Photo: RNZ / Samuel Rillstone
The government has confirmed $604 million over four years in extra Pharmac funding, to cover "up to 54" new medicines including 26 cancer treatments.
Health Minister Shane Reti says it will mean the agency can fund all 13 cancer drugs promised at the election, or replacements that are "as good or better", and will benefit about 175,000 people in the first year.
Dr Reti said some of the treatments would be available from October or November, "with more phased in over the next year". He said he expected that to take up to a year.
The money was a pre-commitment against next year's Budget, and was separate to the $5.48b over four years pre-committed to Health NZ Te Whatu Ora from Budget 2025, as signalled alongside this year's Budget.
Health NZ was being funded with $38m in startup funding, with the remainder of the money as a contingency.
He, Prime Minister Christopher Luxon, and Associate Health Minister David Seymour made the widely expected announcement after this week's Cabinet meeting, with the roughly $600m over four years the most likely of three options expected to be presented at that meeting.
The other options included directing Pharmac to fund the specific drugs National campaigned on, or setting up a separate agency to fund them - but both options could have compromised the independent processes Pharmac normally uses to buy medicines.
"This approach allows the government and Pharmac to act on updated clinical advice, funding new and more effective treatments which have superseded previous options," Seymour said.
"For many New Zealanders, funding for pharmaceuticals is life or death, or the difference between a life of pain and suffering or living freely.
"It was a priority for this government to find the additional $1.8 billion to fix the fiscal cliff left by the previous government, and we're now providing a $604m uplift to Pharmac to ensure more Kiwis can access life-changing medicines."
Reti said they had been working through how to deliver on their commitment and "today we have settled on a pathway which does much more".
"As a government, I am very pleased to be able to provide certainty today, following a process which we absolutely needed to get right."
He apologised to patients and their families for the uncertainty the delay of today's announcement has caused, acknowledging communications could have been better, and saying "there was a vacuum" of information immediately after the Budget.
"We didn't give a pathway or explanation as to why we weren't ready to make more formative announcements at Budget, that we wanted to get this right, we wanted to make sure we had implementation capacity, we wanted to make sure that we could bring together a package that lands today that benefits 175,000 New Zealanders.
"That's what we would do different if we could."
Asked if the initial promise was not respecting the independence of Pharmac, Luxon said it was an attempt to get 13 cancer drugs that were not available to New Zealanders "essentially working outside of the Pharmac system".
They "equally" could have created a whole new model instead of funding the drugs through Pharmac, he said, but "as we came to government it became pretty obvious we've got a good model, why would we want to create a second model, and then it's important that we could actually embed it into the Pharmac model. And that's what a lot of our conversation has been over recent months.
"It's a big commitment, but it's one that matters."
Asked if he would personally offer an apology the people who were affected, Luxon said: "well, we have, we've apologised for the fact that we haven't communicated this as effectively as we could have.
"We were genuinely wrestling with a way in which we could deliver cancer drugs and other drugs to New Zealanders in a consistent, sustainable, proper enduring long-term way. That's what we've done here."
He said the government would have liked the timing to be a bit sooner, "but the reality is we've juggled a lot, we've put $16.7b into the healthcare system, we've funded the $1.8b Pharmac cliff, and in addition we've been able to find $600m to put into this cancer drug programme".
National had campaigned on funding the medicines at a cost of $70m a year, starting in this year's Budget. The commitment was labelled a broken promise when the funding was not included when the Budget was revealed.
Finance Minister Nicola Willis said it "hasn't been possible in this year's Budget".
"I don't think anyone expects that we would tick off every single campaign commitment in our first Budget. We've got two more Budgets to go," she said that evening.
However, she was soon promising the promised funding would come before the end of the year, with the funding coming from next year's Budget.
Reti said the approach taken meant they were aiming to meet National's commitment to the 13 treatments, "so they needed to be covered. And then when we were there we looked to see if there were any small incremental gains we could get".
Pharmac chief executive Sarah Fitt said they would immediately start work to deliver the additional medicines following the "significant" funding boost.
She said the next step would be to determine which medicines to fund, followed by negotiating with suppliers and consulting publicly.
"A lot of work happens behind the scenes so that as soon as funding becomes available, we're ready to go," Fitt said.