Thursday 7 October 2021


As debate has intensified over the last year or so about the procurement of New Zealand’s Covid19 vaccines I have become increasingly puzzled by the apparent absence of Pharmac from the process. 

Pharmac is, after all, the government’s specialist agency for purchasing the range of medicines that the country needs. Over the years, it has built up a solid reputation as a tough and shrewd negotiator, well able to do the best deals possible for the New Zealand taxpayer. In the process, it has become distinctly unliked by international pharmaceutical companies, but nevertheless respected for its professionalism and persistence. Successive New Zealand governments over the last thirty years have been uncompromising in fighting to protect Pharmac’s role and autonomy whenever international free trade negotiations have raised the possibility that Pharmac is a barrier to free trade, which should be removed. 

When the pandemic came along, and the international rush to secure vaccines at competitive prices began, Pharmac, by dint of its international experience and capability, seemed the obvious choice to lead New Zealand’s quest to obtain the best vaccines at the best price for New Zealanders. Yet it was quickly cast aside in favour of the Ministry of Business, Innovation and Employment, and there has never been a plausible explanation why this was so. 

MBIE may be many things – and certainly and curiously, along with the Ministry of Health, seems to have become one of the government’s “go to” agencies during the pandemic – but as recent developments have shown it has absolutely no experience as an international vaccines’ procurer. Pfizer and the other vaccine manufacturers must have jumped for joy and rubbed their hands in glee when they heard it would be the neophytes from MBIE they would be dealing with, not the wiser and harder heads from Pharmac. 

Reports that MBIE took six weeks to respond to Pfizer’s initial approach in June last year confirm the mystery, especially when the reason given for the delay was that it was not until August that the Cabinet approved the funding required to set up MBIE’s negotiating team “with the right skills and expertise in specialist negotiations.” Those skills already resided within Pharmac and were tried and true when it came to dealing with the likes of Pfizer. They did not need to be replicated and it is hard to see any justifiable reason why they were not utilised. At the very least, it would have meant that the response to Pfizer’s approach could have been immediate, without the duplication of setting up another negotiating team within MBIE, and the effective waste of the more than $500,000 additional funding that required. 

Looking back now, when New Zealand is rushing to play international catch-up on vaccination, that delay, and the subsequent duplication of effort it led to, was little short of scandalous. And there still has been no explanation of why it was necessary, and why the proven skills and expertise of Pharmac were not immediately utilised. 

There are two possible explanations. One is that Pfizer and other vaccine manufacturers pressured the New Zealand Government in some way not to use Pharmac as their vaccine negotiating agent because of their historical antagonism. However, to resort to explicit blackmail like that, followed by craven acceptance from New Zealand seems unlikely. It would be an even bigger scandal than the current situation, were it to be true. 

A more likely explanation lies with potential government wariness about handing too much responsibility on this matter to Pharmac, notwithstanding the fact that procurement of vaccines has long been part of Pharmac’s mandate. In carrying out its role as the purchaser of medicines and vaccines, Pharmac has always operated independently of the government of the day. For their part, politicians have always been quick to reinforce Pharmac’s independence and autonomy and constantly reiterate that medicines and vaccines purchases are not subject to political interference. 

None of that narrative fitted conveniently with the government’s messaging about the Covid19 response. From the outset, the government has been determined to be seen to be directly in charge of and driving the official response. It explains why, for example, general practitioners, community health agencies and pharmacists were initially shut out of any role in the vaccine roll-out, because this had to be seen as a government initiative driven by the Ministry of Health and delivered by district health boards. Only when that model was exposed as too cumbersome and slow did the government acquiesce and allow other health professionals to be involved. And it is no coincidence that all of the innovation we have seen in vaccine delivery has occurred since that time. 

From the government’s political perspective, allowing Pharmac to negotiate the supply of Covid19 vaccines was too risky. As the government had already initiated a review to curb some of Pharmac’s autonomy when it comes to funding new medicines, it was unlikely to be comfortable with a situation that would put Pharmac centre stage in the vaccine procurement and roll-out process. 

But that of itself does not justify the establishment and funding of a whole new and untried parallel negotiating structure under MBIE that so far seems to have done little more than delay the vaccine roll-out to New Zealanders. And since the Pharmac board is now chaired by a former senior Labour Government Minister, the agency is more likely to be far better attuned to the government’s concerns than might have been the case. 

Now, I am not holding a special candle for Pharmac. When a Health Minister I frequently found it to be infuriating, uncompromising and insensitive, but I also quickly came to respect its capability and professional expertise. It knew what it was doing and just wanted to get on with it, attributes which, on the whole, have served the country well over the years and would have been particularly valuable in the face of the pandemic. Given Pharmac’s expertise and experience, and in the absence of any explanation otherwise, it seems simply crazy that the agency has been overlooked throughout this process. 

After all, when you go into war, as we have been with Covid19, you use all the troops and resources at your disposal, not just those you like.


  1. Valuable insights as always Mr Dunne!
    It is a shame that such detailed and balanced analysis is not given more credence in our mainstream media.
    It is less a shame but perhaps more perplexing that opposition politicians do not take advantage of published analysis to hold a spotlight on the current governments "transparency ".
    Surely Dunne Speaks should be mandatory reading for any MP. But I suspect a good number of MPs cant deal with or carry forward nuanced and well constructed arguments:/

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