Pharmac (the New Zealand pharmaceutical funding agency) only funds a fraction of the medicines available in NZ. For treatments Pharmac doesn't fund — particularly cancer drugs — the cost falls entirely on patients. This is where health insurance becomes critical.
What is Pharmac?
Pharmac is the government agency that decides which medicines are subsidised for New Zealanders. It operates on a fixed budget and uses cost-effectiveness criteria to decide which drugs to fund.
The reality: many effective treatments — particularly newer cancer drugs — are not funded by Pharmac because the cost-per-QALY (quality-adjusted life year) exceeds Pharmac's threshold.
The Non-Pharmac Drug Gap
The gap between what's available internationally and what Pharmac funds is significant: - Some cancer immunotherapy drugs cost $100,000–$300,000 per year - Targeted cancer therapies may cost $50,000–$150,000 per course - Multiple sclerosis treatments: $30,000–$80,000 per year
Without private insurance, patients either pay out-of-pocket, fundraise, or go without.
Which Insurers Cover Non-Pharmac Drugs?
Most comprehensive hospital policies now include some non-Pharmac drug coverage:
Southern Cross: Wellbeing Two and above includes non-Pharmac drug cover with limits nib: Ultimate and Comprehensive plans include non-Pharmac cover AIA: Trauma Recovery and premium hospital plans include non-Pharmac cover Partners Life: Premium hospital cover includes non-Pharmac drug benefit
Limits and Sub-Limits
Most policies have annual limits on non-Pharmac drug coverage, typically ranging from $50,000 to $300,000 per year. When comparing policies, pay close attention to these limits.
Is Non-Pharmac Cover Worth It?
For most people, yes — especially for cancer. The probability of needing an expensive cancer drug that Pharmac doesn't fund may be 10–20% over a lifetime. The financial protection far outweighs the additional premium cost.