Medicines to get larger share of health funding under Act policy

Author: Adam Pearse,
Publish Date: Sun, 26 Jul 2026, 2:04pm

Vote 2026

Act is proposing to increase the Government’s medicines budget as a proportion of overall health spending with the hope of eventually achieving parity with Australia’s current spending.

The election policy, announced today in Auckland, proposed to increase the proportion of spending on medicines within the Government’s total health budget by 1 percentage point annually to 2033.

The policy used a 2025 report from the New Zealand Institute of Economic Research, which assessed New Zealand’s total pharmaceutical expenditure at 4.9% of health spending. It was the smallest proportion of the 13 countries included, less than half of Australia’s 12.2% and the 13.3% average among countries surveyed.

Under Act’s plan, medicines spending in Budget 2027 would increase to 6% of an estimated health expenditure between $33.4 billion and $36.6 billion. That would come to between $2b-$2.2b; an increase of $200m-$400m in medicines spending.

The medicines budget would increase by 1 percentage point each year until it reached 12% or $5.4b-$6.1b of an estimated $44.9b-$51b health budget in 2033-34.

Act’s policy claims it would put New Zealand “on a pathway to close the 7% medicines gap with Australia”. The policy assumes Australia does not increase or decrease its medicines spending as a proportion of its overall health spending between now and 2033.

Act leader David Seymour, also the minister responsible for the drug-buying agency Pharmac, believed the agency was held to a higher standard than the wider health system with regard to cost-effectiveness and didn’t receive a sufficient proportion of funding.

“This year health got a $1.5b funding uplift in Budget 26. Pharmac got $13.5m.

“Pharmac sweats every dollar for results, but the wider system doesn’t face the same discipline.

“Under Act’s policy, the medicines budget would have increased by around $320m in Budget 26, and health [spending] still would have increased by $1.2b.

“That means more New Zealanders getting medicines Pharmac already says are worth funding, instead of sitting on waiting lists because the budget has run out.”

Pharmac Minister David Seymour seated between Pharmac board chairwoman Paula Bennett (left) and chief executive Natalie McMurtry during a select committee. Photo / Mark Mitchell

Pharmac and successive governments had long faced criticism for not funding certain drugs which are available in other countries, leading to stories of patients who travel to seek treatment.

In his statement, Seymour addressed the concern by supporting the ability for New Zealanders to be treated within the country.

“No Kiwi should have to empty their savings, uproot their family, or leave the country to get medicines Australians receive as a matter of course.

He explained how medicines patients were seeking were waiting to be funded, prompting heartbreaking letters appealing to Seymour and Pharmac to commit more funding.

“Too often, I’ve had to explain the answer is no. My hands are tied because Pharmac just doesn’t have the money.”

Seymour acknowledged it would be ideal to achieve cross-party consensus when it came to medicines funding. While other parties would have their own policies, Seymour hoped it would receive widespread support.

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.