Why Pharmac's record budget boost likely won't fund any new medicines

The Government announced a record boost for Pharmac's budget today - but it likely won't result in any new medicines being funded. 

That's because the medicine funding agency had a hole in its books due to both rising costs and time-limited funding, or what the Government is calling a fiscal cliff left by the Labour Party. 

A lot has happened in Fiona Tolich's life since she marched on Parliament in the freezing rain three years ago.

She and her family made the difficult decision to move to Australia because the medicine she needs to treat spinal muscular atrophy isn't funded for adults.

On Monday, she was back, speaking at Parliament, still fighting for better access to medicines for New Zealanders.

"The last time I was here I was petitioning. I had my children here, so we haven't gone far enough because it's still not safe for me to come back because my treatment's still not available," she said.

Associate Health Minister David Seymour on Monday announced the Government will give Pharmac nearly $1.8 billion over four years.

"We inherited a very challenging circumstance. To be perfectly frank, the previous Government wasn't honest with the books and left us with a fiscal cliff of monumental proportions," Seymour said.

That means the record boost likely won't actually fund any new medicines. It just allows Pharmac to keep paying for the ones it already does. 

"[It] gives us the certainty… that we can continue funding the medicines that we've already funded," Pharmac chief executive Sarah Fitt said.

Effectively Pharmac's increased budget was given time-limited funding so - as Seymour showed in a graph - it was going to fall away if the Government chose not to fill the gap. 

"That is the cliff that we're facing. A lot of people will talk about fiscal cliffs, that is literally what one looks like," Seymour said.

"But right now, we've inherited a fiscal cliff where we have to save the furniture. I mean this is real. Pharmac would have basically been choosing not which new things to fund but which things they’re currently getting which they should take away."

"Politicians very rarely will make a decision that directly impacts on a person's life. Depending on the level of funding they give Pharmac will determine whether or not some New Zealand patients will live or die," Patient Voice Aotearoa chair Malcolm Mulholland said.

There are currently 140 applications on Pharmac's options for investment list - the list of medicines it would fund if it had the budget to do so. To fund those Pharmac would need even more money in the May Budget. 

"I'd like to see us get average to the rest of the world. That would require right now a $2.25 billion increase," Dr Mulholland said.

Prime Minister Christopher Luxon said there will be more funding for health in the upcoming Budget.

"You'll have to see that as we get the Budget in the end of May," Luxon said.