Associate Health Minister David Seymour said he is advocating for an extra allocation of hundreds of millions of dollars for drug funding in the upcoming budget.
Evidence is currently being collected to support the increased spending.
A new report revealed that the gap in medicine availability between Australia and New Zealand is growing larger and more severe.
Medicines New Zealand published its Access to Medicines report, which examined drug funding in both Australia and New Zealand from January 2011 to June 2025. The report found that during this period, Australia publicly funded 215 modern medicines, while New Zealand funded only 86.
The report has also revealed that in Australia, medicines were funded on average within 18 months after registration, whereas in New Zealand, the average wait time was nearly three years.
Seymour said there is a strong case for increasing drug spending and that a new approach is needed to evaluate the cost benefits of medications.
“We need to move from economising within a capped budget to optimising the use of medicines and medical technology within the New Zealand healthcare system,” he said.
“That means that if, for example, our medicine costs more, but people can return to work fast to pay more tax and require less treatment in hospitals, then we should be factoring that in and actually using that kind of information to justify higher spending.”
As the minister responsible for Pharmac, the country’s drug purchasing agency, Seymour said they are currently working on proposing this new funding approach.
“Pharmac and the Ministry of Health are preparing just such a budget bid in order that we can justify to the rest of the government and the budgeting process a greater expenditure on medicines.”
“We are going to seek hundreds of millions of additional medicines funding.
“Of course that is subject to the budget process, which I can’t get ahead of or try to predetermine, but we’re certainly going to make a strong case that more medicines are good for patients and can be offset by other savings in the health system and the wider New Zealand economy.”
Seymour expressed confidence that his coalition partners were receptive to the idea.
“It’s a lot like what Nicola Willis, for example, talks about in relation to social investment spending now to reduce cost to the government in the future.
“New Zealand First campaigned in the election on uncapping the medicines budget, and I think they might have even said double it. So certainly there is openness to this kind of change within the coalition.”
However, he acknowledged that the government is facing “enormous” pressure to maintain a balanced budget.
“It has to be viewed within that context and the fact that we’ve already had bigger upgrades for Pharmac funding under this than just about anything else the government’s done, and certainly bigger than at any other time in the history of Pharmac.”