Pharmac's approach not fit for purpose, major review finds

An independent review has found Pharmac's current approach is not fit for purpose and has called for an overhaul of both strategy and culture.

Late last year, the board commissioned consultant Debbie Francis to review the drug-buying agency - amid criticism of some of its funding decisions.

The review's executive summary, released Tuesday, says major changes are required to meet the government's expectations - with staff at all levels expressing some sceptism over whether that was even possible.

It says Pharmac needs a clearer idea of its mission, and a set of measurable goals, as well as a complete reset of its operating model.

"The starting point for assessing Pharmac's performance is its statutory objective which is "to secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided".

"While its statutory objective has remained unchanged since Pharmac was established, government and stakeholders expect the agency to evolve and be agile to meet the growing health needs of New Zealanders in a landscape in which new and more targeted drugs are constantly being developed and in demand. Specifically, the latest Letter of Ministerial Expectations for 2024/25 called for changes in organisational culture, roles and responsibilities, and methods and processes to meet these new challenges.

"Through the course of this review, it became clear that meeting these expectations will require a fundamental change in strategy and culture. Staff at all levels of the organisations expressed a degree of scepticism as to whether such a shift will be possible."

The board's chair Paula Bennett said she was confident people will soon see changes as Pharmac adopts a more outward-focused approach.