David Seymour on how Pharmac culture ‘needs to change’, CEO Sarah Fitt and future of Board chair Steve Maharey

David Seymour, who has assumed responsibility for the public drug-buying agency Pharmac, says the culture there “needs to change” in light of recent comments from its CEO, who he is “reserving judgement” on.

Seymour was speaking in response to questions around CEO Sarah Fitt and if she should continue in her role given her recent conduct, which included emails about journalist Rachel Smalley and her campaigning efforts to reform the drug-funding entity that were heavily criticised by former Health Minister Ayesha Verrall, her own board chair and the Public Service Commissioner.

Seymour also declined to comment on the future of Board chair Steve Maharey, a former Labour Government cabinet minister who was first appointed in 2018. Maharey has not responded to requests from the Herald for comment.

In the coalition deal with National, Seymour managed to secure responsibility for Pharmac through his Associate Health Minister portfolio, which would normally rest with the Health Minister.

Seymour will have powers to appoint and nominate Pharmac Board members at his discretion. It is the Board that appoints the chief executive.

The internal emails in question were written by Pharmac staff and released to Smalley as part of an Official Information Act request.

Prime Minister Christopher Luxon and Act leader and Associate Health Minister (Pharmac) David Seymour with Governor-General Dame Cindy Kiro after the swearing-in ceremony at Government House, Wellington. Photo / Mark Mitchell

Smalley, a former Newstalk ZB and Today FM radio host, had been an outspoken critic of Pharmac and the way it decides which drugs to fund.

In released emails, Fitt said Smalley has “not much of a following”; a senior staff member described a “nauseating” interview, and a staff member said she was “gunna be out of a job” with the closure of Today FM.

Another Pharmac staff member said Smalley would be “mega shitty” about not getting an interview with their CEO while another worker wrote a limerick about Smalley.

This month Fitt apologised publicly and to Pharmac’s board. Maharey said the board had accepted the apology and endorsed an “action plan” proposed by Fitt and other leaders to improve the organisation’s culture, including by hiring “an external party to assist the senior leadership team and the board”.

Fitt was appointed in January 2018. She was previously the agency’s director of operations, and chief pharmacist at Auckland Hospital.

Seymour told the Herald he was “not going to pass judgement” and order a review in his first day on the job, but was “wary” about Fitt’s conduct.

Asked if she was safe in her job, along with the politically-appointed Board chair Maharey, Seymour said he was “not going to pre-judge.

“Certainly what’s clear is that the culture that allows those emails, that does need to change.”

Reform at Pharmac has long been a focus of Act during its time in opposition, with major questions around transparency in its decision-making processes over drug funding choices.

In his new role, Seymour will have powers to give directions to the Pharmac Board, and review and set strategic direction of the agency.

Act’s agreement with National states the new coalition Government will: “Update Pharmac’s decision-making model to ensure it appropriately takes patient voice into account and reform the funding model to account for positive fiscal impacts on the Crown of funding more medicines.”

It will also require the Ministry of Health to publish a Medicines Strategy every three years and Medsafe to approve new pharmaceuticals within 30 days of them being approved by at least two overseas regulatory agencies recognised by New Zealand.

Act leader David Seymour (right) and New Zealand First leader Winston Peters shake hands after they signed their new Government deal, with Prime Minister Christopher Luxon looking on. Photo / Mark Mitchell

National’s agreement with NZ First includes near-identical policies, along with a guarantee to increase funding each year.

National’s plan is also to allocate $280 million in ring-fenced funding to Pharmac over four years to fund 13 treatments for lung, bowel, kidney, and head and neck cancers.

Seymour said he agreed Pharmac funding would increase as determined by the “new lens”, but could not put a number on it yet. Labour had pledged a $1 billion increase over four years, after having increased funding 62 per cent since 2017.

Seymour said he would have three main areas of focus.

“One is that it appears from some recent scandals that Pharmac has built a kind of siege mentality very desperate people feel locked out and even attacked. That cultural change needs to occur.”

Seymour said the agency also needed to listen more to patient voices and look more at what value treatment might provide more broadly - such as productivity, which was a finding from a recent Pharmac review. The review also found major inequities for Māori and Pasifika accessing drugs.

Seymour gave the example of a woman he knew who had multiple sclerosis but was declined medication and eventually reached a point where she was unable to work and ended up receiving a disability benefit.

“Where is the value in that?” said Seymour.

“We want to reconsider what some people call a productivity approach. Sometimes you can almost get something for nothing, because the treatments will increase people’s productivity.”

Seymour said he was “absolutely committed” to the underlying concept of Pharmac and keeping funding decisions at an “arm’s length.

“The last thing we want is a world where the people who run the most heart-wrenching political campaigns get funded, while other people we don’t know about.

“But I think we’ve gone from being world-leading to quite a way behind the rest of the world. And that’s what we need to change.”

Pharmac declined requests for an interview and in a short statement said the action plan was under way and it would look to engage with Seymour in “due course”.