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Dunne maintains PHARMAC attack

Media statement
For immediate release
Wednesday, 6 April 2005

Dunne maintains PHARMAC attack

United Future leader Peter Dunne today maintained his attack in Parliament on the performance of the government's drug-buying agency, PHARMAC.

During Question Time and the general debate in the House, he challenged the agency to justify its 'obsessive focus on cost-cutting' in preference to helping individual New Zealanders deal with pain or illness.

"PHARMAC's director, Wayne McNee, keeps insisting that every dollar spent on the nation's drug bill is another dollar that cannot be spent elsewhere on the health budget.

"But this simplistic view ignores research which says every dollar spent on pharmaceuticals means $3.85 is saved elsewhere in the health sector."

Mr Dunne called on Health Minister Annette King to start work on developing a national medicines policy, similar to that in Australia.

"Such a policy would allow for a more sophisticated, rational and flexible approach to dealing with individual New Zealanders and their pharmaceutical needs, as well as maintaining a firm control over the national expenditure on drugs."

Mr Dunne contrasted PHARMAC's Scrooge-like attitude towards the healthcare needs of New Zealanders who contract illnesses through no fault of their own, with the treatment of New Zealanders who may get injured on the sports field and whose needs are met more generously by ACC.


Attached: History of PHARMAC's drug-buying policies

History of Pharmac Problems

Sole Supply Problems:

March 2005

flu vaccine


Allohexal (gout)

Ativan (sedative)

Ferrograd Folic, an (iron and folate supplement for pregnant women) Ponstan (for period pain)




Augmentin (commonly prescribed antibiotic)

Lora-Tabs (hayfever)

Fergon elixir (liquid iron supplement commonly for infants)

Some kidney dialysis medicines

Jan 2002

Shortages of some heart failure, epilepsy, hayfever and iron-deficiency medications, and ointments for thrush, rashes, constipation and haemorrhoids

Access to Drugs Denied or Restricted:

To improve bone density






Breast cancer treatment

Aromatase inhibitors (Arimidex)

Chronic Obstructive Pulmonary Disease



Aricept, Exelon, Reminyl





Motor Neuron Disease




Rheumatoid Arthritis

TNF inhibitors (Enbrel)

Difficulties with Generics:


Statin Lipitor replaced with Lipex


Disruptions with blood pressure medication felodipine


Pacimol (generic of Panadol) causes problems


Slow-release morphine sulphate drugs for cancer pain relief switched to generic with negative effects


Chemotherapy drug Aredia changed to generic Zometa


A. Sole Supplier Issues

March 2005 Sole supplier contract with Sanofi Pasteur for 750,000 doses of flu vaccine was unable to be fulfilled.

2004Pharmacists say supplies of many drugs including Allohexal, for gout; Ativan, a sedative; Ferrograd Folic, an iron and folate supplement used by pregnant women; and Ponstan, for period pain, have either run out or are in short supply.

2002-3 Pharmacists reported substantial shortages of Betaloc, Dilantin, Augmentin a commonly prescribed antibiotic, Lora-Tabs for hayfever, Fergon elixir, a liquid iron supplement commonly used to treat infants with iron deficiencies and some kidney dialysis medicines as result of sole supply agreements.

Jan 2002 Pharmacists face shortages of some heart failure, epilepsy, hayfever and iron-deficiency pills, and ointments for conditions including thrush, rashes, constipation and haemorrhoids.

B. Access to Pharmaceuticals

The list of drugs which New Zealanders are denied access to, or otherwise must fund privately at great cost to themselves to ease their suffering is staggering. The bottom line is that each decisions results in shortened, reduced-quality, and loss of life. Some of these include:

1. Fosamax - a drug to improve bone density. After an initial application in 1995, Pharmac agreed to subsidise this drug in 2000, but with the narrowest criteria in the world, excluding most potential patients. This is despite estimated savings of $200,000 per 1000 patients treated through the prevention of fractures and orthopaedic operations.

2. Statins, one of the biggest clashes between clinicians and Pharmac has been over the ability to prescribe these cholesterol-lowering drugs, a process that took almost 10 years. The number of patients suffering from a fatal heart attack or stroke during this time cannot be measured.

3. HIV/AIDS drugs - while the antiretroviral Kaletra has been listed since July 2004, it is regarded by Pharmac as merely salvage therapy rather than a treatment from the first instance. This means despite the 50 people estimated to benefit from Kaletra and its ability to restrict the progression of HIV/AIDS, only 8 - 10 are likely to access it.

4. Breast cancer treatment drugs are available for those in advanced stages of the disease, but of the Breast Cancer Foundation says calls over the last two years for Pharmac to subsidise aromatase inhibitors (Arimidex) for women with early breast cancer have gone unanswered.

5. Chronic Obstructive Pulmonary Disease (COPD) - the drug Spiriva could halve the 10,000 hospital admissions each year which currently cost the health sector $192 million. After three years it remains unsubsidised.

6. Alzheimer' s drugs - Pharmac does not subsidise any medications for Alzheimer's disease unlike other Western nations. Currently about 400 patients privately fund medications such as Aricept, Exelon and Reminyl to delay the progression of dementia, and save on home care and nursing costs.

7. Evista, a drug used in the treatment and prevention of postmenopausal osteoporosis and other conditions is currently subsidised in Australia, however, while it is registered as safe in New Zealand, it will not be introduced as no Pharmac subsidy is available.

8. Pharmac agreed to fund the diabetes treatment Actos from September 2004, but health specialists claim the strict criteria patients have to meet to qualify for a subsidy will restrict access to some 3000 out of 90,000 who could benefit from the medication.

9. Motor Neuron Disease - The only known drug to stem the disease's progress, Rilutek, is available in New Zealand but is not registered or subsidised by the Government's drug-buying agency, Pharmac. In Australia, where Rilutek is subsidised for certain patients, a month's supply costs $4.20 with a concession card, or $26 for others. Patients on the drug can live better for longer, anywhere from two months to more than 18 months. Rilutek is subsidised in 15 OECD countries.

10. Anti-cancer drug Glivec has been funded in Britain and Ireland since 1996, in November last year Pharmac announced it would fully fund Glivec but only for the 120 patients who were already approved to use it.

11. TNF inhibitors have recently been found to be the most effective therapy available for rheumatoid arthritis. In New Zealand they have been made available over the last year, to those with the childhood form of this disease, however, they must stop treatment at 18. The Rheumatology Association estimates that 300-400 people aged over 18 would fit the stringent criteria of the drug, however, standard intensive drug therapy can cost up to $7,000 a year in costs for hospitalisation to these people often totals more than $600 a day, on top of that and surgery.

C. Difficulties with Generics

1. Pharmac threatened to stop fully funding the statin Lipitor in June last year for patients who met specialist criteria, switching many patients to the generic Lipex or otherwise having to pay part charges for Lipitor. While Pharmac planned to fully subsidise Lipitor for the approximately 3000 patients on the highest dosage, cardiologists raised alarm that potentially 60,000 people could die from heart attacks and strokes with a year, because the generic is only about quarter as effective and those with high cholesterol levels would not have their levels sufficiently lowered. After significant pressure Pharmac agreed to widen the criteria for those able to access fully funded Lipitor.

In the process, however, Pfizer who manufactures Lipitor cancelled a $66 million research contract with the Auckland Cancer Society Research Centre in protest at Pharmac's reference pricing to the generics.

2. Patients prescribed the blood pressure medication felodipine have suffered massive disruptions and uncertainty over the last several years. In 2002 Pharmac stopped subsidising the patented form of felodipine, called Plendil, and replaced it with the generic drug, Felo ER. But soon after most patients changed to the new brand Medsafe recalled Felo ER amid concerns of its safety, forcing Pharmac to return to the more expensive Plendil, manufactured by AstraZeneca.

In November 2003 Pharmac decided to return to the cheaper brand after Medsafe reapproved the 5mg and 10mg tablets but not the 2.5mg dose. AstraZeneca immediately withdrew all its tablets, including its 2.5mg tablets, leaving about 10,000 patients without any medication.

Then, in March 2004 the supply of one type of Felo ER tablet ran out meaning that patients prescribed a three-month supply of the five-milligram Felo ER tablets were to be given one month's supply of 2.5mg tablets of Plendil, to be taken two at a time. As a result, patients faced their third confusing medication change in just over a year.

3. 2004 - While Pacimol, a generic form of Panadol, was touted to offer annual savings of $500,000 to Pharmac, many prescribers raised concerns that patients found this subsidised brand extremely difficult to swallow.

4. Until February 2004, Pharmac fully subsidised three slow-release morphine sulphate drugs for pain relief (particularly for cancer sufferers) - Kapanol, LA Morph and MST, a brand used in New Zealand for more than 10 years. But Pharmac swapped these in favour of the cheaper m-Eslon, and many patients reacted adversely, finding the drug ineffective and having to take much higher doses.

5. Patients have suffered significant distress this year at having their chemotherapy drugs changed from Aredia to Zometa. It takes five times longer to administer the cheaper drug - 2 1/2 hours - cutting the number of patients who could be treated and prompting calls that discontinuing Zometa was a "false economy" which puts delicate health conditions in more danger.


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