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

Media release Medicines

Pharmac welcomes the $191 million increase to its pharmaceutical budget over the next two years. It is already working its way through the medicines options for investment (OFI) list, looking at what agreements it can now make with pharmaceutical suppliers.

“This budget increase is the biggest we’ve had since we were formed almost 30 years ago,” says Pharmac’s Chief Executive Sarah Fitt. “We are getting an additional $71 million for 2022/2023 and then an additional $120 million for 2023/2024 - extra budget that means we can keep making more treatments available to more New Zealanders.”

With the budget increase confirmed, Pharmac is now talking with pharmaceutical suppliers about possible agreements for treatments on its options for investment list(external link), including signalling that it will be releasing a request for proposals for immune checkpoint inhibitors for lung cancer treatment shortly.

“The funding increase now enables us to progress a request for proposals for immune checkpoint inhibitors for lung cancer. We had previously planned this for 2020 but had to postpone it due to the uncertainty of COVID’s impact at that time.

“We are pleased to be able to progress this commercial process now, as Te Aho o Te Kahu’s recent report into the availability of cancer treatments reaffirms for us that lung cancer is one of the most commonly diagnosed cancers in Aotearoa. We also know that lung cancer is a condition that disproportionately affects Māori and Pacific peoples. Lung cancer incidence as a whole is more than three times higher in Māori compared with non-Māori and nearly two times higher in Pacific peoples compared with non-Māori, non-Pacific peoples.”

Pharmac also started formal consultation processes today on proposals to fund medicines for conditions including breast cancer, blood cancer, multiple sclerosis, hormone replacement and HIV - medicines that could benefit many more New Zealanders.

“This is just the beginning; this budget increase will mean many more treatments being progressed for funding over the coming 12 to 24 months,” says Ms Fitt. “We will be working closely with our colleagues across the health sector to plan for the implementation of new treatments

“With new and often expensive medicines being developed all the time, there will always be medicines we won’t be able to afford. We will, however, be using our expertise to ensure we can secure as many treatments as possible.

Today’s announcement means Pharmac’s budget for medicines is now $1.186 billion and next year will be $1.245 billion. In addition, Pharmac is also managing $300 million of COVID-19 response funding for COVID-19 treatments that was provided last year and $175 million for supply issues, caused by COVID-19.

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Pharmac released our options for investment list (OFI) last year, aiming to be more transparent about the medicines that we would like to fund when there is funding available. Some applications on this list are for new medicines and some are for medicines already funded that Pharmac would like to fund for wider use for more patients.  Our OFI list is published in alphabetical order to keep the preferential rankings of individual funding applications confidential. This ensures we can continue to negotiate the best prices we can for the medicines we can afford.