$40m in Pharmac savings should be moved into new drug purchases - Labour

Labour has suggested that Pharmac's projected savings should be used to fund new, potentially life-saving drugs.
Louie Douvis

Labour has suggested that Pharmac's projected savings should be used to fund new, potentially life-saving drugs.

Nearly $40 million of savings from national drug buyer Pharmac's negotiations is being used to cover under-funding in other areas when it could purchase new life-saving medicines like cancer drug Keytruda, the Labour Party says.

Labour says documents from the 2015 budget show that the Government decided to "reprioritise" $39.2 million of Pharmac drug savings, $9.8 million a year, intended for district health boards.

The funding was reallocated to cover "cost and volume pressures" in disability support community residential services, caused by increased complexity and higher needs for clients.

Labour has been pushing for the Government to fund Keytruda, a biologic drug for terminal melanoma patients that has produced promising results in early clinical trials, through Pharmac.

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Labour health spokeswoman Annette King said the money saved by Pharmac should go back into buying new drugs like Keytruda, rather than covering under-funding in other areas of the health sector.

"Pharmac for a long time have always made savings in the deals they do ,that's been their huge strength and why they're so supported, they get the best deals, but rather than this money going in to pay for new drugs...it's being used to pay for under-funding in other areas."

Pharmac did not receive the funding it asked for in the last budget to purchase new drugs, when there was "huge demand" for access to new pharmaceuticals, King said.

'We're not just talking about Keytruda, we're talking about dozens of other pharmaceuticals that are waiting to be funded."

The re-prioritisation showed how the health budget was being "squeezed" by the Government.

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"They're short of money, but [reallocating it] is at the expense of pharmaceuticals."

Pharmac should fund Keytruda on a temporary basis until more data about its efficacy was available, due to the lack of alternative treatments for patients with advanced melanoma, King said.


Health Minister Jonathan Coleman said the Government had increased Pharmac funding by $150 million over the last seven years, to "a record $800 million per year", while the overall health budget had increased from $11.8 billion to $15.9 billion.

Coleman said he sympathised with melanoma patients undergoing treatment, but Pharmac had to feel assured it was "funding the best possible medicines which make the biggest difference to the largest number of New Zealanders".

Pharmac was already in "complex commercial negotiations" with more than one drug company supplying medicines in a similar class to Keytruda, Coleman said

The Government backed Pharmac's decision-making process, as the drug buyer had to consider the needs of all patients.

 - Stuff

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