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The eye-watering costs of non-PHARMAC drugs

21 Feb 2022

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Imagine being in need of a life-saving or life-extending drug that could set you back hundreds of thousands of dollars a year because it wasn’t government funded. The reality is that many Kiwis face challenges like this every year.

It’s not only people with rare diseases, many Kiwis with more common diseases such as lung cancer and diabetes can miss out on effective treatment options, because the drugs aren’t subsidised – and paying for them out-of-pocket is often simply unrealistic.

A series of tragic case studies have cropped up in the media in recent years, highlighting the difficulty many New Zealanders face when trying to access affordable treatment for life-threatening illnesses.

How drug funding decisions are made in New Zealand

PHARMAC, the government agency responsible for deciding which medicines are publicly subsidised after they have been approved by drugs regulator Medsafe, has a $1 billion annual budget and funds nearly 1,000 different medicines.

The agency undertakes a difficult balancing act to ensure the drugs it funds benefit the greatest number of people for the least amount of money. But it can’t fund everything.

In fact, a study commissioned by Medicines New Zealand published in November 2021, found that Kiwis have the least access to publicly funded modern medicines out of 20 OECD countries.

PHARMAC hasn’t funded modern arthritis or diabetes medicines in the last decade, while it also funded fewer modern cardiovascular disease and hepatitis C drugs than all other OECD20 countries .

In an attempt to improve drug access for Kiwis, advocacy group Patient Voice Aotearoa, has been urging the Government to make changes to our drug funding model. In May 2021, it delivered a petition to parliament signed by 100,000 people to double PHARMAC’s funding and to reform the organisation – a number which lead campaigner, Malcolm Mulholland, says represents one in every 15 New Zealanders.

While public outcry has likely played a part in the recent independent review of the PHARMAC system, funding decisions were not part of the inquiry.

Unfunded treatment options are often out of reach

In 2020 a petition was launched with 30,000 signatures calling on PHARMAC to fund a drug called Ustekinumab, for the treatment of bowel disease. The drug is funded in more than 35 countries, but not in New Zealand.

Inflammatory bowel disease affects about 15,000 New Zealanders and those who are significantly affected by the condition and can’t access treatment must undergo surgery. What’s more, they face living with a colostomy bag for the rest of their lives.

Here are some examples of treatment options and their potential out-of-pocket expenses without PHARMAC funding:

Ustekinumab - Newsroom reports that it would cost patients suffering from bowel disease $35,000 a year for the first year and $27,000 a year after that.

Keytruda - currently only funded for the treatment of melanoma, but can help in the treatment of other types of cancer. Non-melanoma patients would have to fork out more than $60,000 a year, and with administration costs that could bump the total cost up to $100,000.

Tafinlar – one of the most advanced treatment options for melanoma, Tafinlar can cost up to $132,000 a year.

So what are my options?

Without health insurance, these daunting amounts often force people to move overseas for treatment, seek donations or forgo treatment all together.

To help bridge this gap, our non-PHARMAC Plus add-on option provides access to many Medsafe-approved drugs not funded by PHARMAC. It also covers the related administration costs, making treatment of cancer and other serious conditions with non-PHARMAC drugs more accessible, in a private hospital and at home*.

About non-PHARMAC Plus

Non-PHARMAC Plus can be added to nib’s eligible Hospital plans, and includes flexible benefit limits ranging from $50,000 to $300,000 per member per year. Together with our comprehensive health insurance benefits, we’re here to provide peace of mind for you and your family.

If you’d like to find out more about non-PHARMAC Plus, go to nib.co.nz/compare-plans

New members can buy non-PHARMAC Plus with a Hospital plan by heading to https://join.nib.co.nz/quick-quote

If you’re already an nib member with a Hospital plan, it’s easy to add an option to your existing policy — simply send us your details using our online form.

*The drugs must be prescribed by a registered specialist under the Medsafe guidelines, used in a recognised NZ based private hospital, day stay unit or a private wing of a public hospital or used at home for up to six months after you are admitted for treatment for an approved related treatment. Policy terms and conditions (including exclusions) apply.