Most of the reaction to the 2016 Budget has been predictable. Government supporters laud it as one of the greatest things since sliced bread, while the Opposition bemoans it as do-nothing, and as always the interest groups lament that there is not enough in it for their particular constituency. The racist xenophobes continue to ignorantly insist it is all the fault of rampant immigration. All so predictable, all so tedious, and ultimately all so pointless.
Any Budget by any government, left or right, is a balancing act between what Ministers would like to do in their own portfolios; their parties’ priorities; and, what the Minister of Finance thinks he can pay for. Every now and then, a budget provides scope for standing back a little and looking at overall policy requirements in a particular area.
There is such an issue in the 2016 Budget. In recent years, successive governments have struggled with how to fund new innovative medicines that are expensive and may not be able to be funded within PHARMAC’s existing budget and criteria. The debate over the breast cancer drug Herceptin in 2007-09 was one such example. The upshot was that the government made specific funding available for Herceptin in 2009. That intervention was not seen as especially successful, and so, when the issue of the melanoma drug Keytruda arose earlier this year, the government took a slightly different approach, confirmed in the Budget, of providing more funding to PHARMAC which was then able to fund the similar medicine, Opdivo.
However, both these examples raise a broader issue in the context of the new and innovative biologic medicines likely to become available in the next few years, that will not only have a profound effect on the treatment of many currently life-threatening conditions, but will be extremely expensive. As things stand at the moment, PHARMAC would be forced to play another game of catch-up, harnessing its resources as best it can, and hoping for more funding from the government to enable the medicines to be made available to New Zealand patients. And, in all probability, it will continue that way until the next such case arises, and so on. It is neither satisfactory, nor sustainable.
We need to be developing a strategic overview of what medicines are likely to be becoming available in the years to come; what is a reasonable expectation of which of these medicines New Zealanders might expect to have access to; and, how that might be funded. In some cases, there may be other medicines available that could be cheaper and just as effective, while in other cases it might be that the particular medicines are not of as much value here as might be claimed elsewhere. And we also need to be brave enough to determine the point at which long standing medicines should be moved on, either to a part-charge regime, or to no subsidy at all, because they have been replaced by newer products.
At the present time, we have no such overview, and, as the Herceptin and Keytruda debates show painfully, governments have been left to react, when it is often too late. A more proactive approach focused on what are reasonable expectations for New Zealanders to have of the national medicines system would enable governments and PHARMAC to prioritise spending better, and would give patients a certainty they lack presently.
The limitations of the current system have been clearly exposed and when in government both the major parties have struggled to accommodate the demands being made. (Part of the problem is that when in Opposition both parties have promised everything to everybody on the medicines front and then become hoist by the own foolish petard when elected to office. As recent events show, that puerile pattern seems likely to continue.)
A more strategic approach would prevent repetitions of that hypocritical tomfoolery, but, more importantly, would give New Zealanders a greater level of certainty than they enjoy now.