The Government has determined to undertake a review of PHARMAC. The purpose of the Review and the recommendations it makes are to ensure that New Zealanders can have confidence that PHARMAC makes the best contribution it can to improving health outcomes for all New Zealanders, particularly Māori and Pacific peoples, as part of the wider health and disability system.
The Pharmaceutical Management Agency (PHARMAC) is a Crown entity established in 1993 which has the statutory objective under section 47 of the New Zealand Public Health and Disability Act 2000 to:
“…secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided.”
PHARMAC is widely regarded as having been highly effective in achieving cost reductions that enable maximum value to be achieved from the fixed annual pharmaceutical budget. Since it was established PHARMAC’s role has widened to also include medical devices, vaccines, haemophilia products, cancer medicines, and hospital medicines.
Given PHARMAC’s role it is inevitable that its decisions attract criticism. Petitions are regularly presented to the Health Select Committee, often objecting to specific decisions not to prioritise an expensive new treatment, or decisions to switch public funding between similar pharmaceuticals and the impact this can have on patients.
A Review will help to address the concerns some have about PHARMAC, while providing an opportunity to ensure PHARMAC is well-positioned to make the best contribution it can to future health needs given the rapidly changing global, societal and technological changes. The review will also be timely as it will be informed by government decisions around health system reforms and take these into account in considering the ongoing role of PHARMAC.
This Review will help to ensure that the public can have confidence in the work of PHARMAC by investigating and making recommendations on two key issues:
In addressing these questions, the scope of the review is expected to include:
The following are outside the scope of this review:
The review will be undertaken by an expert review Committee, comprising a Chair and up to five other Committee members who collectively have expertise in clinical and health sector issues, economics and data analysis, law, and Māori and consumer perspectives. The Committee will be supported by a secretariat and will be able to seek independent advice on matters within the scope of its Terms of Reference.
The Committee will be expected to engage with stakeholders including the Ministry of Health, PHARMAC, DHBs, PHOs, other health providers and health professionals.
Public consultation will occur and is critically important so that consumers, family and whānau perspectives can inform the review, as well as ensuring the public can have confidence in its findings.
The Committee should have its first meeting no later than April 2021 and issue an interim report to the Minister of Health no later than 20 August 2021. A final report must be issued to the Minister of Health no later than 10 December 2021. These dates may be varied only with the consent of the Minister of Health.
 PHARMAC also has related statutory functions under section 48.