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SUMMARY OF SUBMISSIONS

This Summary of Submissions document provides a summary of the submissions we received. The views that stakeholders expressed in their submissions are described in general terms. For the purposes of this document, PHARMAC staff paraphrased and shortened respondent’s comments. It is important to note that this summary is not intended as a replacement for the individual submissions themselves, all of which stand in their own right. All submissions were individually provided to and considered by the PHARMAC Board, as part of the decision making process. Preparing submissions often takes considerable time and effort and we were grateful that stakeholders took time to provide their views on this important topic. In total, we received nine responses during the three month consultation period. Submissions were made by: • • • • • • • • • A member of the public Access to Medicines Coalition (ATM) Researched Medicines Industry (RMI) Pharmaceutical Society New Zealand Medical Association (NZMA) Janssen-Cilag Another pharmaceutical supplier Lakes DHB Hauora Taranaki PHO

In addition, one submitter drew our attention to a related document that was released after the closing date for submissions as a consultation response to the draft Medicines Strategy. While we did not treat that document as a formal submission, we proactively sought a copy and summarised a portion of it as related to high cost medicines issues and wider PHARMAC-related issues for the Board to consider along with the formal submissions. We have analysed the stakeholder submissions and present a summary of the information contained in these under the following five categories: • • • • • Considering the topic of decisions about funding high-cost medicines Review process PHARMAC’s framing of the review questions Expert reports on PHARMAC’s decision-making processes Decisions about funding high-cost medicines

Considering the topic of decisions about funding high-cost medicines Some submitters commented that they thought that it was important to consider the topic of highcost medicines funding decisions. It also was noted that high-cost medicines funding is an issue of international interest and contention. Some submitters commented on the complex and challenging nature of funding decisions about high-cost medicines. The view was expressed that the issues raised by these decisions engender strong feelings and that people will often not like the outcomes. Some submitters considered it inappropriate that PHARMAC was undertaking the high cost medicines review. Reasons for this included that submitters considered PHARMAC’s role as an operational agency was simply to undertake resource allocation decisions, and that the strategic direction for funding high-cost medicines should be set by government policy (led by the Ministry of Health). In addition, some submitters commented that the broader policy should be set in the

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context of the development of the Medicines Strategy. These submitters advised that they would feed their submissions into the Ministry of Health’s medicines strategy process in addition to responding to PHARMAC’s consultation process.

Review process One submitter commented that the timing of PHARMAC’s announcement of the review was planned to ameliorate public criticism of some funding decisions. This submitter also considered that PHARMAC’s inclusion of its preliminary view on decisions about funding high-cost medicines, which were included in consultation material, called into question the authenticity of the consultation. In addition, this submitter noted the length of the review process.

PHARMAC’s framing of the review questions Some submitters expressed the view that the review questions did not correctly frame the issues. One submitter considered the focus on the characteristic (high cost) of the medicine within the tools and techniques for rationing decisions was inappropriate. This submitter commented that the issue should have been considered from a more strategic perspective, including by considering the characteristics and needs of populations affected by diseases that are treated by high-cost medicines; the application of the objectives of the Health and Disability Act to this population group; and the objectives of DHB’s and PHARMAC’s role in assisting DHBs to achieve these. In addition, this submitter suggested that international initiatives to support the development and registration of, and access to, high-cost medicines should be considered alongside advice from patient organisations on how governments should respond to rare diseases. Another submitter expressed the view that the review questions assumed PHARMAC’s systems for funding other medicines were effective and equipped to introduce modern and innovative new medicines. This submitter suggested that a more appropriate question to ask is whether New Zealand needs a different approach to funding all medicines. This submitter also considered that a discussion of budget-setting is essential when considering whether the New Zealand system is robust enough to accommodate high-cost medicines, and noted that PHARMAC had not sought views on this topic. A further submitter suggested that the first consultation question was an over-simplification of the issues involved in funding high-cost medicines. This submitter suggested that an independent review should be undertaken to determine how decisions have been made in the past and how they should be made in the future.

Expert reports on PHARMAC’s decision-making processes Some submitters commented positively on the reports that PHARMAC had commissioned and provided to inform consultation responses. These submitters considered that the reports were thought-provoking, and included valuable opinion and debate on the economic issues relevant to the prioritisation of medicines and health interventions in general.

Decisions about funding high-cost medicines Submitters responded to the consultation questions with a range of views on how, and on what basis, PHARMAC should make decisions about funding high-cost medicines. In addition to commenting on whether high-cost medicines require a different approach compared to other medicines, submitters suggested improvements for the decision-making process, and identified the criteria they thought should be considered in funding decisions. Submitters’ views on these topics are summarised in this section.

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Do high-cost medicines require a different approach? Submitters provided a range of views on whether a different approach is required for making decisions about funding high-cost medicines, compared with decisions about other medicines. Some submitters agreed with PHARMAC’s preliminary conclusion that the same framework should be used for all medicine funding decisions – regardless of whether the medicines are high-cost or not. One submitter expressed the view that while decisions about high-cost and other medicines should ideally be made in the same way, they are currently not. This submitter considered that lobbying pressure and media attention appears to have changed the consideration given to some medicines. This submitter also commented that all medicines do not appear to be treated the same, as there is a group of medicines about which decisions are never made. Other submitters did not support PHARMAC’s preliminary conclusion that the same funding approach should be used for all medicines. One submitter considered that instead, equal priority should be given to cases of equal seriousness. The view was also expressed that PHARMAC’s processes were not adequate for any pharmaceutical funding decisions, whether for high-cost medicines or not. One submitter commented that cost-effectiveness does not currently guarantee funding. The view was expressed that medicines that pose a higher net cost to the Pharmaceutical Schedule struggle to achieve funding, and those medicines that have relatively high costs per patient or costs per quality-adjusted years of life (QALYs) are even more unlikely to achieve funding. All submitters, regardless of their view of the appropriateness of a single process for all medicine funding decisions, suggested improvements for PHARMAC’s decision-making processes. These are detailed in the following section. Suggestions for PHARMAC’s decision-making processes Some submitters identified process improvements that they considered PHARMAC should make to its budget-setting and decision-making processes. Not all of the suggestions proposed by submitters were directly related to high-cost medicines. However all views are reflected in the following summary for completeness. Some improvements suggested by submitters had been included in the expert reports that PHARMAC commissioned and made available to submitters. Some submitters expressed the view that PHARMAC appears to have ignored the suggestions contained in these reports.

The pharmaceutical budget It was recognised that PHARMAC’s role is to fund within a budget, and that funding is not unlimited. One submitter suggested that PHARMAC lobby the Government for an increased allocation from Vote:Health to fund new medicines. The view was expressed that PHARMAC’s current policy of funding new medicines out of existing savings is self-limiting. This submitter further suggested that additional funding could be used to fund new expensive medicines.

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Another submitter commented that budget-setting should involve a methodology that establishes the optimal level of investment in pharmaceuticals. This submitter considered that the budget should be based on factors including cost-effectiveness (which should take into account the benefits that accrue across the health system), meeting patient needs and health priorities, equity and social objectives and affordability to the tax-payer. A further submitter commented on a problem with a specific aspect of New Zealand’s tax regime and suggested that the resolution of this could result in more money being available for pharmaceutical funding.

Transparency Some submitters commented on the need for PHARMAC’s decision-making processes to be open, explicit, and transparent. Some submitters considered that the weighting of individual criteria in decision-making should be more transparent; in particular PHARMAC should be explicit about its list of priorities; the budget-setting process should be explicit, and that fuller information should be made available on all funding decisions. It was also suggested that PHARMAC should be clear when it has made a decision about an application, and decline those applications it does not intend to fund. Greater clarity about who makes decisions and how independent advice is integrated was also requested. It was suggested that transparency about PHARMAC’s investment priorities and what will not be funded would provide greater certainty, and inform people about the trade-offs PHARMAC has to make. The view was expressed that this would also assist suppliers’ to develop their commercial strategies.

Consultation on decisions Some submitters considered that PHARMAC needed to improve its consultation processes to ensure the views of a wide range of stakeholders are involved in the decision-making process. One submitter suggested specifically that PHARMAC distribute papers explaining reasoning behind the decisions when consulting on decisions. It was considered that this would benefit public understanding and debate as well as increasing transparency.

Appeals mechanism Some submitters considered that an appeals mechanism should be introduced to enable challenge of decisions and ensure that people feel their perspectives have been heard. The view was expressed that an appeals Committee should directly inform the PHARMAC Board.

Consideration of criteria Some submitters commented that PHARMAC’s decisions need to be made according to explicit criteria. The view was also expressed that these criteria must be inclusive, reasonable, responsible, publicised, and open to scrutiny. Some submitters supported the use of implicit judgments or non-technical methods to weigh criteria, in a context of explicit moral values. In contrast, another submitter commented that PHARMAC should consider using more formal methods for determining the relative importance of its decision criteria, rather than the intuitive approach that the submitter believes is currently used.

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Some submitters supported the use of a four-step approach, as described in one of the expert reports, to make decisions. The view was expressed that this framework could be used to consider the cost/QALY of a medicine alongside its impact on health disparities. One submitter commented that they were considering such an approach for funding interventions in their DHB to allow a flow of budget between pharmaceutical and personal health services budgets. However, this submitter noted this approach would be very complex and potentially costly. Some submitters considered that there needed to be a greater focus on ethical considerations and social values. The view was expressed that PHARMAC should publish an ethical framework and use this to supplement and clarify the current decision-making framework. One stakeholder suggested that PHARMAC should seek the assistance of an allocation committee, which would have the same status as PTAC but would advise on social values. One submitter suggested that PHARMAC’s approach to weighing criteria should prioritise the funding of medicines that would have a disproportionately greater benefit for populations that experience inequalities in health outcomes. The submitter commented that this approach is consistent with the DHB operating framework which requires efforts to address inequalities in health. This submitter also considered that a Rawlsian (described in the expert reports), rather than utilitarian approach would better support PHARMAC to weigh criteria in the manner they suggest. One submitter identified a range of reforms that they considered were necessary to ensure that PHARMAC’s processes could cater for all (not just high-cost) medicines funding decisions. The suggestions involved different groups considering different criteria in order to reach decisions on different aspects of an application. It was proposed that clinical decisions and therapeutic substitution decisions be separated from procurement decisions and that cost-effectiveness decisions be separated from funding decisions. This submitter also considered that an independent body should make decisions about the relative merit of medicines.

Decision criteria The view was expressed that the current decision criteria are sound and appropriate for decisions about high-cost medicines. One submitter expressed support for what they considered to be a narrow view of benefit that focuses on health and not on other factors that deliver utility. Other submitters thought that PHARMAC should tighten its criteria and consult with stakeholders more fully about what the criteria should be. Some submitters suggested a range of criteria that they thought should be considered in decisionmaking, including: • • • • • • • • • • • • numbers needed to treat and/or numbers not needed to treat impact of the treatment on life expectancy, morbidity and mortality the implications of funding a class of drug on other groups which will consider themselves disadvantaged implications of funding decisions on areas outside of health (for example, the effect on the patient’s dependants), although submitter recognised that this approach could give rise to human rights issues clinical efficacy and effectiveness impact of funding on health disparities the cost per QALY of a medicine cost cost-effectiveness patient need health priorities funding priorities

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• • • • • • •

technical performance safety organisational implications social consequences legal considerations ethical considerations a specifically New Zealand set of values

A view was expressed that cost-effectiveness should not be the only consideration in funding decisions. In addition, one submitter was of the opinion that cost-effectiveness analysis favours pharmaceuticals that offer a small benefit for many, over those that offer a significant benefit for a few.

Quality of process One submitter commented that PHARMAC needs to use a robust process, as well as explicit criteria that are publicly accessible, to ensure that its decisions are defensible. Another submitter considered that there should be an agreed set of standards for different aspects of the decisionmaking process. The view was also expressed that PHARMAC needs to be accountable for following its criteria when making decisions.

Speed of decision-making One submitter expressed the view that delays in listing and restrictions on access are used to help reduce expenditure. The view was expressed that the effect of these delays is that timely and appropriate access to new medicines, especially high-cost medicines, is significantly compromised.

PHARMAC’s role One submitter commented that PHARMAC should embrace the debate generated by difficult decisions and not try to protect itself from the criticism that arises from these decisions.

Rebates One submitter suggested that PHARMAC could assist generic suppliers by not using confidential rebates within three years of patent expiry and/or include provision in its contracts for disclosure of the net effective price by 30 June of the year in which the relevant contract expires.

SUBMISSIONS Attached are copies of the individual submissions. Some material has been withheld in accordance with the Official Information Act 1982 (OIA) to protect the privacy of natural persons (section 9(2)(a)).