The Government’s pharmaceutical-buying agency PHARMAC has just announced that it will be working with District Health
Boards round the country to help them purchase drugs for their hospitals.
PHARMAC Chief Executive Wayne McNee says the agency will be working collaboratively with the District Health Boards to
work out what their drug purchasing needs are.
He says PHARMAC’s role in hospitals will be different from its current role in managing pharmaceutical expenditure in
the community. However, PHARMAC is confident that many of the strategies it has successfully used over the past eight
years will work in the hospital sector.
Currently, most individual District Health Boards negotiate with pharmaceutical companies for the drugs they use.
“We can see variations in the price of the same drug in different hospitals around the country. We think there is room
for savings to be made by implementing a sensible national strategy,” says Wayne McNee.
PHARMAC was set up in 1993 to manage drug subsidies for medicines available in the community.
“New Zealand’s growth in spending on pharmaceutical subsidies outside the hospital sector has averaged three per cent a
year over the past seven years. Before PHARMAC was set up, the growth in spending had been as high as twenty percent.
“New Zealand has a finite health budget and our job is to try to make those health dollars go further.”
Wayne McNee says the battle to keep pharmaceuticals affordable, is the same internationally. Australia has just reported
that its drug subsidy system has had a budget blow-out of 22 percent and the United States’ spending on prescription
drugs increased by nearly 19 percent in 2000.
“In New Zealand we have been successful in keeping down the price of drugs, at the same time achieving the best health
care we can within the funding available. It is this successful formula we will now be working on with the hospital
Wayne McNee says the bill to the taxpayer for drug subsidies on community medicines is between $530 and $540 million.
Hospitals spend an estimated $100 million to $140 million in total.
“We will be looking at where we can make savings to help them manage their budgets.”