17 Mar 2021

The Pharmac compromise

From The Detail, 5:00 am on 17 March 2021

One thing everybody involved with the inquest into the deaths of six epilepsy patients can agree on is that Pharmac, the national drug-buying agency, has a tough job.

With a capped budget of around a billion dollars a year and the seeming reluctance of successive governments to meaningfully increase its resourcing, the agency is constantly faced with decisions: which new drugs to buy; which drugs don't have a compelling cost-benefit case; which existing drugs to switch to generic equivalents.

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Photo: RNZ / Claire Eastham-Farrelly

These are literal life-and-death decisions. And in 2019, when the agency decided to plough ahead with a change to epilepsy medication which meant more than 10,000 people had to swap their existing medication for a generic equivalent, it knew there could be consequences.

It hoped those consequences would be limited to a healthier bank balance: the move was forecast to save Pharmac a total of $30 million over five years.

As it turns out, more than a year later, six people who were forced to swap medications have died since that decision was made.

An inquest into whether the drug swap contributed to those deaths has just finished.

And RNZ investigative reporter Guyon Espiner, who followed the story every step of the way, has come to a conclusion.

"I think they got this wrong”, he says.

“They looked at the balance of it, they looked at the saving. But given the weight of the advice [against making the switch] ... I think they got that wrong."

Today on The Detail, Emile Donovan speaks to Espiner to shed some light on a complicated, multi-faceted story which highlights the unique pressures organisations like Pharmac face; the remarkable power it wields; and the resourcing challenges and balances it must strike.

This story concerns a drug called lamotrigine, which is used by people with epilepsy to control seizures.

Lamotrigine is available under several different brand names, like Lamictal, Arrow, and Logem.

Up until late 2019, the most popular brand was Lamictal; but, after striking a deal with a different manufacturer, Pharmac announced in August 2019 that all people who needed to take lamotrigine would have to switch to Logem - a generic equivalent.

While Logem works in the same way as Lamictal - and these swaps are common with many types of medication - the move was opposed by the medical regulatory body, Medsafe.

Essentially this is because epilepsy medication is finely balanced. Even a small change can have a profound impact. Official advice in countries like the UK and the USA is that effective anti-epileptic medication should not be messed with.

Despite Medsafe's objections, Pharmac went ahead.

"They were really determined - I'm not going to say reckless, some would argue that, [but] I don't think they were reckless - but pretty determined to push it through.

"And this is high-stakes stuff. The medical watchdog, the regulator, is saying 'don't do this, this is against international best practice'. [Medsafe] sat in the inquest and said the same thing - we didn't think Pharmac should do it.

"Pharmac went ahead anyway."

Some of Espiner's critics accuse him of harbouring a grudge against Pharmac; of having little sympathy for the myriad issues it faces.

He acknowledges Pharmac has a difficult job and performs extremely well in many elements of that.

But he says inert funding means the organisation is constantly forced to make high-stakes calls which can have a devastating impact.

"Is the government starving them of money and forcing them to be too aggressive in their brand switches?

"These are good-hearted people, driven by science, making these decisions in the public interest.

"It's driven by the idea - 'I'm not going to give you any more money. You're going to have savings within your own organisation. Go out and do it.’

"If you put that pressure on people, and there's $30 million over here, that is going to drive you.

"My question - the question lying behind my reporting on this ... is I wonder whether we've put so much pressure on Pharmac that they've had to be too aggressive in their cost-saving mentality."