– Determining a medicine’s priority using cost-effectiveness
analyses alongside other criteria such as health
needs; the health needs of Ma¯ori and Pacific populations;
availability of existing treatment options; clinical
benefits and risks; budgetary impact, etc.
– A therapeutic group approach, which funds equivalent
medicines at the lowest price, forcing pharmaceutical
companies to accept the PHARMAC price as full
payment or charge individual patients an additional fee.
– A capped budget.
– Negotiations between PHARMAC and pharmaceutical
companies to keep prices low.
– Tenders for off-patent medicines, involving a sole
supply arrangement for the whole of New Zealand (e.g.
amoxicillin [31], some antipsychotic medicines [32]).
Since 2002, PHARMAC estimates that it has saved
DHBs $NZ3.8 billion1,2 against forecast expenditures
through its work [34]. PHARMAC has survived numerous
changes of government and has had its role expanded to
include hospital medicines and, most recently, devices.
Critics argue that PHARMAC means New Zealanders do
not have access to the same range of medicines as other
countries, leads to uneconomic prices, poses risks to health,
and that it is slow to make decisions, lacks transparency,
and at times places supply at risk through sole-supplier
arrangements [29]. But on only two significant occasions
have New Zealand governments ‘overturned’ PHARMAC
decisions, where PHARMAC had argued there was a lack
of evidence about the cost-effectiveness of the medicines
involved. In both cases, PHARMAC decisions were
‘overturned’ as a result of election promises. Thus in 1999,
the Labour-led government enabled the funding of interferon
beta for multiple sclerosis; while in 2008, the
National Party-led government allowed funding to support
the 12-month course of breast cancer medicine trastuzumab
for HER2-positive breast cancer[29]