Pharmac role expanded

22 July 2010

Pharmac will take over the procurement and management of all hospital medicines from district health boards.

The agency is already responsible for deciding which hospital cancer drugs are funded by DHBs and will also have a say in the management and procurement of medical devices, along with Shared Services Agencies (SSA).

Announcing the expansion of Pharmac’s role today, health minister Tony Ryall said the agency has been successful in keeping down the cost of individual community medicines, while increasing the number of treatments funded and the volume of prescriptions filled.

“There's strong clinical support for bringing hospital medicines into the Pharmac process. DHBs currently spend about $215 million a year on hospital medicines,” he said.

“Over time, we expect a national Pharmac procurement approach will achieve value for money as well as ensure national consistency so that patients get equitable access to these treatments wherever they are.”

Initial set up costs are likely to be around $1 .5 million for Pharmac and for DHBs to improve their hospital IT systems. This will come out of the existing baseline budget.

Pharmac also manages pregnancy test kits, blood glucose testing and management devices, and urine testing devices for blood/protein and the government will now extend that role to include insulin pumps.

Mr Ryall says over time, Pharmac will become responsible for managing the prioritisation, assessment, standardisation and procurement of all medical devices.

“But the government will carefully pace any changes to address the caution of many clinicians about Pharmac taking over this role from DHBs.

“As clinical confidence in the process grows, the government will consider additional classes of devices for Pharmac management on a case by case basis. This approach will ensure national access to a range of medical devices, beginning with insulin pumps.”

The SSA will begin procuring a range of medical devices nationally, which are already used in public hospitals, to achieve lower costs through bulk purchasing. The Ministry of Health, in consultation with Pharmac and the SSA, will report back in two years with a detailed plan setting out a path for Pharmac to take over managing other medical devices.

Meanwhile, Pharmac has welcomed the development.

In a statement today, chief executive Matthew Brougham says the agency already has some knowledge of the hospital sector, which is a good basis to start from

“We do, however, want to take a careful approach to ensure decisions on these medicines take into account the different context in which hospital medicines are used, and the views of hospital clinicians are heard and considered.

“At present we have no set view on how to achieve the aims sought by this change, which is why we will be taking a consultative approach over several years, asking clinicians for their views on how best to proceed, and continuing to consult as we approach each decision.”

Mr Brougham says the agency wants to ensure it works alongside clinicians who are prescribing medicines as it aims to secure greater consistency in access regardless of where people live, and good deals for DHBs and the taxpayer

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