Neil Woodhams: Multiple Sclerosis New Zealand President on their call to change how Pharmac funds drugs in New Zealand

There's been yet another call to shake-up how Pharmac funds drugs in Aotearoa. 

Multiple Sclerosis New Zealand's independently commissioned report recommends the Crown entity adapts a cost benefit model. 

That means funding decisions would be made not just on the cost of a drug or medical device itself, but on the wider fiscal impact the decision would have on our society. 

President Neil Woodhams says that currently, Pharmac doesn't take into account the total economic costs —or costs to individuals— when making the call. 

He says the failure to do so gives a distorted view of the benefits from proposed new medicines. 

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Episode Transcript

Speaker 1 (00:00):
Are there are calls for FARMAC to change up the

(00:01):
way it funds drugs are report commissioned by Multiple Sclerosis
New Zealand says it's time to base funding decisions not
just on the cost of the medical device, but on
the impact we'll have on the health system and society
as a whole. The cost benefit model has been widely
used overseas and was recommended by the Treasury in twenty fifteen.
Neil Woodhams is the Multiple Sclerosis New Zealand President. He's

(00:23):
with me this morning. Neil, Good morning to you.

Speaker 2 (00:25):
Good morning Ryan, how are you well?

Speaker 1 (00:27):
Thank you. My first question is has this not changed already?
David Seymour gave a directive, did he not to Farmac
to do something like this?

Speaker 2 (00:36):
Yes, we are hopeful as this changed. We actually started
this report last year and it's the first detailed, evidently
based report on the subject. We think it supports David
Seymour's position, but we also think it's worthwhile demonstrating execs

(01:00):
what those costs are and how significant they are.

Speaker 1 (01:04):
Can you give us one example of a medicine that
we don't currently fund, you know, using the old model
versus your new one.

Speaker 2 (01:13):
Well, the medicine that we use in this case is
a drug called ocalism ab, which has been approved for
relapsing remitting MS, but not for primary progressive MS until
just very recently. It took us about I suppose eight
years to get that drug approved, and so we've based

(01:38):
the report, or Richard Milners based the report on the
modeling that was done for OSM. But the model that
he's used is applicable to any drug in a similar situation.

Speaker 1 (01:53):
It's basically saying there are wider benefits to society, to
the health system, etc. From using these drugs other than
it might save one, two, three lives whatever.

Speaker 2 (02:04):
That's absolutely right. I mean there are significant costs to
the government in a disease like multiple sclerosis that farmic
don't take into account. For example, this cost to social
welfare when people stop working and go on to an

(02:25):
unemployment benefit or a disability benefit. But there's also very
substantial cost to the family and to the individual. People
with MS may well stop work fifteen twenty years before
they would be due to retire, and so there's the
whole impact economic impact of the family of a loss

(02:47):
of an income and then on retirement, can we save
for etc.

Speaker 1 (02:51):
Etc. It's interesting, isn't it. I mean something you would
have thought obviously Treasury recommended it in twenty fifteen. It's
something you would have thought that a government would be
looking at doing, or a lens through which they would
look at funding. Anyway, Neil, thank you for that. New
Wadham's the multiple Scleritist New Zealand President.

Speaker 2 (03:08):
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