Health Committee on Feb. 14th, 2017

[Dr. Graeme Jarvis]

Yes. We've seen, I think, over the past five years quite a bit more awareness in the public and health care professionals and in general media debates over a lack of access to medicines in New Zealand. Out of interest, an online survey completed last year showed that of the over 1,000 people who responded, 89% thought the New Zealand government should invest more in new medicines.

Specialists and doctors in oncology and their patients have become far more vocal. There was a big one last year around innovative medicines for skin cancer, melanoma. We have the highest rate globally for melanoma. Australia had five innovative medicines that were funded; we had none, absolutely none, and these are shown to make quite a big impact.

It's not just cancers; it's rare diseases, diabetes, and arthritis. There is a lot more public debate on access to these medicines. Even in the case of general practitioners, such as community-based doctors, a survey last year showed that 71% of them thought that the range of medicines reimbursed through Pharmac may compromise patient health outcomes, and 72% also felt the range of medicines available affected their prescribing practices.

These are not good things from a New Zealand patient perspective or a health care system perspective, and yet we are cognizant of the fact that there is only a certain amount of money to go around. It means investing the best you can with the best return on investment. For us, and from the evidence, we believe that innovative medicines are a very good return on investment for any health care system to consider.

Thank you.

[The Vice-Chair, Conservative, Len Webber]

Thank you for your presentation, Dr. Jarvis and Ms. Roy.

We have to move quickly into the questioning. We're on tight timelines here.

We will start with our Liberal colleagues, with Ms. Sidhu. You have seven minutes of questions.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair.

Thank you, Medicines New Zealand.

In your view, what types of pharmaceutical pricing and/or reimbursement strategies are necessary to promote innovation in the development of new medicines while ensuring the financial sustainability of prescription drug coverage programs?

[Dr. Graeme Jarvis]

I think it's a matter of hitting the right level of funding. As we've stated, Pharmac has done a good job with what the agreement is, but it's a matter of funding it at the right level. I'm not sure whether Matthew touched on this, but Pharmac received a very large increase in funding last year, a record new investment in funding. I remember that was based on the business cases built around innovative medicines, such as the melanoma medicines, the hepatitis C medicines. These are medicines that are curing people of disease in some cases, and they are reducing the bills upstream, which is a point I touched on.

I think it's a matter of having a good balance among things, and it shouldn't be done on a cost containment model. It should be based on the best return on investment, looking beyond the medical budget to the impact it will have more broadly on society and the health care system itself. It is a way of looking at as an ambulance at the top of the cliff versus an ambulance at the bottom. The ambulance at the bottom will often cost more money.

[Sonia Sidhu, Liberal, Brampton South, ON]

According to Medicines New Zealand, the wait time for medicines listed on the pharmaceutical schedule is too long, with an average wait time of approximately two and half years. What is the impact of long wait times for formulary listing decisions? Additionally, in your view, what steps could Pharmac take to improve the timelines of its approval process?

[Heather Roy]

Our view is that wait times are too long, and there's no guarantee any medication that is put before Pharmac will be funded. The clinical committee considers applications and makes recommendations to the Pharmac board, which says yes or no to the funding and gives it a priority of low, medium, or high.

Medicines New Zealand has done a project we call “the waiting list” to look at how many of those products that have been give a priority are actually funded. At the moment, an increasing number of medicines are waiting for funding. They have been recommended for funding, but haven't been given funding. Often it's the low-priority medicines that come recommended from the public board committee that receive funding first, not the high-priority ones.

There's a lot of work to do here to get priorities right. There are some issues around transparency as well.

That only answers your question in part, but those are some issues we'd like to highlight for you. They're things that are problematic with this type of model that do need to be looked at if they're going to make best practice on other HTAs.

[Sonia Sidhu, Liberal, Brampton South, ON]

Do you think copayments have created a barrier for some citizens in New Zealand?

[Heather Roy]

Some people here would say it's a very low copayment in New Zealand. It's a maximum of $5, depending on what the cost of the medicine is, and no family is asked to pay for more than 20 prescriptions every year. It's not as huge a barrier as one might anticipate. Frequently, for families or individuals who do need medicines, pharmacists are very generous in forgoing that copayment. I don't believe it's a huge barrier, no.

[Sonia Sidhu, Liberal, Brampton South, ON]

In your experience, what is the cost-benefit comparison between taking on the cost of pharmacare and the savings to the overall health system?

[Dr. Graeme Jarvis]

Although I'm quite happy to send the committee the papers, if they so I wish, there have been studies that actually quantitfy this, and these are those real-world studies that I was referring to.

The Australian study I referred to talked about a range of chronic and acute conditions—cancers, diabetes, arthritis—and actually showed that you are saving money, so there's a return on investment for the health care system. Other studies have also shown that in terms of productivity, meaning economic impact, access to a number of medicines provides you with enhanced productivity, as I mentioned, because there's less absenteeism from work, and less presenteeism, which is a term meaning you're not optimal at work. You're half asleep, as I am this morning.

There are studies that have actually quantified that based on real-world analysis. These are economic studies. Therefore, I think there is a place for medicines, and for innovative medicines in particular, in the health care system; and it's a matter of getting the balance right.

I think that is our fundamental discussion here today. If you don't get the balance right in terms of funding, if you only have costing payment on what is allowed you and don't deal with the real return on investment from innovative medicines as part of the health care system, that creates problems in your health care system.

If everything was great and we had the right medicines, I wouldn't expect to see health care costs ramping up as quickly as they can. The year-on-year investment in our health care system is 29 times greater than it has been for our medicines. That's quite significant.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

[The Vice-Chair, Conservative, Len Webber]

Thank you, Ms. Sidhu.

We're going to move on to a Conservative member, Rachael Harder. You have seven minutes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

Thank you to each of you for joining us this morning. I know it's quite early there, so thanks for coming in on our behalf.

I was reading some statistics, and The Commonwealth Fund says that 18% of those in New Zealand do not fill their prescriptions. I'm just wondering if you can comment on that and help me understand why 18% of your population would not go about filling them.

[Heather Roy]

I think there are a number of reasons. Adherence is a factor, so it's not just not filling prescriptions. Not taking some of the medicines that people have collected is also a significant problem. Many organizations, including us and Pharmac, have turned our minds to this.

I think some of those issues are cultural; people are often reluctant to take medicines, even if their general practitioner has encouraged them to do so. Some people would say that costs are significant, and there were comments previously about the copayment being a barrier, but I don't think it's a significant problem. When you look at the copayments that exist in other countries that have similar health care systems, they are significantly higher.

I think there is a rank of reasons. It's difficult to grapple with. Sometimes it's just the fact that people don't really like taking medicines unless they feel they really have to. It's an educative process that's required, rather than a problem that is caused by the type of system that we have.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

My next question has to do with wait times. You've already commented on this. One of the problems that you are identifying with your system is that wait times are 2.4 years on average. That's almost two and a half years. Meanwhile, in Canada our wait times are only 464 days, on average, across the provinces. This is about a half the time, which means that our individuals are accessing medicines that they need in a timely fashion.

One of the things that you're raising as well, if I'm understanding you correctly, is that high-priority medicines are actually being worked somehow to the bottom of the timeline rather than being moved towards the top.

I need some help understanding this, because this appears to be very detrimental to your population.

[Dr. Graeme Jarvis]

It comes down to transparency, because while their PTAC had the priorities—high, medium, low, or funded but cost-neutral—we're not sure of the criteria that they've come up with for this. We assume it's what they refer to as the factors for consideration, but it's a question that remains unanswered.

They're not the longest waiting times. We have some recommended medicines that have been on the list for up to two years now. Some of the high-priority ones have been as long as six years. It's a question we can ask, but getting an answer would have to come from Pharmac, unfortunately, not us.

[Heather Roy]

You raised the point when you were talking to Matthew about the comparison, and you said that New Zealand is at the bottom of the OECD list, and that is absolutely correct. For a first world country, we believe this is unacceptable. We do take a very long time to get access to medicines that people need because they are unwell, and they would have access to those medicines much more quickly if they lived in any of the other 19 countries listed in those OECD statistics.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you very much.

My understanding, along this same line of thinking, is that in New Zealand you are facing some significant delays when it comes to oncology drugs. You mentioned that there were drugs available in Australia that weren't available at all in New Zealand, and again, this is a detriment to those who need access to these medicines.

My understanding is that this time delay is increasingly detrimental, because what it could do is delay or cut back on the number of clinical trials that are performed within your country with regard to these drugs.

Can you comment on that?

[Dr. Graeme Jarvis]

Yes. The opposite was actually used as the reason for doing clinical trials. The idea was that because you don't get access to the innovative medicines, you should be doing clinical trials in New Zealand, because then patients could actually.... The Health Select Committee investigated this. That was one of the pros for doing trials.

The two are not necessarily linked, to be quite frank. Our companies do a lot of clinical trials in New Zealand; I would like to see them do more. Perversely, I think it is one way of getting access to the innovative medicines. That's why New Zealand is a really good place to recruit for studies. In fact, studies are often moved from Australia to New Zealand because the patients need access. I'm sorry to say it as a New Zealander, but that is actually the case.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

It is my understanding that most of the formularies or most of the drugs on the formulary are generic. Generics don't work for everyone, so there will be times when people are going to need to purchase a more expensive name brand medicine.

Could you comment on how that works within your system? How do you make provisions for that?

[Dr. Graeme Jarvis]

It's the same process that you go through, generic or innovative. About 78% by volume is generic. The majority of the medicines are generics. It's only some that we're aware of that have the rebate system, which I'm sure Matthew touched on.

You go through the same system. Obviously the cost-utility analysis that PTAC does for Pharmac comes a little bit more into focus as a result, because innovative medicines cost a little bit more.

It's the same prices, essentially, but we have a lot less innovative medicines than a lot of other countries.

[Heather Roy]

Your comment was quite right. A particular medicine, though approved, might not suit every patient.

One of the difficulties we have in New Zealand is that because there is often a sole-supply issue—one medicine in a family of medicines is chosen for funding, and others aren't—clinicians often don't have the choice that we believe would be beneficial to patients.

It's very difficult for somebody if they can't afford a medicine that isn't funded but is a better one for them. Often they have to do the best they can on one that isn't as effective as another one might be. That lack of choice certainly is problematic for our clinicians.

[Dr. Graeme Jarvis]

I think about the last round of tenders—

[Rachael Thomas, Conservative, Lethbridge, AB]

You can finish your thought.

[Dr. Graeme Jarvis]

It was about 80% in the last round of tenders, which is what Pharmac goes out for. About 80% of the community pharmaceuticals were sole supply, and for hospital medicines it was about 78%.

An interesting little fact is that we have drug shortages in New Zealand. Of the last eight drug shortages that we've had, Australia didn't have those same drug shortages because it had more than one supplier. It does create issues for patients in the health care system, and the pharmacists and doctors. Sometimes when you only have one supplier and they can't get it in the country, you order the medicines as best you can.