Limits to Neoliberal Reforms in the Health Sector: The Case of Pharmaceutical Management in New Zealand

In New Zealand in 1993, a pharmaceutical management agency (PHARMAC) was established during the height of neoliberal reforms in the health sector. The agency's relationship with pharmaceutical companies, patient lobby groups, and health professionals has been hostile at times, but despite this hostility, PHARMAC has remained substantially independent from political interference. This article draws on critical theory and Durkheimian perspectives to explain how such a strong regulatory organization was established during a time when attempts were made to reshape the health sector to conform to a neoliberal agenda. An analysis of historical and contemporary issues demonstrates the contradictory position of the state in relation to the regulation and subsidization of pharmaceuticals, with conflicting demands to retain popular support, restrain state expenditure, and respond to expectations to provide pharmaceuticals to its citizens. This article demonstrates how the establishment of PHARMAC reconciles these contradictory demands, arguing that it removes decision making from political control and has been able to sustain its place by appealing to objective assessment criteria. This case signals limits of the neoliberal agenda. © 2014, Baywood Publishing Co., Inc.