Pharmac can be seen as an example of an organisation within the health system which has highly effective structural design, where it has identified the political challenges and accommodated them within its organisation, ensuring they are managed in the most effective way. Pharmac was created in 1993, by the four RHAs, who were seeking to create a larger economy for pharmaceutical purchasing in order to curb the increasing cost (Gauld 2003).
The objectives of Pharmac are to ‘secure for eligible people in need to pharmaceuticals, the best health outcomes that are reasonably achievable, from pharmaceutical treatment and from within the amount of funding provided’ (NZPHD Act 2000). Pharmac is governed by a board who is collectively responsible for deciding what is on the schedule, based on tests of set criteria and expert recommendations (Kanavos and Reinhardt 2003; Ministry of Health 2010).
Pharmac is structured as a separate and autonomous entity from the Ministry of Health and the DHBs. It also includes a process by which it comes to its decisions which is transparent and permits accountability, where the decision making process is consistent and made publicly available (Pharmac 2002). In this way Pharmac acts as a neutraliser between clinicians, pharmaceutical companies, lobby groups, and government (Braae, McNkee, and Moore 1999; Gibbs 1988).
For more information, please see the Pharmac website