HIV+ activists have drawn attention to the slow pace of new protease inhibitor approval and access. How does NZ pharmaceutical access and approval policy work? Commentator Craig Young observes the process. In a recent issue of the Australian Health Review, Dr Peter Davis provided a useful oversight of how Pharmac, the Crown pharmaceutical access regulator, provides us with access to new drugs - or not. In the early nineties, Pharmac was formed as a Crown agency that administers (mostly imported) pharmaceutical product purchase and distribution amongst New Zealand District Health Boards as they are currently constituted. It is one of the few surviving legacies of National's public health sector restructuring from the nineties, and has served the needs of the current administration as well. It is run as a corporate structure and is entrusted with keeping down pharmaceutical costs and also maximising benefit to the greatest possible number of pharmaceutical product consumers. Pharmac is viewed benignly because it has contained prices, despite opposition from manufacturers and ambivalence from pharmacists, as well as some health consumer organisations. Pharmaceutical industry representatives argue that Pharmac obstructs access to new treatment options, but against this, Davis argues that pharmaceutical benefit costs threatened investment elsewhere within the public health sector. He explains that New Zealand pharmaceutical supply, purchase and demand economics rely on three principal groups- overseas manufacturers, consumer organisations and medical practitioners. Central government needs to mitigate manufacturers and their commercial demands and balance them with the needs of public hospitals and related service providers. As an industry, pharmaceutical manufacture had become enmeshed within New Zealand's state-subsidised public healthcare system until the mid-eighties, when the Fourth Labour Government moved toward targeted service provision, and the Bolger and Shipley National administrations carried on their policy orientation. They tried to corporatise the public health sector, but were mostly unsuccessful. Until the Clark administration, Pharmac had some degree of autonomy from ministerial discretion. Davis argues that Pharmac 'works' because it bids for cost-effective medication and pharmaceutical companies and the regulator negotiate over relative access costs related to different pharmaceutical product lines. Pharmac can also negotiate volumes of "limited release" targeted at specific groups, which reduces consumer prices. Unfortunately, this public good objective is mitigated by Pharmac's use of so-called "cost/utility requirements." Translated into plain English, what does "cost/utility requirement" mean? Essentially, Pharmac provides fixed purchasing budgets, which mean that Pharmac's staff assess whether requested supplier prices are worth estimated therapeutic benefits. Here, I am afraid that I must agree to differ with Dr. Davis' analysis. He contends that the regulator does respond to evidence-based claims, weighed alongside the aforementioned cost/utility assessments. However, I noted that has been no such documented procedure recorded for protease inhibitors as specific pharmaceutical products, and People With HIV/AIDS as a consumer group. Without such a detailed assessment, it is difficult to evaluate whether or not the needs of People Living With HIV/AIDS are being served. Furthermore, Davis does question whether pharmaceutical manufacturers have fewer incentives for product research, development and investment, if their markets suffer as a result of purchaser monopolies. However, without a regulator, any existing social inequalities may worsen, given that consumers may be forced to pay top dollar for new products and experimental treatments, without access to independent clinical verification about the effectiveness of the aforementioned new treatment options and potential combination therapies. At the moment, Pharmac provides those. So, is Pharmac an effective regulator? From Davis' useful description and analysis, there may be particular problems for PLWAs. Due to the effectiveness of protease inhibitor treatment regimes, PLWAs have increased survival prospects, but gradually develop tolerance for their existing treatments until they require access to new treatments. Due to prior effectiveness, new protease inhibitor treatments could be argued to present high costs for a tiny consumer population, which means that rationed access occurs, and will not serve the interests of PLWAs who have developed tolerances due to their small scale. However, what about the context of palliative care and the specifics of pharmaceutical economics in that context? It could be argued that if PLWAs are denied access to protease inhibitors and their condition deteriorates, healthcare costs are clearly incurred. After all, hospitalisation requires commitments of staff time, renumeration, hospital bed occupancy, medical supplies, equipment wear and deterioration, and other costs. While protease inhibitor access rationing may save short-term pharmaceutical costs, they might end up transferring costs downstream to other areas of public healthcare. Shouldn't this be taken into account within any cost/utility analysis? If I were Body Positive, I'd get myself a good health economist and argue the point about whether rationed access does contain total healthcare costs, rather than focus narrowly on pharmaceutical policy alone. However, Davis has done an excellent preliminary job within his paper, and offers considerable food for thought and political strategising amongst our communities. Highly Recommended: Peter Davis: "The Ins and Outs of Regulating Pharmaceuticals in New Zealand" Australian Health Review: 28: 2 (8/11/04): 171-181. Available online (Abstract/PDF): http://www.aha.asn.au/publications/articles/issues/ahr_28_2_081104/ahr_28_2_171-181.html Craig Young - 26th June 2005