Transcript of Guyon Espiner’s interview of Pharmac, CEO, Sarah Fitt

“There are more than a hundred medicines on the PHARMAC waiting list. Some have been there five, ten or even fifteen years. I interviewed the Chief Executive of PHARMAC, Sarah Fitt, and asked her whether she was comfortable with that. Well, if there’s other medicines that have come along and replaced it. If there’s not a supplier in the country, we can’t supply it. So historically, we’ve never declined applications. We’ve kept applications open in case new evidence comes or the pricing changes. But I think that the feedback we’ve got from people, is they’d rather have some certainty. So rather that it’s sitting on a list for a long time and not moving anywhere, we’ll be moving to decline them. But the one that’s been sitting there the longest is an EpiPen. I mean, that’s not some, you know, fringe sort of medicine, is it? No, but we fund Adrenalin as the ampule, so there is a product that is actually available and that is funded. Yeah, but you don’t fund the EpiPen, the means of actually transmitting the Adrenalin into the body, do you? But we actually fund the Adrenalin ampules, so there is an option there for people. Because PHARMAC has a capped budget, it has to free up money in order to fund new medicines. Now, one of the key ways it does that is by putting the supply of drugs out to tender. If it gets a cheap price from the drug company, the patient may be forced to switch brands to a cheaper generic form of the drug. So we do that very carefully. It’s not something that we do lightly. But you do it all the time. You do it 60 times a year. Yeah, but some of those things have changed brands multiple times. The brand, the tender runs every sort of three years, so something might have changed three or four times. But for the first time we do it, we don’t even put it in the tender till we’ve got clinical advice as to whether that’s appropriate to do it. But you’re doing it for mental health patients. Yes, yes. And that’s based on the advice we get from our psychiatrists and our clinicians as to whether it’s appropriate to do it. We wouldn’t do it if the advice was not to do it or if there was a risk. Yeah, but you’re doing it to save money, aren’t you? Well, it frees up money to spend on new medicines. I mean, you shifted 45,000 people with serious mental illnesses to a new form of antidepressant. Well, it’s exactly the same antidepressant. It’s the same chemical. It’s a different brand. Yes, but it’s a generic, isn’t it? Yes. And we thought about that long and hard, and it was something we planned for a long time with a lot of clinical advice before we did that. So we take this very, very seriously. We don’t want to cause harm to people at all. No, but you had 142 reports in a year of adverse side effects from that, didn’t you? Out of 45,000. Yeah but 142 people? Yes. So we worked very closely with Medsafe, we monitored the reports we were getting. Gee, that’s a big risk to take to save some money, isn’t it? Well, it was something that we, as I said, we take very seriously. We get clinical advice, we have a very comprehensive implementation plan, we involve primary care, pharmacists, the psychiatrists. Are you confident that no one harmed themselves or no lives were lost in that switch? Well, it’s still going on, so we get that advice and we watch it very carefully. Can I repeat the question? Are you certain that no one has harmed themselves or even taken the advice because of the switch? I can’t be certain. I don’t know all the individual details of those 142 cases. But we monitor it very, very carefully, and obviously if there was any issues of concern, we would have acted on that. Have you been advised of any issues? No. PHARMAC makes a ranking list of which medicines it wants the most. But it’s a secret list, so patients never know when or if the medicine will be funded. Well, we can never give a date. I mean it’s always dependent– So why not? Well because it’s like any time, when you’ve got a capped budget, you’re always looking at what savings you can make, that frees up the headroom, we can work down the list. Yeah, but you say that, but you know, I mean, isn’t it fair to be able to say to people, “Look, we will make a decision on this at X point?” But we don’t know. We don’t know when we’ll have the money available. Because the thing is, you don’t just fund it for one year. Once we fund it, we fund it forever. So we have to be sure that we have the money going out. That’s what our prioritisation and our ranking does, it stacks up what actually is gonna– But we don’t know what the ranking is either, do we? No. Why not? Because it’s the most commercially sensitive bit of information we have. Why? Because it acts as our leverage with companies. So the leverage comes before– Well, because if they know that they’re high on the list, they’re not gonna necessarily want to negotiate better pricing. So we can use that ranking to sort of work out what actually do we want to settle on. So the leverage over the companies trumps the transparency with the public? We want to work down that list, we want to fund medicines. You didn’t like the way that question was characterised. Well, it’s quite simplistic. But it’s true though? Yeah. Well, the people know that it’s got a positive recommendation. It goes in with all the other medicines waiting to be funded– Pompe is another rare disease where advocates are pushing for funding of it. Why did Pharmac fund a drug for infantile onset of Pompe in December of 2016 when there are no infants with Pompe in New Zealand? Well, there could be… Children could turn up or be diagnosed, so it’s available. If a child was to present with that condition, it’s there. Is any one claiming it? I don’t know, I’m sorry. Because your committee, the last I read, said that there was, quote, there are currently no patients on treatment. No. But there could be patients that present at any time. So you funded a drug that no one– At that particular moment in time, there wasn’t anyone. But I mean, a child could present tomorrow, and need that– But there are 10 adults with Pompe, which is a devastatingly debilitating illness. So again, we rely on the evidence. The evidence in the infantile group was much better evidence than in the adult. Yeah, but does it seem a bit strange to you that you funded a drug for infants, there are no infants with Pompe, there are 10 adults in dreadful conditions, with Pompe in New Zealand, and you didn’t fund it for adults. Well, it’s a different condition. A lot of these conditions, if you present in childhood, they’re different types of disease to presenting in adulthood, so that’s the advice we get from the clinicians looking at the clinical evidence in these different patient groups. Lung cancer’s the biggest cancer killer, yet, when the Lung Cancer Foundation has looked at the top five cancer meds in the cost of Pharmac of $122 million, the top three cancer drugs just $2.7 million, or 2.3% of their total spent on those top five cancer drugs. They call this, quote, a staggering imbalance. What’s your response to that? Well, I guess we don’t fund based on proportions, we look at the evidence, we look at the medicines, and there are a lot of new medicines for lung cancer coming through, and our oncology committee that met last week certainly looked at a lot of these medicines, both first line and second line lung cancer treatments. Did you look at Pemetrexed for example? Mm-hmm. Now, you funded it in 2017, didn’t you? Uh, yep. 13 years after Australia. Well, we’d been funding it through our exception scheme for most of the patients that needed it. Through the ACC– Yeah, but not funding it for general patients on lung cancer though. For 13 years. So what, did you get it wrong for 13 years? No, as I said, it was never declined, it was there waiting to be funded. The evidence, for the price that was being asked– You just weren’t prepared to pay the money for it. Well, there’s always other things that are higher up the list to be funded with better evidence. Yeah, but 1900 people a year die from lung cancer. I know, yep. 1900. Mm-hmm. But the trouble is, most of these patients present very late with very advanced lung cancer, they’re often at stage four when they present, so again, I come back to my point that we’re part of a wider health system. Treatment for cancer isn’t all about medicines, it’s about screening, it’s about diagnosis. Medicines are about eight to ten percent of cancer control. The most effective things to manage cancer are screening, diagnosis, radiotherapy, and surgery. Medicines make up eight to ten percent of cancer control. Yeah, but they can buy you years though, can’t they? Well… Some can, some can’t. And that’s what we have to work out. And you’re comfortable to wait 13 years behind Australia to fund a drug like that? Well, that’s… We funded other medicines in the meantime. Keytruda’s funded for melanoma but not for lung cancer, why’s that? That’s what that’s going… That was being assessed by our oncology committee. So it might be. Well, it’s in the pile with everything else, yep. This is a huge area with the immunotherapies coming through, and many of them have got multiple indications across many different cancers. We have, though, ended up with a two-tier system haven’t we? If you want Crizotinib, which in some cases can add months and years on to lives, and there are patients that we know of in New Zealand with five years clear using Crizotinib, if you can pay your $13,000 a month for that, which is out of the reach of many, you could live for a few more years and watch your kids grow up, and if you can’t, you die. Well, there’s lots of examples like that, and that is difficult. We hear all these patients. Yeah. So do you accept there is a two-tier system? Well, I don’t think it’s a two-tier system. Well, it is. It’s the rich and the poor. Well, you could say that for lots of things. Well, do you agree in this case? Well I don’t, because I think we have to make the decisions about what’s the best use of the medicine we’ve got. If people choose to go and fund medicines themself, than that’s their choice. A lot of people choose to do that, a lot of people have insurance policies to do that. It’s like having elective surgery on insurance, you can choose whether to do that rather than going to to– Yeah, but if you’re a low-income, you’re not– Yeah, that’s not gonna be a choice, absolutely. And this is the medical environment that we’ve got, medicines environment we’ve got, isn’t it. But I’d come back to we’re part of a much broader health system, and funding medicines is just part of the story, there’s much bigger issues around screening, particularly Māori in Pacific Islands. They’re presenting at a much later diagnosis because they’re not accessing screenings services for whatever reason. We’re hopeful that the cancer action plan that’s coming, they will be part of that, and we become part of a broader system solution to these issues.”

Link to the interview –