Time for health insurance industry to speak up

Friday, June 3rd 2011, 6:53AM 1 Comment

by Darrin Franks

The recent focus on Pharmac’s place in the progress of trade talks with the United States has been more than a bit myopic. It has centred on powerful and politically connected US pharmaceutical companies being a real threat to the longevity of our own ‘dedicated minder of the New Zealand public purse’. Pharmac will no doubt relish repeating some of the supportive comments from previously critical quarters in its annual report. The irony aside, the debate about whether Pharmac should be a victim of change so New Zealand can become an acceptable part of the Trans-Pacific Partnership – a free trade agreement between Asian and Pacific countries - needs to have wider scope. If the National coalition government allows its negotiating team to tinker at the edges of the Pharmac structure, it must be with clear understanding of the domino effect. Take health insurance for example. Concessions to the US pharmaceutical lobby are generally accepted to mean the cost of US drugs to New Zealand will go up, ultimately pushing up insurance premiums and altering payouts. Alternatively, India’s generics may get a bigger look in. You can be sure they are standing by, ready. New Zealand’s health insurance industry needs to speak up and get the calculators out.

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Comments from our readers

On 14 June 2011 at 10:38 am Dr Ian McPherson said:

New Zealand can’t afford all the healthcare it would like. It’s an issue that has to be addressed by both the public and private health sectors, and an issue that’s certainly not unique to New Zealand.

Pharmac is a success story for this country. It has been set up and resourced by the Government to make decisions that will achieve the best possible value for taxpayer dollars and has been very effective in maintaining a good quality/cost balance.

New Zealanders need to preserve Pharmac, and models like it, in order to help keep the future cost of quality healthcare down. Though this inevitably results in difficult choices having to be made, it is an essential component to the affordability of the New Zealand health sector.

Despite Pharmac managing the cost of drugs for New Zealand, our small market has meant the big pharmaceutical industry has somewhat left us alone. That has not been the case with other countries, with spiralling pharmaceutical costs, when they have tried to copy the Pharmac model.

The Government will have to look very closely at what the benefits of a trade deal are, if it involves compromising a national treasure like Pharmac.

Dr Ian McPherson
CEO, Southern Cross Healthcare Group