Challenges and opportunities in New Zealand’s pharmaceutical scene Kevin Sheehy – Chief Executive, Medicines New Zealand Dalton Kelly – Chief Executive, New Zealand Cancer Society Assoc. Prof. Ken Whyte – University of Auckland Medical School

Changes & opportunities in NZ Pharmaceutical Scene: An individual clinician’s view.

Ken Whyte Respiratory, Transplant & Sleep Physician

Demographic time bomb

Christensen K et al, Lancet 2009;374:1196

Increasing demands: kidney dialysis projections

Pharmac & NZ successes

 Controlling pharmaceutical spending     For majority of conditions has delivered adequate therapies & benefits at reduced cost Developed a “commercial” model that both sides (funder & Pharmaceutical Industry) understand Clinicians griped but could live with system for most therapies – system struggled with genuinely “new” therapies and high cost treatments.

Pharmac overall has “Brownie points” in the bank with the health system (providers/funders/users)

Pharmac & NZ weaknesses?

  Treasury small – Health budget finite Minimal resource for health economic analysis:  Poor costing data for NZ health & disability costs  Total lack of University health economic departments to train & offer analytical resource for Pharmac/Industry/Government/Patient groups  Pharmac very limited resource ( MOH similar)  Failure to debate the ethics of health funding and delivery.

Ethical approach – not clear?

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Utilitarianism

 the greatest good for the greatest number  The worst off have no priority 

Maxmin Principle

(Rawls – Justice as Fairness)  to the greatest benefit of the least advantaged, open to all under conditions of fair equality of opportunity

In health care (+/- social care) – should a life saving or altering therapy, (even if very expensive) take priority over treating a lesser problem in a larger number?

Variety of tools tried to measure but crude tools in reality & struggle to assess life altering/saving therapies.

Precedent, equity & transparency – if one high cost treatment funded ($/QUALY) then others of same benefit should be funded

The Clinician’s dilemma

   Advocate for individual patient In rare or very disabling conditions often no other advocates for the patient group Awareness of resources and societal demands  Pharmac’s response:  Exceptional circumstances  Now named patient approach (NPPA) from 1/3/12  In past no clear societal decision in health funding re Utilitarianism versus more “graded” approach

Looming threats

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Break down of the Pharmaceutical model:

 In short term many therapies will come off patent so $$$ looks good  Large pharmaceutical companies portfolios shrinking  Small niche companies (often funded by venture $$) targeted & often “individual” therapies (small volume & great cost)  Shrinking room for Pharmac to trade over a portfolio to allow new therapies affordable entry in NZ 

Dramatically life altering & saving replacement therapies

 This leads to an increasingly complex and probably insoluble dilemma around allocation of resources.

 Orphan diseases*: rare, yet many (estimated 5000-7000) & both randomised trials and cost benefit analysis not feasible as such small numbers – yet up to 2+% of population suffer when all added together!

* life-threatening or chronically debilitating diseases which are of such low prevalence that special combined efforts are needed to address them

Replacement therapies?

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Pompe’s disease

(progressive muscle weakness leading to disability & death):  algluosidase alfa drug, Lumizyme© - “adult”  $250,000 per year for initial improvement & slowing of progression  Societal costs of care altered by therapy?

  Cystic Fibrosis – disabling, fatal 25-40yrs with very poor quality of life & huge cost:  For some sufferers – prospect of replacement therapy from infancy with dramatically altering life quality & expectancy:  Therapy for life - ?1-75 yrs Cost versus benefit – normal versus disabled life.

Go forth and multiply?

Medical Devices?

   Triumvirate of material scientists/smart engineers/health scientists  near limitless “new” developments  Rapid redundancy – limited time for trials Traditional RCT model difficult:  Placebo difficult  Time frames to assess QALY often long Cost benefit analysis for in-patient devices (theatre, wards etc) differ for individual services & different hospitals.

“Publicly” funded utility trials rather than manufacturer funded?

Pharmac & NZ future?

    Pharmac model needs to be pro-active & change before “melt-down” & loses credibility?

Pharmac taking on Medical devices maybe a step too far?

Pharmac has always been under-resourced (proud & lean is not always productive!) NZ Society has to debate the ethics & make decisions – Pharmac can only delay