New Zealand's Medicines Landscape 2017 - Medicines New Zealand
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New Zealand’s Medicines Landscape 2017 Better health outcomes for New Zealanders
Message from the Chair
New Zealand is “dragging its feet” when it comes to accessing breakthrough world-class
medicines and treatments. Many comparable countries have access to these approved
modern medicines but the current model that New Zealand works under produces significant
delays for publicly funded access. This makes it difficult for healthcare professionals to
provide a specific personalised approach when treating patients.
Often the argument is around the costs of these medicines and due to our system having
a capped funding model, sacrifices have been made. This has repercussions on patients
publicly accessing the best possible treatments and the health system missing out on
potential long term savings.
However, when costs are publicly announced they are typically the full list price to access
these modern medicines. What is not mentioned is the discounts due to a competitive
negotiation process. These discussions lead to substantial rebates (44% on average) from
pharmaceutical companies once the contract has been confirmed.
Improving New Zealand’s access to modern medicines can improve
the well-being of patients and provide long-term cost-effective
savings for our health system. While New Zealand is still trying
to make decisions on what to give access to whom, patients are
receiving outdated and less than optimal treatments impacting
on individual patient well-being and the wider economy.
I believe patients need to have equitable access to the right
medicines at the right time. It’s time to address our inequity with
the world, improve patient well-being and start reaping the cost-
saving benefits of modern medicines.
The real cost of medicines in New Zealand1
44%
Full list price Real cost
(often used by media) Average rebate (price reduction using rebate)
Pharmaceutical companies provide a price reduction using confidential rebates for
publicly funded medicines in New Zealand.
Modern medicines include a more generous rebate than generic medicines.
1 Medicines Landscape 2017
MIND THE GAP
New Zealand’s combined medicines budget in real terms2
6.2% $682M is required
to return the
budget back to the
equivalent of 2007.
Vote health
Vote health
3.6%
2007 Inflation and population growth 2017
Since 2007 the medicines budget has consistently been underfunded. Minor investments
have not kept up with New Zealand’s increasing population and inflation.
Other countries invest more of their total healthcare spending to publicly fund medicines3
Australia 10% UK 11% France 13% Spain 12%
The gap between comparable countries3
New Zealand Australia Modern medicines that have
22% UK
45% 86% been registered and then
publicly funded.
New Zealand Australia All possibly available first
26% UK
44% 92% in class modern medicines
that have been funded.
The time it takes to fund a modern medicine3
114 134 329 370 517 543
days days days days days days
Germany UK France Australia New Zealand Portugal
1. PHARMAC Official Information Act (OIA) response to Medicines New Zealand: 24 March 2017. 2. NZIER. (2017). Community
pharmaceutical expenditure trends. Wellington, New Zealand. 3. Medicines Australia. (2017). Comparison of access
and reimbursement environments (COMPARE) 3rd edition. Canberra, Australia.
2 Medicines Landscape 2017
MEDICINES WAITING LIST
How a prescription medicine is funded
Most common process for funding modern prescription medicines in New Zealand.
Medsafe PTAC The waiting Pharmac funding Patient
registration recommendation list decision
for funding
The Pharmacology and Therapeutics Advisory Committee (PTAC) reviews funding applications
for new medicines. PTAC makes recommendations on which medicines should be funded by
PHARMAC.
The waiting list only includes medicines recommend by PTAC for funding, and excludes
other modern medicines which have been registered for use in New Zealand. Medicines
New Zealand actively updates this waiting list to increase transparency around PHARMAC
decision making, timelines for listing and help with budget forecasting.
Medicines wait to be funded1
Over 80 medicines have priority to be
funded and sit on the medicines waiting list.
Patients wait longer for access1
Medicines recommended for funding but sitting on waiting list Waiting up to
10.75 years
10 PTAC high priority recommendations Waiting up to
6.75 years
3 Medicines Landscape 2017Number of various types of medicines on the waiting list1
Depression Hepatitis C Schizophrenia Arthritis
Cancer Diabetes
A growing number of patients wait for access2,3
For only 1/3 of medicines on the waiting list...
235,000+
patients are waiting for access.
That’s more than the population of Otago!
Other countries already have access to these medicines2,3
Available in comparable OECD countries and over 45 other countries including:
Cyprus Estonia Greece
Slovenia Lebanon Moldova
1. Della Barca, C. (2017) Funding medicines in New Zealand: revision of the medicines waiting list. Auckland, New Zealand:
Subscripts limited. 2. PTAC minutes (2004- 2018). 3. MNZ member survey responses (2018). Wellington, New Zealand.
4 Medicines Landscape 2017ILL HEALTH IN NEW ZEALAND
Arthritis1
There are This is expected
currently 624,000 to rise to 650,000 Currently it costs
New Zealand 5 biologic medicines are
available in other countries
including Australia that can
reduce ongoing damage and
$3.2 6 arthritis medicines that can
billion
treat personalized conditions.
patients with Arthritis by 2020
Diabetes2,3
There are currently Nearly The estimated costs
for New Zealand is
257,000
40 Management of diabetes has
been stated as a Government
people per day health priority, yet three
are diagnosed $1.7 types of type 2 diabetes
billion treatments are not funded in
New Zealand – going against
patients diagnosed with by 2021,
international guidelines.
type 1 and type 2 diabetes. a 30% increase
Cancer4,5,6
In 2014 over 20,000 9251 died Cancer is a rising estimated
from cancer annual cost to New Zealand
$880
million
People were diagnosed
with cancer in New Zealand
Average cancer rate7
New Zealand’s average cancer rates are over 62% higher than the world average.
World average 183 New Zealand 295
Age standardised rate per 100,000. All cancers excluding non-melanoma skin cancer rates.
1. Arthritis New Zealand. (2017). Taking the next steps for arthritis: an Arthritis New Zealand election manifesto. Wellington, New Zealand.
2. Ministry of Health. (2009). New Zealand cost-of-illness studies on long-term conditions. Wellington, New Zealand. 3. Ministry of Health.
(2017). Virtual Diabetes Register 2010 – 2015. Wellington, New Zealand. 4. Ministry of Health. (2014) www.health.govt.nz/publication/new-
cancer-registrations-2014. 5. Ministry of Health. (2014) www.health.govt.nz/publication/mortality-2014-data-tables.
6. Blakely, T., et al. (2015). Med Care. 53:302-309. 7. WHO International Agency for Cancer. (2012). Estimated cancer incidence, mortality
and prevalence worldwide in 2012.
5 Medicines Landscape 2017HEALTH INEQUITY IN NEW ZEALAND
Diabetes impacts our ethnic communities more significantly1,2,3,4
Indian Pacific Island Asian Maori
1 in 5 1 in 9 1 in 15 1 in 16
Diabetes is most common among Indian and Pacific communities.
New Zealand is second to the United States in the years of life lost to diabetes.
Maori have increased health burdens5,6,7,8,9
x
27% 1.5
3x
Māori make up 27% 12% of Māori families Māori children are 1.5 x The total cancer
incidences of cancer with ill children cannot more likely to develop mortality rate is 1.5 x
afford prescription asthma and are 3 x more higher for Māori than
costs likely to be hospitalised non-Māori
with eczema
Māori are 5 x more likely to:
R.I.P
Wait longer for Have less lymph Require emergency Die after
chemotherapy nodes removed surgery elective surgery
Ethnicity affects life expectancy1,2
Māori men Māori women Pacific Island men Pacific Island women
6.8 7.3 5 4.5
years less years less years less years less
life expectancy life expectancy life expectancy life expectancy
1. Ministry of Health. (2016). ’Ala Mo’ui progress report. Wellington, New Zealand. 2. Ministry of Health. (2015). Tatau Kahukura: Māori
Health Chart Book 2015. 3rd edition, Wellington, New Zealand. 3. Statistics New Zealand. (2013). www.stats.govt.nz/Census/2013-census/
profile-and-summary-reports/quickstats-culture-identity/asian.aspx. 4. Danaei. G. et al. (2011) Lancet. 378: 31 – 40. 5. Ministry of Health.
(2014). The Health of Māori Children and Young People with Chronic Conditions and Disabilities in New Zealand (series II). Wellington,
New Zealand. 6. Rameka, R. (2006). He Arakanihi ki te Oranga. Wellington, New Zealand. 7. Ministry of Health (2015) National Cancer
Programme: Work Plan 2013/14. Wellington, New Zealand. 8. Ministry of Health (2015) Māori Health Unequal Impact II. Wellington, New
Zealand. 9. Moore S. P., et al. (2015) Lancet Oncol. 16:1483 - 1492.
6 Medicines Landscape 2017BENEFITS OF INNOVATION
Medicines make a huge impact on public health1
Reduction in the incidence of the following diseases since the introduction of a vaccine.
100% 100% 99.9% 99.9% 97.4% 96.6% 87.2%
Polio Smallpox Rubella Measles Mumps Tetanus Chicken pox
Modern medicines increase survival2,3
83%
2 out of 3 people diagnosed with of survival gains in cancer
cancer survive at least 5 years are attributable to new treatments
Modern medicines have contributed to a decline in Cancer mortality rates2 (since 1991).
Canada 21% Mexico 18% Australia 26%
Modern medicines can treat and cure chronic disease4,5,6
Hepatitis C
Now curable in more than 90% of treated patients with only 8 - 12 weeks of treatment.
Diabetes HIV
2000 – 2012 death rates have declined Has been transformed from a
48% in Korea and 31% Canada. death sentence to a manageable
disease.
Korea 48% Canada 31%
1. Roush, S. and Murphy, T. (2007). JAMA. 14: 2155-2163. 2. American Cancer Society Statistics Centre (2016). 3. Sun, E.
et al. (2008).The determinants of recent gains cancer survival: an analysis of surveillance, epidemiology and end results
SEER database: J. Clin. Oncol suppl. 6616. 4. PHRMA. (2014). 25 years of progress against hepatitis C. 5. PHARMA. (2015)
Biopharmaceutical research industry profile. 6. WHO mortality database (2016). www.who.int/healthinfo/mortality_data/en/.
7 Medicines Landscape 2017MODERN MEDICINES ARE A COST-SAVING SOLUTION
Medicines have a direct saving on hospitalisations1
$1
For every dollar spent on new medicines
$3 to $10 is saved on hospitalisations for
adherent patients with congestive heart
$3 - $10 saved failure, high blood pressure, diabetes and
high cholesterol.
In 2011, modern medicines reduced hospital expenditure in Australia by2
$7
billion
Modern medicines help patients get back to work3
4 out of 5 cancer patients around the world today are
returning to work following diagnosis due to modern
therapies.
In Europe $330 Million is saved annually from averted GP visits, hospitalisa-
tions and lost work days as a result of seasonal influenza vaccinations4
330m
1. Roebuck, C. et al. (2011). Health Affairs, 30: 91-99. 2. Lichtenberg, F. (2017). Econ. Record. 93: 353-378. 3. Amir, Z.
and Brocky, J. (2009). Occup. Med. 59: 373-377. 4. Preaud. E. (2014). BMC Public Health. 14: 813.
8 Medicines Landscape 2017INVESTING IN THE FUTURE OF HEALTH
It takes an average of 12 years to develop a medicine1
Regulatory Safety
Drug discovery Clinical trials review monitoring
3-6 years 6-7 years 0.5-2 years Indefinite
On average only 1 in 6000 compounds makes it through the whole process.
The average cost to develop a modern medicine is increasing1
US$2.6
Key drivers include:
billion
Increased trial complexity and regulatory barriers.
Increased focus on areas where science is difficult
US$1 and failure risks high.
billion
Expanded research burden to meet payer demands.
1990s - 2000s -
early 2000s early 2010s
7000 medicines are currently in In 2017 The FDA approved 46 new medicines3
development around the world2
Of which 18 approved to treat rare diseases,
17 considered breakthrough therapies
1. Di Masi, J. A. et al. (2016) .J. Health Econ. 47: 20-23. 2. Adis R&D insight database. (2016). 3. FDA (2017). CDER: new drug
therapy approvals. Washington, D. C.
9 Medicines Landscape 2017CLINICAL TRIALS AND NEW ZEALAND
Clinical trials contribute to New Zealand’s economy1
Estimated $78 million per annum.
Clinical trials are a cost effective option2 What if I receive the placebo medicine?2
The estimate saved per year As a minimum ethical requirement
on medicine costs alone at all participants receive the
$750,000 Middlemore, Counties Manukau ‘international standard of care’
in 2016. medicines even if it is not available
in New Zealand.
Benefits of clinical trials to New Zealand3
Every dollar spent
Patients receive at least four fold
earlier access DHB staff gain projected as a
to modern additional net economic
medicines. knowledge. benefit to society.
Top clinicians
seek to engage
Phase 4 in clinical
studies can Opportunity research and
lead to cost for DHBs to are likely to stay
savings. derive income. in NZ.
Medicines New Zealand Members contribute to New Zealand4,5
$384 $171 $129
million million million
Our member companies help Our members have undertaken Our members have purchased over
to generate over $384 million of 589 clinical trials over last 4 $129 million of value added materials
GDP every year In New Zealand. years investing $171 million and ingredients over the last four years.
1. Dixion, S. Jarvis, G. (2018) Medicines New Zealand: Economic impact of clinical trials in New Zealand. Manuscript in
preparation. 2. Middlemore Clinical Trials. (2017) Annual report. Auckland, New Zealand. 3. Health Select Committee. (2011).
Inquiry into improving New Zealand’s environment to support innovation through clinical trials. Wellington, New Zealand
4. Nana, G. Fareti, N. (2016) Economic impact assessment of Medicines New Zealand members 2014. New Zealand: BERL
5. Medicines New Zealand confidential R&D survey (2016). Wellington, New Zealand.
10 Medicines Landscape 20172017 Parliamentary Dinner – Professor Ian Frazer
The annual Medicines New Zealand Parliamentary Dinner brings top international
speakers to New Zealand to provide perspective on international standards, treatments,
collaborations and advancements in health.
This year’s speaker was Professor Ian Frazer, the founding CEO and Director of Research
at the Translational Research Institute, Australia. Professor Frazer and his colleague
Jian Zhou discovered and developed the HPV vaccine – which now prevents thousands
of New Zealanders contracting the HPV virus and cervical cancer.
Professor Frazer spoke about the story of the HPV vaccine development
and lessons learned. He provided insights on the importance of
research to change health in order to improve patient health
outcomes. The presentation also informed on the collaboration
needed between public and private institutions for the
advancement of health.
The Dinner was hosted by the 2017 Chair of the Health Select
Committee, Simon O’Connor MP and was attended by MPs,
dignitaries, health specialists, researchers, patient group
representatives and pharmaceutical representatives.
2017 Value of Medicines Award winner – Professor Lisa Stamp
The Value of Medicines Award aims to stimulate and reward contemporary research
that improves the understanding, effectiveness or safety of the use of medicines or
vaccines in New Zealand.
Professor Lisa Stamp, Director of Arthritis Research at University of Otago, Christchurch,
won the 2017 award for her and her colleagues’ influential research into the treatment
of gout with Allopurinol.
Her research was the first randomized controlled trial to demonstrate
an improved dosing strategy for Allopurinol, helping more patients
effectively manage their gout symptoms.
“Previously patients with chronic kidney disease would not be
effectively managed with Allopurinol due to the increased risk
of side effects. This research reveals that with gradual dose
increases of Allopurinol over time, we can help these patients
to better manage this disease without the further risk of side
effects” says Professor Stamp.
The winning research was published in the top international
rheumatology journal, The Annals of Rheumatic Diseases.
info@medicinesnz.co.nz www.medicinesnz.co.nz
+64 4 499 4277
© Copyright Medicines New Zealand 2018
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