New Zealand’s pharmaceutical management agency PHARMAC says that promoting competition among suppers of high-cost drugs could be the key to improving patients’ access to high-cost medicines for rare disorders. 

Therefore, the agency plans to test out a “contestable” fund for high-cost drugs to treat rare conditions, and says it could be seeking proposals for this from pharmaceutical companies by the end of this year.

The fund is a response to concerns about access to such medicines which PHARMAC has been hearing from patients through forums and consultations in recent months, the agency reports.

“We’ve listened closely to these views, and thought about them carefully. Our thinking leads us to the view that the core problem is a lack of competition,” says chief executive Steffan Crausaz.

“We know competition leads to lower prices,” he adds, pointing out that PHARMAC’s activities in promoting competition has enabled New Zealand “to achieve some of the lowest prices for medicines in the world.”

“We think that by promoting competition among suppliers, prices will reduce and, as a result, patients will get funded access to them. Ultimately, that’s what this fund is all about,” he says.

Mr Crausaz adds that pharmaceutical suppliers tell PHARMAC that one of their main motivators is providing patients with access to their products. “That’s something we certainly want to see, and I hope the industry takes this opportunity to help us find a way to make these medicines more available to patients,” he SAYSs.

This proposed new approach is possible within PHARMAC’s current operating framework, and would still involve the agency seeking to get the best health outcomes for patients from the available funding for pharmaceuticals, and the best value in investments. 

“The approach we intend to use will be consistent with the PHARMAC model and, importantly, will still enable us to continue to fund other new medicines for conditions that aren’t rare,” said Mr Crausaz.

The agency has now published a discussion paper on its website and is inviting comments from the public and the industry, which it hopes could help iron out some of the detail of how the contestable fund would operate.

Up to NZ$5 million a year could be available, through funding that has already been budgeted but not likely to be used for the NZ$8 million exceptions policy, says Mr Cruasaz. Because this funding is already budgeted, it will not limit PHARMAC’s ability to fund other treatments for less rare conditions, he adds.

Should PHARMAC request commercial proposals by the end of 2014, funding could begin in early 2015, the agency says.