How a ‘Rule of Two’ could remove our barrier to better drug access

Dr Eric Crampton
7 November, 2023

When a new pharmaceutical is so successful that it blows out the national income accounts, it’s probably safe to call it a wonderdrug.

Semaglutide, marketed as Ozempic when treating Type II diabetes and as Wegovy for weight loss, turned a half-year 0.3% decline in Danish GDP into a 1.7% year-on-year increase.


But the real wonder for New Zealand is how Medsafe stands as barrier to new pharmaceuticals like Ozempic.

Ozempic was approved by America’s Food & Drug Administration in December 2017, one year to the day after Novo Nordisk filed for regulatory approval in Europe and America, and two months after a 16-0 approval vote from the FDA’s advisory committee. The European Medicines Agency approved it in February 2018.

It was approved in Canada in January 2018, one year after Novo Nordisk filed for Canadian approval.
 Japan approved in March 2018 and Australia followed in 2020.

Ozempic was on the market abroad for four years before Novo Nordisk bothered filing for regulatory approval from Medsafe in December 2021. Pharmaceutical companies’ regulatory affairs teams are not likely to put small markets at the front of any queue.

With approvals from the FDA, EMA, and Canada in hand, and the drug’s obvious safety attested to by its widespread use abroad, you might have expected Medsafe could simply have said, “Yes please” when Novo Nordisk finally filed for New Zealand approval.

The FDA’s drug approval budget is hundreds of millions of dollars larger than Pharmac’s entire drug buying budget. The EMA isn’t small either. Is it likely that Medsafe would find something that everyone else had missed?

New Zealand has more than a few diabetics. And Pharmac does not bother assessing drugs for funding if it sees little prospect of a New Zealand approval. In August of this year, Pharmac proposed withdrawing 24 drugs from evaluation because they “are not aware of any supplier willing to pursue Medsafe registration.”

Nevertheless, Medsafe approval for Ozempic took fifteen months.

Think about that in context. The FDA took 12 months to approve Ozempic. It took Medsafe three months longer than that to simply confirm what significantly better resourced overseas pharmaceutical approval agencies had already found.

It is hardly the first time that Medsafe has delayed access to pharmaceuticals found safe by overseas approval agencies and proven safe by widespread use abroad. Medsafe regularly lagged foreign regulators in approving access to Covid vaccines and treatments.

When challenged about slow vaccine and treatment approvals during Covid, the government typically blamed overseas pharmaceutical companies for not having yet filed for Medsafe approval. But requiring Medsafe approval for drugs already found safe by trustworthy overseas regulators is the problem.

Last week, the New Zealand Initiative published a short research note arguing for a “Rule of Two” for Medsafe approvals.

Under my proposed Rule of Two, any pharmaceutical that has already been approved by at least two trustworthy overseas agencies, like the EMA, the FDA, Health Canada, the UK’s MHRA, and Australia’s TGA, would automatically be approved for use in New Zealand, unless Medsafe has extraordinary and compelling reasons to believe approval should be delayed. Medsafe would maintain an ability to check drug safety after approval, either because it saw problems or because foreign approval agencies had initiated investigation.

The rule would not replace Medsafe. But it would mean that Medsafe would not spend months or years uselessly delaying access to drugs already proven safe overseas.

Two teams of Canterbury students helped us check the effects of a Rule of Two in practice.

From 2006 through 2022, Medsafe was found to have refused twelve drugs, nine of which were subsequently approved. Only one of the remaining three would have been automatically approved by the Rule of Two, in low-dose formulations that have not caused problems overseas.

And Medsafe tends to move in concert with other approval agencies in withdrawing drugs from the market if they are later found to be unsafe.

They found that the Rule of Two would have meant much faster approval for drugs that Medsafe eventually approved. Herceptin, a treatment for breast cancer, would have been approved about a decade earlier. Other drugs would have been approved between one and twelve years earlier, for the set of drugs reviewed by the student team.

Medsafe approval is hardly the only barrier to access to new pharmaceuticals. New pharmaceuticals are expensive, Pharmac has a limited budget, and not everyone is able or willing to pay for private insurance covering foreign-approved medicines.

But one of the drugs that Pharmac proposed pulling from funding consideration in August, because it seemed unlikely that anyone would register the drug with Medsafe, was reported as approved for funding in Australia later that month. There is no guarantee Tafamidis would have passed Pharmac’s necessarily stringent cost-effectiveness hurdles; it had previously failed Australian funding evaluations. But a Rule of Two would have meant Pharmac could at least have assessed it – if it thought it worthwhile.  

The problem is not just that duplicating regulatory efforts undertaken overseas costs taxpayers money, which regulatory agencies attempt to recoup through fees. The more important problem is that Kiwis lose out when regulations make New Zealand simply not worth the hassle.

Small middle-income countries at the far end of the world cannot afford to build their own regulatory standards for every type of product.

And Kiwis know this. We sensibly rely on other countries’ standards when deciding whether a new car model is suitable for New Zealand’s roads. Instead of having our own requirements, we have a list of other countries’ standards that a new car must meet. It works.

If New Zealand required car manufacturers to send a half-dozen of each model-year to New Zealand for our own destructive front and side impact tests, a sharply reduced range of options would turn up late on dealer lots.

Requiring companies to jump over bespoke New Zealand hurdles to access the New Zealand market, when they’ve already proven themselves fit by jumping more rigorous hurdles overseas, just puts Kiwis at the backs of queues.

To read the full article on the Newsroom website, click here.

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