Government Sets New Direction for Pharmac to Improve Patient Access

The Government believes improving efficiency will help stretch available funding further while maintaining confidence that public money is being spent where it delivers the greatest benefit.

The New Zealand Government has set a new direction for Pharmac, asking the agency to improve how it delivers medicines and medical technology while making better use of its existing budget. Associate Health Minister David Seymour says the updated expectations are designed to ensure New Zealanders receive quicker access to essential treatments, stronger engagement in funding decisions and greater transparency throughout the process.

For many patients, access to funded medicines is not simply about treatment options but about extending life, reducing pain and improving everyday wellbeing. Seymour said Pharmac must continue delivering high-quality outcomes within its fixed budget by finding smarter and more efficient ways of working, allowing more people to benefit from publicly funded medicines.

The Government believes improving efficiency will help stretch available funding further while maintaining confidence that public money is being spent where it delivers the greatest benefit. The latest Letter of Expectations for the 2026/27 financial year builds on reforms introduced over the past two years and places a stronger focus on patients, digital innovation and accountability.

Faster decisions, stronger patient voice and wider health impact at the centre

Among the Government's priorities is ensuring that Pharmac's assessment, procurement and exceptional circumstances processes continue to work effectively for patients seeking access to medicines and medical devices. Seymour said the agency should also strengthen the way it evaluates funding decisions by considering not only direct health outcomes but also the wider social and economic benefits that medicines can deliver for individuals, families and communities.

Another key expectation is giving patients, carers and families a stronger voice throughout the decision-making process. The Government wants Pharmac to continue expanding consumer engagement so that those directly affected by funding decisions have greater opportunities to contribute their experiences and perspectives.

Improving transparency is also a major focus. Pharmac has been asked to introduce assessment timeframe targets, publish performance information and release decision records more quickly so patients and healthcare providers have a clearer understanding of how funding decisions are made and how long assessments are expected to take.

The Government also wants Pharmac to deepen collaboration with consumer organisations, pharmaceutical suppliers and other stakeholders. Better communication and planning across the health sector is expected to improve procurement processes and create better outcomes for patients needing access to new treatments.

Digital transformation forms another important part of the agency's future direction. Pharmac has been encouraged to continue investing in modern data systems and digital infrastructure, including the responsible use of artificial intelligence to improve core operations, strengthen decision-making processes and support more efficient management of medicine funding.

Budget increases and recent achievements lay the foundation for future reforms

Seymour acknowledged that Pharmac has already made significant progress in responding to earlier government expectations. He said the agency has shifted its organisational culture through a year-long Reset Programme developed with input from the Consumer and Patient Working Group, while also establishing a new strategic vision following extensive consultation with both internal teams and external stakeholders.

The agency has also modernised several of its operational systems. Work has begun to replace the ageing Pharmaceutical Schedule with improved digital infrastructure, and a streamlined assessment pilot has helped accelerate parts of the medicine evaluation process. Pharmac has strengthened partnerships across the sector by creating a Medical Devices Supplier Reference Group, establishing a dedicated Consumer Engagement team and expanding public consultation to include its annual tender process.

Additional work has focused on improving access to medicines and medical technology. Pharmac has consulted international experts to better understand how funding decisions can account for broader societal impacts and has also established a medical devices procurement arrangement with Health New Zealand.

The Government says these improvements have been supported by record investment. Since taking office, it has allocated Pharmac a four-year budget of $7.2 billion, the largest in the agency's history. This funding includes a $1.77 billion investment announced in Budget 2024 to replace previous time-limited funding arrangements, a further $604 million uplift announced in June 2024 and an additional $54 million over four years included in Budget 2026.

According to Seymour, the increased funding has already translated into better access for patients across New Zealand. Pharmac has made 135 decisions to fund new medicines or expand access to existing treatments, including 47 cancer medicines. More than 680,000 patients are expected to benefit during the first year these funding decisions take effect.

While recognising the progress achieved so far, Seymour said Pharmac's improvement journey is continuing. He believes listening carefully to patients and consumers will remain central to the agency's next stage of reform as it works to deliver faster, more transparent and more effective medicine funding for New Zealanders. The Government expects these changes to strengthen confidence in Pharmac while helping ensure that more people receive the treatments they need when they need them most.