What could possibly go wrong?
PHARMAC’s leadership has always been willing to move fast and innovate to bring about change in the interests of better health outcomes.
But it hasn’t always gone completely to plan. In 2012 PHARMAC sought to choose a single supplier of blood glucose meters and test strips as part of a sole-supply deal that would save $10 million a year, savings that would be reinvested to buy more medicines for more New Zealanders.
“A crowd of people, many of them angry, confronted PHARMAC last night at a public meeting to discuss a proposed brand switch of glucose meters,” wrote Amanda Cameron in NZ Doctor in March 2012.
The change was to see four different brands of glucose meters replaced with one brand, CareSens. But diabetes patients around the country were alarmed – they had grown used to their glucose meters, potentially life-saving devices for type 1 diabetes patients, and Diabetes New Zealand and other groups were concerned that the big existing supplier, Roche, which had around 80 percent of the market, would pull its support for the products and the diabetes community.
“Switching at least 100,000 people’s meters in the six months expected by PHARMAC will place an unreasonable burden on primary care,” Paul Drury, Medical Director of the New Zealand Society for the Study of Diabetes, told NZ Doctor.
Concerns were raised about the features and quality of the new CareSens meters, though they met international standards.
PHARMAC had underestimated the level of resistance and the backlash was swift and powerful.
“We put out a request for proposal; what could possibly go wrong?” says PHARMAC’s chief executive at the time, Steffan Crausaz.
“It turned out a lot could go wrong.”
Up to 120,000 patients were faced with moving to a new, unfamiliar product from South Korean company i-Sens. The concerns of diabetes patients soon caught the Minister of Health’s attention – it was one of the top three issues on his watchlist, says Crausaz.
PHARMAC had to manage the transition over a longer period of time than usually occurs with changes of brands, with extensive consultation and support and information for consumers.
Eventually almost all people with diabetes made the transition to the new technology.
“It was one of those [transactions] where I felt, gosh my job is on the line here if we can’t do it, and actually it should be; that’s what you sign up for,” says Crausaz.
PHARMAC had learned a valuable lesson, which it put into action when an opportunity arose to go back to the market for a new sole-supplier agreement for diabetes meters in 2017. This time around it engaged much earlier with clinicians, held consumer engagement groups, and had the proposed meters independently lab tested by New Zealand laboratories.
Following this extensive process, the decision was made to award a new sole-supplier agreement to health care specialist Pharmaco (NZ) Limited, which had won that 2012 contract, and an expanded range of blood glucose meters and strips was included.
“[The new deal] will benefit all New Zealanders by releasing significant savings, in excess of $10 million over five years. PHARMAC will be able to reinvest this money and improve access to other funded medical devices and medicines for New Zealanders,” said Dr Bryan Betty, PHARMAC Deputy Medical Director.
This is the PHARMAC model in action – looking for opportunities to get better health outcomes for more New Zealanders, while getting better at the way it did things.
“It was one of those [transactions] where I felt, gosh my job is on the line here if we can’t do it, and actually it should be; that’s what you sign up for.”
- Steffan Crausaz.
But other issues emerged for PHARMAC that were, to some extent, outside its control.
PHARMAC has learnt the hard way over the years that you can’t underestimate people’s brand loyalty when it comes to changing medicine.
In 2005, PHARMAC changed the brand of the common brand of asthma inhaler, Ventolin, used by more than 540,000 people. The change introduced a new brand to people, Salamol, which was clinically the same, but tasted different, felt different, and had a small amount of alcohol in it.
Such was the loyalty to the Ventolin, described as the “trusty puffer” in an editorial in the New Zealand Medicial Journal, the move wasn’t popular, and there was public outcry from patients, doctors and advocacy groups alike. Some claimed it would lead to increased hospitalisations from poorly managed asthma.
The negative perceptions of the change were compounded by negative reporting in the media. One report noted that the alcohol content led to a failed road side breath test, despite the alcohol content in each puff being “less than the amount of naturally occurring alcohol found in a glass of freshly squeezed orange juice.”
While PHARMAC had no concerns over Salamol’s efficacy, they listened to the feedback and brought back the subsidy for Ventolin, with a part-charge, allowing people to get this funded if they wanted to.
“A number of people raised issues with PHARMAC and Medsafe about Salamol, so we moved to address those concerns,” Medical Director Dr Peter Moodie said in a June 2005 media release announcing the change.
As noted in an editorial in the NZMJ in August 2005, “both patients and clinicians can be very “brand loyal” and any change to an “iconic” product needs to be handled carefully,” lessons that PHARMAC has heeded when making changes to other brands of medicines.
Last updated: 13 September 2018