The national drug-buying agency will get an extra $66 million in 2023 in a one-off cash injection, according to documents reviewed by Newsroom
The Government will announce a one-off boost to Pharmac's budget of $66 million ahead of or at this year's Budget.
In November, then-Health Minister Andrew Little took a paper to Cabinet seeking authorisation to increase the medicines funding agency's budget for the 2023/24 fiscal year. Treatments funded with the additional cash are expected to help 4700 people in the first year, increasing to 15,000 the next year.
The precise figure arose from Pharmac estimates of what it needed to fund more medicines over the coming years. It asked for $11m for 2022/23 and $66m for 2023/24, but the dollar figures for the next four years were redacted from the paper.
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A spokesperson for Ayesha Verrall, the current Health Minister, confirmed Cabinet had agreed to the proposal. Little wrote in the paper that it would be announced as part of Budget 2023 in May.
The Cabinet paper noted this one-off boost would need to be shored up with ongoing funding in Budget 2024 or Pharmac "will need to go through a process of delisting medicines to ensure that spend is contained with the available funding level of the [Combined Pharmaceutical Budget]".
The money is on top of a record boost the agency received at the last Budget - $71m for 2022 and $120m for 2023. Both the latest increase and the Budget 22 money will run out at the end of the 2023/24 year, dropping the agency's budget from $1.31 to $1.13 billion.
"Funding this ongoing investment at Budget 24 will mean that there will be a reduced ability to progress other priority new initiatives in the Budget," Little wrote in November.
The source of the one-time boost was redacted in the paper, but a later section said $41.56m will be deducted from capital allowance originally appropriated to help the health system with the Covid-19 response. A reference to impact on net core Crown debt indicates the remainder could potentially be debt-funded.
Little did detail the benefits of the move.
"The majority of the treatments would advance Pharmac and the health and disability system's ambitions to achieve equity of health outcomes for Māori, primarily because there is a higher prevalence of Māori living with the conditions and/or because Māori are at higher risk of poorer health outcomes from the conditions, compared with the general population," he wrote.
"For most of these treatments there is evidence to suggest that the same is also likely to be true for other groups experiencing health disparities such as Pacific people and people living in low socioeconomic areas."
It would also raise New Zealand's medicines investment "closer to that of other similar jurisdictions" and "demonstrate the Government's ongoing commitment to provision of new medicines, whilst retaining the benefits of a fixed budget and a focus on value for money and fiscal sustainability".
