Jacinda Ardern responds to heartfelt plea from Pharmac funding advocate Malcolm Mulholland

Prime Minister Jacinda Ardern has responded to a heartfelt plea by Malcolm Mulholland, a man advocating for an increased Pharmac budget to fund more life-saving drugs that can better the lives of critically-ill New Zealanders.

Last Tuesday, the Government announced it would launch a review into Pharmac, the public agency that decides which medicines are subsidised for public use on behalf of the District Health Boards (DHBs). However, its total budget - a point of contention for Mulholland - will not be included in the assessment. Instead, the review will focus on how Pharmac performs against its objectives, the timeliness and transparency of its decision-making regarding new medicines, and equity concerns, including access for Māori and Pacific peoples.

The following day, Mulholland, the chair of Patient Voice Aotearoa - a charity collective campaigning for the rights of Kiwi patients - sent a message to Ardern live on The AM Show. 

He pleaded with the Prime Minister to give him 30 minutes of her time to discuss why the drug-buying agency's budget should receive a significant boost. 

"Prime Minister, Jacinda, we've known each other now for over a decade, since you entered into politics. You know myself, you know Wiki, you know our kids," Mulholland said, referring to his wife, Wiki, a woman who has been battling advanced breast cancer.

"Ever since we have been speaking out against Pharmac, the communication trail has gone cold. You don't return texts or calls. You know where we live - why don't you come around, have a cup of tea? Let's sit down and just have a talk… you know how to reach me. Please, we'd love your ear for half-an-hour." 

On Monday, Ardern responded to that plea - and argued that she had already listened to Mulholland.

"I do believe that we've listened. One of the things Malcolm has called for is for us to look at whether or not our model is allowing that early access. For many in New Zealand, the question that is often raised, particularly for cancer drugs, is whether or not our system is responding quickly enough to some of those new, emerging options for patients," she said.

"One of the reasons that we've instigated this review is despite, of course, as a Government, increasing the amount of funding for Pharmac - is the model orientated to deal with that properly? That's why we've said, 'let's take a look'."

When The AM Show host Duncan Garner pressed Ardern on whether she would be willing to further discuss the issue with Mulholland, she said she didn't have "anything scheduled".  

"I feel like I've heard Malcolm. I do know him through a friend and I have known him for a number of years. I do think I'm responding to what he's called for. I'm not necessarily always going to be able to satisfy everyone, but Malcolm knows my heart is exactly where it should be on this - even if we don't always agree on everything," Ardern said.

"The point that I'm trying to make is I've heard him. That's the reason we have this review in the first place." 

What is Pharmac's budget?

Pharmac's yearly budget is decided by the Minister of Health following a consultation with the agency, the Ministry of Health and DHBs. In the 2019/20 financial year, Pharmac spent $1.04 billion on medicines - up by roughly $19 million from the year before. 

On September 1, 2019, the Government announced an additional $60 million in funding for Pharmac - $20 million of which was allocated for 2019/20 and $40 million for 2020/21. In April 2020, that announcement was followed by a one-off investment of $35 million in essential medicines as part of the Government's response to the COVID-19 outbreak.

In May, the Government announced a further boost, investing an extra $10 million for 2020/21 and allocating $150 million over the next three years.

The additional funding increased Pharmac's medicines budget to a record $1.045 billion for 2020/21 - an increase of $174 million, or 20 percent, since the 2017/18 period.

Two months later, then-Health Minister Chris Hipkins announced a $302 million boost to medical funding in response the ongoing pandemic, $150 million of which would be invested in Pharmac over two years to ensure New Zealand has access to the medications and equipment required to fight the virus.

What is Mulholland campaigning for?

Mulholland is actively campaigning for an increased Pharmac budget, which will provide the agency with the funding to afford more life-saving drugs for New Zealand patients. He claims the agency is underfunded in comparison with its overseas counterparts and wants the budget doubled - or tripled. 

To keep costs low, Pharmac - described by Mulholland as a "hard bargainer" - typically waits for competition to arrive on the international market, driving down the price of costly medications. 

"That means that for forever and a day, New Zealand's going to be anywhere between five to 15 years behind the rest of the world," Mulholland said during an appearance on The AM Show in September.

"If we want to adopt that model, that's fine - but what that will mean is that those with rare disorders, with chronic illnesses, with cancers - their life expectancy will remain stagnant, whereas the rest of the world will move on."

According to its annual review, Pharmac managed to save around $625 million in the 2019/20 financial year, due to the deals it can cut with providers as a single-buyer. The agency argues that keeping costs down allows it to fund a wider range of medications.

But research in 2019 found that New Zealand takes twice as long as the average to get medicines funded, and had the least number available. New Zealand also came last for access to priority medicines in the OECD. 

Health Minister Andrew Little said in a statement that Pharmac's overall budget would be excluded from the upcoming review as the ministry knows "there is no sum of money that will ever be enough to provide all of the medications to meet all the needs of every person".

"In the end, the budget, like the rest of the health budget and the rest of the Government budget is a set of political decisions and political trade-offs and that's why it doesn't make sense to review that," he said.

"What we want to know is that when Pharmac is making its decisions, that it is doing so in the best way possible."