New Zealand's Striking Lag in New Medicine Access Uncovered by Latest Research

New Zealand's patients are enduring some of the longest waits in the developed world for access to innovative medicines, according to a comprehensive independent report released late last year. Commissioned by Medicines New Zealand and authored by the New Zealand Institute of Economic Research (NZIER), the study titled "Health Priorities?" meticulously compares public health expenditure across 13 OECD peers, painting a picture of systemic underinvestment in pharmaceuticals. This research publication highlights how New Zealand allocates just 4.9% of its health and disability budget to medicines, starkly below the 13.3% average of comparable nations. The findings have sparked calls for reform from policymakers, including Act Party leader David Seymour, who has publicly endorsed most of the report's conclusions.

The report's analysis draws on government budgets, OECD data, and Pharmac's own Options for Investment (OFI) list, which currently features 87 medicines awaiting funding decisions. With an average delay of 5.9 years from regulatory approval by Medsafe to public reimbursement, New Zealand patients miss out on treatments that could prevent hospitalizations and improve quality of life. This isn't merely a funding shortfall; it's a structural issue tied to Pharmac's fixed Combined Pharmaceutical Budget (CPB), which prioritizes generics and tenders over cutting-edge therapies.

Dissecting the Data: How NZ Stacks Up Against OECD Peers

The NZIER report provides granular comparisons, revealing New Zealand as an extreme outlier. While countries like Portugal (26%) and Spain (22.6%) dedicate over 20% of health budgets to pharmaceuticals, even closer peers lag far behind NZ's meager share. For context, here's a snapshot from the study's key table:

This over-reliance on service delivery (NZ's 70.3% is the highest) comes at the expense of preventive medicines that could reduce demand for hospitals and clinics. The research notes NZ's absence from OECD health expenditure reporting since 2007 exacerbates transparency issues, making international benchmarking challenging.

Historical trends show NZ's pharmaceutical share stuck around 5% since 2009, while peers like South Korea adjusted dynamically. The study correlates this with poorer health outcomes: NZ's healthy life expectancy is 85% of total life, below the peers' 87% average.

The Role of Pharmac: Fixed Budgets and Funding Bottlenecks

Pharmac, New Zealand's Pharmaceutical Management Agency, operates under a capped CPB of about $1.3 billion annually, achieving savings like $162 million in 2023/24 through tenders. However, this model delays uptake of new medicines, with 1.4 million Kiwis potentially benefiting from OFI-listed options. The NZIER research argues that medicines act as substitutes for services—e.g., statins prevent heart attacks, reducing ER visits—yet the fixed budget stifles such efficiencies.

• 87 medicines on OFI, many deemed global standards of care.
• Average 5.9-year wait from Medsafe approval.
• Recent $600 million CPB boost in Budget 2024 helped, but structural reform needed.

Critics, including Medicines NZ CEO Dr. Graeme Jarvis, note that low investment burdens the workforce and patients alike. Even Act's David Seymour concurs, stating the report aligns with government goals for better access.

Patient Stories and Real-World Impacts

Delays translate to tangible suffering. Cancer patients wait years for immunotherapies funded elsewhere, while rare disease sufferers rely on private imports costing thousands monthly. The Access to Medicines (AtoM5) report, another Medicines NZ-commissioned study, reveals NZ misses 142 modern drugs publicly funded in Australia—81% of which treat cancers, immunology, and neurology. A migraine patient, for instance, might endure debilitating attacks for six years post-approval, as NZ's median reimbursement lag tops OECD charts at 71 months.

Equity gaps amplify: Māori and Pasifika populations, already facing higher chronic disease rates, suffer disproportionately. University of Otago research underscores broader vulnerabilities, like medicine shortages in global disruptions, highlighting domestic production needs.

Photo by Marek Studzinski on Unsplash

Economic Toll: Billions in Lost Productivity and Avoidable Costs

The NZIER quantifies the drag: one extra healthy year per person could unlock $3.7 billion in annual economic value. Hospitalizations from untreated conditions exceed medicine costs manifold—e.g., a delayed biologic might save $10,000 in drugs but cost $50,000 in inpatient care. Treasury forecasts health spending hitting 10% of GDP by 2065; inefficient allocation fuels workforce shortages and infrastructure backlogs.

NZIER Report PDF details how peers leverage flexible budgets for cost-utility assessments without caps, yielding better outcomes.

University Research Driving Insights into Access Challenges

New Zealand's universities are at the forefront of scrutinizing these delays. The University of Auckland's School of Pharmacy conducts pharmacoeconomics studies, modeling cost-effectiveness for Pharmac decisions. Otago researchers warn of supply chain risks, advocating local manufacturing. A PLOS ONE study from NZ academics explored consumer access barriers, noting funding and doctor visit costs hinder switches to over-the-counter options.

Health economists at Victoria University analyze priority-setting, identifying vulnerabilities in rare diseases and Māori health. These efforts position unis as key advisors for reform. For those pursuing careers in health policy or pharma research, explore higher ed research jobs or academic CV tips.

Stakeholder Perspectives: From Industry to Government

Medicines NZ pushes for OFI prioritization, while Pharmac defends its model for value-for-money. Seymour's partial agreement signals coalition momentum. The Association of Salaried Medical Specialists critiques opaque data, urging OECD reinstatement. Patient groups like Migraine Foundation lament six-year lags versus OECD norms.

• Industry: Increase pharma to 10-13% for parity.
• Govt: Budget 2024's extra funds a start, but uncapped needed.
• Academics: Evidence-based thresholds without budgets.

Pathways Forward: Recommendations and Reform Blueprint

NZIER urges immediate pharma investment hikes, OFI clearances, and input-mix research. Broader fixes include flexible budgets, horizon scanning, and international price referencing like Australia's. Universities advocate multi-criteria decision analysis incorporating equity. Pilot uncapped funding for high-need areas like oncology could test impacts.

Photo by Marek Studzinski on Unsplash

Global Lessons and NZ's Unique Position

Australia funds 2.5x more new drugs via PBAC; Canada's pCPA balances speed and cost. NZ's single-payer edge could excel with reforms. PhRMA's Global Access report ranks NZ low on launches. OECD Health at a Glance notes NZ's care quality but access gaps.

OECD Health at a Glance NZ

Future Outlook: Toward Equitable, Timely Access

With 2026 budgets looming, reform momentum builds. Universities gear up for trials and econ modeling. Patients stand to gain healthier lives; the economy, productivity. Track developments via NZ academic opportunities. Interested in health policy roles? Check higher ed jobs, rate your professors, and career advice at AcademicJobs.com. Share your views in comments below.