Pharmac chief executive Sarah Fitt (left) speaks as chairwoman Paula Bennett looks on, after the agency is criticised for a recent supplier switch. Photo / Mark Mitchell
Neither Pharmac Minister David Seymour nor board chairwoman Paula Bennett are expressing confidence in chief executive Sarah Fitt as the agency comes under fire for a decision to switch the supplier of hormone replacement patches for menopausal women.
It comes as Seymour believes Pharmac still has time to correct its decision but is warning the board of a “very different conversation” if a similar situation occurs again.
“Fool me once, but don’t fool me twice,” he said.
The developments came during the first day of Parliament’s second-ever scrutiny week, which included Opposition MPs accusing the Health Select Committee chairman of “shallow scrutiny” as they protested the time they received to ask questions of Government ministers.
A wave of public criticism stunned the Government last week after Pharmac confirmed it had switched from Estradot to Estradiol TDP Mylan, used by menopausal women to relieve symptoms that could range from anxiety and weight gain to heart palpitations and severe depression.
In its announcement of the switch last week, Pharmac cited an “ongoing shortage of oestradiol patches” and hoped the decision to engage with supplier Viatris would improve supply issues.
However, the announcement soon prompted reports women felt blindsided by the change and were anxious about switching products.
The series of events conflicted with Seymour’s letter of expectations he had given Pharmac in May, in which he told the agency to improve its public trust and increase consultation with patients and advocacy groups.
Seymour last week said he had asked Pharmac for an explanation but today confirmed to Parliament’s Health Select Committee the agency was reviewing its decision amid “considerable outcry”.
“I don’t think there was enough discussion in this case,” Seymour said of Pharmac’s consultation effort.
He wouldn’t promise the decision would change but was confident the new culture he wanted to see within Pharmac could be applied retrospectively with respect to this change.
It’s not the first time Seymour has had to step in. In November last year, Seymour first called for a culture change within Pharmac as Fitt publicly apologised following the release of internal emails commenting on journalist Rachel Smalley’s efforts to reform Pharmac, which were heavily criticised by former Health Minister Dr Ayesha Verrall, her own board chair and the Public Service Commissioner.
At the time, Seymour said he was “wary” of Fitt’s conduct but said it was a matter for the board to assess her future as chief executive.
Speaking to journalists, Seymour wouldn’t comment on Fitt’s employment, again saying it was a matter for the board.
Asked about the consequences for the board should a similar situation arise, Seymour said he would have a “very different conversation” with board members in that case.
“Fool me once, but don’t fool me twice.”
He acknowledged there had been concerns expressed by patient advocacy groups that Pharmac hadn’t sufficiently changed its culture since the letter of expectations.
However, Seymour believed there had been evidence Pharmac was changing and hoped that would be reflected in the agency’s review of hormone replacement patches decision.
Bennett, who became Pharmac’s chairwoman in April, said the decision didn’t go through the board and noted it was “equally a surprise” to her.
While she accepted Pharmac had “dropped the ball”, Bennett sought to explain how the agency had been “fixated on supply” amid global shortages and lost sight of the potential public reaction as it was concerned about women going without.
“Obviously, they haven’t got this right,” Bennett said of Pharmac.
Bennett, who fronted the select committee alongside Fitt shortly after Seymour, told journalists she apologised on behalf of Pharmac and admitted she was “blindsided” by the decision.
She wouldn’t answer whether she had confidence in Fitt, arguing it was inappropriate to discuss employment matters publicly.
Bennett revealed the change was deemed “non-contentious” by Pharmac, something she wholeheartedly disagreed with. She recognised there had been an unacceptable level of consultation, which largely consisted of the official tendering process for the new contract.
Fitt declined the Herald’s request for an interview.
Verrall told the Herald she believed the review was the “right thing to do” but said there were outstanding questions about Pharmac’s judgment concerning the new product.
Bennett also revealed there was an ongoing “short and sharp” review at Pharmac into its internal staff culture and its external relationships with patient groups and other stakeholders.
While it wouldn’t produce recommendations, the three-week review would inform an action plan that would inform monthly and annual success markers the agency could measure itself against.
“Change is needed, there’s no two ways about it,” Bennett said. “How we do that in a measurable way ... is what we’re trying to work out.”
Bennett expected to receive a draft of the review’s findings in the coming weeks and estimated an action plan would be completed by February.
The review had been conducted by Debbie Francis, who also led the damning review of Parliament’s workplace culture which revealed 14 people said they had been the victim of a sexual assault in the parliamentary workplace.
Seymour and Bennett were also questioned about Pharmac’s reported $243 million surplus, which was enabled by factoring in an agreed payment of $284m for Novavax Covid-19 vaccines, which hadn’t yet been paid.
Bennett and Fitt explained Pharmac was currently in negotiations with the supplier with the aim to avoid paying the $284m, given the vaccines were no longer needed.
However, neither Bennett nor Seymour could give assurances that contract wouldn’t have to be honoured and they couldn’t provide an estimate of when the matter would be resolved.
“We’re going to fight for it with everything we’ve got ... we’ll get something,” Bennett said.
Bennett also noted the supplier was based in the United States, which complicated communication efforts.
New Zealand First MP Jenny Marcroft inquired as to whether Pharmac could do a “swapsie” and buy other medicines with that funding.
Fitt and Bennett quickly explained that was not possible, saying the funding would return to the Government’s coffers and not Pharmac’s budget if it was retained.
Bennett briefly sought to defend the advanced purchase approach, citing the extraordinary demand for vaccines as the pandemic took hold. She accepted it was unlikely a similar approach would be taken in current circumstances.
The Health Select Committee was among the first of Parliament’s committees to sit during scrutiny week, which allowed Opposition and Government MPs to interrogate ministers and agency chief executives.
It didn’t take long for Opposition MPs to protest what they believed was an unfair application of Parliament’s rules in how much time was afforded to Opposition MPs compared with Government MPs.
Tension arose as committee member and Te Pāti Māori co-leader Debbie Ngarewa-Packer questioned Seymour about Pharmac’s efforts to address health inequities.
Unsatisfied with Seymour’s answer, Ngarewa-Packer sought to question Seymour further but was cut off by committee chairman and National MP Sam Uffindell.
Unhappy with Uffindell’s intervention, Ngarewa-Packer declared: “This is shallow scrutiny.”
Her comments followed earlier concerns expressed by Labour MPs Verrall and Glen Bennett, who didn’t accept Uffindell’s system of affording each member one primary question and two follow-ups, despite Opposition MPs traditionally being given more time than Government MPs.
Uffindell, who was clearly losing patience with the repeated complaints, soon intervened: “Can you please be quiet when the chair is speaking? We need some order in this place.”
Seymour appeared to take pleasure in the tension, joyfully pointing out to Labour MPs that their protests only served to chew up more time that could be used to question him.
After his appearance, Seymour accepted Uffindell’s rules did not align with how select committees had been run historically. However, he stopped short of criticising Uffindell for it, claiming he’d learned his lesson from taking shots at committee chairs in the past.
In the half-hour break between Seymour and Bennett’s appearance before the committee, members had clearly resolved their issues as the conduct during the second session was much improved.
Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the Herald in Auckland, covering Covid-19 and crime.
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