Kiota. I'm Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. It may have taken a month to get there, but the government has fulfilled its promise to fund new cancer drugs. Rather than the thirteen promised on the campaign trial, it's giving six hundred and four million dollars for fifty four
new medicines, including twenty six cancer treatments. It's hoped the promised cancer drugs will be rolled out within the next year and a half, with the first becoming available from October.
But the back and forth.
Over national's pre election promise has raised questions about why it's so difficult to fund drugs in this country and if Farmac is up to the task. Today on the Front Page, University of Auckland professor doctor PAULA Lorgelli is with us to discuss if our decades old process needs a refresh. First off, Paul, can you explain to us how the FARMAC model works.
So it is a process where a pharmaceutical company, but it doesn't have to be a pharmaceutical company. It can be somebody who sponsors a submission to them and says hey, we've got this new technology, we think it should be publicly funded, and therefore it comes in with a dossier of evidence, and you look at the evidence and you say, well, how good is it. Medsafe has already decided it's safe to use, and so it says, well, is it better
than what we already have? And then most things generally are better than what we already have, And then it says, does it generate more given how much it's going to cost us? So obviously also things are more expensive, and so they kind of assess value for money by looking at the benefits of the intervention over a comparator, you know what's currently standard practice, and compare that to how much it's going to cost to deliver that new technology
into the health gaess. If they've got budget, then they can fund it. They then consult on it and they start price negotiating, and then it's listed available for doctors and other prescribers to start prescribing those technologies, those pharmaceuticals. If they don't have enough budget, then they might try to renegotiate some stuff they already have in their kind of shopping basket and trying to get more value of what they're already funding, so they can try and fund
something new. If they can't do that, then they put it on something they call it options for investment lists, which is kind of like their wish list, and then when they do come across more funding because they've been able to negotiate a better price elsewhere in the system, then they can fund what's on their options for investment lists. So it's a really universal way of assessing whether what you're purchasing gives the public, herve the taxpayers value for money.
FIMAC was established in nineteen ninety three. Hey, is this the best way of funding medicines? Do you think or do you think it's time to rethink the model.
It's our way of funding medicine. So we're kind of unique globally, and that FARMAC has a budget, a fixed budget, so if you want to fund a drug, you need to be able to pay for it. In other countries they have the same evidence based assessment, but for example, in the UK, or in England and Wales at least, and in Australia for example, they actually will say, oh, that delivers value for money and then they'll just pass on that cost to the rest of the health system
so they get funded. So other countries don't have this waiting list, and I think it's this waiting list that most people take issue with, both in New Zealand and many other countries. They legitimate and they can say no. So if something is way too expensive and it doesn't deliver benefit, then they'd say no. There's a whole bunch of ways within that process. You could do a different job credibly. Whether that's a better job, I'm not sure. And you could look at different things that are valuable.
So you know, how do we as a country value equity? So at the moment, we often just look at efficiency. Does it deliver value for money? Maybe we want to look at how we distribute that benefit around individuals in New Zealand and so we might want to look at equity. There might be some other things that we value that might come into that kind of value proposition. So there are different ways of doing it and they probably are better, and it just kind of depends on what you think
is better and what you think is worth doing. I think getting rid of a farmac model and having no one to assess value is just a disaster wanting to happen because it wouldn't mean we would have no ability to price negotiate, because we wouldn't have any evidence to price negotiate on.
We've heard the government's funding up to twenty six new cancer treatments alongside twenty eight other medicines as part of a six hundred and four million dollar health budget to honor a national re election promise.
Clarrent farm ac estimates so that around twenty six cancer treatments in twenty eight other treatments will be funded as a result of the bold new package that we're announcing today. This will be a mix of new medicines and widened access to medicines that are already available. Of the thirteen cancer treatments listed in twenty twenty three, up to seven will now be included, and remaining treatments will be replaced
by alternatives just as good or better. This means treatments for all the cancer types in the pre election manifesto list are covered.
Should parties really be promising funding for drugs when farmac is actually meant to be independent anyway? A flat no.
They can promise funding more drugs, so they could have promised a greater FARMAC budget, but they should never go and promise specific drugs or even you know, fund in a specific area like cancer, because that's the political undermining of the independence is FARMAC. And as soon as you've indicated that you want to fund a drug, then that company now knows that FARMAC won't be hard price negotiating with them, right because they're already showing their hand that
they want to buy that drug. They'll have to buy that drug. Why price negotiate hard? I often use the analogy It's like kind of like if you want to buy a used car, we already know we want to buy it, but we're not going to tell the used car salesperson you know what we want to pay for it straight up, right, we're going to start negotiating. You
don't show your hand in that situation. And what the government did is it showed its hand and it left farmc and that really precarious situation, and the only persons to benefit was going to be a pharmaceutical industry and obviously patients as well, but at the expense of other patients who wouldn't be able to access drugs.
It almost feels like these other drugs only got funded because of these cancer drugs were causing a headache for the government. In total, we're getting fifty four new medicines available for a raft of situations, including those twenty six new cancer treatments. We've also we've seen media campaigns in the past push for specific drugs to get funded. Is there a worry that whatever gets the most media attention, I guess can potentially jump that queue in farmac's wait list.
No, and that's the beauty of FARMAC being independent. It should be independent of anybody's own agenda. And I think it's really interesting because we are getting up to the key there is up to fifty four new medicines coming on to the FARMAC list. That would suggest that one of those cancer treatments that they wanted to fund must have been a long way down that waiting list and it hasn't been bumped up, So it's not just that they're given them more money. It sounds to me we can't see.
The list right.
The list is confidential to FARMAC, but given they're having to provide money for fifty four up to fifty four drugs, of which only twenty six are for cancer, it would suggest that some of those newly funded cancer drug were lower on that list. Which would suggest that they were given the priority that people thought they should have been given. But it was an order that was based on priority that farmac's advisory groups decide.
A review into FARMAC a couple of years ago made thirty three recommendations with a focus on the agency's governance and accountability, its decision making, and a call there for a closer look at cancer medicines and rare disorders.
The interim report into FARMAC condemns the agency, saying it has a fortress mentality that permits little transparency, it's not fast enough, saying it appears each funding decision takes as long as it takes, it's increasingly disconnected from other parts of the health system, and farmac's processes are not patient centered.
In your opinion, has farmac's decision making processes improved since that review, I think it was a couple of years ago.
No.
I think it's kind of like trying to turn the Titanics a slow moving agency. One of the calls was for greater transparency. With this impending announcement and now the announcement yesterday, I have been looking into what evidence they do produce. It's very scant on evidence compared to what you might see in other countries. You know, I've analyzed submissions and decisions in other countries, so they're not very transparent. I'm not aware that their methods have changed. I know
their methods are under review for undertaking economic evaluations. So I think it's been highlighted that there is a need for change, and they're well aware of it. But let's suspect what's happening within FARMAC is they're spending their day job trying to review medicines and they don't have enough kind of airtime headspace to actually think about how do we change the way that we review medicines, how do
we change the way we make decisions. So I would hope that in some of this new funding they've received give some a little bit of space in which to change the way they operate.
I mean, we constantly hear about New Zealanders looking abroad for treatments and fundraising for the treatments they need. What are these other countries doing differently? Is it a question of the money or is it a question of they're just quicker at approving new and up to date medical treatments.
Yeah, some countries have a fast track process where they might say, well, we'll approve this medicine even though we're a bit unsure about whether it's effective, and then while patients are using it, will assess and evaluate how good the medicine is. So it's kind of like extending the clinical trial evidence into the real world and therefore patients get access and then at the end of that period they then use that evidence they've collected as part of
an new evidence review. So there are different ways there where you can kind of fast track access, which works as long as you've got then an opportunity to renegotiate and revisit the price according to how well they worked in the real world. So that's an option that happens in other countries that we don't have here in New Zealand.
Because it does feel like New Zealand is constantly on the back foot when it comes to these breakthrough drugs available overseas. Does it take too long for drugs to be approved in New Zealand or do you think it's good to be cautious And I.
Guess it depends on what's approved. I mean it doesn't. They are rigorous and it's important that the evidence is addressed with an our Chiro and New Zealand lens because our healthcare system is different. What they will be displacing the system will be different, so we do need to have our own evidence dossier. So there's always a longer time doing the evaluation, doing the assessment. That's probably longer than other countries, but it's just that the budget is
not available in FARMAC. So in other countries they'll make a decision. In England, the National Institute for health Care Excellence makes a decision, so NICE makes a decision, and then the NHS funds the decision, so the decision has just passed on to somebody else with funding, and then the NHS has to find funding. It's not that they get more money, so they just have to find it
in another part of their healthcare system. But we just don't have that here, and so the constraint for FARMAC is that it's constrained by its budgets, so I think it probably makes decisions a little bit slower. But then pharmaceuticals then go on this waiting list.
Ozzie murdered. It was the first medication on their list that they promised to fund if they were elected into.
Government, and that's the medication that I desperately need. I've spoken to a former health minister and they say National should never have promised this in the first place, because essentially, when you name thirteen drugs, it shows your hand and allows drug companies to milk it.
Going back to talking about showing our hand, do you think National promising these cancer drugs and then the backlash of them not actually being included in the budget has ultimately cost us money?
Well, we're only going to fund something we've already evaluated. So I'm not clear now on where the industry won't budge on price because we've already declared we were going to fund them. So it may be costing us more than if they had instead just given Farmac the money and not named any drugs. So I suspect we will be paying more because they outwardly said we wanted to fund thirteen cancer drugs.
So Bill, what ultimately needs to change? Do governments need to put more money into drugs just full stop? Does Farmac need a refresh? Is it just both elements? Is it something else? How do we stop ourselves from having these conversations? I guess every few months, Yeah.
And we'll continue to have these conversations. See some patient advocates have come out and said, you know, we hope to not have these conversations again, but we will continue to see them because of the fixed budget model of FARMAC. So if FARMAC didn't have a fixed budget model, then we'd be having potentially lease of these conversations, but we'd still then have to have broader conversations about value for
money and the wider healthcare system. I actually think we spend a lot of time talking about a part of a healthcare system where which actually spend a small percentage of our healthcare budget on It just happens to be look large in terms of numbers, but I'm going to say it's probably something like ten to fifteen percent, which
is what it is in many other countries. So I actually think we probably need to do a better job of understanding how do we spending our money our other kind of like eighty five percent in the healthcare system. So if we had better access to GPS, maybe we'd be more proactive and have more preventative healthcare and we wouldn't need people having to go on and have many of these high cost drugs. So actually, I think a broader conversation about how much do we spend on health
and are we spending it in the right place. So FARMAC is an easy one because there's lots of evidence around pharmaceuticals and technologies. But maybe we need to have a broader conversation about whether there's evidence around more preventive healthcare, the scans we get or the surgeries we get, or
the access we have to GPS. And I think actually having a broader kind of healthcare conversation would mean we can probably potentially stop focusing on the ambulance at the bottom of the cliff, which is a lot of these drugs, and think more about having a healthier healthcare system.
So, just to confirm Paula, you reckon that FARMAC shouldn't have its own independent funding. I guess it should be an approval process and then go through the health budget like other countries.
I'm not sure I'm recommending that. Yeah, that would require some other things for FARMAC to change that we'd have to understand what our threshold would be in terms of cost effectness, so that it would require a few steps before I went down that recommendation approach. And I'm also not sure that that's necessarily any better or worse. Because FARMAC does have a fixed budget, it does negotiate very well.
So the fact that people say, oh, we paid some of the least for drugs, I think we should be proud of that because that's because FARMAC is doing its job so well. If we took away potentially that fixed budget, so FARMAC just was passing the costs onto another part of the healthcare system, maybe FARMAC wouldn't be so strong in a negotiating stance. So it's kind of like, you know, where's the balance there.
So just finding that balance, I guess, and being more transparent in the long run exactly.
I think that's what people want. We want to know how long we have to wait. We want to know who we're waiting in front of them behind and you know, and we want to know that there's a process there, that there's fairness in the process, because you know, sometimes there won't be fairness in the outcome, but you know, we can take some faith in that there's fairness equity in the process.
Thanks for joining us, Paula. That's it for this episode of The Front Page. You can read more about today's stories and extensive news coverage at enzed Herald dot co dot nz. The Front Page is produced by Ethan Siles with sound engineer Patty Fox. I'm Chelsea Daniels. Subscribe to the Front Page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.