People who need expensive Pharmac-funded drugs can access them regardless of their DHB's ability to pay for it under changes to the drug-funding model.

From July 1, Pharmac will take over responsibility from District Health Boards (DHBs) for buying all their medicines, which Treasury forecasts will save close to $200 million over four years through its purchasing power.

Until now, Pharmac managed the DHBs' community drug-buying budget while DHBs held their own budget for buying medicines for their hospitals.

Under the new arrangement, DHBs will turn over that budget to Pharmac as well, to take advantage of the agency's purchasing power.


"This means, that no matter where patients are in New Zealand, everyone can access the same medicines for the same illness," Pharmac chief executive Sarah Fitt said.

"DHBs do not have to worry about their medicines expenditure, leaving them to concentrate on treating patients they see with the right medicines at the right time," she said.

"It also means that Pharmac will improve our purchasing power. We can generate more savings that will lead to more, innovative medicines being funded in the future".

The change is expected to produce savings of $194.7m over four years.

The Combined Pharmaceutical Budget, which includes DHB funds, will increase to a record $985m in 2018/19 - an increase of just under $114.2m on 2017/18.