About Medicines Access in New Zealand

New Zealand has a unique environment for publicly funding medicines.

Our model for medicine funding is the only one in the world that operates with a capped budget enshrined in legislation. Even when a medicine meets safety, quality and efficacy standards and is deemed to offer health benefits to patients, it is not guaranteed that it will be funded. Often no decision is made at all, with many medicines being placed on a waiting list.

The Medicines Funding Process

Medsafe is responsible for regulating medicines and medical devices in New Zealand. The 20 District Health Boards (DHBs) have a budget for medicines which PHARMAC (the medicines procurement agency) manages. PHARMAC’s Pharmacology and Therapeutics Advisory Committee (PTAC) reviews funding applications for cost-effective new medicines and PTAC makes recommendations on which medicines should be publicly funded by PHARMAC. Until these cost-effective medicines are funded, they remain on a Waiting List.

Problems

There are four main problems with the medicines system in New Zealand: timely medicines access, the medicines budget, the medicines waiting list and health inequity.

Timely medicine access

Unnecessary delays in the funding system provide significant setbacks for the health system and patients who could benefit from the medicine being funded. Some patients are still waiting a decade or longer for a public funding decision on some of these medicines.

While comparable countries have access to breakthrough world-class medicines and treatments, our current funding model continues to deprive New Zealanders of publicly funded access to these medicines. In many cases, modern medicines that are recommended as a priority by PTAC to be publicly funded remain unfunded despite PTAC’s clinical expertise.1

The Medicines Budget

Currently, the medicines budget setting process is complex and not clear.

The allocation of the total funds granted by parliament for health services are negotiated between New Zealand’s twenty DHBs and the Medicines Procurement Agency and then sent to the Minister of Health for budget approval. In theory, the decision sits with the DHBs but, in reality, it is the Minister who decides whether to top up the medicines budget over what may have been initially agreed.2

Medicines Waiting List

The medicines waiting list is made up of over 100 prioritised medicines that have been registered in New Zealand and recommended by PTAC but await public funding.

The existence of this waiting list (of more than 100 recommended medicines) is evidence that New Zealand’s medicines funding processes and budget levels require review. Without a review, the waiting list is likely to remain – and possibly grow.1

More than 250,000 patients are waiting for access1,3

for only 1/3 of the medicines on the waiting list...

This is more than the population of Otago!
Image source: Free World Maps

Health Inequity

3631 cancer patients deaths could have been avoided from 2006 to 2010 if New Zealand had the same access to cancer treatments and therapies as Australia.4 From 2011 to 2018 Australia publicly funded three times as many medicines as New Zealand and made those funding decisions twice as fast.5

New Zealand sits last out of 20 comparable OECD countries for modern medicines access.6
It takes more than twice as long to fund the same modern medicines in NZ than the OECD average.7
As a percentage of our health budget, we spend less than half of what Australia and the UK spend on Medicine.7

Outcomes

What does this mean for New Zealanders?

Poor health outcomes

New Zealand’s failure to fund proven modern medicines lets down many New Zealand patients who rely on the public health system to be there when they need it.

The failure to fund cost-effective medicines results in higher hospitalisation and mortality rates.8-11

Other countries have better access to modern medicines which, in many cases, can be linked to better outcomes in those countries.8-11

Kiwis going to extreme lengths to get access to medicines

Due to the lack of funding for so many modern medicines, many patients are forced to try and fund them themselves.

Because unsubsidised modern medicines are often unaffordable for the average Kiwi, these patients are forced to take extreme measures to get the medicine they need, including;

  1. Selling or downsizing their homes
  2. Starting a fundraising campaign
  3. Moving overseas, to a country where the medicine they need is funded.
Kiwis pay their taxes, so why are they not looked after by the public health system when they need it most?

Solutions

How do we fix New Zealand's medicines funding environment?
New Zealand’s medicines funding system is not broken, but is no longer fit for purpose. Kiwi patients don’t have
access to the best medicines quickly enough. New Zealand has an outdated medicines policy
and a lack of funding for medicines.1,2

Kiwi patients deserve to have access more quickly to the best modern medicines. It’s only fair.
It’s time to reform our medicine funding system and put fairness into focus.

Including patients, clinicians, industry and other stakeholders affected by medicines funding decisions in the consultation process allows for an inclusive and holistic decision to be made.

Additionally, making the allocation of the medicines budget transparent means that funding can be easily and accurately measured.

Transparency in the budget setting process would mean Parliament would decide on the overall national medicines budget as part of the government’s annual budget package instead of medicines funding being the outcome of a complex negotiation between 20 DHBs, the medicines procurement agency and the Minister of Health.2,12

Comparable Funding

Kia Tairite te Nui o ngā Pūtea

The medicines budget needs to be increased to bring New Zealand’s spending per capita in line with other comparable OECD countries.

The medicines budget has been underfunded since 2007 - investment needs to be made to ensure New Zealand patients don’t continue missing out on proven modern medicines and that New Zealand is well placed to fund innovative medicines coming down the pipeline.13-15

Introducing a rapid access to medicines scheme would provide patients with access to effective medicines faster to ensure no patient is left waiting for a medicine they need.

Doing nothing is not an option if timely access to new medicines is important for retaining trust and confidence that publicly funded health is ‘modern’ and fit for the future.2,16

Resources

  1. Della Barca, C. (June 2020). Funding Medicines in New Zealand: Revision of the Medicines Waiting List to 30 April 2020. Subscripts Ltd. Auckland, New Zealand.
  2. NZIER (May 2020). A new generation medicines policy. Wellington, New Zealand.
  3. Medicines New Zealand Member survey responses. (2018). Wellington, New Zealand.
  4. Sandiford, R. et al. (2015) Australian and New Zealand Journal of Public Health. 2015; 39:157-161.
  5. IQVIA (June 2020). Access to Medicines 2 (AtoM 2) Report.
  6. Medicines Australia. (2018). Comparison of access and reimbursement environments (COMPARE) 4th edition. Canberra, Australia
  7. IQVIA (2020). International Comparison of Modern Medicines 2011-2018 (ICOMM2).
  8. Rawson, N. S. B. (2016). Can. Health Policy. Canadian Health Policy Institute. Toronto, Canada.
  9. Breast Cancer Foundation NZ. (2018). “I’m still here”: Insights into living - and dying – with Advanced Breast Cancer in New Zealand. Wellington, New Zealand.
  10. Caswell-Jin, J.L. et al. (October 2018) Change in Survival in Metastatic Breast Cancer with Treatment Advances: Meta-Analysis and Systematic Review. JNCI cancer spectrum, 2(4), pky062.
  11. Lichtenburg, F., Williams Spence, J. (2016). The impact of pharmaceutical innovation on the longevity and hospitalisation of New Zealand cancer patients. New York: Columbia University, National Bureau of Economic Research.
  12. NZIER (January 2020). Establishment of a medicines appropriation. Wellington New Zealand.
  13. Health at a Glance: OECD Indicators. (2017). Paris, France.
  14. OECD Health Statistics. (2018). Paris, France.
  15. NZIER (December 2018). Community pharmaceuticals: Expenditure trends. Wellington, New Zealand.
  16. NZIER (December 2019). Rapid access to new medicines in New Zealand. Wellington  New Zealand.
  17. OECD (2020). Pharmaceutical spending (indicator). doi: 10.1787/998febf6-en (accessed on 22 July 2020)  
  18. PHARMAC 2018/2019 Annual report: (accessed on 22 July 2020)
  19. Stats NZ 2019
  20. OECD National currency units PPP
  21. IMF. (2018). International Monetary Fund World Economic Outlook Database 2018. Gross domestic product per capita, current prices (Purchasing power parity; international dollars)