$1.8b for Pharmac keeps the lights on, boss says

Monday, 29 April 2024

Pharmac told the Government it’s facing a $1.77 billion annual shortfall, Associate Health Minister David Seymour says.

Pharmac’s chief executive says a $1.77 billion funding announcement means critical medicines will remain funded and plans to fund life-changing blood glucose monitors for diabetes will be able to go ahead.

In an announcement on Monday morning, Associate Health Minister David Seymour said the Government would invest an extra $1.77b over four years to make up a shortfall left by the previous government.

But Pharmac boss Sarah Fitt confirmed the money would simply keep the lights on and that more funding would be needed in May’s Budget if it wanted to go further.

“Our focus really at the moment is on the funding for the medicines budget. So this is the first step and obviously Budget ‘24 will determine whether there’s any funding for new medicines,” Fitt said.

Pharmac chief executive Sarah Fitt says the funding will would simply keep the lights on and that more will be needed in May’s Budget if it wants to go further. (File photo)

“We have got certainty for funding of the medicines that we currently fund, and also we can finalise the processes we've got out of consultation at the moment around the CGMs (continuous glucose monitors) and myeloma medicines… we’ve got that budget for next year.”

Diabetes NZ has labelled the plan to fund continuous glucose monitors (CGMs) and insulin pumps for people with type 1 diabetes as life-changing for the 18,000 New Zealanders with the autoimmune condition.

The funding announcement means Pharmac will receive a total of $6.29b over four years from the Government, in what Seymour said was the agency’s largest budget.

But Ah-Leen Rayner, chief executive of Breast Cancer Foundation NZ, said the announcement doesn’t touch the broader problem of patients who are denied new, modern drugs.

“The $1.774b investment won’t cover the 13 new cancer drugs National promised it would fund, or any other new treatment on Pharmac’s Options for Investment list.”

Labour had allocated $180 million a year to ensure recently added treatments could continue to be funded, but Seymour said the true cost was more than $400m a year.

“The previous government wasn’t honest with the books,” Seymour said, at a Medicines Access Summit at Parliament on Monday.

Health spokesperson for Labour, Dr Ayesha Verrall, says the Government’s plan to bring back $5 prescription fees to pay for cancer drugs will destroy access to medicine for millions of people. (File photo)

“This lack of funding jeopardised New Zealanders by potentially causing Pharmac to delist medicines, thereby reducing access to vital healthcare.”

But Labour’s health spokesperson Dr Ayesha Verrall hit back, saying the actual figure published in the pre-election update was $724m and Seymour was trying to gloss over $1.05b of increased costs at Pharmac.

“David Seymour needs to explain why an additional estimated $1.05b needs to be spent for the Pharmac budget to stand still.”

Verrall took a stab at the Government’s plan to fund a list of cancer treatments by bringing back $5 prescription fees, which would “destroy access to medicine for millions of people”.

Associate Health Minister David Seymour speaks at the Valuing Life New Zealand Medicines Access Summit in Parliament.

“Today’s talk of fiscal cliffs is merely scapegoating for the funding the Government won’t deliver because they have prioritised tax cuts over properly funding health,” Verrall said.

Seymour said the Government has come to “a very sound position” on prescription fees and the effects they would have on revenue, but would not provide more detail before the Budget in May.

Meanwhile Seymour said he had full confidence in Fitt, despite a scandal in October in which impolite comments were circulated between Fitt and her board members about journalist Rachel Smalley.

Fitt apologised and provided an explanation to Pharmac’s board over her involvement in the emails, which the board accepted.

Seymour described Fitt as 'very diligent and professional'.

Fitt said she was 'pleased to hear that and we're obviously focused on moving on'.

Seymour said he wanted to see Pharmac put greater weight on how funding pharmaceuticals could save the government money overall.

“Since Trikafta has been funded, lung transplants in New Zealand have fallen off a cliff now.

“If you can keep people in work and feeling well then that can have major savings for the government.”

The medicines summit, co-hosted by Patient Voice Aotearoa and Medicines New Zealand, brought together patients, clinicians, health advocates and decision-makers, with the aim of improving medicines access for New Zealanders.