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PHARMAC Information sheet

Introduction to PHARMAC

What is PHARMAC?

PHARMAC is the New Zealand Government agency that decides, on behalf of District Health Boards, which medicines are subsidised. PHARMAC, a Crown Entity, was created in 1993 to ensure that New Zealanders get the best possible health outcomes from money the Government spends on medicines. Trying to meet the public’s growing demand for new medicines within a defined budget is a challenging and important job. Since its establishment, PHARMAC has made a wider range of subsidised medicines available, while staying within an agreed budget each year.

Optimal use of medicines

As well as making medicines available, an important part of PHARMAC’s role is to ensure that medicines are used appropriately, and not overused, underused or misused. We do this by developing campaigns, such as Wise Use of Antibiotics (encouraging appropriate use of antibiotics) and One Heart Many Lives (encouraging men to improve their heart health).

Hospital medicines

PHARMAC negotiates prices (and other supply terms) for some hospital medicines on behalf of District Health Boards. These are listed in Section H of the Pharmaceutical Schedule. District Health Boards may also use PHARMAC’s expertise to manage the purchasing of other products used in hospitals. We also negotiate annual supply contracts for the influenza vaccine - on behalf of the Ministry of Health.

What does PHARMAC do?

PHARMAC has four main roles: • managing the Pharmaceutical Schedule of over 2000 Government-subsidised community medicines (those medicines that your doctor prescribes) • promoting the best possible (or ‘optimal’) use of medicines • managing the subsidy of some medicines and products for public hospitals • managing Exceptional Circumstance schemes (medicines funding for people with rare conditions) and other special access programmes. We are guided by a number of laws and Government guidelines, and Medicines New Zealand – the strategy for the medicines system.

Pharmaceutical Cancer Treatments (PCTs)

PHARMAC manages the cancer treatments `basket’, a list of pharmaceutical cancer treatments which all District Health Boards must fund. PHARMAC decides which medicines to add to the list. Funding is currently held by District Health Boards, and this may be transferred to PHARMAC in future.

Advisory committees

PTAC, the Pharmacology and Therapeutics Advisory Committee, gives PHARMAC advice on whether new medicines should be subsidised and, if so, what priority they should be given. PTAC is made up of practising clinicians with expertise in general and specialist medical practice, clinical pharmacology, and examination of data from clinical trials. The committee generally meets four times a year. Members are appointed by the Director General of the Ministry of Health. PTAC has subcommittees for specialised advice, such as on cancer and diabetes treatments, when necessary. Together these committees provide PHARMAC with a resource of more than 50 clinicians helping us to make the right decisions. The Consumer Advisory Committee provides PHARMAC with an important patient or health consumer point of view. Its members are appointed by the PHARMAC Board. Members bring a wide range of consumer perspectives, such as gender, age, ethnicity and geographical location.

Managing the medicines budget

The budget for medicines that people take when they are not in hospital - the Community Pharmaceutical Budget - is set each year by the Minister of Health, on the advice of District Health Boards and PHARMAC. District Health Boards hold that money and PHARMAC works on their behalf to manage the spending. PHARMAC decides what medicines to fund, negotiates prices, sets subsidy levels and conditions, and ensures spending stays within budget. The list of subsidised medicines is called the Pharmaceutical Schedule. Legislation requires that PHARMAC does not spend more than the budgeted amount. PHARMAC tries to keep spending as close as possible to the target figure, while remaining under it.

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PHARMAC Information sheet

Decision-making

Decision making process

The process set out in this diagram is intended to be indicative of the process that may follow where a supplier or other applicant wishes a pharmaceutical to be funded on the Pharmaceutical Schedule. PHARMAC may, at its discretion, adopt a different process or variations of the process (for example, decisions on whether or not it is appropriate to undertake consultation are made on a case-by-case basis).

Receipt of proposal Listed on PHARMAC website

Summary of proposal Preliminary economic assessment and questions for PTAC

Review of proposal by PTAC

Request more specialised advice from Subcommittee / Experts as required

There are nine Decision Criteria that PHARMAC considers when making funding decisions. A wide range of information is considered under these criteria, including patients’ needs, whether there are other existing treatments, the amount of health gained for each dollar spent on the medicine (value for money), and the Government’s health priorities. In assessing these factors PHARMAC seeks advice from the Pharmacology and Therapeutics Advisory Committee (PTAC - a committee of expert doctors).

Considering evidence

Assessing Relative Value

Recommendation to PHARMAC Some minutes published on PHARMAC website

Negative recommendation

PHARMAC’s people

PHARMAC employees undertake a wide variety of roles including analysing proposals to subsidise medicines, negotiating with pharmaceutical companies, economic and clinical assessment and developing optimal use initiatives. A range of skills and expertise enables this work to be done effectively. Our office is based in Wellington, with approximately 60 staff.

Positive Recommendation

Economic Assessment

Prioritisation of all proposals

Review by PTAC

Negotiation with supplier(s)

Consultation on Preliminary agreement

Reaching a Decision

Summary of all relevant information prepared for board

PHARMAC Board Decision

Implementation

PHARMAC is the Government agency that decides, on behalf of District Health Boards (DHBs), which medicines get subsidised so that they are more affordable for New Zealanders and available nationally. The subsidies PHARMAC sets are funded from a fixed budget that is part of DHB funding. PHARMAC also promotes the optimal use of medicines, carries out some procurement for DHBs, and manages special access programmes for some medicines. Information Sheets on various PHARMAC topics are available from our website: www.pharmac.govt.nz/patients/infosheets If you have specific areas of interest (such as consultations, committees or vacancies), visit our website and subscribe to news feeds in the area(s) of interest to you: http://pharmac.govt.nz/feeds

Contacting Us

Call us on 0800 66 00 50 (between 9am and 5pm, Monday to Friday), or on 04 460 4990 (between 8am and 5.30pm, Monday to Friday). Write to us at: PHARMAC, PO Box 10 254, Wellington – we respond to all letters Email us at enquiries@pharmac.govt.nz – we respond to all emails