26 May, 2004

Greens reveal Pharmac's drug-price warning

Pharmac is warning the Government that New Zealanders will end up paying more for prescription drugs if New Zealand signs-up to a Joint Therapeutics Agency (JTA) with Australia, according to papers obtained by the Greens under the Official Information Act.

The warning is made in Pharmac's submission to the June 2002 Discussion Paper on the proposed joint agency to regulate therapeutic products and in a series of increasingly concerned letters from Pharmac to the Ministry of Health in March and May 2003.

Pharmac will be making a public submission to the Health Select Committee at 10.30 this morning.

"Pharmac is warning that there will be significant cost increases for new medicines, resulting in a reduction in the number of generic medicines approved and available in New Zealand. It suggests that most pharmacy companies will relocate to Australia."

"Given these serious concerns, one has to wonder why on earth we would consider regulating our medicines through a Joint Agency,' Ms Kedgley said. "It appears from Pharmac's papers, that in return for giving up our sovereignty over an important industry, we will be rewarded with higher costs and fewer medicines. This is absurd."

Pharmac notes that the full cost recovery model proposed for the Joint Agency would increase fees for the approval of drugs, which would have to be passed on to the public and to District Health Boards.

The drug agency also warns that New Zealand will surrender the automatic right to acquire medicines of importance to New Zealand.

It states: "Requests that result in 'considerable' financial savings accruing to the New Zealand health system may not be perceived as being significant when compared to savings or priorities for other products in the Australian market."

The submission also notes: "Pharmac's overall perception of the joint Agency is that New Zealand is conforming to the Australian system."

"Pharmac's papers make it clear that we are simply joining an expensive, Australian regulatory system which is based on meeting Australian, not New Zealand, needs," said Ms Kedgley.

"In light of these concerns, the Green Party calls on government to reject the option of regulating our industry through the Joint Agency, as it is clearly not in our national interest to do so."

ENDS

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