Making funding decisions
Our decision-making process
Text version of the process diagram
Application tracker is updated during the application.
Prepare application (supplier, consumer, clinician)
- Discuss application with PHARMAC staff
- Submit application
Consider evidence (PHARMAC and clinical advisors) using factors for consideration
- Review application, collate additional information and undertake preliminary analysis
- Either or both:
- PTAC advice
- Subcommittee or other clinical advice
- Research and assess information on factors for consideration
- Rank application against other applications
- PTAC review
- Board review
Negotiate (PHARMAC and supplier)
- Further development of proposal
- Provisional agreement
- No current action or consult on decline
- No current action or consult on decline
Consult and decide using factors for consideration
- Consider submissions
- Amend proposal as necessary, then PHARMAC Board or delegate decision
- PHARMAC Board or delegate decision
- Proposal not progressed
- Notify decision
- Activate implementation plan for Schedule decisions
Finding out what's funded
All PHARMAC funded medicines and devices are published on a list called the Pharmaceutical Schedule. It is mostly used by health professionals such as doctors and pharmacists but is available for all to see and is updated regularly.
The Pharmaceutical Schedule contains information about each medicine or device that’s funded. Information includes things such as:
- brand name and chemical name
- amount of government subsidy
- prescribing guidelines, such as how much can be prescribed at one time
- any access criteria that may apply, for example, access to some funded medicines is restricted to patients who would benefit most from that treatment.
New funding applications
Anyone – a consumer, a health professional, or a pharmaceutical supplier – can make a funding application to PHARMAC. Most applications are provided by pharmaceutical companies, which have access to the full range of information PHARMAC requires to assess applications.
We have more information about making a funding application on our website.
How we decide what to fund
We receive applications to fund medicines and devices from pharmaceutical companies, health professionals and other individuals. We’re also constantly looking for the latest medical developments, and we engage directly with the manufacturers of new medicines that could benefit New Zealanders.
To help us assess any new funding proposal, we use the Factors for Consideration. This means when deciding whether to fund a medicine or device, we consider:
- Need – what’s the impact of the disease or condition which the medicine/device would address?
- Benefits – what benefits and/or side effects would the medicine /device deliver?
- Costs and savings – what costs and savings would result from a decision to fund the medicine/device?
- Suitability – does the medicine/device come in a form that makes it easy to take/use for the intended patient group? For example, what’s the size, shape and taste of a medicine, and how is it administered, eg orally or by injection?
We consider each factor on three levels – as it applies to:
- the individual requiring treatment
- their family/whānau and wider society
- the broader health system.
We recognise that not all Factors for Consideration will be equally relevant to every funding decision we make. That’s why we use them as a guide, and don’t apply them rigidly.
Balancing different considerations
As our Factors for Consideration show, deciding whether to fund a particular medicine or device is strongly affected by its clinical properties – how well it works – but that’s not the only thing that matters.
Technical and operational factors are important too. For example, what maintenance and servicing might a device require? Or what impacts could funding a particular medicine have on a DHB’s operation? Could it reduce or increase the number of people likely to need treatment in a DHB hospital?
Commercial considerations also play a big part. For example, can we get the medicine or device at a good price? This is important because the lower the price, the more medicines and devices we can buy overall. Encouraging competition between pharmaceutical suppliers to lower their prices is a big part of what PHARMAC does.
Economic considerations are also important. We look carefully at whether buying a particular medicine or device is the best way to spend part of the fixed budget.
Our job involves weighing up all these different considerations, and seeking the relevant external advice and feedback, to help us come to a decision.
We seek a wide range of input as part of our decision-making process
We’re mindful of the impact our decisions may have on people’s lives. We take a lot of care to ensure our decisions are as fair and robust as possible.
To help us with our decision-making, we draw on:
- the expertise of PHARMAC staff, who come from a range of different professions and disciplines
- advice from senior practising medical professionals – we get this through the Pharmacology and Therapeutics Advisory Committee. The committee includes people from a range of specialities. The committee can seek advice from one or more of its subcommittees that specialises in a particular clinical area.
- feedback we receive during public consultation, which ensures we take into account the views of interested individuals and the community.
PHARMAC’s Board is responsible for deciding what medicines and devices are funded. The Board meets regularly throughout the year to consider funding proposals. In some circumstances, the Board may delegate the Chief Executive to make a decision.
New evidence can lead to a new decision
Our job is to prioritise which new medicines and medical devices will deliver the best possible health outcomes for New Zealanders.
Generally, if we decide not to fund a particular product, this doesn’t mean it won’t ever be funded. Instead, it reflects that other treatments have been given a higher priority.
If more evidence becomes available, we can always reassess.
Last updated: 18 October 2019