Evaluating spending and regulation decisions on the basis of objective criteria is a good thing. The standard tool in economics to do so in called Cost-Benefit Analysis. In a high quality, just-released report, Multiple Sclerosis NZ argues, with great lucidity, that Pharmac is not taking into account all costs & benefits on society when it decides which drugs to fund. When the Nats were last in power, I attended a function at which Paula Bennett spoke. She talked about the National Party's "Social Investment Approach" which was (supposedly) guiding their spending decisions. Bennett was Minister of Social Development at the time. The chap next to me, a Knight of the Realm no less, asked her, "What is the Difference Between Cost-Benefit and Social Investment?" Her answer was entertaining, in the sense it appeared she had not the remotest clue. To muddy waters even more, Pharmac uses Cost-Utility Analysis. Paula Bennett is now Chair of Pharmac. Should someone ask her, or Finance Minister Willis, or ACT Leader Seymour, "Can you explain the difference between Cost Utility (as used by Pharmac), Social Investment (as used by Willis' Department of Social Investment), and Cost-Benefit (as used by Seymour's Ministry of Regulation), I bet their eye-balls would pop out & the subject quickly changed to the Treaty, or anything.
So here's the gist of what Multiple Sclerosis NZ are saying. Pharmac often delay purchasing drugs, waiting for cheaper generics to be manufactured. However, using Nicola Willis' own Social Investment approach, early intervention can mean that someone's condition does not worsen, and they can remain highly productive members of society, with higher benefits and incurring lower costs (that are funded by taxation). Multiple Sclerosis argue that a proper cost-benefit analysis, that includes all costs & benefits to the nation, and which encapsulates Willis' own early intervention Social Investment way of thinking, would lead to important drugs being funded now which are not (and vice versa). Its a convincing point. Willis, Bennett & Seymour should prove they're on top of their Ministries by answering it. Multiple Sclerosis NZ deserves it.
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