Budget bid information

Budget 2023

Budget 2023 saw the overall Combined Pharmaceutical Budget (CPB) increase to nearly $1.5 billion.

The CPB funds medicines, devices, vaccines, haemophilia treatments, and related products, that are provided in community settings and all spending on medicines that are given in public hospitals.

The increase includes funding to pay for COVID-19 vaccines and treatments, which were previously paid for from a separate budget. An additional $21.8 million of funding was also provided because the $5 co-payment was removed. We expect this policy change to increase the number of people picking up their prescriptions - increasing the cost to the CPB.

Changes to the CPB from 2022/23 ($ million)

BUDGET BREAKDOWN ($ Million)	2022/23	2023/24
Budget 2021	1,090	1,100
Budget 2022 Hospital medicines - baseline increase	25	25
Budget 2022	71	120
Budget 2023		66
COVID-19 vaccines and treatments		164.8
Impact of $5 co-payment removal		21.8
Total CPB	1,186	1,497.6

Budget 2022

From 1 July 2022, an appropriation was created by Government and allocated to Pharmac (widely referred to as the Combined Pharmaceutical Budget or CPB). This was part of health and disability system reforms, shifting budget holding and management away from the previous 20 District Health Boards to the national body responsible for assessment and decision-making about funding.

2022/23 Vote Health estimates(external link)

The appropriation for the CPB is called ‘National Pharmaceutical Purchasing Appropriation'

What we asked for

Pharmac’s advice to the Ministry and Minister of Health for Budget 2022 was for an increase of $191 million to the CPB over two years.

Pharmac will use biggest budget increase ever to fund more medicines for more New Zealanders

$ MILLION	2021/22	2022/23	2023/24
CPB baseline	1,085	1,090	1,100
New medicine investments	-	71	120

COVID-19 Response and Recovery Fund

Pharmac received additional separate funding from the Government to meet additional CPB costs that were incurred as a result of the COVID-19 pandemic. The table below summarises the funding received from 2019/20.

$ MILLION	2019/20	2020/21	2021/22	2022/23	2023/24
COVID-19 Public Health Response: Additional Funding	35.0
COVID-19 Response and Recovery Fund (CRRF)		74.0	76.0	50.0	-

How the CPB has changed over time

Combined Pharmaceutical Budget (CPB), 2017/18 to 2023/24

FINANCIAL YEAR	CPB ($ MILLION)	CHANGE FROM PREVIOUS YEAR ($ MILLION)	PERCENTAGE CHANGE FROM PREVIOUS YEAR (%)
2023/24*	1,497.6	311.6	26.3
2022/23	1,186	101	9.3
2021/22	1,085	40	3.8
2020/21	1,045	5	0.5
2019/20	1,040	55	5.6
2018/19	985	114.2	13.1
2017/18	870.8	20.8	2.4
2016/17	850	50	6.3
2015/16	800	5	0.6
2014/15	795	-	-
2013/14	795	11.4	1.45

* Current financial year

Pharmac's financial year runs from 1 July to 30 June.

Previous budget bid letters

Before 2022/23, we worked with all the district health boards to agree the CPB bid. Together, we sent this proposal to the Ministry of Health.

More information

About the Combined Pharmaceutical Budget

We have released a lot of information about the CPB under the Official Information Act (OIA). Search for Budget on our OIA index page.

Official Information Act responses