Pharmac decision-making framework good regulatory practice
Pharmac is consulting on its proposed framework for making
decisions on drug funding, and for its new roles in funding
hospital medicines and medical devices. The decision-making
framework is of interest to the medical and pharmaceutical sector.
More generally, Pharmac's approach represents good
decision-making practice and provides an excellent model for other
The decision-making framework builds on the current policies and
procedures. The most significant changes are to restate the
existing decision-making criteria as factors for consideration and
specify those factors within Pharmac's overall legal
The proposed decision-making framework is open for consultation
until Monday 21 April 2014.
Recognising the overall context
At present, Pharmac sets out decision criteria as part of its
operating policies and procedures. It proposes to recast them in
the new decision-making framework as factors for consideration.
Although there is no indication that the criteria were improperly
applied in the past, the change better recognises their role within
the legal framework that Pharamc acts under.
Pharmac is required to give effect to the overall statutory
objective of securing, for eligible people in need of
pharmaceuticals, the best health outcomes that are reasonably
achievable from pharmaceutical treatment, and from within the
amount of funding provided.
A wide range of factors could potentially be relevant under this
objective. The factors for consideration proposed in the
consultation document provide an indication in advance of the
factors that Pharmac considers are likely relevant.
Specifying the factors in advance is a very sensible and
practical step for decision-makers to take. It assists parties in
preparing applications for approvals, provides some predictability
for interested parties, and should speed up decision-making.
The danger in specifying relevant factors in advance is that
they will be applied too rigidly, with the result that the
decision-maker fails to take into account the special circumstances
of a particular case. This can result in decisions breaching
administrative law principles and subjected to judicial review.
The change in terminology from "criteria" to
"factors for consideration" recognises this issue and,
particularly, that the term "criteria" could have caused
confusion. Pharmac also states that the extent to which any one
particular factor is relevant, if at all, and the weight to be
given to each factor is for Pharmac to determine on each occasion.
If Pharmac applies the factors in this way, it will be safe from
A change that Pharmac could consider is to more clearly explain
how the factors for consideration advance the overall statutory
purpose and other legal requirements that apply to Pharmac. At
present, it is not clear how some of the factors relate to the
statutory objective or other requirements. While a small and simple
step, it would further assist in achieving regulatory best
Pharmac is, over time, taking over responsibility from DHBs for
the purchase of medical devices. The first agreements have already
been signed, and more devices will be added to the scheme over time
through further negotiations with suppliers.
In earlier stages of the consultation, questions were raised as
to whether separate criteria should be specified for medical
device. Pharmac recognises that there are substantial differences
between devices and medicines, but provisionally considers that
these can be dealt with in the decision-making framework and the
way the factors for consideration are worded.
Changes in the criteria
The proposed factors for consideration include a reasonably
small number of changes from the existing criteria. These
Recognising that disparities in health outcomes affects groups
in society in addition to Maori and Pacific peoples
Removing the statement that Pharmac can consider matters other
than those listed. This statement is unnecessary, as Pharmac is
able to do so under ordinary administrative law rules and, indeed,
must do so in some circumstances
Clarifying unclear wording in various places
Inserting references to medical devices
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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