Health New Zealand has backtracked and has now cleared the way for a small group of cancer patients to get free early access to the drug Keytruda later this month.
It had initially indicated that the patients - about 20 or 30 people - would have to wait until the treatment was officially funded from 1 October, which sparked a backlash from cancer organisations.
In a statement released on Tuesday afternoon, Health NZ chief clinical officer Richard Sullivan said clinicians had advised they could manage the small group earlier.
Those patients will be prepared for treatment over the next few weeks.
Health NZ estimated a total of at least 300 patients were likely to be eligible overall, including that early group of 20 to 30.
Health Minister Shane Reti said he had asked the agency if there was a "clinically safe and pragmatic way forward" and this was the solution they found.
"It was one I asked them to re-look at and they might have come back and said 'No, we think we're going to stick with it' but indeed they said 'We think we can find a pragmatic way forward, small number of people, 20 to 30, we have capacity'.
"We think it's still clinically appropriate so we can do that."
Just before the announcement from Health NZ, Labour leader Chris Hipkins had said Health NZ had not been able to offer the drug early due to staffing issues.
"And yet, now you've got Lester Levy, just as of an hour ago, saying there are too many nurses in the health system."
Labour health spokesperson Ayesha Verrall also said Monday's decision was wrong.
"When a pharmaceutical company is offering free medicine, and in many instances it would mean that people would be treated more easily in our health system than otherwise, we should take it.
"I understand there might have been some concerns that certain hospitals weren't ready for the roll out, but many are, and so we should make those medicines available to people ... I want to know who took this decision not to make Keytruda available."
The coalition government has a faster cancer treatment target, intending to have 90 percent of patients receiving treatment within 31 days from decision to treat.