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Exceptional Circumstances Scheme Under Review

New Zealand’s Pharmaceutical Management Agency (PHARMAC), which is responsible for managing the national pharmaceutical budget, is reviewing its programs for providing coverage for drugs under exceptional circumstances. These programs consider special access to drugs that are not subsidized by the government for patients with rare conditions or who are in unusual medical circumstances.

In addition to managing exceptional circumstance schemes, PHARMAC is responsible for deciding which prescription drugs are subsidized by the government, promoting appropriate use of the medicines, and managing certain medicines and devices for public hospitals. In 2008, PHARMAC helped New Zealand to achieve prescription drug spending of $257 per capita, as compared with $897 per capita in the U.S. and an average of $461 per capita in other countries (OECD median), adjusted for differences in cost of living.

PHARMAC has faced criticism, however, for declining more than 75 percent of the funding applications submitted to its exceptional circumstances schemes. After seeking views from stakeholders on how to improve the policy, PHARMAC has proposed the Named Patient Pharmaceutical Assessment (NPPA), which the government says will provide “fairer and wider” consideration for the funding of uncovered drugs.

PHARMAC is currently seeking feedback on the NPPA, which would create a single exceptional circumstances program in place of the three existing benefit categories. Though a single program, patients would be able to apply for funding for drugs not listed on the schedule in one of three discrete areas: 1) Unique Clinical Circumstances, for patients with rare conditions or in unusual medical circumstances; 2) Urgent Assessment, for patients with severe or potentially life-threatening conditions who would experience significant deterioration in health or would lose the opportunity for significant improvement if access were not expedited; and 3) Hospital Pharmaceuticals in the Community, which would grant District Health Boards funding consideration for a patient to receive non-cancer treatment in the community, if it is more affordable than the alternative treatment options.

Recommended changes and final proposals will be presented to the PHARMAC board in June of this year.


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