Pharmac will get a boost to its budget, with it increasing to almost $6.3 billion over four years, the coalition Government has announced.
Associate Health Minister David Seymour made the announcement at the New Zealand Medicines Access Summit in Parliament’s Grand Hall this morning.
The Government says the funding will fix a more than $1.7 billion “fiscal cliff” for Pharmac, a government agency which decides which medicines and related products are funded in New Zealand.
It’s a shortfall Seymour said in a statement was “because Labour neglected to budget for medicines, creating a significant fiscal challenge”.
“In Labour’s fiscal plan, they allocated $180 million annually. However, the true cost to secure Pharmac’s budget was over $400 million per year. This lack of funding jeopardised New Zealanders by potentially causing Pharmac to delist medicines, thereby reducing access to vital healthcare.”
He said access to medicines was a crucial part of many Kiwis’ lives and the funding would help enable fulfilling lives for those people.
“For many New Zealanders, funding for pharmaceuticals is life or death, or the difference between a life of pain and suffering or living freely. It was a priority for this government to find the additional $1.774 billion to prevent this from happening.”
He said that kind of prioritisation was what New Zealanders could expect from the coalition Government.
“The Government is committed to providing New Zealanders with greater access to the medicines they need.
“Pseudoephedrine cold and flu medicines will be on shelves within weeks, we’ve streamlined Pharmac’s approval processes so it can assess a funding application at the same time Medsafe is assessing the application for regulatory approval, and we’re committed to faster approvals within Medsafe for products already approved by at least two overseas regulatory agencies recognised by New Zealand.”
At the weekend former deputy prime minister and National MP Paula Bennett was named as the board chairperson of Pharmac.
‘Partnership rather than adversity’
Speaking to media following the announcement, Seymour was questioned on where the funding would be coming from.
“In practically every area of Government activity, we are looking to find savings,” he said.
“There’s no one thing that is being changed in order to fund Pharmac, but I think what we’re doing today sums up what the Government is having to do across the board.”
He cited the disestablishment of the Māori Health Authority alongside reductions at ministries and a “whole range of departments” as example of where expenditure was being reduced.
“The reality is, we need the Government to balance its budget as rapidly as possible, and that means a combination of re-prioritising to spending in things like this, where we were in real trouble.
“And also it means reducing expenditure in areas where we can’t really show that there’s a benefit to people right now.”
He reiterated that in his role as the Minister he had clear hopes for what Pharmac would do but that it operated on its own decisions independently from Government.
“We are not going to interfere in the way that Pharmac makes their decisions. We are only going to tell them, this is their budget and within that budget they must optimise according to their formulae.”
He said they need to work on a culture of “partnership rather than adversity”.
“Pharmac needs to work on how it can optimise the funding of medical technologies rather than economise, within a fixed budget. We need to effectively help them make better budget bids.
“We need to work out whether Pharmac is in the medicine business or the technology business or both, we’re not going to have this hybrid situation where Te Whatu Ora does most of the technologies, where Pharmac does some.”
Seymour said it was “always going to be the case” that New Zealand would have smaller budgets than other larger, richer countries, but that it was “totally unacceptable” that it would have to choose between funding new things and taking away existing options.
Labour responds
Labour’s health spokesperson Ayesha Verrall said the announcement was a far cry from the “bold promises made to fund cancer medicines pre-election”.
“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.
She said the Minister needs to be upfront with hopeful patients and advocates about how far the funding will go and why an additional estimated $1.050 billion must to be spent for the budget to stand.
“Associate Minister of Health David Seymour has asserted there is a ‘$1.774 billion fiscal cliff’.” The actual figure published in the pre-election update was $724 million and David Seymour is trying to gloss over $1.050 billion of increased costs at Pharmac,” she said.
Verrall cited Labour’s 51% increase to Pharmac’s budget over the six years in Government, which she said saw access to 75 new medicines and widened access to 137 treatments.
“Labour did more to increase access to medicine than any government before it, and will continue to fight to see the investment in the health of Kiwis continue.”
