Thank you so much.
Evidence of meeting #42 for Health in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pharmac.
A recording is available from Parliament.
Evidence of meeting #42 for Health in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pharmac.
A recording is available from Parliament.
12:30 p.m.
Conservative
The Vice-Chair Conservative Len Webber
We'll have to move on quickly here to seven minutes for the NDP. Go ahead, Mr. Davies.
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you for being with us today.
Just to situate where you're coming from, our description of your group is that you're the industry association representing companies engaged in the research, development, manufacturing, and marketing of prescription medicines.
Is that an accurate description of your group?
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Do you represent only companies that are New Zealand-based or do you represent multinational companies that are also operating in New Zealand?
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
All of our companies are multinational companies operating in New Zealand.
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Can you give me a list of the major companies that you represent?
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
Yes. I can't promise to give them all here off the top of my head—
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
—but they are Novartis, Bristol-Myers Squibb, Pfizer, Sonovion, GSK—
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
—Roche, Bristol-Myers, I think I said, and Biogen.
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
No, that's good. That gives me an idea. Thank you.
Where I want to start is...if I have it right, New Zealand created Pharmac in 1993. Is that accurate?
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I am told that since then New Zealand has achieved the lowest per capita spending on universal drugs in the world. Is that correct?
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
I suspect it is. I can't say categorically it is. I would say that cost containment is only one part of an effective health system, though.
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I heard that. I just wanted to establish that as a fact.
Could you explain to our committee how Pharmac has been so successful in controlling drug prices? What are the major cost drivers resulting in that quite remarkable feat?
12:30 p.m.
Chair of Board, Head Office, Medicines New Zealand
There are a number of things, I think. You eventually need to ask Pharmac that question to get a comprehensive answer, but I think—and I referred to this in my introductory comments—they deal very aggressively with the companies. They negotiate hard, one company versus another. They've been very effective in driving costs down significantly.
Now, we don't know exactly what those costs are. Only the companies and Pharmac know what they are. We also have a system here of confidential rebates, which are confidential. Nobody knows what those are. Sometimes the cost that is quoted as the list price is not the actual cost. Frequently, for example....
You do need to be a bit careful when you're talking about some of these cost containment measures, because we know that some of the pharmaceuticals appear to be cheaper than they are in Australia, but in fact that isn't the case.
12:30 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
What about the administration? I know that in Canada, for instance, we have a lot of coverage provided through workplaces, and employers arrange private prescription coverage through a number of carriers. There are hundreds, maybe thousands, of plan administrators in the country.
How is the process of paying for drugs and getting reimbursed for drugs administered in Pharmac? Is it done through a single administration structure or multiple ones? Do you know?
12:35 p.m.
General Manager, Medicines New Zealand
It's a publicly funded system. I think it's been mentioned before that most people would access it through going to a doctor to pick up a prescription, then going to a chemist, a local pharmacist, and picking up medicine that way. Essentially the way the system works is that as soon as the scrip is filled, the company gets a cheque from Pharmac for those medicines. That is how the system works.
12:35 p.m.
General Manager, Medicines New Zealand
Yes, it's a public administration system. It's through public health.
12:35 p.m.
Chair of Board, Head Office, Medicines New Zealand
There are very few employers in New Zealand who provide medical coverage for their employees. If they do, it is much more likely to be in the surgical space than in the pharmaceutical space.