Guide
How Pharmac funding works.
Written for suppliers outside New Zealand who need to understand the process before committing to it. Pharmac is not a threshold system, and that single difference reshapes most of what a supplier arriving from another market expects.
New Zealand has one national buyer for publicly funded medicines. Pharmac decides what the public system pays for, operates within a budget fixed by government, and negotiates commercial terms itself rather than handing that to a separate body.
That structure produces the thing most suppliers get wrong. Because the budget is fixed, an application is not assessed on its own merits against a bar. It is ranked against every other option competing for the same money. A product can be genuinely good value and still wait, because other options ranked above it.
Everything below follows from that. The guide sets out the process, how it differs from the systems you already know, and where medical devices now sit, which is currently the least settled part of the New Zealand landscape.
If you already know another system
What transfers, and what does not.
NICE, United Kingdom
Assesses a technology against a cost-effectiveness range. Clear the range and a positive recommendation normally follows, with funding obligations attached.
In New ZealandNo published threshold to clear. An application is ranked against every other option competing for the same fixed budget, so a cost-effective product can still wait.
PBAC, Australia
A committee recommends listing, then price is negotiated separately and government decides on funding.
In New ZealandAssessment and commercial negotiation sit inside one organisation. Pharmac takes clinical advice, ranks the option, and negotiates the deal itself.
Payer markets such as the United States
Many payers, many formularies, many parallel negotiations. Access can be built account by account.
In New ZealandOne national buyer for funded medicines. There is no second payer to approach if the answer is no, though a private channel exists alongside it.
How funding actually works
Pharmac does not assess against a threshold. It ranks against everything else.
This is the part that surprises most suppliers arriving from other markets. A strong application is not judged on its own merits and approved once it clears a bar. It joins a queue, and it is ranked against every other option competing for the same fixed budget.
Application
A funding application is submitted to Pharmac. A supplier, a health professional or any New Zealander can lodge one.
Clinical assessment
Pharmac takes clinical advice from PTAC and its specialist advisory committees, who consider the evidence and give the application a clinical priority.
Economic assessment
The health benefit and cost are assessed against Pharmac's Factors for Consideration, alongside the commercial offer attached to the application.
Options for Investment
The application joins a ranked list, competing against every other option for the same fixed budget. This is where most applications wait.
Funding decision
Pharmac funds down the ranked list as budget allows, then consults publicly on the proposed decision.
Contract and listing
Terms are agreed and the product is listed on the Pharmaceutical Schedule, with the supply obligations that come with it.
Where the outcome is actually decided.
Suppliers often treat the submission as the moment that matters. In practice the decisions that shape the result are made earlier: which comparator you choose, which patient group you define, what the commercial offer looks like, and whether the evidence answers the questions Pharmac will actually ask.
Those choices are difficult to unwind once an application is in. That is the argument for getting senior input before the submission is written rather than after it is declined.
Medical devices do not follow this pathway. Responsibility is split between Pharmac and Health New Zealand, and the process for funding a new device is still being built.
Questions suppliers ask
The things people want to know before they commit.
- What is Pharmac?
Pharmac is New Zealand's government agency for deciding which medicines and related products are publicly funded. It operates within a fixed budget set by government, and it both assesses applications and negotiates the commercial terms.
For a supplier, the practical consequence is that one organisation controls both the clinical assessment and the price negotiation for the funded market.
- How is Pharmac different from NICE or PBAC?
The central difference is that Pharmac does not assess an application against a published cost-effectiveness threshold. It ranks applications against each other, competing for the same fixed budget.
This means a product can be assessed as good value and still not be funded for some time, because other options ranked higher. Suppliers arriving from threshold-based systems often plan for a decision point that does not exist in the same form here.
- Who can apply to Pharmac for funding?
A supplier, a health professional, or any New Zealander can lodge a funding application. It is not restricted to the product's manufacturer.
- Does Medsafe approval mean a product will be funded?
No. These are separate processes run by separate organisations. Medsafe assesses whether a medicine is safe and effective enough to be legally supplied in New Zealand. Pharmac decides whether the public system pays for it.
A product can be fully approved by Medsafe and never funded. Regulatory consultants handle the first; the second is a different discipline.
- How does funding work for medical devices?
Differently, and it is currently changing. Responsibility for hospital medical device procurement is split between Pharmac and Health New Zealand, with categories allocated between the two agencies and legacy contracts still transferring.
There is no settled, documented application pathway for funding a new hospital device equivalent to the medicines process. For device suppliers this means the first question is usually which agency owns the category, and that is not always the agency holding the budget for it.
- Can a dossier prepared for another market be reused?
Parts of it, usually. Clinical evidence generally travels. The economic case often does not, because it has to be built against New Zealand comparators, New Zealand treatment practice and New Zealand costs.
The most common problem is a submission that answers the questions the previous market asked rather than the ones Pharmac asks.
- What happens if an application is declined?
A decline is not necessarily final. Applications can be revisited when new evidence emerges, when the commercial offer changes, or when the comparative landscape shifts.
What matters is understanding why the answer was no, since a rejection on evidence, on price, and on ranking against other options each call for a different response.
- Do I need someone in New Zealand to do this?
Not legally, but the New Zealand specifics are difficult to decode from offshore. The process is documented, the judgement calls around comparator choice, patient group definition and commercial structure are not.
Many suppliers manage the administrative side themselves and bring in local support for the strategic decisions made before a submission is written.
Where this comes from
This guide describes the process as Pharmac publishes it. It deliberately avoids timeframes, budget figures and any claim about how Pharmac weighs an individual factor, because those move and because a wrong number is worse than no number.
For the current official position, go to pharmac.govt.nz. Navigate North is an independent consultancy and is not affiliated with Pharmac, Medsafe or Health New Zealand.
Working out whether New Zealand is worth it?
Send a brief outline of the product and where it sits in other markets, and we can talk through the likely pathway and whether it is worth pursuing.