No such thing as a free lunch

Pharmac is spending money to wean us off expensive drugs. But JAN CORBETT finds that a free lunch can be rather indigestible.

One lunchtime just over a week ago, half-a-dozen journalists took the lift to a ninth-floor suite in the plush Somerset Grand Metropolis Hotel in central Auckland.

Here they were treated to an Asian-style buffet, speeches and an annual review presentation.

In the private sector this sort of public relations exercise at annual report time is routine, even expected.

What makes this function notable is that it was hosted by Pharmac, the Government agency assigned with the task of squeezing every last cent out of the Government's drug budget.

At times throughout its seven-year history, that squeeze has been so tight patients have had to pay for expensive drugs that are no longer subsidised or be content with inferior ones that are.

So why is this cost-conscious agency that has been accused of trading people's health for budgetary imperatives spending money on public relations?

On one level, it is so we will stop thinking of it as an organisation that puts saving money ahead of saving lives. Its business plan describes how publicising funding decisions that also improve health "leads to numerous small supportive articles in the media that together help change the image of Pharmac as being solely interested in cost-cutting."

That same business plan, says Pharmac, sees the media "as a major route to raise awareness of resource allocation issues." But general manager Wayne McNee rejects the notion that Pharmac is spending the health dollar on selling a controversial political policy. He sees it instead as "paying to try to get the best value we can out of the taxpayer dollar we're spending."

Much of what we call public relations and he calls an information strategy is, he says, designed to make doctors and patients aware of what drugs are available and at what cost to them.

On another level, Pharmac is determined to combat the sometimes subtle and sometimes blatant marketing techniques used by drug companies to persuade doctors and ordinary people like us that we need drugs when probably we do not.

That determination goes as far as complaining to the Broadcasting Standards Authority when the Holmes show ran a story about an acne drug which Pharmac saw as nothing more than a free advertisement - the complaint was rejected - and filling the annual review with scathing descriptions of the way drug companies have tried to pressure the agency, and tables of the enormous profits drug companies make in the US.

Mr McNee says people need to know this because the drug companies claim Pharmac is forcing them out of business in this country.

Set up to manage the supply of drugs, Pharmac soon realised that if it was to control the budget it would have to control that demand for drugs, a demand it sees as largely manufactured by the drug companies, especially since New Zealand joined the United States as the only two countries in the world to allow drug advertising directly to the public.

Pharmac has now even gone as far as asking the select committee considering the new legislation to to give it the role of promoting the responsible use of pharmaceuticals.

This demand-side strategy operates on several fronts, employs two people, and cost a total of $1,076,000 in the last financial year.

Some of that money paid the bills for Cabix, its public relations arm that helps it communicate with doctors, pharmacists and patients. Occasionally it also uses a firm called Viewpoint to help it communicate with its political masters.

After all, says Mr McNee, MPs who are often lobbied by angry constituents denied free access to the drugs they want need to understand what the funding constraints and policies are. The bill from both public relations companies last year was $221,000.

Compare that with what Mr McNee estimates could be as much as $350 million spent by the drug companies on marketing here, including the $15 million they spent on television advertising last year and it looks as if Pharmac is using bows and arrows against the commercial equivalent of a nuclear power.

The demand-side budget also finances the Preferred Medicines Centre, which advises doctors on good prescribing habits, and an anti-drug company magazine, Healthy Scepticism, that goes to GPs and is run by an international organisation called MaLam - the Medical Lobby for Appropriate Marketing.

Pharmac paid for its Australian editor to tour here last year, teaching doctors how to read between the lines of drug company advertising.

But the idea that Pharmac has to spend more than $1 million to untangle doctors from the grip of drug companies rankles with many doctors.

Medical Association chairwoman Dr Pippa MacKay says not only do many doctors refuse to see the sales representatives, but doctors are not gullible and there is no evidence they succumb to undue influence.



Mr McNee says studies by the US advertising industry show 80 per cent of people who went to the doctor asking for a certain drug got it, even when in 30 per cent of cases the doctor did not think it was the best treatment.

Dr MacKay agrees that advertising directly to the consumer drives up the drug bill, but often because it is the first time people suffering from a particular condition find out there is a treatment for it, so they see their doctor.

Unlike in the US, she says, most local GPs are in budget-holding practices where there is a financial incentive to prescribe appropriately. But "Pharmac has got to accept that appropriate, effective use of pharmaceuticals sometimes means more."

She gives the example of cholesterol-lowering drugs, too few of which were being prescribed in this country.

Pharmac's medical director, Dr Peter Moodie, says Pharmac does recognise that more is sometimes better, and that it gave the presentations about the best use of cholesterol drugs.

Pharmac is also paying to remind doctors that exercise is good for their patients. It is putting $425,000 annually towards financing the Hillary Commission's Green Prescription campaign, whereby patients leave the doctor's surgery with a note telling them to walk around the block twice a day after meals rather than a prescription for drugs.

Why does Pharmac need to fund a campaign telling doctors something they should already know?

"It helps to be reminded," says Mr McNee, "and if they've got a piece of paper they can give the patient it helps to fulfil the expectation that they will go out of the surgery with something written down."

But wouldn't a patient whose preferred drug is not subsidised because there isn't enough money in the kitty be angry that Pharmac is spending $425,000 a year telling GPs about the importance of exercise?

"If you can get behaviour change in people the benefits are large," says Mr McNee.

But if indeed doctors have been busily over-prescribing all these years, isn't there something wrong with their training?

Before Pharmac put the screws on them, drug companies assumed much of the responsibility for educating doctors about drugs, although where the line was drawn between education and marketing was anyone's guess.

Pharmac is considering stepping into that education role, particularly once nurses are granted the power to prescribe.

But if it did it would meet considerable resistance from the medical profession, which, says Dr MacKay, sees Pharmac as driven by fiscal considerations with quality patient care much further down the line.

If lunch at the Metropolis is any guide, Pharmac may be in danger of adopting too many of the mind-altering techniques it accuses the drug companies of employing.

"We do try to get a good deal when we hire a room," says Mr McNee, and this one cost a mere $137.

He doubts sending the annual review through the mail would have the same effect, because not all reporters would bother reading it.

"The journalists came along and got lunch and wrote some stories," he observes.

And as a pun on drug company marketing tactics they were also issued with ballpoint pens reminding them there are no free lunches. It might have added, no matter who is paying.