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Robertson says Pharmac's bulk-buying model is 'different', not 'worse' than other OECD countries

Grant Robertson says the drug-buying agency Pharmac’s bulk-buying model is “different”, but not “worse” than other OECD countries. 

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The Deputy Prime Minister says the agency’s bulk-buying model works for many Kiwis. Source: Breakfast

It comes as Budget 2021 saw Robertson, as Finance Minister, allocate an additional $200 million for Pharmac over the next four years. The figure disappointed patient advocate groups. A 100,000-strong petition demanding increased funding for Pharmac was also delivered to Parliament last month. 

On Thursday, the agency's director of operations Lisa Williams appeared on Breakfast saying it was “not just all about the money” while at the same time refusing to share the cost of spinal muscular atrophy drug Spinraza, which wasn’t funded by Pharmac because it was “extremely expensive”. 

Pharmac is currently undergoing an independent review to assess its performance. 

Today, Robertson said Pharmac’s model worked for a large number of New Zealanders because it could negotiate bulk purchases with pharmaceutical companies, bringing the price of drugs down. 

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Breakfast host Scotty Stevenson pointed out Pharmac needed about $400 million a year just to clear the backlog of drugs it had already committed to funding. 

In response, Robertson said the additional Budget allocation of $200 million was an election promise, and that the $400 million figure is an estimate of the total market price of the backlog. He said Pharmac’s bargaining power, because of its bulk buying approach, meant that figure could change. 

“Pharmac is a bulk drug-buying agency. One of the issues that we’ve got to look at as part of the review is what do we do where we’ve got a smaller group of New Zealanders who may be able to benefit from a drug that is new to the market or that only works for a small number of people?” he said. 

“We understand that issue, that’s the reason we’re doing the review.”

Robertson said the Government was already spending about $1 billion a year on buying drugs, and since Labour came into power in 2017, Pharmac’s overall funding had increased by 25 per cent. 

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The agency's director of operations Lisa Williams says the agency is working to be more open and transparent. Source: Breakfast

He said the agency also funded 14 new drugs last year and extended funding for 19 others. 

Stevenson asked whether the system was up to scratch internationally, given a 2019 study that found New Zealanders had the worst access to modern medicines among OECD countries. 

“Our system is different. I definitely wouldn’t say it’s worse,” Robertson said.