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Letter to the editor

Editor, – The editorial by Steve Morgan and Katherine Boothe (Aust Prescr 2010;33:2-4) makes a number of concerning statements. The authors consider that Australia and New Zealand appear to be 'converging in their use of certain [pharmaceutical procurement] policy tools'.

The authors do not identify the major factor responsible for the success of the Pharmaceutical Management Agency of New Zealand (PHARMAC) in reducing prices paid for pharmaceuticals. PHARMAC is exempt from the entire portion of the New Zealand Commerce Act 1986 that deals with restrictive trade practices. The result is that PHARMAC is in a dominant position as a monopsony and is able to embark on negotiating tactics not allowed under World Trade Organization rules or national legislation in most other first world countries.

The authors have made comparisons of growth in costs between PHARMAC and OECD (Organisation for Economic Co-operation and Development) data. The conclusions drawn are unreliable as the reporting methods used to collect these data are not comparable over time (as stated by the OECD).1

Where the authors report 'conspicuously little evidence' of health outcomes related to pharmaceutical access being different between the countries, they indicate no attempt to identify differences in health outcomes. It would be imprudent to assume that the lack of epidemiological evidence to support worse health outcomes in New Zealand linked to pharmaceutical access vindicates the reduced access to medicines.

For these reasons, it is unlikely that Australia could or would choose to align itself more closely with the New Zealand methods of pharmaceuticals procurement.

Kevin Sheehy
Researched Medicines Industry Association of New Zealand
Wellington, New Zealand


Lachlan Brown

General practitioner/Anaesthetist, Batehaven, NSW