'You can't ignore cost': Pharmac bosses recognise drug-buying constraints, promise transparency

Pharmac's chief executive Sarah Fitt is defending the drug-buying agency in the face of petitioners calling for more drugs to be funded, pointing to financial constraints. 

"You can't ignore the cost," Fitt told members of the Health Select Committee on Wednesday. "We're not arguing whether these medicines work or don't work."

Fitt told the committee members Pharmac has to consider the demand, as well as whether a drug is effective, in order to justify the cost of purchasing it. 

She explained that when a new medicine becomes available, Pharmac tells suppliers to submit their "best price". The drug-buying agency is then able to "give them an idea if it's going to fly early on".

Suppliers are also given multiple chances to submit their medicines, she added, telling MPs the "list we have moves all the time" when prices change and demand grows. 

Pharmac is under pressure with multiple petitions to Parliament urging them to fund more medicines, the most prominent being cancer drugs petitions.

The Government recently gave Pharmac a $40 million boost to pay for three new medicines to be available, including two cancer drugs, following several protests and petitions.

But there are lesser-known diseases New Zealanders are pleading with Pharmac to fund treatments for, such as Spinraza which can help with spinal muscular atrophy (SMA).

Steve Maharey, chair of Pharmac's board, and Sarah Fitt, chief executive of Pharmac.
Steve Maharey, chair of Pharmac's board, and Sarah Fitt, chief executive of Pharmac. Photo credit: Newshub / Zane Small

It's a rare, muscle-wasting genetic disorder that affects a person's movement. The most severe form is type 1, which can cause respiratory issues and extreme weakness - and Spinraza can treat it.

National deputy leader Paula Bennett asked Fitt why Pharmac's Rare Disorder Subcommittee deferred an application in November 2018 by US biotech company Biogen to fund Spinraza.

"The long-term data wasn't there," Fitt said, adding that Pharmac relied on the advice of clinical experts. 

She said some of the medicines "are incredibly expensive" and often don't match up to the amount of evidence.

Bennett asked Fitt if she could provide a timeline of when SMA sufferers might be able to expect the treatment to be funded, but Fitt said it all depends on the upcoming recommendations of the subcommittee.

Biogen's head of market access for Australia and New Zealand, Bronwyn Underwood, argued that clinical trials have shown promising results for children, giving them increased motor function and longer life expectancy.

National deputy leader Paula Bennett.
National deputy leader Paula Bennett. Photo credit: Newshub / Zane Small

She said in January this year the subcommittee questioned the benefits of Spinraza, making New Zealand "the only country in the world" to question it.

Biogen has since submitted further evidence to the subcommittee and it will be considered. 

Labour MP Louisa Wall pointed to Australia, where Spinraza was officially funded by the Australian Government in May 2018, and would cost just AU$40 instead of hundreds of thousands of dollars. 

Bennett asked Fitt, why is it so different in other countries?

Fitt said that other countries don't operate under fixed budgets.

"You can't ignore the costs."

Biogen's head of market access for Australia and New Zealand, Bronwyn Underwood.
Biogen's head of market access for Australia and New Zealand, Bronwyn Underwood. Photo credit: Newshub / Zane Small

Fitt said there hasn't been a dedicated Pharmac money for rare diseases since a five-year pilot launched by National in 2014, which included $5 million within Pharmac's budget.  

But rare disease medicines had to compete against others that benefit larger populations. National's Michael Woodhouse said the money should have been kept only for those rare disease medicines. 

Labour campaigned on establishing a rare diseases fund, pledging more than $20 million for it during the 2017 election. But the Government backtracked on it in early 2018. 

Pharmac board chair Steve Maharey said the drug-buying agency is "doing everything we can" to make the process of purchasing medicines "less of a mystery" to the public.