How does the operation of PHARMAC's 'Community Exceptional ...

These measures were in response to the Crown’s desire to fulfil their
obligations under the Treaty of Waitangi to deliver greater Maori participation in
the public health services. The Minister intended by this mechanism to advance
the health status of Maori and prevent further deterioration in that status
(Ministry of Health, 2000). The government also believed that encouraging
greater participation at all levels of the health and disability services, including
governance, would contribute to better health outcomes for Maori.
The Establishment of PHARMAC as a Crown Agency
The Bill made provision for the establishment and terms and conditions of other
Crown Agencies related to the public health and disability service. One of these
agencies was PHARMAC. This was established as a stand-alone Crown Entity
with direct accountability to the Minister of Health. The legislation gave
PHARMAC the responsibility to create and maintain a Pharmaceutical Schedule
for the purposes of consistently applying criteria for providing subsidies to the
general public for their prescription medicines (Ministry of Health, 2000).
One of the initial purposes of establishing PHARMAC in the Bill was to improve
purchasing of pharmaceuticals by managing relationships with the
pharmaceutical supply companies. Another purpose was to cap government
funding for a schedule of drugs on which the government would pay a subsidy
on behalf of the patient (Ministry of Health, 2005). The establishment of
PHARMAC also opened the way for purchasing and planning strategies that
would integrate services and provide a rational analysis on which drugs would
be purchased (Cumming, Powell, & Barnett, 2004) and a platform for
understanding the cost implications to the government for doing so.
The Bill set out PHARMAC’s accountability to the Minister of Health and
Parliament. Specifically, PHARMAC was required under Section 47 (s47) to
secure for eligible people in need of pharmaceuticals the best reasonably
achievable health outcomes from pharmaceutical treatment. This was to be
done within the funding provided by the DHBs (s47 NZPHDA 2000). The
accountability to the Minister was to take the form of service agreements and a
statement of forecast of service document signed between the Minister of
Health and PHARMAC. Section 48 in the Bill required the agency to also be
accountable to the public of New Zealand.
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