Guyon, we are the problem, not Pharmac

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Guyon Espiner has written two pieces in the last week about Pharmac, New Zealand’s medicines buying agency. They can be found here and here.

Both pieces read as attacks. Claiming that the ‘secret’ black box processes Pharmac uses to justify funding for some medicines and not for others is causing people to die.

I do not work for Pharmac, and beyond being a citizen of New Zealand, I have no vested interest in how Pharmac operates. These attacks are unfair and completely miss the point. By singling out Pharmac as the bogey, those of us, yes all of us, who are actually the problem, get away free.

Is there even a problem?

Pharmac’s processes are consistent with international best practice in health funding prioritisation and their objectively determined ‘incremental cost-effectiveness ratios’ or ‘ICERs’ are in line with how health researchers around the world determine value for money. This is what produces the ‘quality adjusted life years per one million dollars’ benchmark that Pharmac bases most of its decisions upon. There is provision for case-by-case exception as well. There is nothing untoward here. And the results of these calculations need to be kept secret for commercial reasons in many cases.

The result of this process? Well the life expectancy of New Zealanders is about 82 years. In the USA, where every drug you can imagine is available, it is 79 years (and falling). So the New Zealand health system is doing something very right (and this includes prevention of disease, and healthy lifestyle promotion, which are all part of the health budget).

So where does the problem (if indeed there is one) lie? It would lie with the amount of money Pharmac is allocated. To repeat, Pharmac is doing the very best it can with the budget it has. So any finger-pointing needs to be directed at David Clark the Minister of Health (who allocates health funding received) and Grant Robertson, the Minister of Finance (who allocates funding to health). These Ministers in turn must direct the question to the New Zealand public. Political leaders need to offer realistic explanations of the options, without spin, to the public.

How much money should Pharmac get?

So how much money should Pharmac get? Well that depends. It depends on our (the New Zealand public’s) values and our preferences. If we value the health of those dying of cancer, and we prefer that expensive life-extending medicine be funded, then that is a completely reasonable position to take. But if these values and preferences mean that the budget for Pharmac must rise, then it is not enough to merely complain and call Pharmac unfair. That is the cowards way out.

We must propose a preferred policy for resource allocation. If we prefer that money is taken out of education and used to buy cancer drugs, then we should say that. If we prefer that Superannuation is reduced or the age of eligibility is raised, then we should say that. If we prefer that road safety initiatives are scrapped (and the road toll rises) then we should say that. If we prefer that income tax is raised, then we should say that. If we prefer to pay more GST, then we should say that. But we are silent.

If we want the government to increase funding for Pharmac, then we need to state unequivocally what we will trade and be specific. Perhaps it is best that we raise the age of entitlement for NZ Superannuation to 67 or 68. This could be a small price to pay so that those in desperate need can access medicines. Or perhaps we forgo special education support for children with learning difficulties, or perhaps we’d rather have less disposable income and simply raise taxes.

Funding of medicines is up to us

We need to vocalise our priorities and elect a government consistent with that prioritisation. Alternatively the government should offer us clear choices, and respect our decisions. It is up to us to determine how much Pharmac can ultimately spend on medicines. We should not be attacking the organisation that actually drives medicine prices down, and gets us the very best deal possible on hundreds of life-saving products.

All of the above are viable solutions to the ‘Pharmac problem’ but this just shows that Pharmac is not the problem, indeed, Pharmac is the solution to the constraints imposed. The resourcing problem is us and our unwillingness to put forward suggestions for managing the opportunity cost of buying more medicines. Given that attack politics is not constructive, I’ve previously suggested some policies relevant to Pharmac, including factors for consideration here, why we shouldn’t fund some expensive medicines here and I’ve also suggested ways to decrease the cost-burden of cancer in New Zealand here. We need solutions, not criticisms.

It doesn’t matter where you draw the value for money line, there will always be medications that sit above it. If Pharmac’s budget was doubled, there would still be patients who in theory would derive benefit from expensive but unfunded medications. The problem of prioritisation will persist. But if we uncap the Pharmac budget, then other budgets must necessarily have sinking lids.

What will we agree to forgo?

So think of this, perhaps we should all forgo some superannuation to fund a $75,000 drug that extends a cancer patient’s life by 3 months. Or perhaps NZ Super should be means tested. Those might actually be morally correct things to do. But again, the crux of the problem then isn’t Pharmac, it is us. Whenever the government suggests raising the age of NZ Super we all scream foul. Whenever the government suggests increasing GST we all scream foul. Whenever the government suggests cutting services, we all scream foul. In that case, it is not Pharmac who are morally bankrupt, it is us.

Overall, we need to vocalise the solution not the problem. Investigative reporting needs to present this wider societal and political context and not merely act as an advocate for a few.