Information and correspondence about funding for COVID-19 medicines

Thank you for your request dated 11 November 2021 under the Official Information Act 1982 (OIA) for information relating to funding for COVID-19 medicines. You wrote:

Please also provide details (and any relevant written correspondence) about:

  • The total budget for the Covid medicines buying fund (if the amount has increased at any time in 2020/21 please provide details of when the budget was increased and by how much
  • Whether the fund operates with a fixed budget? If so, is Pharmac legally required to stay within budget as per the Combined Pharmaceutical Budget?
  • How was the budget set? Did Pharmac negotiate with Treasury? Engage with the Ministry of Health? If the Covid budget setting process differed from the process used to set the CPB in any way please detail how.
  • The purpose of the Covid medicines buying fund – and details of any Covid medicines strategy – including details of any Government or Ministry directives re. Procuring covid medicines
  • The nature of the Covid medicines buying fund – eg, is the goal to spend every dollar of the fund as per the Combined Pharmaceutical Budget?
  • Are medicines funded from Pharmac’s Covid fund subjected to the same applications process as medicines funded from the CPB (as per https://pharmac.govt.nz/medicine-funding-and-supply/the-funding-process/from-application-to-funded-medicine-how-we-fund-a-medicine/)? If not, please provide details of the alternate process.
  • Please also note whether any part of the Covid medicines fund outlined in your responses is designated to purchase Covid vaccines. If so, how much.

For Covid medicines earmarked for funding from 1 August – present please provide the following details for each medicine:

How we are securing COVID-19 treatments for New Zealand

Pharmac is working to secure a portfolio of treatments for COVID-19. Pharmac is engaging with a range of pharmaceutical suppliers about emerging COVID-19 treatments and products repurposed for treating COVID-19, as well as some investigational products still in clinical trials. We are assessing treatments and supply as soon as information is available, prior to Medsafe approval. 

We are progressively securing a portfolio of COVID-19 treatments that would cover prevention of disease and treat all severities of illness in hospitalised and non-hospitalised patients. More information about treatments for COVID-19, and our response to COVID-19 is being regularly updated on our website. 

Budget for COVID-19 treatments

COVID-19 treatments are funded through the COVID-19 Response and Recovery Fund(external link) (CRRF). This is dedicated and ring-fenced funding available for COVID-19 treatments and is separate to the Combined Pharmaceutical Budget (CPB) that Pharmac manages for the funding of pharmaceuticals. 

Initially, in July 2020, $150 million (over two years) was announced to provide funding for the continuity of supply of medicines and medical devices in response to global supply issues caused by COVID-19: https://www.beehive.govt.nz/release/securing-medicine-supply-and-investing-covid-19-capacity(external link). However, due to the need of DHBs, some of this funding was used to secure supply of treatments for COVID-19.

In November 2021, Pharmac engaged with the Treasury about the COVID-19 treatments allocation of the CRRF. On 25 November 2021 the Government announced funding of $300 million over two financial years (2021/22 and 2022/23) to support the purchase of new COVID-19 treatments: https://www.beehive.govt.nz/release/supporting-new-zealanders-recover-covid-19-community(external link). Pharmac can seek further funding from the Government if it is required for COVID-19 treatments.

I note on 15 December 2021, in clarification of your initial request, you asked for “communications between Pharmac and Government re. The Covid medicines fund. Particularly anything related to how the budget was fixed and whether Pharmac had to ‘bid’ for a covid medicines budget as it does for the CPB.” This clarification was logged as a new request (as allowed under section 15 of the OIA) with a decision to be provided by 2 February 2022. I have provided an update about the decision for your subsequent request below.

As noted above, Pharmac engaged with the Treasury in November 2021 about funding for COVID-19 treatments. We need more time to consult about the release of any correspondence we hold regarding this engagement. As such, we have extended the timeframe to make a decision (as allowed under section 15A of the OIA) for this request by a further two weeks, to 16 February 2022. This is because consultations necessary to make a decision are such that a proper response cannot be made within the original time limit. 

Please note you have the right, by way of complaint under section 28(3) of the OIA to an Ombudsman, to seek an investigation and review of our decision. 

Funding process for COVID-19 treatments

COVID-19 treatments are not subject to the same application process as medicines funded from the CPB. Instead, they are considered using an expedited assessment process. This is due to the specific and fast-changing circumstances of the pandemic and the impact of COVID-19 globally, we need to move quickly to secure treatments for New Zealanders. 

When a pharmaceutical company contacts us (or when we contact them) about a COVID-19 treatment, we review the information provided about the treatment and seek advice and recommendations from our COVID-19 Treatments Advisory Group. Details and records of the COVID-19 Treatments Advisory Group, and earlier ad hoc COVID-19 treatment advisory groups, can be found on our website: www.pharmac.govt.nz > About > How we get expert advice > Advisory groups.

Once a recommendation has been made, we negotiate with the pharmaceutical company to reach a suitable agreement for treatment supply. This includes some advance purchase agreement arrangements, which are subject to criteria such as Medsafe approval of the medicine. If an agreement is reached, a decision is made by the Pharmac Board (or its nominated delegate) to fund the supply of the treatment. Unlike our usual supply agreements, which are for ongoing supply, the agreements we have negotiated with suppliers specifically for COVID-19 treatments are one off agreements for set volumes of stock. COVID-19 treatments are not ranked in our prioritisation lists for funding like non-COVID-19 funding applications. 

Update on COVID-19 treatments approved from 1 August 2021

As above, COVID-19 treatments do not necessarily follow the same application process as medicines funded from the CPB. 

To date, we have secured agreements for 6 treatments for COVID-19: https://pharmac.govt.nz/news-and-resources/covid19/funded-covid-19-treatments/. These treatments will be available in 2022, subject to Medsafe approval. I have included a summary of the agreement/funding journey of the 6 treatments below, as requested. 

Tocilizumab

Initial discussions commenced: February 2021

Pre-purchase agreement/decision to fund approved: September 2021

Time taken to approve: 7 months 

Pharmac staff from across the organisation were involved throughout the process of funding tocilizumab for the treatment of COVID-19, including representatives from Pharmac’s Medical Directorate, and Pharmac’s Pharmaceutical Funding, Contract Management, Health Economics, Funding Application Advisor, Legal and Senior Leadership Teams. 

Specialist clinical advice regarding the proposal to fund tocilizumab for the treatment of COVID-19 was sought from Pharmac’s Tocilizumab ad hoc Advisory Group in April 2021 [PDF, 112 KB]. A record of the meeting is available on Pharmac’s website.

In accordance with Pharmac’s financial delegation policy the decision to fund tocilizumab was approved by Pharmac’s Director of Operations in September 2021. 

Baricitinib

Initial discussions commenced: September 2021

Pre-purchase agreement/decision to fund approved: November 2021

Time taken to approve: 2 months 

Pharmac staff from across the organisation were involved throughout the process of funding baricitinib for the treatment of COVID-19, including representatives from Pharmac’s Medical Directorate, and Pharmac’s Pharmaceutical Funding, Contract Management, Legal, and Senior Leadership Teams. 

Specialist clinical advice regarding the proposed access criteria for baricitinib for the treatment of COVID-19 was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in October 2021 [PDF, 291 KB]. A record of the meeting is available on Pharmac’s website. 

In accordance with Pharmac’s financial delegation policy the initial decision to secure supply of 500 courses of baricitinib was approved by Pharmac’s Director of Operations in November 2021. In December 2021 Pharmac’s Director of Operations approved a decision to purchase an additional 500 treatment courses of baricitinib. 

Remdesivir

Initial discussions commenced: July 2020

Pre-purchase agreement/decision to fund approved: August 2020

Time taken to approve: 1 month 

Pharmac staff from across the organisation were involved throughout the process of funding  remdesivir for the treatment of COVID-19, including representatives from Pharmac’s Medical Directorate, and Pharmaceutical Funding, and Senior Leadership Teams. 

Specialist clinical advice regarding the proposed access criteria for remdesivir for the treatment of COVID-19 was sought from Pharmac’s Ad Hoc Remdesivir COVID-19 Advisory Group in September 2020 [PDF, 125 KB]. A record of the meeting is available on Pharmac’s website. Further advice regarding the access criteria for remdesivir was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in December 2021, records from this meeting have not been published yet. 

In accordance with Pharmac’s financial delegation policy the initial decision to purchase 125 vials of remdesivir was approved by Pharmac’s Director of Operations in August 2020. Additional decisions to purchase 1,000 additional vials of remdesivir (2,000 vials in total) were approved by Pharmac’s Director of Operations in September and December 2021. 

Casirivimab with imdevimab (Ronapreve)

Initial discussions commenced: July 2021

Pre-purchase agreement/decision to fund approved: October 2021

Time taken to approve: 3 months 

Pharmac staff from across the organisation were involved throughout the process of progressing the proposal to fund casirivimab with imdevimab for the treatment of COVID-19, including representatives from Pharmac’s Medical Directorate, and Pharmaceutical Funding, Contract Management, Health Economics, Legal and Senior Leadership Teams. 

Specialist clinical advice regarding the proposed access criteria for casirivimab with imdevimab for the treatment of COVID-19 was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in October 2021. [PDF, 291 KB] A record from this meeting is available on Pharmac’s website. Further advice regarding the access criteria for casirivimab and imdevimab was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in December 2021, records from this meeting have not been published yet. 

In accordance with Pharmac’s financial delegations policy the decision to purchase an initial quantity of 5,300 doses of casirivimab and imdevimab was approved by the Pharmac Board of Directors in October 2021. The Pharmac Board of Directors made the decision to purchase an additional 7,500 doses of casirivimab and imdevimab in December 2021. 

Molnupiravir

Initial discussions commenced: September 2021

Pre-purchase agreement/decision to fund approved: October 2021

Time taken to approve: 1 month 

Pharmac staff from across the organisation were involved throughout the process of progressing the proposal to fund molnupiravir for the treatment of COVID-19, including members from Pharmac’s Medical Directorate, and Pharmaceutical Funding, Contract Management, Health Economics, Legal and Senior Leadership Teams. 

Specialist clinical advice regarding the proposed access criteria for molnupiravir for the treatment of COVID-19 was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in October 2021 [PDF, 291 KB]. A record from this meeting is available on Pharmac’s website.

In accordance with Pharmac’s financial delegations policy the decision to purchase 60,000 treatment courses of molnupiravir was approved by the Chief Executive in October 2021. 

Pfizer protease inhibitor (nirmatrelvir with ritonavir)

Initial discussions commenced: September 2021

Pre-purchase agreement/decision to fund approved: December 2021

Time taken to approve: 3 months 

Pharmac staff from across the organisation were involved throughout the process of progressing the proposal to fund nirmatrelvir with ritonavir for the treatment of COVID-19, including members from Pharmac’s Medical Directorate, and Pharmaceutical Funding, Health Economics, Legal and Senior Leadership Teams. 

Specialist clinical advice regarding the proposed access criteria for nirmatrelvir with ritonavir for the treatment of COVID-19 was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in October 2021. was sought from Pharmac’s COVID-19 Therapeutics Advisory Group in December 2021, records from this meeting have not been published yet. 

In accordance with Pharmac’s financial delegations policy the decision to purchase of 60,000 treatment courses of nirmatrelvir with ritonavir was approved by the Pharmac Board of Directors in December 2021. 

Vaccines for COVID-19

The Ministry of Health is responsible for the COVID-19 vaccine rollout. This means that the Ministry is responsible for deciding which COVID-19 vaccines to fund and procuring the vaccines for New Zealand. The Ministry of Health has established several Technical Advisory Groups (TAGs) to provide advice for COVID-19 related matters. See the Ministry’s website for a list of its COVID-19 TAGs: https://www.health.govt.nz/about-ministry/leadership-ministry/expert-groups(external link)

For information about vaccines for COVID-19, please contact the Ministry of Health. 

We trust that this information answers your queries. We are making our information more freely available, so we now publish selected OIA responses (excluding personal details) on our website. 

Thank you for your interest in our work. If you have any follow-up questions, we would be pleased to assist you further.