A Day in the Life of PHARMAC

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A Day in the Life of PHARMAC

• Royal New Zealand College of GPs conference
• 11-14 July 2007

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IntroductionPresenter Dr Jim Vause PTAC
Member
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Funding ProcurementPresenter Stephen
Woodruffe Therapeutic Group Manager
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PHARMACs Objective

• To secure for eligible people in need of
  pharmaceuticals the best health outcomes that are
  reasonably achievable from pharmaceutical
  treatment and from within the amount of funding
  provided

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Decision Criteria

• Health needs of eligible people
• Health needs of Maori and Pacific peoples
• Availability and suitability of existing
  pharmaceuticals and other therapies
• Clinical benefits and risks
• Cost-effectiveness (compared to purchasing other
  health care and disability services)
• Overall budgetary impact (both pharmaceutical and
  total health budget)
• Direct cost to health service users
• Government priorities for health
  funding/Government objectives
• Other criteria (with appropriate consultation)

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Funding and Procurement What do we do?

• Manage the Therapeutic Groups
• Determine
• What is in the Pharmaceutical Schedule (what is
  subsidised)
• The subsidy for each item on the list (not the
  price)
• Conditions of use (to gain subsidy)

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What do we do?

• In doing this we
• Facilitate decisions
• Negotiate with suppliers
• Make recommendations to the PHARMAC Board

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Tensions in managing a Therapeutic Group

• We have a fixed budget and it will never fund all
  the medicines available for all people (not an
  issue unique to New Zealand)
• A fixed budget requires prioritisation
• Is this the best way to spend the money we have?
• We look after the populations health
• You look after an individual patients health

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Facilitate Decisions

• Often we need clinical advice
• We use the Pharmacology and Therapeutics Advisory
  Committee (PTAC)
• PTAC provides expert independent advice that is
  evidence based
• Does the medicine work?
• Is it a safer or more effective than current
  medicines?
• Is it the best way to spend the money we have?

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Cardiovascular Subcommittee- low dose aspirin

• Strength and coating of low-dose aspirin
• Bioequivalence study (Cox et al, 2006) concluded
• Equivalent doses of EC aspirin are not as
  effective as non-EC aspirin
• EC aspirin has poor absorption from the higher pH
  environment of the small intestine
• EC aspirin has a lower bioavailability than
  non-EC aspirin which may result in inadequate
  platelet inhibition (particularly in heavier
  subjects)
• 100 mg EC is equivalent to 75 mg non-EC

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Negotiate with suppliers

• Once we have clinical advice we negotiate/run a
  competitive process to obtain a price which is
  cost effective for a listing or a widening in
  access

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Negotiate with suppliers

• Negotiations can be complicated by
• Revenue stream being created through hospitals
• Large over the counter/private market
• Small markets
• Discontinuation of products

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Summary

• Therapeutic Group Managers are responsible
  for/manage their therapeutic groups determine
  what is subsidised
• There will always be differences in opinion as to
  what should be subsidised
• In managing the therapeutic groups we
• Facilitate decisions
• Negotiate with suppliers
• Make recommendations to the PHARMAC Board

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Cost-Utility AnalysisPresenter Matthew
Poynton Analyst/Health Economist
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Cost-Utility Analysis (CUA) at PHARMAC

• Inform decision criteria - Cost-effectiveness
• Need to maximise health gains from within the
  funding available
• Weigh up costs and benefits
• Opportunity cost more apparent
• What else could be funded with that money?
• Provide a measure of relative value for money

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The PFPA

• Overview of methods PHARMAC uses when doing CUA
• Ensures consistency in methods
• Intended users PHARMAC staff, pharmaceutical
  suppliers and contracted health economists
• Amendments include
• Differences in costs included
• Discount rate

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Ziprasidone an example

• Atypical antipsychotic treatment for
  schizophrenia
• High Priority from PTAC
• Listed 1 August 2007
• Can be prescribed by GPs
• Cost-Utility Analysis
• With and without ziprasidone as a treatment option

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Quality of Life (QoL) - EuroQol EQ-5D
Mobility 1 No problems walking around 2 Some
problems walking around 3 Confined to
bed Self-Care 1 No problems with self care
(washing and dressing) 2 Some problems with
washing and dressing 3 Unable to wash or
dress Usual activities 1 No problems with
performing usual activities 2 Some problems with
performing usual activities 3 Unable to perform
usual activities Pain/Discomfort 1 No pain or
discomfort 2 Moderate pain or discomfort 3
Extreme pain or discomfort Anxiety/Depression 1
Not anxious or depressed 2 Moderately anxious or
depressed 3 Extremely anxious or depressed
Health State 11111 Qol 1
Health State 11212 QoL 0.690
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Quality Adjusted Life Years (QALYs)
Incremental QALY gain 1.3 QALYs
QALYs Years X QoL 3.2 QALYs
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Costs

• Taken from the DHB Perspective
• Resources/Costs considered
• Pharmaceutical
• Hospital
• Doctor/Nurse/Pharmacist time
• Direct patient costs (restricted to partially
  subsidised)
• Average cost per patient
• Without ziprasidone 27,000
• With ziprasidone 22,000
• Incremental Cost -5,000

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Cost per QALY

• Cost/QALY Incremental Cost
• Incremental QALYs
• Relative Value for Money
• Ziprasidone -5,000 Cost saving
• 0.07 QALYs
• Drug X 100,000 10,000 / QALY
• 10 QALYs
• Drug Y 1,000 20,000 / QALY
• 0.05 QALYs

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Exceptional Circumstances Presenter Jayne
Watkins Panel Coordinator
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Community Exceptional Circumstances

• Entry Criteria
• One of these must be met
• 1) The condition is rare.
• 2) The reaction to alternative treatment is
  unusual.
• An unusual combination of clinical circumstances
  applies.
• (Where rare and unusual are defined as single
  figures nationally)

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What type of medications does Community EC fund?

• Registered medications used to treat unregistered
  indications.
• Registered medicines that are currently not
  funded being used to treat rare diseases.
• Unregistered medications used to treat rare
  diseases.
• Products that are available without
  registration being used to treat unusual
  diseases.
• A small number of unregistered medicines that are
  approved automatically .

We reimburse to a community pharmacy the cost of
the medication to them. Reimbursement is through
the HealthPAC electronic claiming system.
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Automatic approvals

• propylthiouracil
• liothyronine
• prednisolone sodium phosphate oral liquid
• ethambutol (100mg)
• Forms for these are on the PHARMAC website
  www.pharmac.govt.nz, search for Exceptional
  Circumstances

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Most common approvals and declines

• Approvals
• Mycophenolate
• Cyclosporin
• Declines
• Tramadol
• Venlafaxine (now listed)
• Celebrex/vioxx
• Mycophenolate
• Orlistat

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The numbers

• CEC
• around 1000 applications pa
• 600 initial applications 50 approved (but all
  automatics are approved, and only 15 of others)
• 400 renewal applications 95 approved
• HEC
• around 1200 applications pa
• 1000 initial applications 77 approved
• 200 renewal applications 91 approved

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PHARMAC Seminar Series
http//seminarseries.pharmac.govt.nz/

• CVD Risk Management (re-run) - 23 July 2007
• Essentials in Emergency Medicine - 3 August 2007
• Q is for quality in rest homes and hospitals -
  22 August 2007
• Normal or not the neonate in the first six weeks
  - 3 September 2007
• Gastro-intestinal disorders - 17 September 2007
• Practical Medicines Management - 2 October 2007
• Understanding the professional roles in primary
  health care - 19 October 2007
• Managing sexual problems in general practice - 8
  November 2007
• Improving childhood nutrition for your patients -
  7 December 2007

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Demand Side Team Presenter Marama
Parore Manager, Demand Side (Acting) Pou
Arahi Manager, Maori Health
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What is the Demand Side function in PHARMAC

• Influence volume and mix
• Work closely with prescribers, dispensers,
  educators and consumers to influence volume and
  mix
• Use Social Marketing and Community Development
• Facilitate and coordinate across the health,
  social and NGO sector
• Hits a lot of PHARMACs Maori health priority
  areas

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Adding Value to the work of DHBs

• 2006/07 DHB District Annual Plans health
  priorities
• 18 DHBs Maori health and diabetes
• 16 DHBs mental health
• 14 DHBs cardiovascular disease
• 10 DHBs respiratory
• The Demand Side team facilitate implementation of
  the DAPs by providing tools and techniques to
  engage with DHB key audiences

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The Demand Side Maori Team Projects

• Diabetes
• Cardiovascular Disease
• Mental Health
• Childhood Asthma
• Dyspepsia
• Wise Use of Antibiotics
• He Rongoa Pai, He Oranga Whanau
• Gout
• Implementation projects

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Two different jobs

• Social Marketing
• All elements of mktg mix
• Behaviour change
• About selling
• Audience focus
• Multiple channels and messages
• Market research
• Feedback and evaluation
• Senate Communications 2005

• Public Education
• Focuses on promotion alone
• Knowledge and attitudes
• About telling
• Subject focus
• Simple messages and mainstream channels
• Academic research
• One dimensional and static

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Community Development

• When the Demand Side team are working on any
  project we use this framework
• Community Development
• Community involvement
• Community engagement
• Empowerment
• Ownership, and
• Self determination
• Community has a broad definition in this context

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Reducing Disparities

• The PHARMAC Maori health priorities are
• Risk factors
• Tamariki Ora
• Smoking
• Obesity
• Health conditions and chronic diseases
• Cardiovascular disease
• Respiratory disease
• Cancer
• Mental health
• Gout

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Maori Responsiveness StrategyPresenter Karen
Vercoe Maori Health Manager
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Maori Responsiveness Strategy (MRS)

• Strategy
• How we enact the strategies
• An example

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Maori Responsiveness Strategy

• Incorporate Maori Strategic Priorities
• Improve Human Resource
• Improve Ethnicity Data Collection Analysis
• Improve our performance in negotiating with
  suppliers and assessing new drug applications.
• Improve our performance in informing Maori about
  available subsidized medicines.
• Improve Maori representation and participation.

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Strategy 1

• Incorporate Maori Strategic Priorities

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Strategy 2

• Improve Human Resource

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Strategy 3

• Improve Ethnicity Data Collection and Analysis

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Strategy 4

• Improve our performance in negotiating with
  suppliers and assessing new drug applications.

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Strategy 5

• Improve our performance in informing Maori about
  available subsidised medicines.

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Strategy 6

• Improve Maori representation and participation

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MRS applied Matariki_at_Pharmac

• Matariki (Maori New Year)
• 7 week programme
• Inform, educate and provide rationale
• Encourage team building (internally)
• De mystify Te Ao Maori

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Matariki_at_Pharmac

• Week 1 Launch
• Week 2 Taste Aotearoa
• Week 3 Sport Culture
• Week 4 Culture Link
• Week 5 Maori Leaders Literature
• Week 6 Tikanga Maori
• Week 7 Maori Mastermind Matariki_at_Pharmac
  Function

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Hei konei ra