Analysis of current strategies of the Pharmaceutical Management Agency in comparison with the health care systems in Germany and the United States of America using the example of herceptin

Abstract

New Zealand, the United States of America and Germany are confronted with problems financing 'their' health care systems. Pharmaceutical drugs play an increasingly important role in health care: in improving the quality of life, extension of life expectancy and also as an important economic and cost factor. Financing of pharmaceutical drugs is thus becoming more important. The aim of this paper is to analyse, scrutinise and compare the various financing and covering models and to quantify the advantages and disadvantages of each model, with particular regard to the Pharmaceutical Management Agency in New Zealand. The cost-benefit analysis the Agency uses is a method of economic evaluation developed by health care economists and tries to indicate whether a health care treatment or drug is worthwhile or not and economists try to find the value of treatments. Researchers and clinicians are turning their attention to targeted therapies which attack special cancer cells while avoiding healthy ones; time, money and energy is optimised. Pharmac's strategy will be scrutinised through systematic research and analysis of studies on this subject and results will be pointed out using the example of one of these drugs: the breast cancer drug 'Herceptin'. Pharmac's cost saving strategy may lead to economic concerns for future generations through delayed and reduced pharmaceutical innovations. It is saving the government money, but these fiscal savings are short-term. Pharmaceutical companies cannot earn money in New Zealand and so they disinvest. This not only affects the selling of drugs but also the value chain as a whole: research and development, manufacturing and marketing and distribution as well. It leads to drug delays and sometimes even to restricted access to new, often better medicines for patients; companies have refused to sell their products in New Zealand and this produces fewer choices between drugs for patients. Disinvestments lead to less capital and technology transfer and less expert knowledge in terms of participation in clinical trials, and no job creation in a well paid area. Lower revenues for companies result in a long-term drop in revenues for the government. But pharmaceutical companies have to make their contribution to ensure access for all parties. Drug price differentials between countries roughly reflect income differences which essentially influence the purchasing power people have. Drug prices in cases like Herceptin are set internationally by pharmaceutical companies, but it cannot be in the firm's best-interest if consumers cannot afford them. If the companies lower their prices, they could increase their revenue and profit, as well as the access for patients to necessary drugs. There is huge potential in a partnership between pharmaceutical companies and the New Zealand Government that could lead to New Zealand strengthening their role in the Pacific area.