Govt says it won't scrap Pharmac for free-trade deal

Photo / Ted Baghurst

The Government has dismissed the possibility it would scrap its drug-funding system as part of the price of a free-trade deal with the United States.

The Researched Medicines Industry Association says its partners in the US are lobbying their Government to push for big changes to New Zealand's state-owned drug-funder, Pharmac.

The association believes the US would apply pressure for Pharmac to be reformed as a condition of its agreement to a free trade deal.

Pharmac's tough management of the country's drugs budget has caused consternation for the RMI and its international pharmaceutical company members - and for doctors and patients' groups which say New Zealand misses out on many new drugs or has to wait too long for them to be funded.

But it has also saved New Zealand taxpayers many millions of dollars since the agency was created by the National Government in 1993.

Health Minister Tony Ryall's office described the RMI's views as "hypothetical and speculative" and the minister would not comment on them.

On the eve of free-trade talks in Melbourne last month - on extending New Zealand's agreement with Singapore, Chile and Brunei, to include the US, Australia, Vietnam and Peru - Trade Minister Tim Groser said he expected the US to raise the issue of Pharmac.

He said Pharmac was an outstandingly successful public institution which had saved the New Zealand taxpayer hundreds of millions of dollars - enough to build the Starship hospital - over five years.

"We'll sit down and listen to what concerns, if any, they have and we'll address them," he said.