The government has declared the largest ever budget for Pharmac, the drug purchasing agency, in its history. Over the next four years, nearly $6.3 billion will be spent, according to Associate Health Minister David Seymour. This new budget addresses a $1.7 billion shortfall left by the previous Labour government.
The former government had allocated $180 million annually for Pharmac, but the actual cost to maintain the agency’s budget is over $400 million per year. This underfunding threatened to limit access to vital healthcare for New Zealanders by forcing Pharmac to remove certain medicines from its list.
A plan to reform Pharmac’s funding model is part of the coalition agreement between ACT and National. Both New Zealand First and National have agreed to increase Pharmac’s funding every year. During the election campaign, Labour leader Chris Hipkins claimed that Pharmac’s funding had increased to $1.2 billion a year during his term in office.
However, there are currently over 130 treatments on Pharmac’s wish-list that it would like to fund but cannot due to budget constraints. Last August, cancer doctors wrote an open letter to Pharmac requesting better funding for newer medications, stating that New Zealand is barely keeping up with the World Health Organisation’s essential medicine list.
Seymour emphasized that funding for medicines is a matter of life and death for some New Zealanders. He said the government is committed to finding an additional $1.774 billion to ensure that all New Zealanders can access the medicines they need.
Seymour also mentioned other initiatives, such as the return of pseudoephedrine cold and flu medicines and streamlining Pharmac’s approval processes. He announced that former deputy prime minister Paula Bennett will become Pharmac’s board chair next month. The previous chair, Steve Maharey, resigned in December.
