Address to NZ Healthcare Summit 2011

Good morning and thank you for inviting me to speak at this Healthcare Summit. 

This is now the third year that I have spoken at this event, and I am pleased to see that it has become a regular fixture on the health sector calendar because it is an important event each year.

I am also delighted to see so many people involved in providing and managing health care resources having come together here today to discuss some of the key issues in determining the future direction of health care in New Zealand.

An update on Medicines New Zealand

I have been asked to speak about the Government’s policy for improving the cost of medicines, access to medicines and optimising use.

At the risk of stating the obvious, medicines make a significant contribution to the health outcomes of many New Zealanders. 

For too long, in my view, we have seen medicines as at the distant end of the healthcare spectrum, rather than a critical part of the continuum of treatment and care.

It is no longer the case of if all else fails, medicate.

Medicines are increasingly an active treatment option, rather than essentially palliative or curative.

It was against this background that I pushed for the development of a national medicines strategy, Medicines New Zealand, while in the previous government, and why I am delighted it has been embraced and given fresh life under the current administration.

I also observe that the strategy has had an endorsement of sorts since the last summit, with the former Researched Medicines Industry Association adopting the name Medicines New Zealand.

Put simply, Medicines New Zealand – the New Zealand medicines strategy – arose from the need for a more coherent approach to the use of medicines within our healthcare system

Over the years, Pharmac has been extremely effective in managing the cost of pharmaceutical supply in New Zealand, but it was becoming apparent that as new and more innovative (and dare I say) more expensive products came onto the market, the Pharmac model was going to face new challenges.

I was keen to see the development of a more forward looking, strategic approach to medicines policy, which built on Pharmac’s successes, and positioned us well for the future.

Medicines New Zealand has become a vital cog in making sure New Zealanders get the most possible benefit from their medicines system, and is now recognised as the cornerstone of national medicines policy, through the following principles:

• New Zealanders can access medicines that are safe, of high quality and effective
• that New Zealanders have access to the medicines they need, regardless of ability to pay, through the government funding provided
• that medicines are used in the best way possible to result in optimal health outcomes.

Benefits of Medicines New Zealand

We have seen good progress in the medicines system since Medicines New Zealand was introduced, in December 2007. 

A new Medicines New Zealand Action Plan was launched in April last year, and many of the actions in this plan have been completely or substantially achieved.

I would like to take a bit of time to focus on recent developments and future priority areas.

The Government recognises the importance of investing in medicines. 

In the 2011 Budget, the community medicines budget was increased by $20 million, bringing the total new investment in medicines over the past three years to $180 million.
 
In the 2010/11 year, 35 new medicines have been funded. 

Decisions taken during 2010/11 are estimated to have benefited around 204,000 patients, and resulted in savings across the health sector of $1.8 million.

In the current economic environment, it is more important than ever that we get value for money from this investment.

For this reason, Pharmac’s role has been extended into prioritising and procuring hospital medicines, and the. 

Government has also signalled an interest in Pharmac becoming more involved in medical devices, but this is a longer term project.

I said earlier that  the challenge of providing access to high cost, highly specialised medicines is arguably now greater than ever before, which is why the Government directed Pharmac to do a thorough review of the Exceptional Circumstances Scheme. 

As a result, and after considerable public input, a new more permissive and streamlined system, the Named Patient Pharmaceutical Assessment has been developed and will come into effect from March next year. 

Pharmac has also sought further information from pharmaceutical companies and other stakeholders about the effectiveness of a range of enzyme replacement therapies.

While we have a limited budget for medicines, and difficult choices will need to be made, New Zealanders need to feel secure that our medicines system is fair.

Key to achieving this is for Pharmac’s processes to be as open and transparent as they can be, taking account of course that there are commercial sensitivities inherent the organisation’s role. 

There has been important progress in this area.

Pharmac’s stakeholder forums, being held at a regional level of the next couple of months, and with a further national forum to be held in February, provide
an excellent opportunity for stakeholders to comment directly to Pharmac on its operations, and are a far cry fro the pre-Medicines New Zealand days where Pharmac was perceived as effectively a law unto itself.

Current challenges in medicines dispensing

Obviously pharmacy and pharmacists are a vitally important link in the medicines chain. 

They have a major role in ensuring that the public get the right medicines. 

They play a particularly important role in facilitating medicine brand switches, when Pharmac changes the brand of a medicine that is subsidised. 

A brand switch fee was introduced to recognise the extra work required by pharmacists to counsel patients about brand switches, and the work that pharmacists do in such cases has a substantial role in ensuring public confidence in those changes.

Pharmacists are highly qualified health professionals, and we should be making greater use of their skills and knowledge. 

Pharmacies and district health boards contract for the delivery of pharmacy services through the Community Pharmacy Services Agreement. 

The current agreement essentially funds pharmacy on the basis of what they dispense, which creates an incentive to dispense more.

Pharmacists and DHBs are negotiating a new agreement, which aims to shift some existing expenditure from dispensing to funding more sophisticated pharmacy services, such as ensuring that people with multiple medications are using their medicines as intended. 

This is expected to benefit people with Long Term Conditions and in Age Related Residential Care.

Better communication between pharmacists and GPs

If we are to get greater value out of pharmacy and pharmacists, it is important that there is better integration between pharmacy and general practice.

I note with interest that the Pharmaceutical Society and General Practice New Zealand have entered into a strategic alliance.

This is one of the positive outcomes of the joint pharmacy and general practice workshop I convened in 2009. 

This alliance has two purposes – to demonstrate leadership in facilitating strong relationships between general practice and community pharmacy, and to partner in the development of integrated, effective, sustainable and well evaluated primary health care service models which enhance the patient experience of care.

We are seeing some examples emerging of greater partnership between pharmacy and general practice.

In December last year, 15 selected community pharmacies began working with general practices in a country-wide pilot to provide an Anti-coagulation Management Service (AMS). 

The project allows community pharmacists to play a greater role in managing patients on long-term warfarin therapy. 

In collaboration with GPs, they have the authority to monitor patients and modify warfarin dosing for stable patients.

Initial evaluation results suggest that this pilot has been successful.

Medical Officers of Health have received applications from 36 pharmacists in Auckland, Waikato and Bay of Plenty to give influenza vaccine in pharmacies over the next four months. 

These pharmacists have completed the same immunisation training that practice nurses and other vaccinators undertake, and are assessed on their clinical expertise and experience.

We are also seeing some examples emerging of pharmacists being better integrated into the primary care team. 

At Northcare in the Midlands Health Network, the pharmacist schedules appointments with patients, manages and monitors their medications and provides specialist input into their care plans.

Further areas for improvement and innovation

There are further things that we need to do to facilitate greater integration between all the agents in primary care, and between primary and secondary care. 

Two key enablers are information technology and the legislative environment.

Of vital importance to the safe and effective use of medicines is the development of a New Zealand Medicines Formulary, a reliable source of clinical information on all available medicines. 

Already, we have launched the Universal List of Medicines, which will help to standardise medicines usage by providing a single medicines terminology. 

I recently announced that we have contracted with a partnership comprising the Best Practice Advocacy Centre NZ (BPAC), the Best Practice Advocacy Centre Inc and the Royal Pharmaceutical Society of Great Britain to deliver the formulary, and we expect to roll this out to the sector within 12 months. This has taken some time to bring to fruition – I obtained the original funding in the 2008 Budget, during the term of the previous government – and am delighted it has now come to fruition.

More generally, the National Health IT Board is working to align IT systems across the continuum of healthcare so that providers can have appropriate access to patient information.

I understand that the Chair of the IT Board is speaking later at this summit.

Another significant development is the NZ ePrescription Service, which enables a GP to send a script electronically to a pharmacy and for a pharmacy to notify the GP when a patient picks up their medication. 

The service is undergoing final testing before being extended to trial sites in Auckland, Lakes District, Taranaki, Palmerston North and Whanganui.

A trial will be run over 18 months, and if successful, should serve as a precursor to a national roll-out likely in 2012/2013.

The legislative framework contained in the Medicines Act is now 30 years old, and is no longer providing adequate safeguards to consumers, or facilitating innovative clinical practice. 

We have already made changes to the regulations that sit under the Act to facilitate innovative clinical practice, and we are looking at changes to the Act itself to facilitate, where appropriate, a broadening of roles for pharmacists and other health professionals.

Prime Minister John Key has also recently announced that Australia and New Zealand will be working towards developing a single regulatory framework and regulator for therapeutic products within the next five years. 

This will provide us with an opportunity to overhaul the Medicines Act in a way that will allow and help innovation. 

It will also allow us to achieve a critical regulatory mass with Australia, so consumers in both countries can have greater assurance of the safety of therapeutic products and quicker access to them.

Conclusion

In conclusion, there is currently a lot of work going on around making better use of medicines and pharmacy, and achieving better integration in healthcare. 

We all have a role to play in this work as it continues to progress, which is why summits like this one are so important.

As part of our healthcare industry you have a role to play in cross-sector collaboration, ensuring structures and systems work well and maintaining a system capable of meeting future demands.

Therefore, against that backdrop, let me assure you of the high value I personally – and the Government – place on your skills and your contribution to the well-being of New Zealanders.

I wish you the best for this Healthcare Summit.