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The Government’s announcement of a review into Pharmac declares that its budget, and the total amount allocated to pharmaceuticals, will be out of scope.

This ignores the most serious weakness with current arrangements: that no one really knows whether they are improving health outcomes, let alone the well-being of New Zealanders, according to a substantial report, Pharmac: The right prescription? published by The New Zealand Initiative last year.

Report author Dr Bryce Wilkinson said, “Pharmac is not to blame for the lack of clarity about what the subsidies are meant to achieve. Only the government can fix that.”

“Pharmac has excelled at the narrow role of negotiating low prices for pharmaceuticals for New Zealanders based on therapeutic efficacy. The pressures on it to become more political are at odds with that focus.

“There are relentless pressures on Pharmac to spend beyond the government’s budget limit. Subsidies for those not in financial need are costly. They invite over-prescribing and waste. The government review simply turns a blind eye to these problems,” concluded Dr Wilkinson.

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