The pills bills: It's life or death

17:00, Jun 22 2013

The Government's drug-buying agency is asking New Zealanders whether young people should be able to jump queues for costly drugs at the expense of older people who've already had a long life.

Pharmac also wants to know if poor people are more deserving of help than rich people, and whether underprivileged groups such as Maori and Pasifika should get priority access to drugs.

The proposals are among a raft of provocative questions being asked by Pharmac as it conducts a consultation exercise about the criteria it uses when deciding how to spend its budget, which last year was $783 million.

Since it was set up in 1993 to control soaring drug spending and reduce political involvement in drug-buying decisions, Pharmac has assessed the value of a treatment using the same nine criteria, which include the risks, benefits and cost-effectiveness of a given medicine.

Worldwide, demand for medicines is outstripping governments' ability to pay for them, as people live longer and expensive new therapies come to market. But Pharmac CEO Steffan Crausaz said unlike similar bodies in other countries, Pharmac has a fixed budget, forcing it to prioritise.

Now, for the first time, the public is being asked to give its opinion on whether those priorities need reform.


Other conversation-starters in a consultation document published by Pharmac last month include:

Should it take into account the ability of parents of sick children to return to work?

Should it assess the future earning potential of children?

Should it have different priorities for providing treatment of conditions considered "preventable", compared to those that are genetically based?

Should priority be given to people who have experienced long-term disadvantage ("such as Maori and Pacific peoples") or have had long-term disability prior to treatment?

At the heart of Pharmac's current cost-benefit analysis is an assessment of the number of good-quality years of life gained from a treatment (measured in "quality-adjusted life years", or QALYs). By measuring the QALYs gained per million dollars spent on a given treatment, it is possible to make comparisons between profoundly different medicines, and prioritise spending accordingly.

Pharmac says the system has worked well, but it wants to know if the public want other considerations taken into account. For instance, some countries vary medicine subsidies according to a patient's income and age, while others are more generous for sufferers with acute rather than chronic conditions.

When preparing the consultation document, Pharmac hired independent health economist Anthony Harris, from Australia's Monash University, to write an overview of factors that can affect health spending.

Harris told the Sunday Star-Times that funding decisions work best when they are based on a set of principles, rather than ad hoc decisions on what seems reasonable. Deciding just what those principles should be, though, can be tricky.

For example, if two people, one young and one old, each stood to live another four years if they received a given treatment, "you might feel you want to give some additional weight to the younger person, because they hadn't lived a full life".

Harris said one suggestion in the Pharmac document - that consideration be given to whether a disease was "preventable" versus genetic - should be treated with caution.

"I think some people would like to punish people for behaving badly, but someone's poor behaviour is not necessarily their own doing."

He said smoking or overeating or not exercising are not always personal decisions, and are often to do with an individual's social and economic environment, and being punitive is a "dangerous road to go down".

Harris said Pharmac's current system of using the QALY is superior to that of many other countries, where "it's about who shouts the loudest about their disease".

The New Zealand system attempts to compare and prioritise, "independently of disease-based lobbying, whether it's from manufacturers or doctors or patient groups".

He says Pharmac should be congratulated for a consultation which showed it was thinking beyond the QALY, yet for all its flaws and generalisations, the current system "is a good way to make decisions".

From Tuesday, Pharmac is hosting a series of free community forums seeking the public's views on what its decision criteria should be. For details see

Pharmac's consultation guidelines:

Sunday Star Times