Political Challenges to Pharmac

Pharmac has several challenges to its system, and its credibility as an organisation of good structural design is based on how well it manages these challenges. An outline of the political challenges to Pharmac and the effect they have is provided in the table below.

Political challenges of Pharmac and the effect they have.

Challenge Effect
Pharmaceutical companies
  • Relationship between them and Pharmac has been damaged due to Pharmac limitations on influence (Ashton 1999).
  • Pharmac caps cost of products, forcing companies to compete against each other for contracts.
Clinicians
  • Restricted to prescribing from Pharmac Schedule limits what they can prescribe (Kanavos and Reinhardt 2003).
  • Without Pharmac, clinicians are at risk of being targeted by pharmaceutical companies to prescribe their products.
Patients
  • New Zealand allows direct to public pharmaceutical advertising which can increase demand.
  • Patients faced with information asymmetries where they can feel they need a specific product due to marketing. Patients may then lobby or influence doctors to prescribe what has been advertised.

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