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PHARMAC: The more things change…

Following an internal review and extensive community consultation process, New Zealand’s Pharmaceutical Management Agency (PHARMAC) is changing the way it makes decisions about the funding of medicines and medical devices.

The overarching objective of PHARMAC will remain “to secure for eligible people in need of pharmaceuticals the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided.”

However the definition of a ‘pharmaceutical’ has been broadened to include medical devices used in the community setting, while a new set of ‘Factors for Consideration’ has been developed to help PHARMAC and its advisory committees decide which interventions are most likely to deliver ‘the best health outcomes’ for ‘eligible people in need’.

The Factors for Consideration effectively replace PHARMAC’s existing Decision Criteria and will be applied to all funding decisions made from 1 July 2016. Any application made to PHARMAC from February 2016 onwards should therefore address these Factors for Consideration, noting that not all Factors may be relevant to every intervention or submission.

While the Factors may appear a little foreign at first, they are broadly consistent with the decision making frameworks applied by other Health Technology Assessment (HTA) agencies internationally. They emphasise the clinical need for an intervention, its expected health benefits and likely economic impacts, as well as its local suitability; at the level of the individual patient, their family and wider community and the broader New Zealand health system.

The most significant shift from the existing Decision Criteria relates to the newly described suitability dimension, which will enable PHARMAC to more clearly consider factors relating to the accessibility, administration and routine use of medicines and medical devices in the community. There is also an increased recognition of the impact of illness and its treatment on the family and broader community of affected patients.

While this has been described as one of the biggest changes in PHARMAC’s history, its impact on industry, patients and the broader health system is unlikely to be immediately noticeable, as:

  • Updated Guidelines for Funding Applications to PHARMAC request only a slightly different presentation of similar core information to previous versions;
  • The various processes, procedures and timelines for the evaluation of funding applications are largely unchanged by the new decision making framework; and,
  • The new Factors for Consideration have not been accompanied by any significant change in the nature or size of the PHARMAC budget.
  • Overall, the change is considered a positive one, which better describes what PHARMAC is seeking from new medicines and medical devices, more explicitly values some of the intangible benefits these provide to patients, their families and the health system, and keeps New Zealand at the forefront of international HTA practice. However, it is unlikely to radically change the kinds of decisions PHARMAC will make in practice.

    The Commercial Eyes Market Access team is involved in a number of funding applications which are at different stages of the PHARMAC decision making process and will be monitoring the impact of the recent changes through these applications over the coming months.

    For updates on the PHARMAC changes or to discuss their likely impact on your products or services, feel free to call us on +61 3 9251 0777.

    This article is written by Andrew Manton, from our Market Access team.

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