Trading Pharmac
Audrey Young reports that the government say they will not scrap Pharmac as part of a free-trade deal with the US. Actually, National is being quite a bit more cagey than that. Tony Ryall is simply not commenting and Tim Groser is being positively vague as this shows:
“He said Pharmac was an outstandingly successful public institution which had saved the New Zealand taxpayer hundreds of millions of dollars – enough to build the Starship hospital – over five years.
““We’ll sit down and listen to what concerns, if any, they have and we’ll address them,” he said.”
So – will he or won’t he put Pharmac on the table?
It should be clear that the New Zealand government would be extremely stupid to rule out a free trade agreement on the basis that Pharmac is inviolate. Pharmac does an admirable job (for the most part) keeping the costs of our medicines down. It saves the government a great deal of money. But if a free trade deal with the US promised to bring in more than sufficient tax revenue to cover the increase in drug costs the scrapping of Pharmac would bring, then Pharmac should be a negotiable item. Note that the free trade deal would need to offer very concrete rewards rather than nebulous promises, for New Zealand to dismantle Pharmac.
Frankly, for doctors, Pharmac is a pain in the ass. They severely restrict our choice of medicine and greatly curtail our access to new drugs (sometimes justifiably, admittedly). They change the formulation and manufacturers of funded drugs like a chameleon on a kaleidoscope and they place bizarre restrictions on drugs requiring special authority (for instance: why insist on a patient using two separate inhalers for three months before they can apply for the special authority to use the combined version – are they deliberately trying to confuse people?) . In short, the savings in our medicine bills comes almost entirely from severe restrictions in our pharmacopoeia that disservice consumers. Often minimally but not infrequently quite severely.
And I suspect it would be a particularly pathetic free-trde agreement that did not at least cover the costs of the loss or partial loss of Pharmac. Certainly few doctors will be crying about it.
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Apr 29 10 1:08 am
“They severely restrict our choice of medicine and greatly curtail our access to new drugs (sometimes justifiably, admittedly).”
Jim, I disagree with this assessment- Pharmac does not have a role in regulating medicines in NZ, regulation is Medsafe’s role (http://medsafe.govt.nz/other/about.asp). Although this should be obvious, I think that a lot of the public just see this miserly organisation which was willing to let Women die of breast cancer because Herceptin caused too much (Jackie Blue to the rescue!)- rather than understand the realities of the decision not to fund (at that time).
I can understand the argument that the non-funding of certain medicines effectively results in reduced access , but the reality is that all Medsafe-approved medicines are available for doctors to prescribe- albeit at the unsubsidized price; there are few examples where non-funded drugs are better. A recent editorial by ‘Australian prescriber’ puts this in context- http://www.australianprescriber.com/magazine/33/1/2/4/.
Sometimes general practice and hospital practice are worlds apart, but there’s nothing more disheartening in either environment than learning that your patient has been admitted (or readmitted) to hospital (or died) simply because they couldn’t afford their medicine script. I’m surprised that I’m seeing this relatively more often in Australia than I did in NZ (mostly parents not picking up their kids antibiotics)- the cost of funded-medicines (http://www.medicareaustralia.gov.au/public/services/scripts/index.jsp) is substantially more in AUS than in NZ- my point being that I look forward to practicing in the pharmac environment again.
Apr 29 10 2:00 am
Pharmac dictates funding for medicines. When medicines are not funded they are usually either withdrawn from the New Zealand market (because the market dries up) or the price differential is so great the patient would rather take the funded drug, regardless of efficacy or safety profile.
The former I know to be true every time I try to do a repeat script for long-stay foreign visitors. At least half the drugs are not available in New Zealand.
The latter I see all the time. Very few New Zealanders will pay more than $30 a month for a drug.
May 2 10 12:40 pm
We should get rid of Pharmac for the same reason we should get rid of the socialist health system – because it interferes and destroys the market for healthcare in NZ. If that means medicine prices rise to the global level – well that’s where they should be!
Pragmatically, if you look at Aussie’s “free trade deal” with the US, well it provides very little benefit, especially in agriculture. If you think the US will allow any kind of free access for NZ’s dairy products you’re dreaming. But, whether or not NZ has a “free trade deal” the experience of the 1980s shows we a far better of removing all our tariffs, protections, and barries – Pharmac certainly among them – than remaning protectionist, regardless of what the US does. We have no influence over the US in any case.
May 2 10 4:20 pm
A free market for healthcare? Who or what do you think sets market prices for healthcare- supply and demand? As it is, fees for private healthcare (other than GPs) are dictated by Southern Cross, even for those individuals who aren’t insured by Southern Cross (http://www.nzma.org.nz/journal/118-1226/1753/).
‘Pragmatism’? There is plenty of evidence which suggests that social medical systems are less costly (in terms of proportion of GDP spent on healthcare), provide better healthcare (in terms of population health outcomes), and are easier and less costly to administer than the Frankenstein that is the US healthcare system (http://www.nytimes.com/2010/04/30/health/29chen.html).
But those who want to open up the drug and healthcare market aren’t interested in outcomes, equality, or the available evidence.
May 2 10 4:39 pm
Note that population health outcomes have little to do with quality of health care and everything to do with lifestyle. This is why the US often has worse health outcomes while spending the most on health care.
A truer set of measurements would be average life span from the age of 70 years (when health care really matters for survival) and general patient satisfaction with the health care system. Access to services is also a good measure.
When you use these types of measures, you find that state medicine is, in fact, much worse than private medicine. This is logical when you think about it. Why would people pay premiums for private health care in New Zealand, if state health care was better than private health care?
Oh, and the GDP expenditure is misleading too. All that the high expenditure in the US shows is that, left to their own devices, people prefer to invest more money into their own health than the state does. Hardly a big surprise there.
May 2 10 5:04 pm
I see you’re good at explaining things away, so explain away economic equalities and their relationship to health outcomes in a private healthcare system.
Here’s a specific example (given that this is a real anomaly of the NZ healthcare system)- how does the 8yo child of a poor family obtain better healthcare when his family has to pay 60 dollars to see a doctor as opposed to paying nothing.
May 2 10 5:23 pm
explain away economic equalities and their relationship to health outcomes in a private healthcare system.
This sentence makes no sense. There is nothing to explain away. In a ALL health care systems, lower income groups generally fare worse than higher income groups. Even in good old statist New Zealand, I can access far better and more immediate health care than, say, the average bus driver, simply because I can afford to.
Inequalities like this are easy to fix (or, at least, ameliorate). In a private system, you simply need to subsidize insurance for poorer folk. In the New Zealand context, you would be far better off targeting subsidies to low-income people than simply making all under six visits free and subsidizing old, but relatively wealthy, folk to travel to Waiheke island.