Cost Resource Manual

This manual is intended to promote consistency in the costs and prices used in health technology assessments by and for PHARMAC. It was first published in 2012.

Current data on key costs and prices that PHARMAC regularly uses in cost-utility analyses (CUAs) and budget impact analyses (BIAs) are listed, so that applications for funding can use the same data as PHARMAC does in its own economic assessments.

The Cost Resource Manual supplements the Prescription for Pharmacoeconomic Analysis (PFPA). The PFPA gives more detail on the scope of costs that PHARMAC considers in technology assessments, and how and when to include different categories of costs in health economic models.

Table 1: Key costs by category

Cost Details


Community and hospital pharmaceuticals
Pharmacy fees
Pharmaceutical administration
Pharmacy costs to patients

Primary health care

General practitioner or practice nurse visits

Investigative and diagnostic tests

Diagnostic imaging
Pathology tests

Hospital care

Hospital inpatient care
Hospital outpatient care (specialist appointments and emergency room visits)
Travel and accommodation

Community health services

Palliative care
Residential care
In-home nursing, personal care and home help
Prenatal and postnatal care
Disability support services

Costs, prices and sources

This manual does not include all costs that may be required for an economic analysis, but rather it lists the key prices that are commonly used in assessments at PHARMAC and that are likely to be relevant to the funding of a new pharmaceutical.

This manual mostly contains information on prices and unit costs. To estimate an average cost for input into an economic analysis, this data needs to be combined with data on resource use, such as the number of GP visits or the length of stay in hospital. Where feasible, resource use estimates should be based on New Zealand information from clinical guidelines, expert clinical opinion, clinical trials, and/or the Ministry of Health. If New Zealand data is not available, international sources may be used, but should be validated for the New Zealand setting.

The methods PHARMAC uses for economic analyses are published in the Prescription for Pharmacoeconomic Analysis (PFPA). The PFPA includes detailed recommendations on how to identify and include costs in health economic analyses. This Cost Resource Manual supplements the PFPA.

As recommended in the PFPA, all costs used in assessments exclude Goods and Services Tax (GST).

Method for collecting cost information

PHARMAC staff have searched for the most relevant and accurate prices and cost estimates, including contacting health organisations directly for data. The source of the costs and the date we received them are recorded in PHARMAC’s cost database. When more than one cost estimate is available, for example, when costs differ between regions, an average cost estimate is often used. A number of the estimates are proxy as accurate cost information is unavailable.

Information and estimates are constantly changing; therefore, the costs listed in this document are subject to change at any time. We aim to update these costs as new information becomes available.

If you need other cost data to complete an assessment, please contact:

1. Cost of pharmaceutical treatment

Total cost to the health sector

The total cost to the health sector of a pharmaceutical treatment for use in the community includes the:

  • cost of the pharmaceutical
  • pharmacy handling and service fees, pharmacy margin and pack fees (community pharmacy dispensing)
  • cost of administering the pharmaceutical (if relevant)
  • cost of the GP visit for the prescription (if relevant).

Treatments used in hospital settings may also have specific administration costs, such as for infusions.

Total cost to patients

The total cost to patients of a pharmaceutical treatment for use in the community includes the:

  • patient prescription co-payment of $5 (excluding children)
  • patient pharmaceutical part-charge (for pharmaceuticals not fully funded)
  • cost of the GP visit to the patient for the prescription (if relevant).

In a hospital setting, the costs to patient may include costs of travel to reach a hospital or outpatient clinic.

2. Primary health care

Primary health care costs include the cost of general practitioner (GP) and practice nurse visits.

Primary care services in New Zealand are funded by a combination of public funding from capitation-based payments and patient co-payments. Cost calculations should therefore be based on the average cost to the patient plus any government subsidy (if applicable).

Under the capitation payment system, primary health organisations (PHOs) and their general practices are paid according to the number of people enrolled, rather than the number of visits made by patients. Age, sex, ethnicity, and deprivation level of the enrolled patients are considered in calculating capitation levels. Capitation rates are revised each year. An approximate cost of a GP visit can be estimated based on the number of visits per enrolled patient within each age band.

The patient co-payment for a GP visit varies significantly between practices. An approximate price was used in cost calculations. GP and practice nurse visits are free for children under 13 years of age; therefore, the full cost is to the DHB.

Table 3: Primary health care costs

Service Cost ($) Per Source Date of estimate Notes
General practitioner (GP) costs

GP practice visit



Various PHOs


Estimated average cost. Includes both patient co-payment and government contribution. GST-exclusive.

GP home visit



Various GP practices across NZ


Estimate, includes patient co-payment and government contribution.

Nurse costs

Practice nurse visit



Various PHO websites


Based on a 10-15 minute consultation at a doctor’s surgery. Includes both patient co-payment and government contribution.

Other primary care costs

Repeat prescription fee



Various GP practices


Average cost (GST exclusive).

Immunisation subsidy



Ministry of Health


Subsidy for administration of a vaccine to an eligible patient.

3. Investigative and diagnostic tests

4. Hospital costs

5. Community health services costs

Community health services costs include:

  • palliative care
  • residential care (rest home, dementia care, and hospital care for the health of older people)
  • in-home nursing, personal care and home help
  • prenatal and postnatal care
  • disability support services funded by the Ministry of Health
  • ambulance services.

Some of the costs associated with health care in the community are outlined in table 6 below. Some costs can be estimated using Purchase Units.

Table 6: Community Care Costs

Service Cost ($) Per Source Date estimated Notes
Residential and hospice care

Rest home



Various rest home providers


National average costs.

Dementia care





Hospital care for health of older people





Hospice care



Average across various hospice providers

2009 inflation-adjusted to 2018 prices.

Includes overheads.

Varies by indication.


Ambulance (emergency)



St John ambulance


GST-exclusive charge for non-eligible visitors.

The patient part-charge for non-accident-related emergency call-outs is $83 (GST-exclusive).

Ambulance (non-emergency)



St John ambulance


Charge for non-emergency ambulance transport not covered by government, for distances less than 35 km.

GST-exclusive price.

6. Summary of costs