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May 2012

Analysis of PHARMAC Forum feedback

Introduction This paper summarises and distils feedback from the 2012 PHARMAC Forum, and outlines how PHARMAC will use this input in its work programmes. Main themes emerging from 2012 Forum PHARMAC’s core role  PHARMAC needs to continue improving how it delivers its core role – patient education, greater transparency and understanding of how it works, solving issues over access to high-cost medicine – “keeping its eye on the ball”  Clinical input and interaction with clinicians will be vital to PHARMAC’s future success.  PHARMAC’s Operating Policies and Procedures should be expanded to reflect PHARMAC’s current work (e.g. Access and Optimal Use, clarification of research role) and also consider how outside forces such as the transPacific Partnership trade negotiations may impact on PHARMAC. Medical devices  Concern over size and scope of nationally procuring medical devices and whether PHARMAC is the right agency to do this – and whether it would be appropriately resourced to do the work.  Medical devices is a challenging and complex area not subject to the same regulatory or evidence-gathering regimes as pharmaceuticals. PHARMAC will need to adapt its business model to effectively manage medical devices.  PHARMAC needs to work closely with and alongside other agencies to ensure consistent approaches are taken to funding decisions. Funding silos need to be broken down. Other agencies can learn from PHARMAC’s approach. Background The third PHARMAC Forum was held in Wellington on 20 February 2012. The Forum was fully subscribed and attended by more than 100 stakeholders from pharmaceutical companies, patient and consumer groups, clinicians and

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pharmacists, professional health associations, medical colleges and the Government sector. The day-long conference included three presentations followed by table discussions; a panel discussion on waste; three breakout sessions on different topics; and a concluding open Forum for any points to be raised. Feedback recorded at tables has been gathered and this feedback forms the basis of this paper. Session 1: The NZ pharmaceutical scene, challenges and opportunities Presentations Steffan Crausaz (PHARMAC) The session featured four different perspectives on the subject. Steffan Crausaz outlined some of the work PHARMAC had done in response to the previous PHARMAC Forum. He also outlined PHARMAC’s strategic priorities for the coming years, particularly in relation to PHARMAC’s expanded roles in hospital medicines and medical devices. PHARMAC’s strategic priorities are:  Enhanced value from expanded functions – demonstrating PHARMAC is able to meet expectations in relation to hospital medicines and medical devices  Enhancing e-influence – better use of information technology  Improved clinical leadership – ensuring PHARMAC is talking to the right people about the right things and having improved engagement with clinicians in secondary care  Core strength – ensuring PHARMAC continues to deliver on its core role of managing funding for community medicines. Dalton Kelly (NZ Cancer Society) Dalton Kelly issued a challenge to adopt some fresh thinking around the way disease prevention and treatment is managed. Dalton Kelly asked stakeholders whether the time hadn't come to abandon the silo approach to delivery of disease prevention and treatment, as is apparent in the public sector. Dalton Kelly also outlined the challenge of increasingly targeted cancer treatments, and the potential ethical issues raised by treating people identified as likely to benefit from treatment, while not treating others with the same drug. Better research was needed on how new treatments impacted the New Zealand population, in particular Maori and Pacific patients. Kevin Sheehy (Medicines NZ) Kevin Sheehy told delegates innovations in new medicines were making it increasingly possible to personalise treatment to patients. Many of these treatments are expensive to develop, but their cost-effectiveness can be improved through targeting to treat those who respond best. Kevin Sheehy also outlined Medicines NZ’s view that factors outside of health should be taken into account in assessing medicines, and that the value of medicines should be compared with other health 2

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interventions (some of which were less cost-effective) when allocating funding. This was broader work the Ministry of Health was engaged on. Immediate future challenges outlined were:      Making Named Patient Pharmaceutical Assessment (NPPA) work Hospital medicines Greater transparency/engagement and responsiveness Measuring performance Understanding unmet needs.

Ken Whyte (Auckland University) Ken Whyte outlined a picture of an ageing population placing increased demands on the health sector; demands which would differ from those of the past. He told delegates PHARMAC had `brownie points in the bank’ but these could be eroded. Particular challenges were in having sufficient economic analysis grunt to take on the additional work identified by Government (hospital medicines and devices), and finding ways to solve issues over low volume-high cost medicines that didn’t seem to fit the traditional QALY model. Ken Whyte also outlined some looming issues around medical devices including the number and complexity (approx 50,000 devices in current use); lack of evidence in clinical trials to establish efficacy, and rapid rate of technology change. These were issues PHARMAC would have to grapple with as it embarked on medical devices work. Feedback summary  Delegates agreed with Dalton Kelly of the need to look beyond individual funding silos to find solutions.  Good data sets will be necessary in order to make informed choices in devices and hospital medicines. In some cases this data may be difficult to get.  Different regulatory framework and varying levels of evidence for devices will challenge PHARMAC’s current purchasing model.  PHARMAC’s current model may not be suitable for purchasing medical devices and will likely have to change.  New funding streams should be examined – eg raising co-payments or allowing a mix of public and private funding (paying for private treatment to be delivered in public hospital).  Alternative assessment methods could be explored, such as giving patients a trial of a particular medicine with agreed clinical end-points, and discontinuing treatment if those end-points are not achieved.  Continued focus on increasing transparency will be important.  The consumer perspective needs to be remembered – increasing health literacy, emphasising consumer responsibility and empowering consumers 3

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will be as important for medical devices and hospital medicines as it is for community medicines.  Ethical considerations – is it okay to target/ration treatment? How do we allocate resources for rare disorders (high cost/low patient numbers) vs common disorders. Some of these challenges will be very similar to those experienced with community medicines (eg enzyme replacement therapies). Comment PHARMAC’s role in managing community medicines will continue to be important. We acknowledge that some changes will be necessary to accommodate and effectively manage the very different requirements posed by medical devices in particular. It is likely that in five years’ time, PHARMAC will look and act quite differently to how it does now. PHARMAC will need to work at building strong relationships with other agencies working in the sector. This particularly applies to those agencies with an interest in PHARMAC’s expanded role in medical devices, such as the National Health Committee and Health Benefits Ltd. Our role is to get greatest value from pharmaceutical funding, and we have a fixed budget. This means choices have to be made, and there will be some medicines we will not fund. We are confident our processes are fair irrespective of the cost of the medicine, size of the patient group or amount of funding available. The Named Patient Pharmaceutical Assessment programme assesses applications on a case-bycase basis and will help address the question of access to very high-cost treatments for small groups of patients. Some of the points raised by delegates would require policy changes that are outside PHARMAC’s control (eg level of co-payments). Session 2: PHARMAC’s role in managing hospital medicines and medical devices Presentation Andrew Davies (PHARMAC) Andrew outlined how the Government has given PHARMAC expanded functions in relation to hospital medicines and medical devices. PHARMAC has developed a process for assessing hospital medicines. This has involved establishing stronger links with DHB hospital clinicians, and forming a new advisory committee primarily made up of hospital clinicians. This would provide expert input to PHARMAC’s primary clinical committee, PTAC. One of the drivers of the project is the variable use of some medicines across DHBs. The aim of PHARMAC’s involvement would be to ensure nationally consistent access to hospital medicines, and eventually find greater efficiency in hospital medicine procurement. Initially this will involve building a nationally-consistent list of preferred medicines that all DHB hospitals use, this will eventually become a hospital schedule of medicines, similar to the community schedule. 4

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Medical devices is a much larger and more complex area for PHARMAC. Initially it is taking small steps through procuring insulin pumps, which would prove something of a test case. Again, clinical input is important and a key driver is the need to build a nationally consistent catalogue of devices. PHARMAC will be working alongside other agencies including the National Health Committee and will be seeking clinical advice as it moves forward. Feedback summary   Regulatory issues are important As well as funding hospital medicines consistently, delegates felt nationally consistent guidance should be provided on their use. Optimal Use activities should be run, as they are in the community. Thought should also be given to measuring the outcomes of medicine use. Managing clinician expectations is an issue, as hospital (secondary care) doctors are not as used to rationing/brand changes as primary care doctors. Complexity of devices area – rapid pace of technology change; doctors being trained in use of one type of device (eg implants) may not adapt rapidly/well to a change; impact on local industry; impact on long-term supply chain/aftersales support if suppliers’ market share diminishes and they leave the country; valuing `bells & whistles’ vs standard devices; difficult to establish therapeutic equivalency; a greater choice of devices means greater cost for training & support. Two types of devices – commodities and other devices. Commodities are those in everyday use and readily available from multiple suppliers (eg swabs, syringes, most wound care products etc). Devices with more of a technological component are more complex. Current PHARMAC model may be appropriate for `commodity’ devices, not necessarily appropriate for others. Early decisions on devices will be high stakes A different approach to evidence-gathering may be needed. Pharmaceuticals tend to have good quality objective (clinical study) evidence. With some devices the clinician experience and anecdotal evidence may also be necessary. Same level of evidence-gathering not required for devices to obtain regulatory approval. Maintaining integrity of the supply chain essential for hospital medicines (eg for those required for surgical procedures etc). Flexibility in PHARMAC’s approach will be essential. PHARMAC will need to be well-resourced to undertake the work (including potentially greater resourcing for PTAC/advisory committees).

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Comment Moving into the management of medical devices represents a significant change to PHARMAC’s business. We will be taking a careful and gradual approach. The feedback provided will be very useful for us in thinking about our resourcing and approach as we work with the other relevant agencies and the Ministry in developing the national plan for medical devices, and making sure it is successful. Breakout sessions: Pharmacy and the patient experience – a workshop jointly hosted by PHARMAC’s Consumer Advisory Committee and the Pharmacy Guild to outline learnings from PHARMAC’s regional forums, and in particular observations on how to improve dialogue between patients and pharmacists. PHARMAC and Maori health – an outline of the work PHARMAC does to address Maori health issues, including an outline of programmes such as He Rongoa Pai – He Oranga Whanau and One Heart Many Lives. The NPPA – A briefing on the change from Exceptional Circumstances to the Named Patient Pharmaceutical Assessment programme, a mechanism for patients to access medicines not listed on the Pharmaceutical Schedule. Session 3: Review of PHARMAC’s Operating Policies and Procedures Presentation Bryce Wigodsky (PHARMAC) Bryce outlined the status of the Operating Policies and Procedures and what they mean to PHARMAC’s work. A review was due and this would take the form of a twostage process: 1. An open discussion with stakeholders on should be included in the OPP; and 2. seeking specific feedback on particular proposals in relation to the OPP. The original OPP was developed in the mid-1990s and was last reviewed in 2005-06. It captures much of what PHARMAC does, including:      The need to have, and the role of, advisory committees Recognition of Treaty of Waitangi The Pharmaceutical Schedule – amendments, decision criteria Procurement strategies – contracts, tendering Procedures – considering funding applications, consultation process, confidentiality, cost-effectiveness.

However, in recent years PHARMAC’s work had expanded and the OPP does not capture the full scope of this work. Examples of current PHARMAC activity not included in the current OPP include:      NPPA Access and Optimal Use activities Stakeholder engagement Legal matters and procedures Research involvement 6

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Delegates were asked whether these activities should be included in the OPP, and for ideas on what else could/should be included in the OPP. Feedback summary Items delegates felt should be included in the OPP included:          Access and Optimal Use activities Clarification of PHARMAC’s role in research NPPA PHARMAC’s role in educating clinicians & patients Trial periods for drugs/risk sharing to be included in list of procurement strategies Stakeholder engagement The scope of advisory committees, e.g. whether they include nurses, physiotherapists, other prescribers or health professionals Timeliness of PTAC advice and PHARMAC decisions Statements as to the way decision criteria are `weighted’ (if they are).

PHARMAC’s OPP should align with the Government’s Medicines NZ national medicines strategy. Delegates questioned whether PHARMAC’s OPP would be influenced by external factors such as the trans-Tasman therapeutic agency, or the trans-Pacific Partnership trade talks. Delegates felt that the OPP should not aim to be too prescriptive, as this could limit the way PHARMAC operates and prevent more innovative ways of working being adopted. Timing of the OPP review was also questioned, as PHARMAC was taking on an expanded role and this may impact on the OPP. OPP review may be an opportunity to define the decision-making criteria for devices. These may need to be different to those for pharmaceuticals. Some delegates felt PHARMAC’s thinking/learnings should be adopted by other departments/agencies. In particular, PHARMAC’s use of cost-utility analysis meant that other less cost-effective interventions were funded while more cost-effective pharmaceuticals were not. Comment PHARMAC’s OPP review will occur through 2012 and likely into 2013. The feedback from the Forum is an important first step. In April 2012 PHARMAC issued a discussion paper to stakeholders seeking feedback on what to include in the review of the OPP. Feedback from that process, plus feedback from the Forum outlined above, will be used to develop draft proposals for the OPP that we will seek further input on later this year, or early next year.

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