Pharmac

Pharmac's current governing legislation is the Pae Ora (Healthy Futures) Act 2022, specifically sections 67 to 74. Section 67(3) states that Pharmac is a Crown entity in terms of Section 7 of the Crown Entities Act 2004.{{cite act |type=Government Act |date=16 July 2024 |legislature=New Zealand Parliament |title=Pae Ora (Healthy Futures) Act 2022 |url=https://legislation.govt.nz/act/public/2022/0030/latest/whole.html#LMS575572 }}

Pharmac's main objective is to secure the best health outcomes for "eligible people" in need of pharmaceuticals that are reasonably attainable from pharmaceutical treatment and within the amount of funding provided.

Pharmac's functions are to maintain the New Zealand pharmaceutical schedule, manage incidents arising out of the procurement of pharmaceutical products for "eligible people," meet its objectives within its operational budget, promote the responsible use of pharmaceuticals, and to seek permission from the Minister of Health and its governing board for performing other non-statutory functions.

One of the main techniques Pharmac uses to reduce costs is only subsidising one brand of a medication at a time. Where a medicine is off-patent and generic versions are available, Pharmac typically tenders out the right to be the sole subsidised brand for a fixed period of time (usually three years). This causes pharmaceutical companies to compete with each other, driving down prices and reducing the subsidy costs, freeing up funds to subsidise newer patented medicines.{{cite web |url=http://www.pharmac.health.nz/assets/infosheet-05-purchasing-medicines-2013.pdf |title=Purchasing medicines |publisher=Pharmaceutical Management Agency |accessdate=20 June 2014 |archive-url=https://web.archive.org/web/20141024201636/http://www.pharmac.health.nz/assets/infosheet-05-purchasing-medicines-2013.pdf |archive-date=24 October 2014 |url-status=dead }}

As a Crown entity, the agency is responsible to the Minister of Health via its board of six members.

Pharmac was created in 1993 as a response to the ever-increasing costs of pharmaceuticals. The agency's primary aim is "to secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided."{{cite act |type=Act |index=91 |date=2000 |legislature=New Zealand Parliament |title=New Zealand Public Health and Disability Act 2000 |url=https://www.legislation.govt.nz/act/public/2000/0091/latest/whole.html |language=en-NZ }} {{Webarchive|url=https://web.archive.org/web/20210927083357/https://www.legislation.govt.nz/act/public/2000/0091/latest/whole.html |date=27 September 2021 }}

While initially responsible for community medicines only, Pharmac's role has been expanded to include all medicines used in district health boards' hospitals, and in preparation for the national management of medical devices.{{Citation needed|date=December 2023}} On 1 July 2012, the management of the national immunisation schedule, and assessment of new vaccines was transferred to Pharmac from the Ministry of Health.{{cite web |title=Discussion document: Improving access to medicines and devices in primary care |url=https://pharmac.govt.nz/assets/Discussion-Document-Vaccines-Purchasing-Funding-and-Distribution-Arrangements-PDF.pdf |publisher=Pharmac |access-date=21 December 2023 |archive-url=https://web.archive.org/web/20230209093734/https://pharmac.govt.nz/assets/Discussion-Document-Vaccines-Purchasing-Funding-and-Distribution-Arrangements-PDF.pdf |archive-date=9 February 2023 |url-status=live}}

In 2016/17, Pharmac had a subsidy budget of approximately $850 million, which was used to subsidise 48.5 million prescriptions issued to 3.6 million New Zealanders.{{cite web|url=https://www.pharmac.govt.nz/assets/annual-report-2016-17.pdf|title=Annual Report 2017|publisher=Pharmaceutical Management Agency|accessdate=11 March 2016|archive-date=27 January 2018|archive-url=https://web.archive.org/web/20180127065708/https://www.pharmac.govt.nz/assets/annual-report-2016-17.pdf|url-status=live}}

In early March 2021, Prime Minister Jacinda Ardern and Health Minister Andrew Little announced that the Government would be appointing a panel of experts to review Pharmac's timeliness and transparency of decision-making.{{cite news |title=PM Jacinda Ardern and Health Minister Andrew Little announce details of Pharmac review |url=https://www.rnz.co.nz/news/national/437457/pm-jacinda-ardern-and-health-minister-andrew-little-announce-details-of-pharmac-review |access-date=3 March 2021 |work=Radio New Zealand |date=2 March 2021 |archive-url=https://web.archive.org/web/20210301213808/https://www.rnz.co.nz/news/national/437457/pm-jacinda-ardern-and-health-minister-andrew-little-announce-details-of-pharmac-review |archive-date=1 March 2021|url-status=live}}

In early October 2023, chief executive Sarah Fitt attracted criticism after the journalist Rachel Smalley obtained 274 pages of internal communications between Fitt and other executives under the Official Information Act. These emails exposed a disdain for Smalley and her efforts to promote greater accountability from the government body. Health Minister Ayesha Verrall, Pharmac Chair Steve Maharey, and Public Service Commissioner Peter Hughes described Fitt's conduct as unprofessional. Haemotologist and chronic lymphocytic leukemia advocate Ruth Spearing and Patient Voice Aotearoa chairperson Malcolm Mulholland called for Fitt to resign.{{cite news |last1=Quill |first1=Annemarie |title=Calls to sack Pharmac boss after 'sick, sneering' remarks |url=https://www.stuff.co.nz/national/health/300985032/calls-to-sack-pharmac-boss-after-sick-sneering-remarks |work=Stuff |date=8 October 2023 |archive-url=https://web.archive.org/web/20231109180838/https://www.stuff.co.nz/national/health/300985032/calls-to-sack-pharmac-boss-after-sick-sneering-remarks |archive-date=9 November 2023|url-status=live}}{{cite news |last1=Williams |first1=David |title=Pharmac CEO must go, says country's top blood doctor |url=https://www.newstalkzb.co.nz/news/national/top-blood-doctor-calls-for-pharmac-chief-executive-sarah-fitt-to-resign/ |access-date=24 December 2023 |work=Newstalk ZB |date=8 October 2023 |archive-url=https://web.archive.org/web/20231027084808/https://www.newstalkzb.co.nz/news/national/top-blood-doctor-calls-for-pharmac-chief-executive-sarah-fitt-to-resign/ |archive-date=27 October 2023}}

In late November 2023, the new Associate Health Minister David Seymour called for a change in Pharmac's culture in light of CEO Sarah Fitt's conduct. That same month, Fitt apologised to Smalley and Pharmac's governing board, and agreed to an external plan to improve Pharmac's culture including hiring an external party to assist the senior leadership team and board.{{cite news |last1=Neilson |first1=Michael |title=David Seymour on how Pharmac culture 'needs to change,' CEO Sarah Fitt and future of board chair Steve Maharey |url=https://www.nzherald.co.nz/nz/politics/david-seymour-on-how-pharmac-culture-needs-to-change-ceo-sarah-fitt-and-future-of-board-chair-steve-maharey/PCJ2J5WCQJE27HJM5DCVNOS5G4/ |access-date=24 December 2023 |work=The New Zealand Herald |date=28 November 2023 |archive-url=https://web.archive.org/web/20231205095658/https://www.nzherald.co.nz/nz/politics/david-seymour-on-how-pharmac-culture-needs-to-change-ceo-sarah-fitt-and-future-of-board-chair-steve-maharey/PCJ2J5WCQJE27HJM5DCVNOS5G4/ |archive-date=5 December 2023|url-status=live}}

In early December 2023, Maharey resigned from his position as Chair of Pharmac after the formation of a National-led coalition government following the 2023 New Zealand general election.{{Cite web |date=1 December 2023 |title=Public sector boss Steve Maharey has resigned |url=https://www.rnz.co.nz/news/political/503674/public-sector-boss-steve-maharey-has-resigned |access-date=21 December 2023 |work=Radio New Zealand|language=en-nz |archive-url=https://web.archive.org/web/20231220192111/https://www.rnz.co.nz/news/political/503674/public-sector-boss-steve-maharey-resigns-as-chair-of-pharmac-and-acc|archive-date=20 December 2023|url-status=live}} In late April 2024, former Deputy Prime Minister Paula Bennett was appointed as the Chair of Pharmac.{{Cite web |date=28 April 2024 |title=Former Deputy Prime Minister Paula Bennett appointed new chair of Pharmac |url=https://www.nzherald.co.nz/nz/former-deputy-prime-minister-paula-bennett-appointed-new-chair-of-pharmac/IUJX3E7FPVAKVJKXP6CSQQVNUM/ |access-date=30 April 2023 |work=The New Zealand Herald|language=en-nz |archive-url=https://web.archive.org/web/20240428002235/https://www.nzherald.co.nz/nz/former-deputy-prime-minister-paula-bennett-appointed-new-chair-of-pharmac/IUJX3E7FPVAKVJKXP6CSQQVNUM/|archive-date=28 April 2024|url-status=live}}

In mid-July 2024, Associate Health Minister David Seymour instructed the purchasing agency to stop factorising the Treaty of Waitangi in its decisions, writing that "Pharmac's role should focus on delivering improved health outcomes underpinned by robust data and evidence, in accordance with its statutory responsibilities. This should serve all New Zealanders based on actual need, without assigning their background as a proxy of need."{{cite news |title=Watch: Considering Treaty of Waitangi is inappropriate, Seymour tells Pharmac |url=https://www.rnz.co.nz/news/political/522294/watch-considering-treaty-of-waitangi-is-inappropriate-seymour-tells-pharmac |access-date=17 July 2024 |work=RNZ |date=16 July 2024 |archive-url=https://web.archive.org/web/20240716052428/https://www.rnz.co.nz/news/political/522294/watch-considering-treaty-of-waitangi-is-inappropriate-seymour-tells-pharmac |archive-date=16 July 2024}} While Seymour's directive was supported by the Pharmac board chair Paula Bennett and Patient Voice Aotearoa chair Malcolm Mulholland, it was criticised by former Māori Health Authority clinical lead Dr Rawiri McKree Jansen, who said that the Government could do more to improve Māori access to health services and medicines.{{cite news |title=Pharmac and Te Tiriti: Changes labelled 'performative', some question relevance |url=https://www.rnz.co.nz/news/political/522352/pharmac-and-te-tiriti-changes-labelled-performative-some-question-relevance |access-date=17 July 2024 |work=RNZ |date=17 July 2024 |archive-url=https://web.archive.org/web/20240717010712/https://www.rnz.co.nz/news/political/522352/pharmac-and-te-tiriti-changes-labelled-performative-some-question-relevance |archive-date=17 July 2024|url-status=live}} In response, Pharmac director Dr Anthony Jordan resigned from his position on 19 July due to his disagreement with the Government's Treaty directive.{{cite news |title=Pharmac director quits over government's Treaty directive |url=https://www.rnz.co.nz/news/political/522584/pharmac-director-quits-over-government-s-treaty-directive |access-date=21 July 2024 |work=RNZ |date=19 July 2024 |archive-url=https://web.archive.org/web/20240721234151/https://www.rnz.co.nz/news/political/522742/nz-media-council-upholds-complaint-on-accuracy |archive-date=21 July 2024|url-status=live}}

In mid-November 2024, Pharmac disestablished its Māori advisory group. Chairperson Bennett said that the disestablishment would allow the purchasing agency to focus on existing partnership agreements. By contrast, the advisory group's co-chair Eugene Berryman-Kamp expressed disappointment in the reduction of Māori input into the organisation's decision-making process.{{cite news |last1=Paewai |first1=Pokere |title=Pharmac to disestablish its Māori advisory group |url=https://www.rnz.co.nz/news/national/533562/pharmac-to-disestablish-its-maori-advisory-group |access-date=29 April 2025 |work=Radio New Zealand |date=12 November 2024 |archive-url=https://web.archive.org/web/20241210011840/https://www.rnz.co.nz/news/national/533562/pharmac-to-disestablish-its-maori-advisory-group |archive-date=10 December 2024 |url-status=live}} In late April 2025, Pharmac proposed disestablishing its Māori Directorate, which would lead to the loss of three jobs including those responsible for supporting an anti-racism research programme. Public Service Association Māori spokesperson Janice Panoho described the job cut proposal as a breach of the Treaty of Waitangi.{{cite news |last1=Paewai |first1=Pokere |title=Pharmac's move to drop Māori Directorate slammed by union as 'another breach of Te Tiriti o Waitangi' |url=https://www.rnz.co.nz/news/te-manu-korihi/559377/pharmac-s-move-to-drop-maori-directorate-slammed-by-union-as-another-breach-of-te-tiriti-o-waitangi |access-date=29 April 2025 |work=Radio New Zealand |date=29 April 2025 |archive-url=https://web.archive.org/web/20250429064827/https://www.rnz.co.nz/news/te-manu-korihi/559377/pharmac-s-move-to-drop-maori-directorate-slammed-by-union-as-another-breach-of-te-tiriti-o-waitangi |archive-date=29 April 2025 |url-status=live}}

Pharmac has been hailed for its success in controlling New Zealand's expenditure on pharmaceuticals. A British Medical Journal article in 2010 credited Pharmac as the key reason for New Zealand’s low pharmaceutical prices.{{cite journal |doi=10.1136/bmj.c2441 |pmid=20483927 |title=How New Zealand has contained expenditure on drugs |journal=BMJ |volume=340 |pages=c2441 |year=2010 |last1=Cumming |first1=J |last2=Mays |first2=N |last3=Daube |first3=J |s2cid=19209007 |url=http://researchonline.lshtm.ac.uk/3688/1/How%20New%20Zealand%20has%20contained%20expenditure%20on%20drugs%20_%20The%20BMJ.pdf |access-date=4 September 2019 |archive-date=4 September 2019 |archive-url=https://web.archive.org/web/20190904202822/https://researchonline.lshtm.ac.uk/3688/1/How%2520New%2520Zealand%2520has%2520contained%2520expenditure%2520on%2520drugs%2520_%2520The%2520BMJ.pdf |url-status=live }}

Pharmac was a regular point of contention in debates around potential free-trade agreements which could affect its ability to operate, particularly the Trans-Pacific Partnership Agreement (TPPA).{{cite news |first=Brian |last=Fallow |date=29 November 2012 |title=Pharmac vulnerable in trade talks |work=The New Zealand Herald |url=http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10850603 |accessdate=28 June 2014 |archive-date=10 September 2014 |archive-url=https://web.archive.org/web/20140910213850/http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10850603 |url-status=live }}{{cite web |title=Access to medicines |url=http://www.itsourfuture.org.nz/th_gallery/access-to-medicines/ |publisher=It's Our Future |accessdate=11 May 2015 |archive-date=26 April 2015 |archive-url=https://web.archive.org/web/20150426043527/http://www.itsourfuture.org.nz/th_gallery/access-to-medicines/ |url-status=live }}

New Zealand's Pharmaceutical market and Pharmac were noted to feature heavily in leaked diplomatic cables in 2010.{{cite journal |title=The Salve for the Pharmaceutical Industries Pains in New Zealand? |journal=Ascension |date=2012 |volume=2 |url=http://officialinformationact.blogspot.com/2012/10/the-salve-for-pharmaceutical-industries.html |access-date=21 December 2023 |archive-date=3 December 2023 |archive-url=https://web.archive.org/web/20231203214335/https://officialinformationact.blogspot.com/2012/10/the-salve-for-pharmaceutical-industries.html |url-status=live }}

Opponents of the TPPA claimed US corporations are hoping to weaken Pharmac's ability to get inexpensive, generic medicines by forcing New Zealand to pay for brand name drugs.{{cite news |url=http://www.3news.co.nz/US-companies-out-to-get-Pharmac/tabid/1607/articleID/279216/Default.aspx |work=3 News |title=US companies 'out to get Pharmac |date=5 December 2012 |first=Dylan |last=Moran |accessdate=22 June 2014 |archive-date=7 July 2014 |archive-url=https://web.archive.org/web/20140707080047/http://www.3news.co.nz/US-companies-out-to-get-Pharmac/tabid/1607/articleID/279216/Default.aspx |url-status=live }} Doctors and organisations like Médecins Sans Frontières have also expressed concern.{{cite news |url=http://www.3news.co.nz/Doctors-warn-TPP-could-threaten-access-to-medicine/tabid/1607/articleID/279062/Default.aspx |work=3 News |title=Doctors warn of TPP risks |date=5 December 2012 |first=Peter |last=Wilson |accessdate=22 June 2014 |archive-date=7 July 2014 |archive-url=https://web.archive.org/web/20140707075137/http://www.3news.co.nz/Doctors-warn-TPP-could-threaten-access-to-medicine/tabid/1607/articleID/279062/Default.aspx |url-status=live }} The New Zealand Government denies the claims; Trade Negotiations Minister Tim Groser saying opponents of the deal are "fools" who are "trying to "wreck this agreement".{{cite news |url=http://www.3news.co.nz/War-of-words-in-TPP-public-perception-battle/tabid/421/articleID/278907/Default.aspx |publisher=3 News |title=War of words in TPP public perception battle |first=Dylan |last=Moran |date=3 December 2012 |accessdate=22 June 2014 |archive-date=7 July 2014 |archive-url=https://web.archive.org/web/20140707093632/http://www.3news.co.nz/War-of-words-in-TPP-public-perception-battle/tabid/421/articleID/278907/Default.aspx |url-status=live }}

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• [http://www.pharmac.govt.nz/ Pharmaceutical Management Agency website]

{{NZ crown entities/Crown agents}}

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Category:New Zealand Crown agents

Category:Medical and health organisations based in New Zealand

Category:Pharmacy organizations

Category:Pharmaceuticals policy

Category:1993 establishments in New Zealand