Pharmac’s $1.69b Medicines Budget Funded 66 New Medicines In Record Year; Gaps Still Drive Health Insurance Purchases

New Zealand’s medicine-buying agency Pharmac managed a $1.69 billion budget in 2024/25 and funded 66 new medicines – 33 for cancer and 33 for other conditions – in the largest investment programme in its history, according to a comprehensive new guide published by personal finance research website MoneyHub. However, the guide reveals that significant gaps remain between what Pharmac funds and what is available internationally, with unfunded cancer immunotherapies costing $50,000–$100,000+ per year for patients paying privately.

MoneyHub’s analysis of Pharmac’s 2024/25 Annual Report shows that 4.182 million New Zealanders – essentially the entire population – received funded medicines, while total gross spending reached $2.71 billion through commercial rebate arrangements that effectively doubled the Government’s buying power.

Key findings from the guide include:

• Record investment: 66 new medicines funded following a $604 million Government budget uplift – estimated to benefit 248,000 people in the first year
• Budget stretching: $1.69 billion appropriation stretched to $2.71 billion gross spending through $1.086 billion in commercial rebates
• Cancer focus: 33 cancer medicines funded including treatments for liver cancer, kidney cancer, melanoma, and leukaemia
• The funding gap persists: Modern cancer immunotherapies cost $50,000–$100,000+ per year unfunded – one of the primary reasons New Zealanders purchase private health insurance
• Average wait time: Approximately 36 months (three years) from funding application to first decision for recent applications
• 83 total decisions: 31 new listings plus 52 widened access decisions – compared to just 28 total decisions the year before
• ADHD and diabetes breakthroughs: Continuous glucose monitors funded for 12,000+ Type 1 diabetes patients, and additional ADHD treatment options with simplified prescribing

“Pharmac affects every New Zealander – every prescription, every hospital treatment, every vaccination – yet few people understand how the system actually works,” said Christopher Walsh, Founder of MoneyHub. “The 2024/25 year saw 83 decisions compared to 28 the year before, but it took a $604 million budget uplift to deliver it. Without increased Government investment, Pharmac’s annual output is typically 20 to 45 decisions.”

Walsh highlighted the connection between Pharmac and personal financial planning: “New Zealanders often buy health insurance without fully understanding why they need it. The answer, in large part, is Pharmac. The public system provides excellent core coverage, but it has limits – and those limits are set by budget, not by what’s medically available. Understanding this gap is essential to deciding whether health insurance is right for you.”

The full guide, including budget analysis, new medicine listings, the NPPA safety net process, and how health insurance covers the Pharmac gap, is available at: Understanding Pharmac – The Definitive Guide

About MoneyHub

MoneyHub is New Zealand’s leading independent financial guidance website, offering free research, tools, and guides to help New Zealanders make better money decisions.

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