A health economics professor says the Government's new direction for Pharmac could exacerbate existing inequities, with the agency now set to make wider economic and social considerations in its funding for drugs.
Associate Health Minister David Seymour is the minister responsible for Pharmac, New Zealand's drug purchasing agency.
He has asked the agency to update its decision-making model to include consideration of the wider financial and societal impact of a drug that's being considered for funding.
University of Auckland health economics professor Paula Lorgelly says the agency could prioritise medicines that help people get back to work – leaving those unable to work at risk.
She said the change was "significant in a New Zealand context" – but nothing new internationally.
"The way that Pharmac currently makes decisions, it has a budget, and its statutory objective says it must maximise health within that budget," Lorgelly explained on Breakfast this morning.
"When it makes a decision on what to fund, it looks at the cost of the drug or the medical technology, the cost savings in the rest of the healthcare system – so if it was going to save money from reducing hospital stays or reducing GP visits, then that's a benefit," she said.
"And then it looks at the outcomes that drug or that medical technology will deliver and compares them against what the alternative is.
"Then it says, 'Well that's a good investment' and, if they can fund it, they will fund it.
"If they can't fund it, they currently put it on their options for investment [list]."
But Lorgelly said Seymour's letter of expectation to Pharmac chairperson Paula Bennett – which also said Pharmac would be no longer required to consider "embedding Te Tiriti o Waitangi" in its work – would broaden the agency's perspective.
"Currently they have a very narrow health perspective," she said. "It only looks at healthcare costs and health outcomes.
"By broadening it to look at the societal perspective, then they need to bring in benefits and costs that might happen outside of the health sector, so that could be things like 'getting people off benefits would be great', 'putting people back to work would be great'.
"You do need to understand how to value those things," Lorgelly added.
She said the Netherlands has been adopting a similar approach for years, considering the value of time spent out of work.
It could involve looking at the value of market wages.
"So if you're not in the market, and you can't work because you're elderly or because you've got a chronic condition, then there are concerns that you're undervaluing somebody," Lorgelly said.
"It could have the potential to exacerbate the inequities that we already see."
She said it may affect the unemployed, those who can't work, the chronically ill, elderly, Māori and Pasifika the most.
Other countries that have measured people's productivity in this way have faced challenges, she added.
"In Sweden, they went down this route and they had a challenge that it went against the equal human value rule.
"One might think we need to think about it in a Te Tiriti sense – but maybe Pharmac won't be able to think about it in that sense, because they've actually been explicitly told not to think about Te Tiriti."
SHARE ME