The Pharmac Gap Explained
Pharmac funds drugs that have proven efficacy for large populations at a reasonable cost. The criteria are strict: safety, efficacy, cost-benefit ratio, and budget.
Some drugs don't meet Pharmac criteria because they're new (Pharmac moves slowly to approve new drugs), expensive (Pharmac balances cost against benefit), or indicate rare conditions.
Patients in the US, Australia, or Europe might have access to newer drugs that Pharmac hasn't approved. Kiwis without private funding simply don't have access.
Examples of Non-Pharmac Drugs
Cancer: Many newer cancer drugs (newer immunotherapies, targeted therapies) are not Pharmac-funded. Costs: $4,000-8,000 per month for 6-12 months of treatment.
Rheumatoid arthritis: Newer biologic drugs are progressively more expensive and not all are Pharmac-funded. Cost: $2,000-3,000 per month.
Multiple sclerosis: Some newer MS drugs are non-Pharmac. Cost: $5,000-10,000 per month.
Psoriasis: Newer biologic treatments for severe psoriasis are non-Pharmac. Cost: $1,500-3,000 per month.
Rare genetic conditions: Drugs for rare conditions rarely achieve Pharmac funding due to small populations. Cost: highly variable, sometimes $50,000+ per month.
The Cost Spiral
A patient with advanced cancer might progress: - Year 1: Pharmac chemotherapy (free or minimal cost): maintained for 8 months - Month 8: Resistance develops; non-Pharmac drug recommended: $4,000/month × 8 months = $32,000 - Year 2: Second non-Pharmac drug required: $3,000/month × 10 months = $30,000 - Total non-Pharmac costs: $62,000
For an average Kiwi, this is impossible without insurance or substantial wealth.
Health Insurance and Non-Pharmac Drugs
Most health insurance policies have annual caps (e.g., "$25,000 per year in cover"). For a non-Pharmac drug costing $4,000/month, your insurance covers 6 months of 12-month treatment. You pay the second 6 months out-of-pocket.
Partial coverage is better than zero coverage, but it's still exposure.
Partners Life and AIA have slightly different approaches: - Some policies have higher caps ($30,000-35,000) - Some policies explicitly cover non-Pharmac drugs; others are vague
Check your specific policy wording for non-Pharmac drug coverage.
The Bottom Line
Insurance is the most reliable protection against non-Pharmac drug costs. Don't rely on pharmaceutical assistance or hoping Pharmac will fund your drug — these are unpredictable.
If you have comprehensive private health insurance, non-Pharmac drug coverage is part of your protection. If you're on surgical-only or basic cover, you likely don't have this protection. Review your policy wording now, before you need it.