Getting the balance right
A large part of the rationale for the creation of PHARMAC was to introduce more rigour into decision making about what medicines were to receive government subsidy.
Central to that goal was building the Pharmaceutical Schedule, a list of what would amount to around 2500 pharmaceuticals that were eligible for subsidisation. The Schedule would note any funding conditions and whether the patient was required to pay any premium on top of the normal user charge for a prescribed medicine.
Previously this type of information was drawn from various lists maintained by the Drug Tariff Unit within the Department of Health. But in its first year, PHARMAC set out to undertake a comprehensive review, a mammoth task that signalled a commitment to evidence-based decision making.
Key to that approach was the use of the Pharmacology and Therapeutics Advisory Committee (PTAC), which had existed in various forms over the preceding decades but was now formalised as the main independent expert advice group informing PHARMAC’s funding decisions.
In 1993 it was a committee comprising eight senior practising doctors and chaired by Blenheim doctor Dr John Hedley, who would lead the group for 11 years.
Hedley had sat on PTAC in its previous incarnation and felt frustrated at the decision-making processes.
“Once a product went onto the list, it was sitting pretty; there was no requirement for a pharmaceutical to continue to justify its place,” he says.
Doctors from around the country would call the Drug Tariff Unit directly to lobby for specific drugs to be subsidised. Pharmaceutical representatives wielded a lot of influence, which could see different drugs with the same efficacy subsidised at different levels.
“There were all sorts of perversions,” Hedley recalls.
Something had to change. Hedley and his colleagues set about establishing robust procedures that would be informed by PHARMAC’s newly drawn-up Decision Criteria.
Subcommittees featuring the country’s best experts were formed to focus on groups and subgroups of therapeutics.
“We invited specialists to join the subcommittees for the specific purpose of thrashing to death the clinical papers so that we had a sound clinical basis for recommending what the dose relativities were,” he says.
It was intensive work, involving trawling through paper medical journals – this was before the internet made access to them instantaneous. There were lengthy teleconferences as committee members weighed up the evidence before making their recommendations to PHARMAC’s Board.
In the agency’s first year, PTAC was prolific, advising on more than 100 applications and assisting in group reviews. Two-thirds of the applications considered resulted in listings on the Pharmaceutical Schedule.
"There was order being established" - Dr John Hedley
“There was order being established,” says Hedley, who carried on his work as PHARMAC general manager David Moore was attempting to build an agency from scratch.
“For me it was a beacon of best practice,” says Hedley of PTAC.
“It wasn’t number 8 wire; it was Wedgwood china. I did feel like it was my baby for a long time.”
PTAC currently comprises 13 members, who are appointed by the Director-General of Health in consultation with the PHARMAC Board.
As in the early days of PTAC, members can apply to join the Committee directly, or seek nomination by medical bodies such as the Royal New Zealand College of General Practitioners and the Royal Australasian College of Physicians.
The high calibre of senior health professionals who continue to make up PTAC shows the importance the medical profession places on its work.
Says current PTAC member Dr Giles Newton-Howes, a clinical psychiatrist from Wellington:
“For me medicine’s always been about caring for the person in front of us and caring for all of the people we don’t see, and I guess part of the reason I ended up doing academia is that good-quality research helps hopefully lots and lots of patients who you’ll never see and actually that’s exactly what PHARMAC does.”
Last updated: 13 September 2018