Former pharmaceutical company executive turned Act MP Todd Stephenson has been appointed to a special role representing Pharmac’s new government minister, his party leader and Associate Minister of Health David Seymour. Stephenson’s experience with drug companies is seen as a boon by some - but others are concerned about his
Investigation: David Seymour’s special medicines envoy has investments in Big Pharma
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Stephenson came from a 17-year career in the pharmaceutical industry in Australia and has maintained close links, appearing on stage in Sydney at the annual BioPharmaDispatch conference and recently being interviewed for a podcast produced by $400 billion pharma giant AstraZeneca.
Stephenson was appointed on February 5 as Parliamentary Private Secretary to Seymour, who is associate Minister of Health with responsibility for Pharmac.
The appointment and the Government’s change in direction has delighted patient advocacy groups usually at odds with Pharmac. A number of groups spoken to by the Herald said they felt an unusual optimism and felt they were being listened to.
But it has also raised questions about Stephenson’s closeness to the pharmaceutical industry - particularly with the fresh publication of the Register of Pecuniary Interests which revealed investments in three health-related companies.
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The register showed Stephenson had investments in a range of areas with three of those in medical biotech or pharmaceutical companies.
Those were Johnson & Johnson, the $590 billion pharmaceutical giant, Chimeric Therapeutics, which is developing cell therapy to fight cancer, and CSL Ltd, an Australian multinational biotech company specialising in blood plasma products, vaccines and other products designed to treat serious medical conditions.
It’s a connection largely dismissed by Seymour’s office - but only because Stephenson is a Parliamentary Private Secretary and not a minister.
No conflict, says Seymour
In a statement from Seymour’s office, an Act Party spokesman said: “Todd is fully compliant with the Cabinet Manual and we are comfortable that there is no conflict of interest.”
It also sent a section of the Cabinet Manual that made it clear Stephenson is not bound by the Cabinet Manual.
“If Todd was part of the executive he would review the situation and make appropriate arrangements.”
The statement quoted the Cabinet Manual saying Parliamentary Private Secretaries supported ministers “by building relationships with relevant communities, representing the Minister at public events, delivering speeches on occasions when the Minister is not available, and assisting with administrative matters”.
It said: “They are not part of the Executive. They have no executive responsibilities and no policy, financial, statutory, or operational authority. They are not bound by the principle of collective responsibility.”
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Stephenson’s office did not respond to requests for an interview but said the MP attended the BioPharmaDispatch conference at the pharmaceutical publisher’s invitation. “BPD covered his costs on that basis.”
The spokesman said the value of the funded trip would not be disclosed and neither would the value of Stephenson’s investments in biotech and pharma companies.
“His pecuniary interests are declared and published annually as per Parliament’s Standing Orders. MPs do not have to quantify the value of their personal investments.”
The spokesman said Stephenson did not “formally” tell Seymour he was taking a funded trip to Sydney “but believes he likely mentioned it in the days leading up to the conference”.
Stephenson has become controversial in some parts of the health sector because of his history of work with pharmaceutical companies. Conversely, some see the depth of knowledge and fresh view he brings as holding the potential for positive change.
‘Fellow with different perspectives’
Stephenson has been critical of Pharmac and his presence in Parliament sent it into a flurry, according to documents released through the Official Information Act.
Pharmac’s pharmaceuticals lead Geraldine MacGibbon emailed two other members of the senior executive a link to an article called “Can Stephenson fix Pharmac”, published in Pharma in Focus, which calls itself “Australia’s most trusted source of Pharma news”.
MacGibbon’s email with the link said “prob not so much the article that’s interesting but the fact that it appears in this newsletter and the links to pharmaceutical company that are highlighted”. It was one of a number of articles about Stephenson in Australian medical and pharmaceutical publishing news executives sent to each other.
In January, ahead of a meeting with Seymour, Pharmac chief executive Sarah Fitt told acting board chair Dr Peter Bramley that Stephenson would be accompanying the new minister.
When Bramley asked who Stephenson was, Fitt said: “He is a new Act MP and their spokesman for Health. Recently returned from a long spell in Australia working for Vertex, Janssen, Roche and Medicines Australia.” He replied: “Hmmm, so Seymour is just Pharmac. This fellow sounds like he might come with different perspectives.”
She wrote: “Worth watching his interview with Jack Tame [on TVNZ’s Q&A] if you have 10 minutes to spare.”
In the interview, Stephenson defended the amount of money pharmaceutical companies charged for drugs. “These large companies invest billions and billions of dollars in bringing these treatments to people and governments around the world make a value assessment about whether they’re going to be funded.
He said Kiwis were frustrated Pharmac was not a “transparent organisation”.
“It doesn’t involve its stakeholders early enough in the decision-making process, people don’t understand how it reaches some of its decisions. I think it could do a lot better just engaging its stakeholders in the first instance.”
Documents from Seymour’s office show Stephenson was briefed and kept abreast of the hunt for a new board chair, including prior to his elevation to Parliamentary Private Secretary. Former National Party deputy prime minister Paula Bennett was appointed to the board chair’s role last month. The Herald understands Stephenson was also involved in producing the letter of expectations for Bennett.
Stephenson’s podcast for Big Pharma
Stephenson has maintained his links with the pharmaceutical industry, most recently appearing on a podcast for the $400 billion pharmaceutical giant AstraZeneca where he was interviewed by the company’s corporate affairs manager for Australia and New Zealand, Penny George,
In it, Stephenson spoke of Pharmac not having moved to change with developments in medicine and science in 33 years.
“We have obviously now lots of exciting and great treatments but there hasn’t been a lot of thought into how the system needs to change to deal with that.
“Community expectations have changed as well. I often say a modern corporate like AstraZeneca, for example, it’s much more open with its stakeholders - you’re inviting in people, you’re actually trying to understand their points of view and work with them. So, you know, Pharmac needs to do a bit more of that as well and actually work with people, partner and be a bit less isolated.”
He did not respond to requests from the Herald for an interview.
Labour’s health spokeswoman Dr Ayesha Verrall said she would not hold shares in biotech and pharma companies if she held the same role as Stephenson.
“In this situation, it appears Todd Stephenson is working very closely with David Seymour as minister. If Todd Stephenson has had a hand in drafting the letter of expectations for the [new board chair] … there are questions to be answered while he holds these shares.”
Pharmac has long been styled as New Zealand’s gatekeeper against multinational pharmaceutical companies, striving to get value for money while buying drugs intended to serve the greater good.
While Pharmac independence - and isolation - from government interference has been championed as necessary to produce the most economical and effective medical outcomes, it has been criticised for not focusing on rare conditions, not being responsive to patients’ needs and being distant from those needing help.
Patient groups praise new approach
Stephenson’s moves among the patient advocacy community have cut through much of the anger and frustration among patient advocates, who told the Herald they felt heard and seen for the first time in years - although all urged more funding for Pharmac.
His intent was signalled when, after meeting Pharmac in January, he sent chief executive Fitt a link to an Australian government document about better processes for getting “consumer and patient perspectives … when determining whether access to a new medicine should be subsidised”.
The New Zealand Medicines Access Summit held in April at Parliament was also considered a win for the advocacy sector with those who attended saying it was the first time they were able to gather with officials, clinicians, drug companies and others in the sector.
Patient Voice Aotearoa chairman Malcolm Mulholland said his meetings with Stephenson revealed someone with “a lot of energy, a lot of experience and knowledge”.
“My view of Todd is that he comes with a wealth of experience not only from a pharmaceutical perspective but from a health technology perspective.”
Mulholland said he was buoyed by Stephenson’s talk of Pharmac shifting its equation when deciding to fund drugs to consider the wider benefit across society, rather than just savings to the health sector. He was also encouraged by Stephenson wanting a greater voice for patients, fast-tracking offshore developments for New Zealand use and developing a national medicines strategy.
Rare Disorders NZ chief executive Chris Higgins was similarly optimistic, citing the hoped-for shift in Pharmac’s assessment process for drug buying.
“What we and others have long argued is it makes more sense for these investment decisions to look at the longer term benefits to society,” he said.
“The discussions we are having at the moment are refreshing compared with the discussions we have had with previous governments.”
‘Tripping over his own feet’
Lisa Burns from Cystic Fibrosis NZ said the medicines summit “was the first time all the stakeholders were in the same room”. “That’s where the optimism is coming from.”
She said Stephenson was accessible. “It’s amazing to know we are being heard.” On his health investments, Burns was untroubled. “It gives him a solid place of understanding.”
Not so sanguine was broadcaster and medicines advocate Rachel Smalley, who said Stephenson’s investments created a “perception” problem.
“Todd may be highly experienced and respected in the industry, but he’s the political equivalent of a newborn foal. He can bring a lot to the table when it comes to reforming Pharmac, but at the moment he’s wobbling around and tripping over his own feet. He can’t hold this role and be invested in pharma at the same time.”
Smalley said there was a lot of optimism among patient groups “because they believe there is now someone in government who understands their world”.
Those whose hopes were buoyed were often those facing serious, sometimes terminal, health conditions and “you want to believe that this is the change you’ve been waiting for”.
“But ultimately, Pharmac needs money as well as reform. If the funding doesn’t come, the medicines won’t either and that’s the biggest challenge for this Government.”
David Fisher is based in Northland and has worked as a journalist for more than 30 years, winning multiple journalism awards including being twice named Reporter of the Year and being selected as one of a small number of Wolfson Press Fellows to Wolfson College, Cambridge. He joined the Herald in 2004.
