because these medicines would add no value or are harmful. Pharmac does not actively work on these applications.

“People should have more certainty of information about applications, even if this is a decision to decline funding,” says Sarah.

“To make our approach clearer, we have been working through this list to formally decline a number of items on it.”

These three priority lists help Pharmac compare and make decisions on the 85 or so funding applications it receives every year.

“Every year, our fixed budget must pay for all the medicines that are already funded. If there is money left over or we receive a budget increase, we use this to fund new medicines or widen access to treatments we already fund.

If a funding application is not on one of the priority lists, it is still under assessment.

“We work hard to negotiate some of the best prices for medicines in the world and we follow a rigorous process to ensure all applications are thoroughly and fairly assessed.

“By making our lists easily available, we hope that New Zealanders will have more clarity about where applications are at that we have completed our assessment of but are not yet funded.”