For a week after arriving in New Zealand, Holden, my three-year old son, was truly out-of-sorts. He was consistently cranky, refused to walk the city sidewalks, and frequently directed abusive behaviour towards his sister and the hotel furnishings. Disturbed, we convened a family summit on how to make him right. Holden suggested “bad guy” toys and his sister proposed gummy worms, but ultimately we settled on the parental preference: pharmaceuticals. My wife, based on prior experience, was concerned that Holden had an ear infection and I was concerned both about waking up at four in the morning and also about lugging a 30-pound child to and from the immigration office to complete visa paperwork. So, we agreed on a compromise – a liquid painkiller called Auralgan for his ears. We decided on this despite the lack of evidence that Holden actually had an ear infection and despite a strong suspicion that moving halfway around the world might have a significant psychological impact on a three-year old.
I was pleasantly surprised to find a local pharmacy that carried Auralgan but taken aback when the pharmacist began to quiz me about my choice. She was (rightfully) dubious about Holden’s diagnosis, and it wasn’t until I explained that I was a physician (and that I believed in the placebo effect), that she finally relented and allowed me to pay $20 for a small bottle of medication.
Afterwards, it occurred to me that this interaction would have gone quite differently back home, where purchasing over-the-counter medications usually only elicits questions like “Do you have a Rite Aid Saver Card?” I soon started noticing other differences, as well. One was quite striking – the absence of drug advertising. No billboards for antacids, no magazine spreads for cholesterol pills, and no wacky television commercials with beavers, Abraham Lincoln and insomnia prescriptions. At work in the Emergency Department, I noticed a simpler approach to prescriptions – fewer choices, shorter medication lists, fewer narcotics, and for the children: “play therapists” to supplement pain control during procedures. Among all patients, I heard far fewer concerns about the meds they could or could not afford to purchase.
In short, it became clear that medications are less prominent in Kiwi society than in America. Why might that be? Well, first off, while direct to consumer pharmaceutical advertising is legal in both countries, it is uncommon in New Zealand with Kiwi television ad time being reserved for truly important products like Marmite (did you hear that there’s a shortage?) Americans, however, cannot avoid drug ads – U.S. pharmaceutical companies spend over $5 billion a year on them and the typical American will spend around sixteen hours each year watching television snippets for drugs. But, more importantly, the structure and incentives regarding prescription medications are distinct. In the U.S., a premium is put on choice and novelty, at the expense of, well, expense. Sure, there are drastic differences between insurers and public assistance programs, but as a nation we spend a lot of money on prescription drugs – something like $300 billion dollars, which works out to about 13% of all health care costs (the highest rate in the world.)
In New Zealand, there is a smaller pharmaceutical budget and unified approach under a national formulary. Created in 1993 in response to rapidly rising drug prices, the Pharmaceutical Management Agency (PHARMAC) recognizes that for some common conditions there are a handful of medications that perform equally as well, and some of these are cheaper generic brands. For example, a patient with high cholesterol has many choices of “statins” – Lipitor, Mevacor, Crestor, etc. – that all work through the same molecular mechanism. In circumstances such as this, and with the input from multiple physician-staffed committees and sub-committees, PHARMAC negotiates with the makers of those medications to get the best value for the money. The result is that a narrow list of medications (often just one) becomes the subsidized choices for that condition and when patients are prescribed one of these they pay a nominal pharmacy charge (between $0 and $3). So, rather than seven statins to choose from, the Kiwis have just three (which seems enough to me).
Of course, if a customer truly desired a different statin, he or she could almost surely pay more to get it. Many large U.S. insurers function in a similar manner regarding formulary and non-formulary medications. But because PHARMAC is negotiating for an entire market of 4.5 million people, they have a reasonable chance of striking a good deal with the drug makers. And financially, at least, PHARMAC has been a success. PHARMAC reports saving $4.7 billion since year 2000, whilst increasing its purchasing power threefold since 1993. This success has allowed the organization to expand funding of specialized and novel medications (for exceptional circumstances). An example is the funding of a new blood thinner called dabigatran for the treatment of atrial fibrillation (this by the way may turn out to be a mistake, but more about that another time.)
Although the cost efficiency is difficult to argue with, not everyone is keen on the PHARMAC model or its decisions. A recent funding switch regarding glucometers for diabetics is an example. Some worry that the newly subsidized glucometer will not work well for everyone and thus not be worth the projected ten million dollars in savings. In the words of one parent to TVNZ…
"We are sheep farmers in a rural area. If I have to call for an ambulance for my daughter the first thing they are going to ask me is what her blood sugar levels are. If I haven't got an accurate meter to tell them, the consequences will be drastic."
But despite flares like this, in general, it does not seem like having fewer pharmaceutical choices bothers the average Kiwi. I asked an Auckland pharmacist if her customers seemed happy with the medication choices they had. “Well, sure they do,” she replied, “but they don’t have much of a choice about that, now do they?” And I must admit that, as a physician, it is sometimes rather nice to have a short and sweet list of prescribing options. This approach seems to lessen the risk of gratuitous medication prescribing and there is less emphasis on pharmaceuticals – with the Kiwi perception of health being, if you will, less drugged out.
This is not to say that one approach or perception is necessarily superior to the other – indeed the Kiwi approach would probably not be possible without the American one. Pharmaceutical companies need markets for new drugs, after all, and we all benefit from them staying in the business of making lifesaving treatments such as vaccines, insulin and antibiotics.
So, you may be wondering, did those eardrops help little Holden? We’ll never know the answer. Ultimately, his mom and I demurred and went with bad guy toys and gummy worms instead. And I am happy to report that this worked quite well. Could it be that those who haven’t been fully indoctrinated into the “pill for every problem” lifestyle might be onto something? Maybe we can all do with a little more “play therapy.”