About Medicines Access in New Zealand

New Zealand has a unique environment for publicly funding medicines.

Our model for medicines funding is the only one in the world that operates with a capped medicines budget written into legislation. Funding is not guaranteed for medicines that meet safety and quality standards and that offer health benefits for patients. Instead, in many instances, medicines are placed on a waiting list for funding.

The Medicines Funding Process

The Pharmaceutical Management Agency (PHARMAC) is responsible for procuring medicines at a subsidised rate for Kiwis, using the fixed annual combined pharmaceutical budget (CPB) set by the Minister of Finance. Before funding a new medicine, PHARMAC usually requires that the medicine has been registered by Medsafe first. Medsafe is responsible for regulating medicines and medical devices in New Zealand, and evaluates the quality, safety and effectiveness of new medicines before they are registered.  
To assist PHARMAC in decision-making about what to fund, all applications  are also reviewed by PHARMAC's committee of clinical experts - the  Pharmacology and Therapeutics Advisory Committee (PTAC).
The PTAC’s role is to advise PHARMAC on each application and make a funding recommendation to PHARMAC based on an objective clinical assessment of the medicine concerned. PHARMAC has a fixed budget and their ability to fund medicines that are safe and clinically beneficial is limited - a positive recommendation from PTAC is not a guarantee that PHARMAC will fund the medicine. Until PHARMAC decides to fund these cost-effective medicines publicly, they remain on a  number of waiting list.

The Medicines Funding Process

Medsafe is responsible for regulating medicines and medical devices in New Zealand. The 20 District Health Boards (DHBs) have a budget for medicines which PHARMAC (the medicines procurement agency) manages. PHARMAC’s Pharmacology and Therapeutics Advisory Committee (PTAC) reviews funding applications for cost-effective new medicines and PTAC makes recommendations on which medicines should be publicly funded by PHARMAC. Until these cost-effective medicines are funded, they remain on a Waiting List.


There are three main problems with medicines access in New Zealand: timely access, the medicines waiting list and health inequity.

Timely medicine access

Unnecessary delays in the funding system provide significant setbacks for the health system and patients who could benefit from the medicine being funded. Some patients are still waiting a decade or longer for a public funding decision on some of these medicines.

While comparable countries have access to breakthrough world-class medicines and treatments, our current funding model continues to deprive New Zealanders of publicly funded access to these medicines. In many cases, modern medicines that are recommended as a public funding priority by PTAC remain unfunded despite PTAC’s clinical expertise.[1]

The Medicines Budget

Currently, the medicines budget setting process is complex and not clear.

The allocation of the total funds granted by parliament for health services are negotiated between New Zealand’s twenty DHBs and the Medicines Procurement Agency and then sent to the Minister of Health for budget approval. In theory, the decision sits with the DHBs but, in reality, it is the Minister who decides whether to top up the medicines budget over what may have been initially agreed.2

Medicines Waiting List

PHARMAC has publicly released their options for investment (OFI) list, consisting of over 100 applications PHARMAC would like to fund if they had the budget for them. This is only a small portion of the applications in PHARMAC’s system awaiting a decision.

The backlog of applications in PHARMAC’s system awaiting a decision is evidence that New Zealand’s medicines funding processes and budget levels require review. Without an increase in the CPB, the long list of applications is expected to grow.[1]

More than 250,000 patients are waiting for access1,3

for only 1/3 of the medicines on the waiting list...

This is more than the population of Otago!
Image source: Free World Maps

Health Inequity and the cost of ill-health

From 2011 to 2020 Australia publicly funded close to three times as many modern medicines as New Zealand and made funding decisions almost a year faster. [5] For example between 2011 and 2020, New Zealand did not publicly fund any of the modern medicines that were launched for mental health, diabetes or arthritis. By comparison, Australia funded 4 for mental health, 10 for diabetes and 4 for arthritis. We think this lack of funding for modern medicines creates healthcare inequity for New Zealanders with these conditions compared with their Australian peers.

Patients with rare diseases also face health inequities in medicines funding as most modern medicines publicly funded in New Zealand for rare diseases, are used to relieve symptoms like pain and inflammation rather than treat the rare disease itself.  In 2021, 1 in 3 rare disease patients in New Zealand were in hospital for an average of 13 days. This impacts on the overall public health system too, with costs of $1,200 per day in a public hospital ward and $5,500 for a day in an intensive care unit.

New Zealand sits last out of 20 comparable OECD countries for modern medicines access.6
It takes more than twice as long to fund the same modern medicines in NZ than the OECD average.7
As a percentage of our health budget, we spend less than half of what Australia and the UK spend on Medicine.7


What does this mean for New Zealanders?

Poor health outcomes

We think that New Zealand’s failure to invest in proven modern medicines is letting down many New Zealanders who rely on the public health system. Other countries have better access to modern medicines, which in many cases, can be linked to better health outcomes. The failure to fund cost-effective medicines results in higher hospitalisation and mortality rates. [8-11]

Kiwis go to extreme lengths to get access to medicines

Because unsubsidised modern medicines are often unaffordable for the average Kiwi, some patients patients are forced to take extreme measures to get the medicine they need, including;

  1. Selling or downsizing their homes
  2. Starting a fundraising campaign
  3. Moving overseas, to a country where the medicine they need is funded.
Kiwis deserve to have faster access to publicly funded essential medicines. It's only fair. 


How do we fix New Zealand's medicines funding environment?
New Zealand’s medicines funding system is not broken but is no longer fit for purpose. Kiwi patients don’t have access to the best medicines, fast enough.[1-2]

Our patients deserve to have faster access to the best modern medicines. It’s only fair.

Modernisation of both the New Zealand Medicines Policy and Strategy 

New Zealand’s current medicines strategy is 15 years old and the current plan supporting it expired in 2020. The current Health Reforms offer an opportunity to change an outdated system which does not provide patients with the best possible health outcomes.

Comparable Funding

Kia Tairite te Nui o ngā Pūtea

The medicines budget needs to be increased to bring New Zealand’s spending per capita in line with other comparable OECD countries.

In 2022, a defined medicines appropriation was included in the Budget, which made it clear that only 5% of New Zealand’s total health budget is invested in medicines. This is in stark contrast to comparable OECD countries like Australia and the UK which both have investments of over 10%.

Even though the Government increased funding for PHARMAC in this year’s budget, the medicines budget has been underfunded since 2007. Ongoing investment needs to be made to help New Zealand catch up with our peer nations and ensure New Zealand patients don’t continue missing out on proven modern medicines and that New Zealand is well placed to fund innovative medicines coming down the pipeline.[13-15]

More Speed

Kia Tere ake

Introducing a rapid access to medicines scheme would provide patients with access to effective medicines faster to ensure no patient is left waiting for a medicine they need.[16]

Doing nothing is not an option if timely access to new medicines is important for retaining trust and confidence that publicly funded health is ‘modern’ and fit for the future.[2,16]


  1. Della Barca, C. (June 2020). Funding Medicines in New Zealand: Revision of the Medicines Waiting List to 30 April 2020. Subscripts Ltd. Auckland, New Zealand.
  2. NZIER (May 2020). A new generation medicines policy. Wellington, New Zealand.
  3. Medicines New Zealand Member survey responses. (2018). Wellington, New Zealand.
  4. Sandiford, R. et al. (2015) Australian and New Zealand Journal of Public Health. 2015; 39:157-161.
  5. IQVIA (June 2020). Access to Medicines 2 (AtoM 2) Report.
  6. Medicines Australia. (2018). Comparison of access and reimbursement environments (COMPARE) 4th edition. Canberra, Australia
  7. IQVIA (2020). International Comparison of Modern Medicines 2011-2018 (ICOMM2).
  8. Rawson, N. S. B. (2016). Can. Health Policy. Canadian Health Policy Institute. Toronto, Canada.
  9. Breast Cancer Foundation NZ. (2018). “I’m still here”: Insights into living - and dying – with Advanced Breast Cancer in New Zealand. Wellington, New Zealand.
  10. Caswell-Jin, J.L. et al. (October 2018) Change in Survival in Metastatic Breast Cancer with Treatment Advances: Meta-Analysis and Systematic Review. JNCI cancer spectrum, 2(4), pky062.
  11. Lichtenburg, F., Williams Spence, J. (2016). The impact of pharmaceutical innovation on the longevity and hospitalisation of New Zealand cancer patients. New York: Columbia University, National Bureau of Economic Research.
  12. NZIER (January 2020). Establishment of a medicines appropriation. Wellington New Zealand.
  13. Health at a Glance: OECD Indicators. (2017). Paris, France.
  14. OECD Health Statistics. (2018). Paris, France.
  15. NZIER (December 2018). Community pharmaceuticals: Expenditure trends. Wellington, New Zealand.
  16. NZIER (December 2019). Rapid access to new medicines in New Zealand. Wellington New Zealand.
  17. OECD (2020). Pharmaceutical spending (indicator). doi: 10.1787/998febf6-en (accessed on 22 July 2020)
  18. PHARMAC 2018/2019 Annual report: (accessed on 22 July 2020)
  19. Stats NZ 2019
  20. OECD National currency units PPP
  21. IMF. (2018). International Monetary Fund World Economic Outlook Database 2018. Gross domestic product per capita, current prices (Purchasing power parity; international dollars)