The distinction between Pharmac-funded and non-Pharmac drugs is one of the most important aspects of NZ health insurance — yet many New Zealanders don't understand it until they receive a diagnosis that requires an unfunded drug.
Pharmac in Brief
Pharmac is NZ's pharmaceutical funding agency. They decide which medicines are subsidised (funded) for New Zealanders through the Pharmaceutical Schedule. Pharmac operates on a fixed annual budget and uses health economics criteria to decide which drugs offer the best value.
The Pharmac Schedule
The Pharmac Schedule contains ~3,000 medicines that are funded. When you get a prescription for a funded medicine, you pay a small co-payment ($5 per prescription for most adults, free for under-14s and Community Services Card holders).
Non-Pharmac Drugs
Non-Pharmac drugs are medicines not listed on the Pharmac Schedule. These include: - Newer cancer immunotherapy drugs - Targeted cancer therapies - Some multiple sclerosis treatments - Some rare disease treatments - Recently approved international drugs not yet assessed by Pharmac
The Cost Gap
When you need a non-Pharmac drug, you pay full price. This can be astronomical: - Keytruda (pembrolizumab): ~$130,000/year for some cancers (now partly Pharmac-funded) - Herceptin (trastuzumab): was $70,000/year before Pharmac funding - Avastin (bevacizumab): ~$50,000–$100,000/year for some cancers - Ibrance (palbociclib): ~$100,000/year for breast cancer
How Health Insurance Helps
Premium health insurance policies include non-Pharmac drug cover. This means if you're diagnosed with cancer requiring a non-Pharmac drug, your insurer covers the cost (up to policy limits, typically $50,000–$300,000/year).
This is increasingly one of the most valuable aspects of comprehensive health insurance in NZ.