Non-Pharmac Drugs: What They Cost, & How Health Insurance Can Help

Pharmac currently subsidises over 2,000 drugs and medical products. But budget constraints and the exorbitant costs of some drugs (see their prices below) prevent the agency from funding many more medicines approved by Medsafe for use by Kiwis.

Today, around 300 funding applications are still waiting to be approved by Pharmac. These unfunded medicines include treatments for:

• asthma
• basal cell carcinoma
• cardiovascular diseases
• cervical cancer
• colorectal cancer
• Crohn’s disease
• cystic fibrosis
• diabetes
• hypercalcaemia
• hyperparathyroidism
• leukaemia
• lung cancer
• lymphoma
• multiple sclerosis and spinal muscular atrophy
• musculoskeletal conditions like osteoporosis, arthritis and gout
• myeloma
• ovarian, fallopian tube or primary peritoneal cancer
• pancreatic cancer
• prostate cancer
• renal cancer
• ulcerative colitis

On top of this waiting list, New Zealand has the smallest number of registered and publicly funded modern medicines when compared to 20 other OECD countries. This further limits our access to the latest treatments for cancer and other chronic diseases.

• Out of the 441 modern medicines launched in 20 OECD countries between 2011 and 2020, only 131 (30%) were registered in New Zealand and can be prescribed to Kiwi patients.
• New Zealand publicly funded only 34 out of the 131 modern medicines registered in the country between 2011 and 2020. By contrast, Australia, the UK, and Germany publicly funded 120, 251, and 260 modern medicines, respectively.

Number of publicly funded modern medicines in NZ and selected comparator OECD countries 2011–2020

Source: IQVIA (Commissioned by Medicines New Zealand) November, 2021. ‘ A Decade of Modern Medicines: An International Comparison 2011 – 2020’.

• New Zealand did not publicly fund new modern medicines for arthritis, diabetes, and mental health within the same time period.
• The country also had among the lowest numbers of publicly funded modern treatments for cancers, cardiovascular diseases, hepatitis C and rare diseases.

Percentage of modern medicines (first registered and launched in the OECD20 2011–2020) publicly funded in key therapy areas, by country.

Source: IQVIA (Commissioned by Medicines New Zealand) November, 2021. ‘A Decade of Modern Medicines: An International Comparison 2011 – 2020’.

Non-Pharmac drugs and your health

When you’re in good health, the cost of medications may not be a big concern. This is especially true if all the medications you’ve ever had to take have been subsidised by Pharmac.

So why think about non-Pharmac coverage and other health insurance benefits?

• Because if you become severely ill, your treatment options will be limited to those drugs that are publicly funded.
• If a new drug that may work best for you isn’t covered by Pharmac, you will be left to your own devices. You will have to independently raise the money to buy these medicines, some of which cost over $1 million per year.
• On top of this, public hospitals are not allowed to administer non-Pharmac drugs. So you also need to pay to have these administered in a private facility.

Status of Pharmac applications

Below is the status of the applications waiting for Pharmac funding at the time of writing.

• 122 under ‘Options for investment’: These are applications that will be funded if there is available budget.
• 47 under ‘Only if cost neutral or cost saving’: These may be funded if Pharmac can generate cost savings or get the medicine at the same price as a currently funded drug.
• 96 under ‘Recommended for decline’: Clinical experts have recommended that these applications are declined.

We’re all hoping that the government will someday have the budget to cover more medications, or that we’ll personally never have a need for drugs not on the Pharmac-funded list.

Until that day comes, you can be proactive in protecting yourself and your loved ones in case of severe medical issues.

Getting appropriate health insurance broadens your treatment options. So if publicly funded drugs are not effective in your case, for whatever reason, you can afford to try other Medsafe-approved treatments.

If waiting times at public hospitals are long, you can choose to get faster treatment in private facilities.

You can access more health options without worrying about the costs.

Want to know how much non-Pharmac drugs cost and how much financial cover health insurers can provide? Check out the figures below.

The cost of non-Pharmac funded drugs (and their administration) in NZ

Below are some life-extending medications and treatments that are still waiting for funding under the Pharmac system, and their estimated costs.

Some of these applications have been on Pharmac’s list for over six years. Applications can be classified as Options for investment if funds are available but not allocated, while others are already under recommendation to be declined. The key below explains the terms used by Pharmac.

Health insurance cover for non-Pharmac drugs and their administration

Having non-Pharmac funded treatments covered by your health insurance policy means that you and your loved ones have access to more treatment options and expensive, Medsafe-approved drugs that aren’t currently funded under the New Zealand public health system.

And just as importantly, your insurer will cover not just the medicine’s cost but also its administration in private facilities.

With many applications sitting on the Pharmac non-funded list for years, without health insurance cover Kiwis have turned to loans, savings, accessing what should be retirement funds and selling assets to pay for access to treatment.

Health insurance cover that takes your circumstances into account and provides access to non-Pharmac funded drugs can give you a break from worrying about finances while you’re ill.

But how much non-Pharmac funded drug cover do health insurers actually provide? The table below summarises the non-Pharmac benefits of selected health insurance plans, some of which have limits of up to $600,000 per policy year.

Note that insurance plans and providers have different maximum limits and restrictions. Some plans might cost very little but not give you the coverage you need.

So it’s important to consult with an insurance adviser to help you choose a health insurer and a plan that provides enough non-Pharmac drugs cover.

Amounts payable for non-Pharmac funded drugs (surgical and medical treatment) on selected health insurance plans

*Up to the hospital surgical or medical benefit, whichever applies.

These benefits far exceed what you’ll pay for your health insurance.

Want to get a personalised health insurance quote comparison? Contact Policywise to get a FREE, no-obligation quote!

We will compare plans from New Zealand’s top health insurers and show you the ones that offer the best coverage for your circumstances, at the best price.

Instead of limiting your choices to a single health insurer’s offers, Policywise will provide you with the best options on the market. We’ll help you find a plan that offers the right coverage at the best price for you.

Don’t leave your own and your loved ones’ health – and finances – to chance.

The best time to get medical insurance is when you and your family are in reasonable health, and you have no ongoing medical conditions that may affect your insurance cover.

But if you do have pre-existing conditions, we can help you find and compare insurance policies that cover your current health concerns.

Book a meeting with a Policywise Adviser to learn more about non-Pharmac funded drugs cover and health insurance options.

Disclaimer: All information on this page or website is general information only, not intended as advice, and does not take into consideration your personal circumstances. We recommend consulting a Policywise adviser before making any insurance decision.

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