A public health professor is backing the call for more drug funding, but says any cost-benefit analysis must include Pharmac’s negotiating power.
It follows an economic study commissioned by Business NZ that found every additional dollar spent on medicines delivers an almost $2 economic return.
The report said New Zealand spent 4.9 percent of its health budget on drugs compared to 12.2 percent in Australia.
Three drug companies – AbbVie, GSK, and Roche helped fund the study and gave expertise – but BERL consultancy says the report findings are entirely its own.
Bond University Business School executive dean Robin Gauld said New Zealand did not spend enough on pharmaceutical goods.
“We are way behind where we need to be globally.”
He said the country did not have the same access to modern drugs, especially advanced cancer drugs or those for rare conditions, and maintained any analysis that helped decision makers expand funding was valuable.
However, he said the report did not include Pharmac’s role in keeping drug prices low.
Gauld said New Zealand paid about half the price that Australia did for the most commonly prescribed drugs, thanks to the state drug buyer.
“If New Zealand was paying Australia’s prices, we may be up nearer to the percentage of dollars being spent on drugs within the overall health budget.
“Australia will be spending a bit more of a percentage in any case, and that means that all of these extra cancer drugs and so forth are available.”
Pharmac director of strategy, policy and performance Michael Johnson said the agency acknowledged the Business New Zealand report, and concerns about New Zealand’s level of medicines spending compared to other OECD countries.
“Funding allocation for medicines is decided by the Government through the annual Budget process, with Pharmac responsible for deciding which medicines are publicly funded within the available budget to deliver the greatest health benefit for New Zealanders,” he said in a statement.
In recent years, the Government had provided significant increases to the medicines budget, he said.
“Pharmac continues to explore how it might update its assessment approach to include the wider societal benefits of funding medicines.”
Gauld said New Zealand’s lack of investment in drugs was symptomatic of a broader under-investment in healthcare and pointed to recent reports of wait times in cardiology and [https://www.rnz.co.nz/news/health/1197171/patients-going-blind-36-000-overdue-for-tests-amid-high-demand ophthalmology of a system that was not working.
He said the health system had been unacceptable for several years.
“I thought about the 36,000 people who haven’t been able to see an eye specialist, I just can’t imagine 36,000 cars sitting up and down the roads of New Zealand with flat tyres, burnt out, unable to be moved because the roads are so bad.
“And that’s the analogy with our healthcare system. People are just being left behind.”
He said it was a political scandal.
“It’s absolutely appalling that in a so-called first-world country, our successive political leaders – across all political parties that have been in power – have abjectly failed the country.
“The drug spend is sort of a micro-system within the broader health spend and health policy of the country.”
Gauld said there was a real need for “genuine cross-party consensus” on health that was designed to endure the election cycle.
The Ministry of Health directed questions to the minister’s office.
The minister in charge of Pharmac David Seymour has been approached for comment.