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Pharmac Gearing Up For Broader Impact In Health Procurement

31 January 2013
Media release

Pharmac Gearing Up For Broader Impact In Health Procurement

PHARMAC is on track to meet targets set in relation to its expanded role with medical devices and hospital medicines.

The Government pharmaceutical funder is now responsible for community medicines, the national vaccine schedule, and will take over managing hospital medicines from July 2013 and hospital medical devices from 2015.

In the agency’s Annual Review, published today, Chief Executive Steffan Crausaz says PHARMAC is currently going through a growth phase as it increases its capacity to carry out these expanded functions.

PHARMAC’s successful record of managing community medicines and their funding has led to its expanded role, and Steffan Crausaz says past experience, coupled with expert input as it moves into less familiar areas like medical devices, will be vital to future success.

“Part of PHARMAC’s culture is that we are continually looking to past experience as we move into our next area of work. We learn from the past, use and adapt the strategies that have worked well, and change those that don’t,” he says.

With hospital medicines, PHARMAC is finalising the list of medicines all District Health Board hospitals will fund. The next step is to consult on and finalise the requirements for using hospital medicines, prior to a national list of hospital medicines being published for the first time on 1 July 2013. The objective of the hospital medicines work is to ensure access to hospital medicines is consistent across New Zealand, and that future additions or changes are managed. Longer-term additional savings are likely which will be available for investment in new medicines or other health services.

While PHARMAC’s medical devices work is longer-term, considerable work is already being done to give PHARMAC the capacity to manage the range of devices currently used by DHBs and to generate benefits for the health system right now.
PHARMAC’s work is part of a DHB-wide initiative being led by Health Benefits Ltd (HBL).
“While there are about 2000 products listed on the community Pharmaceutical Schedule, with medical devices is the range is far greater with some estimates putting the number of itemsat 250,000,” says Steffan Crausaz.

“As we heard at our national Forum last year, it’s a diverse area with a more rapid pace of change than pharmaceuticals, and we will need to adapt our approach to suit this difference in technologies. We’re very aware that in terms of procurement strategies, `one size fits all’ just won’t work.”

Medicine funding

PHARMAC’s Annual Review outlines the agency’s activity in funding medicines during 2011/12, with the community Schedule seeing 14 new medicines added, and a further 10 having funding access widened so more patients can have funding.

Key decisions included:

• Funding for the new-generation anti-coagulant dabigatran (Pradaxa) – gross spending (subject to a confidential rebate) was $16 million in the first year.
• Widened access to rituximab (Mabthera) for chronic lymphocytic leukaemia,
• Funding lapatanib (Tykerb) for advanced HER2-positive breast cancer
• Funding pazopanib (Votrient) for advanced kidney cancer.
• Funding raloxifene and teriparatide for osteoporosis

Major savings decisions included those for widely-used cardiovascular treatments atorvastatin, metoprolol and felodipine were forecast to save more than $50 million over three years.

Diabetes testing equipment

Decisions to fund new blood glucose meters and insulin pumps for diabetes management have been a major project. In early 2012 PHARMAC had one of the largest responses ever to its consultation (around 3000 responses), and made changes to its proposals as a result when decisions were made in late 2012.

Steffan Crausaz says the meter change has been going well since it began on 1 September 2012 and is being supported by one of the most comprehensive patient implementation campaigns ever managed by PHARMAC.

The programme includes information for doctors, pharmacists, practice nurses and patients; 0800 numbers run by PHARMAC and the supplier of the new meters, Pharmaco; online training modules for health professionals and a patient information programme called Meet Your Meter. PHARMAC is also paying Brand Switch Payments to pharmacies to help them manage patients’ changes to the new meters.

20-year highlights

The Annual Review also outlines highlights of PHARMAC’s first 20 years and some of the ways the agency has changed over the years, such as in relation to how it uses different purchasing strategies, the way it has engaged the clinical community and consumer sector, how patent changes and emerging technologies like biosimilars may impact on future work, and some of the significant changes in pharmaceutical technology over the past 20 years.

Steffan Crausaz says: “There’s no doubt PHARMAC will need to adapt and be agile to adjust to the ever-changing landscape it will be operating in. There have always been high expectations on PHARMAC’s ability to deliver, and these expectations will be even higher in future.”

“The organisation will grow, and we will have to make sure our internal systems and structures are well suited to the work ahead of us, and that they enable us to keep meeting our objectives.”

“One thing is certain – how PHARMAC looks and acts in five years is likely to be quite different to how it looks and acts today.”


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