29 Apr 2024

Pharmac's budget boosted to $6.3b over next four years

3:12 pm on 29 April 2024
Capsules an pills in a plate. 
France (Photo by VOISIN / Phanie / Phanie via AFP)


The government has announced what it says is the largest Pharmac budget in its history.

Associate Health Minister David Seymour said it will spend nearly $6.3 billion on the drug buying agency over the next four years.

He said the new budget fixed a $1.7 billion fiscal cliff left by the former Labour government.

"In Labour's fiscal plan, they allocated $180 million annually. However, the true cost to secure Pharmac's budget was over $400 million per year.

"This lack of funding jeopardised New Zealanders by potentially causing Pharmac to delist medicines, thereby reducing access to vital healthcare."

A deal to reform the Pharmac funding model is part of ACT's coalition agreement with National, while New Zealand First and National agreed to increase funding for Pharmac every year.

During the election campaign, Labour leader Chris Hipkins said Pharmac's funding had increased to $1.2b a year during his government's term in office.

The Labour Party is accusing the government of "fiscal jiggery-pokery" over the funding boost.

Labour MP Ayesha Verrall

Labour health spokesperson Ayesha Verrall. Photo: RNZ / Angus Dreaver

Labour health spokesperson Ayesha Verrall said the cash injection would only make minimal increases in access to medicines.

Seymour needed to explain why more than $1b needed to be spent for the Pharmac budget to stand still, she said.

Verrall said Seymour had "asserted there is a '$1.774b fiscal cliff'. The actual figure published in the pre-election update was $724m and David Seymour is trying to gloss over $1.050b of increased costs at Pharmac".

"Hopeful patients and advocates will welcome this funding - but David Seymour needs to be up front with them about how far it will go."

The Labour-led government increased Pharmac's budget by 51 percent over its six years in government, allowing access to 75 new medicines and widening access to 137 treatments, Verrall said.

"This is a government that has pledged to remove free prescriptions for New Zealanders, they have promised to destroy access to medicine for millions of people.

"Today's talk of fiscal cliffs is merely scapegoating for the funding the government won't deliver because they have prioritised tax cuts over properly funding health."

This month The Detail reported there were more than 130 treatments on Pharmac's Options for Investment list - a wish-list of drugs and medical devices that it would like to fund but could not stretch to.

Last August, oncologists wrote an open letter to Pharmac appealing for newer and better funded medication, saying the country was barely keeping pace with the World Health Organisation essential medicine list.

Seymour said in a statement on Monday funding for pharmaceuticals was "life or death, or the difference between a life of pain and suffering or living freely" for some New Zealanders.

"It was a priority for this government to find the additional $1.774 billion to prevent this from happening."

He said the government has committed the funding to make sure New Zealanders were able to access medicines they needed to live a fulfilling life.

Seymour also pointed to other moves including the return of pseudoephedrine cold and flu medicines "within weeks" and streamlining Pharmac's approval processes so it could be assessing a funding application at the same time as Medsafe was deciding on regulatory approval for a drug.

On Sunday he announced former deputy prime minister Paula Bennett had been appointed as Pharmac's board chair from next month.

Former Pharmac board chair Steve Maharey, who was previously a Labour minister, resigned from the role - and as the board chair of the Accident Compensation Corporation - in December.

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