Pharmac is rejecting any suggestion it reacted to political pressure to fund a new anti-HIV drug.
The drug-buying agency has announced that from next month it will expand access to a treatment using Truvada.
The drug is already funded as part of a treatment for those infected with HIV but will now also be free for those not infected but at high risk of contracting the virus.
Last July, the Labour Party accused the then National-led government of dragging its heels over funding Truvada and promised to fund the drug if elected.
From 1 March 2018 we're widening access to Truvada for the prevention of HIV. Up to 4000 eligible people could benefit from this decision. Check out our website for more info #PrEP https://t.co/EMN218FzQb @NZAFofficial pic.twitter.com/BUJxxJL8IB— PHARMAC (@PHARMACnz) February 7, 2018
However, Pharmac chief executive Sarah Fitt said it had been assessed under normal processes with no fast-tracking since the election.
"Throughout last year we'd been working with the New Zealand Aids Foundation and actually helped them put an application through to us and it went through our normal process where we got clinical advice.
"It got a high priority recommendation for the high-risk group, from our clinical advisors so we took it through our normal process."
Aids Foundation praises funding decision
The Aids Foundation said the decision was a game-changer that could halve or drive down the rate of HIV infection.
Many gay men, who are most affected, currently pay up to $100 a month for generic forms of Truvada, the Aids Foundation said.
The foundation's executive director, Jason Myers, said it would be a big help.
"It's been proven to be highly effective at preventing the transmission of HIV and, in jurisdictions overseas that have already made it widely available, we've already seen dramatic reductions in new HIV infection numbers over the past year."
It estimated up to 4000 people would benefit from the decision.
The change will take effect in March.