Pharmac - Struggling to meet the needs of New Zealanders

Living in a first-world country, most New Zealanders diagnosed with a serious or life-threatening illness would expect their public healthcare system to deliver the best treatment and medicines that money could buy.

But they’d be wrong.

While New Zealanders pay some of the highest taxes in the OECD, they can no longer rely on our healthcare system to deliver world-class medicines if they fall seriously ill.

Should they need to access the cutting-edge drugs that could extend or even save their lives, most have few options, none of them particularly palatable: selling assets such as cars, homes or investments such as shares; mortgaging their home; emptying their KiwiSaver account (if their provider will allow this); or using online crowdfunding platforms like Givealittle, in the hope that people will make donations towards their life-saving surgery or drugs.

Whichever way you fund it, access to state-of-the-art drugs could set you back tens, if not hundreds, of thousands of dollars a year. But these medicines could make the difference between life and death. Sadly, they are way out of reach for most New Zealanders – unless they are very wealthy and/or have private health insurance, with a policy that specifically covers non-government-funded medicines and other treatments.

According to the Financial Services Council, just under a third of New Zealand adults (1.4 million people) have private health insurance, as of June 2021. It’s harder to get a fix on the number with policies that specifically cover non-Pharmac drugs.

Pharmac is the government’s drugs-buying agency and it decides which medicines and other pharmaceutical products will be subsidised in our public hospitals and in the community.

Trouble is, Pharmac’s annual budget is capped by the government at $1 billion per year. While that may seem a lot, it’s only a fraction of the amount required to give all New Zealanders, especially those with serious illnesses or rare disorders, access to the life-changing therapies subsidized by governments in many other OECD countries. This has created a two-tier health system in New Zealand: the haves and the have-nots.

New Zealanders have some of the worst access in the western world to modern, life-saving drugs. Within the OECD, we’re at the bottom of the list at number 20 (just below Portugal). Germany is at the top and Australia is number 17.

According to a 2020 report by Medicines NZ, a lobby group for the pharmaceutical industry, New Zealanders have publicly-funded access to only 24 of the 403 modern medicines (6%), which were launched and registered in the OECD countries between 2011 and 2018 – the most recent figures available. By way of contrast, Germany, the top-ranking country, funded 211 new medicines.

So, it’s hardly surprising that desperately ill Kiwis are forced to sell their homes or resort to Givealittle pages when they or a loved one receives a bad diagnosis. The government is not investing sufficiently in state-of-the art medicines to help New Zealanders who need access to these life-saving drugs.

Unfortunately, the situation with Pharmac is not likely to improve any time soon. Many New Zealanders have, and will continue to be, stuck with the limited and often outdated medications that Pharmac has chosen to fund.
One of the most viable ways to protect yourself and your family against the pitfalls in our public health system, is by having private medical cover. Some of the best policies on the market fund up to $300,000 per year for non-Pharmac medications, along with comprehensive coverage for other private hospitalisation and surgeries.

Not all policies are made equal. It's really important if you already have private medical in place, to know what your policy does and does not cover you for, before you need to make a claim. If you are unsure on any details of your policy, please contact us and we can look into this for you.

If you are considering taking out private medical, or would like to know more, please talk to us. We have access to the best policies available, and can help find cover that ticks all of your boxes and fits within your budget.