Pharmac faces pressure to evolve from cost-focused to health-impact-focused, emphasising transparency and equity. Photo / Getty Images
Pharmac faces pressure to evolve from cost-focused to health-impact-focused, emphasising transparency and equity. Photo / Getty Images
Opinion by Cecila Robinson
Cecilia Robinson is a founder and co-chief executive of primary care provider Tend Health.
THE FACTS
Pharmac faces pressure to evolve from cost-focused to health-impact-focused, ensuring access to modern medicines.
Canadian Natalie McMurtry will join Pharmac on September 15
The Government boosted Pharmac funding by $1.7b in 2024 over the next four years
New Zealand’s medicine gap has long been a source of public frustration.
While last year’s announcement of an additional $604 million over four years by the coalition Government was warmly welcomed, a significant gap remains, compared with other countries.
Patient advocates such as Malcolm Mulholland and Fiona Tolich,alongside groups such as Patient Voice Aotearoa, have brought urgency and humanity to the issue of delayed or denied access to modern medicines.
Their tireless advocacy, amplified by journalist Rachel Smalley’s sharp campaigning and the lived experiences of thousands of New Zealanders, has helped shift this conversation from the margins to the mainstream.
How Pharmac can transform into a health enabler: Cecilia Robinson writes that it's about reimagining what Pharmac is here to do. Photo / Getty Images
The question is no longer whether Pharmac is doing the best it can with what it has, but whether its model is still fit for purpose.
As someone who moved from Sweden, where access to modern treatments is standard, I was horrified to discover that many New Zealanders must turn to Givealittle to fund medicines available freely elsewhere.
Therefore, the appointment of Natalie McMurtry as Pharmac’s new chief executive comes at a critical time. While her background in Alberta’s health system brings relevant experience, the task ahead is not just about leadership, it’s about reimagining what Pharmac is here to do.
Pharmac must shift from being a gatekeeper of cost to an enabler of health impact. Its role can no longer be confined to doing more with less. The public expects more transparency, compassion and to access medicines freely available in countries such as Australia, Ireland and Singapore.
Pharmac’s original model was developed in a different era, when the core challenge was controlling pharma companies, who were gaming the system, and skyrocketing costs. These issues are still important, but cost-effectiveness, particularly as measured through QALYs (Quality-Adjusted Life Years), is now too narrow a lens. It doesn’t account for broader system benefits: medicines that prevent hospitalisation, help people stay in work, reduce caregiving pressure or support mental wellbeing.
New Zealand's medicine gap persists despite a $604 million investment, with patient advocates urging change. Photo / 123rf
We need to move towards a broader, health-impact framework. Medicines should not be viewed in isolation as a standalone budget line but as levers that can help to reduce pressure across the entire system. They reduce demand on emergency departments, improve quality of life and help address chronic conditions before they escalate.
This evolution in thinking requires stronger alignment between Pharmac and Health New Zealand Te Whatu Ora. As integrated care becomes the national direction, the way we fund medicines must reflect how those medicines contribute to overall system efficiency and patient outcomes.
Pharmac’s current structure, operating within a ring-fenced budget, has created artificial constraints that limit innovation. While it has helped secure competitive prices, it has also locked us into a rigid, risk-averse model that can’t keep pace with the demands of modern medicine.
To stay relevant, Pharmac must adopt smarter, more flexible funding approaches. This includes:
● Outcomes-based pricing: linking funding to real-world results, so high-cost drugs are only paid for if they work
● “Access equity” funding: targeted budgets for treatments that don’t fit traditional metrics, such as rare disease therapies
● Public-private co-investment: partnerships to enable earlier access to emerging or breakthrough treatments
These models are already in use globally. New Zealand, with its small scale and centralised health system, is well placed to adopt and lead in this space but doing so will require political will and cross-agency collaboration.
One of the strongest criticisms of Pharmac is that its decision-making too often overlooks the most marginalised. Equity must not be treated as a footnote, it must be central to how decisions are made.
Pharmac must evolve to meet New Zealand's healthcare needs, advocates say. Photo / Getty Images
That means asking tough but necessary questions: are Māori and Pacific patients missing out? Are people in rural communities being reached? Are high-cost treatments for small groups, such as children with rare conditions, being given a fair assessment?
True equity means seeing value not only in volume, but in fairness. We must move away from one-size-fits-all measures of utility and toward a model that recognises the value of treating the under-served, the isolated and the overlooked.
Pharmac has made efforts to improve its equity lens, but these steps need to be embedded and expanded. This includes involving communities earlier in decision-making, co-designing criteria for assessment and setting explicit targets to reduce access gaps.
If there is one thing Pharmac must urgently regain, it is public trust. Right now, too many New Zealanders feel shut out of its processes, confused by its rationale and left behind by its pace.
Trust won’t be rebuilt through a communications campaign. The Pharmac chair, Paula Bennett, is pushing through some important reforms which require a fundamental shift in how Pharmac relates to the people it serves. That means:
● Transparent processes that clearly explain what’s funded and why
● Better engagement with patients, clinicians, researchers, and advocacy groups
● A willingness to admit when the system isn’t working and to try new things
The leadership of new CEO McMurtry offers an opportunity to reset that relationship. Her described strengths, quiet achievement, systems thinking, and clinical experience, will need to be paired with openness, boldness, and humility.
It’s encouraging to see the appointment of Dr Dale Bramley as CEO of Health New Zealand Te Whatu Ora.
Bramley brings deep experience as a public health physician and former chief executive of the Waitematā District Health Board, along with a strong understanding of the health system from both clinical and leadership perspectives.
Dr Dale Bramley has been appointed CEO of Health New Zealand Te Whatu Ora, bringing extensive public health and leadership experience to the role. Photo / Dean Purcell
His appointment provides a valuable opportunity to strengthen alignment between Health New Zealand Te Whatu Ora and Pharmac. As the country moves towards integrated care as the national model, our approach to funding medicines must also evolve, recognising the role modern medicines play in improving patient outcomes and driving overall system efficiency.
Health systems globally are shifting from volume to value. New Zealand must do the same. That requires moving beyond simple funding silos and embracing joined-up thinking, where medicine access is seen as a strategic investment, not just a cost centre.
Pharmac has a unique role to play in this shift. But to fulfil it, the agency must move from cautious gate keeping to confident leadership. It must be willing to challenge legacy assumptions and champion bold ideas that better serve the public good.
The real test is whether it can lead to a smarter, fairer, more compassionate approach to medicine access – one that reflects the realities of modern New Zealand, embraces equity, and evolves as science and society change.
The opportunity is real. With the right leadership, the right frameworks and the courage to think differently, Pharmac can become not just a funding body but a force for health transformation.
But that will take more than good intentions. It will require bold decisions, structural reform and a clear commitment to doing things differently.
Tinkering at the edges won’t cut it.
The time for real change is now.
Ultimately, Pharmac’s legacy won’t be defined by how tightly it managed its budget. It will be judged by how well it met the health needs of its people.
