Looking after New Zealand's medicines and hospital medical devices
Pharmac manages a fixed budget set by the Government and decides which treatments will be funded. We’re also working on a new way of managing hospital medical devices.
Our job is to get the best health outcomes from treatments for New Zealanders, while staying within the fixed budget the Government sets. This means we must make difficult decisions about which treatments we will fund – there will always be more treatments we want to fund than we can afford.
Our budget has increased over time to enable us to fund new treatments, widen access to treatments already funded, and meet other costs, such as those related to price increases and population growth. To help free up budget to fund new treatments, we also work hard to reduce the cost of the treatments we already fund.
Pharmac’s work with hospital medical devices
Pharmac is also working with Health New Zealand, suppliers, and others, towards a new way of managing hospital medical devices used or supplied in hospitals or hospital specialist services.
We are doing this in two ways:
- We are adding hospital medical devices to the Hospital Medical Devices List and negotiating contracts as we go.
- We are developing new processes that will be used to manage what is added and removed to the Hospital Medical Devices List.
Combined Pharmaceutical Budget expenditure, 2013–2023
This graph shows our impact on New Zealand’s spending on funded pharmaceuticals over the past
decade, using 2012 prices as a baseline. The gap between estimated expenditure (dark blue line)
and actual expenditure (dark green line) highlights the nearly $2.5 billion the health and disability
system would have had to spend on treatments this year without Pharmac’s pharmaceutical
management.
Spend and savings for hospital medical devices, 2014–2023
This graph shows our impact on medical devices spending and savings over the past decade. The total annual expenditure under agreement line (solid line) shows how much hospitals have spent on devices we have under contract each year. The cumulative savings line (dotted line) shows what savings have accumulated through Pharmac’s national contracting.
Price, volume, mix, and subsidy for treatments in New Zealand,
2013–2023
This graph shows that the number of treatments (volume index) and the variety of treatments (mix index) have increased – meaning we’re seeing more, and varied, treatments in New Zealand. At the same time, the cost of treatments (the cost index) has increased but the actual price paid (the subsidy index) has decreased – showing Pharmac is getting more treatments for less money.
