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Tuesday, June 25, 2024

Professor Robert MacCulloch: Seymour should never have politicized Pharmac....


Seymour should never have politicized Pharmac by making National's Biggest Fundraiser, Paula Bennett, its Chair.

I thought the ACT Party was meant to stand for meritocracy, something that has been missing in this country the past six years. I though ACT was meant to stand for the ideal of an independent Central Bank, run by monetary policy technocrats whose sole focus is to achieve price stability, which is a job that requires technocratic, not political, skills.

I thought ACT wanted the best drugs purchased to ensure the highest level of health & well-being, without politicians, their spin-masters, pollsters & communications experts influencing what drugs to purchase based on their reaction to the latest Newshub, Stuff, or Herald headline. In the past weeks, primarily due to a ferocious media reaction to the Budget in which it was claimed that the Coalition did not fund a bunch of cancer drugs Finance Minister Willis had promised it would, National and ACT went into massive damage limitation mode.

The problem National & ACT's Associate Health Minister David Seymour ran into is that Pharmac makes drug purchase decisions independently of what politicians may like in order to get a headline. Pharmac uses tools like working out the additional "Quality Adjusted Life Years" that different drugs offer. Since our politicians don't have technical expertise in this field, that is an appropriate model. Consequently, even allocating more money to Pharmac does not guarantee it will buy the particular drugs that Willis promised. She was never in a position to make those specific promises.

Consequently, that's when the New Coalition activated Plan B. That plan is "Paula Bennett". Back in April of this year, Seymour announced that the Chair of Pharmac would be former National Party Deputy Prime Minister, Paula Bennett. Bennett has no expertise in the technical business of medical purchases. She does have expertise in fund-raising. Bennett was one of National's biggest fundraisers leading up to the last election. Seymour stated, "As chair, Paula will lead the Pharmac board in their role of managing the pharmaceutical schedule and driving greater efficiencies and access to medicine for New Zealanders."

So Seymour is on the record as saying that the former National Deputy PM will "manage the pharmaceutical schedule". These past weeks, there was a pressing political need to manage that schedule in favour of getting the New Coalition out of a political mess. The PM and Seymour should never have put a prominent politician aligned with themselves to head Pharmac. It has taken away Pharmac's independence. How do we know the extra money announced yesterday going to Pharmac is not going to buy drugs that give the new Coalition good news headlines, rather than to where need to greatest?

This has been a disgraceful episode for National & ACT. Jobs for the boys and girls, turning our drug-purchasing agency into a tool of politics - and all at the same time when the Reserve Bank Chairman was reappointed by Nicola Willis, after she has spent the past three years attacking the RBNZ for screwing up our economy. Luxon, Willis and Seymour better start looking like A-list acts, because at the moment they're looking worse than C graders. If they can't even get support from folks that want them to succeed, like this Blog, then they will lose everyone's support in quick notice. Then the country is truly stuffed.

Sources:

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.

4 comments:

CXH said...

' Luxon, Willis and Seymour better start looking like A-list acts, because at the moment they're looking worse than C graders.'

Couldn't agree more. They have gone from a strong opposition, to a meek government scared of the public service. They need to find where their gonads have been hidden and quickly.

Anonymous said...

No-one should be surprised when political parties fail the integrity test. This situation has been building for the last 50 years, and we are well and truly on the downhill slide. Hang on everyone; it can only get worse from here.

Basil Walker said...

Submitters . I have been to, TOO many cancer funerals to accept your criticisms especially from Professor Robert MacCulloch whoose contributions are my daily pick me up. The Pharmac situation was dire under Labour without prior knowledge for the incoming Coalition and $80 million was the suggested shortfall this budget .
I say well done Coalition Govt, rabbit out of the hat stuff, my tax this week is sent with gratitude .

Empathic said...

I agree with Prof MacCulloch here. Also, I'm not sure Luxon or the coalition partners promised the new drugs would be funded in the very first budget. If that's correct, that should have been the response to critics. However, such an election promise should never have been made because it rode roughshod over the Pharmac model. Better to have promised to increase Pharmac's funding in order to speed up their assessment of certain new drugs.

Alternatively, government could change the model to allow some drugs or some categories of drugs to be purchased independently of Pharmac based on criteria other than research evidence and cost-benefit analysis. Leaving Pharmac to deal with all other medications without political interference. Probably wouldn't work though as various patient groups would all be lobbying for their drugs to be purchased outside the evidence-based Pharmac approach. There would be tragedies involving drugs with insufficient safety research.

I'm not sure a politically independent Pharmac would have funded some of the cancer drugs in question. For example, one that for each patient costs more each year than most people's yearly income and provides a 50% chance of extending life by a few years. That just may not be judged as a priority over many other drugs that would save lives with better efficacy. The funds available will always be limited and funding one drug will prevent funding others. All due respect and compassion to those hoping for respite from their illness.