Source: Radio New Zealand
Former Pharmac chief executive Sarah Fitt. RNZ / LUKE MCPAKE
The Minister for Pharmac says the departure of its former chief executive – which appears to have come with a $357,000 payout – was “very well managed” by the board.
Sarah Fitt resigned from the drug-buying agency in February after years of controversy over what has been called a culture of contempt and a fortress mentality.
She had been in the role since 2018 and faced criticism over interactions with and about a journalist.
When the agency came under criticism over changes to hormone replacement therapy patches in 2024, Pharmac’s board chair Paula Bennett and Associate Health Minister David Seymour – who has responsibility for Pharmac – refused to express confidence in Fitt.
Labour Party health spokesperson Ayesha Verrall. VNP/Louis Collins
Labour’s Ayesha Verrall at the Health select committee on Monday afternoon questioned Bennett about the $357,000 payout to a single employee, asking if it was made to Fitt.
Bennett acknowledged the payment was made under an employment contract, noting she has not notified Seymour of the figure.
“I don’t think I ever gave the minister a number, it’s confidential and it’s what’s to be expected in negotiations for… cessation payment for someone leaving,” she said.
“The truth is we were in negotiations as you would with someone exiting. They had an employment agreement, we negotiated that, we did everything within our powers to actually do the best for New Zealanders and New Zealand taxpayers but that was the terms of the agreement that I inherited and that’s – that’s what it is.”
Verrall responded that it was “well beyond the norm in the public sector”.
Seymour had appeared to confirm the assumption that the payment was made to Fitt was correct, saying Pharmac was a $2b a year operation for buying medicines for New Zealanders.
“Having the right leadership at the head is absolutely critical and I think the board’s managed it very well,” he said.
Minister in charge of Pharmac David Seymour RNZ / Mark Papalii
Verrall questioned whether it was a good use of taxpayer funds, considering the exit payment amounted to at least eight months salary for the highest-paid individual at Pharmac in that time.
“Well, you know, my views about employment law are on record and fairly expansive but we are bound by the laws of this country and we have done everything that we need to under them.”
Verrall asked if the matter had been “bungled”, but Seymour said he wasn’t involved and “as far as I’m concerned the board has operated very effectively in challenging circumstances”.
He pointed to having brought Malcolm Mulholland, a senior researcher and cancer patient advocate, on board as the chair of Pharmac’s advocacy committee after Mulholland previously protested against the agency’s decisions.
When Fitt resigned in February, Seymour thanked her, saying he was impressed by her commitment to Pharmac on its core role of expanding opportunities and access for patients.
Verrall had earlier asked about why a review into Pharmac’s culture had not been released in full.
Bennett said the report looked into “staffing issues”, and the advice the board received was that releasing the executive summary was enough.
She said a series of meetings and patient workshops had been run face-to-face and efforts were made to “genuinely not run it the Pharmac way, actually run it their way”.
“There was such a divide … I felt for us to do that we had to look eye to eye, we had to take the honesty and the bluntness of some of the hurt that had gone on.”
Bennett said she was present to “be the buffer if needed”.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand