The ACT Party has proposed increasing the share of the health budget spent on Pharmac by one percentage point per year, rising to 12% of total health spend by 2033.

The policy, outlined in a press release authored by ACT leader David Seymour and published on the ACT Party website on 26 July 2026 under the title "ACT sets achievable path to close medicines gap with Australia," would see Pharmac's share of health expenditure climb from the current baseline toward the OECD average.

New Zealand currently spends 4.9% of its health budget on medicines, against an OECD average of 13.3% (RNZ). Seymour currently holds ministerial responsibility for Pharmac.

Under ACT's proposed trajectory, in the 2027/28 year overall health spending would sit between $33.4 billion and $36.6 billion, with medicine expenditure between $2 billion and $2.2 billion, representing a 6% share. By 2033/34, projected health expenditure would reach $44.9 billion to $51 billion, with medicine expenditure between $5.4 billion and $6.1 billion, equating to a 12% share.

The lower-end costing draws on the Treasury's 2025 Long-term Fiscal Model, while the upper end uses the Treasury's 2025 Overlapping Generations model.

Seymour had not pitched the Pharmac funding policy to his coalition partners before announcing it, according to RNZ. The proposal therefore sits as an ACT Party position rather than an agreed government programme.

The announcement comes against a backdrop of tension between broader health funding and Pharmac's allocation. In the 2026 Budget, the health system received a $1.5 billion funding uplift, of which Pharmac received $13.5 million. At the time of the announcement, 139 applications sat on Pharmac's Options for Investment wishlist.

Pharmac has previously stated it needs over $400 million in extra funding to cover all the medicines it wishes to cover, a figure ACT cited in a 2021 press release (ACT Party). ACT's Brooke van Velden, then the party's Health spokesperson, argued at that time that the shortfall proved the funding model needed to be reviewed. Van Velden is now ACT's Deputy Leader, the MP for Tāmaki, and Minister of Internal Affairs. She had also previously welcomed a $191 million boost to Pharmac funding while continuing to call for a proper funding review, and pressed for greater transparency from Pharmac on its decision-making, asking the agency to disclose when each medicine was first added to its priority list.

ACT has previously argued that measuring long-term benefits from pharmaceutical funding decisions could inform decision-making that frees up hospital beds faster, positioning medicines spend as upstream investment with downstream effects across the health system.

The broader context here is that Pharmac operates as New Zealand's single medicines purchaser, and its budget decisions effectively ration which funded medicines are available to patients. The gap between New Zealand's 4.9% medicines spend and the OECD's 13.3% average has been a recurring point of pressure for successive governments, and the 139 applications on the Options for Investment list represent treatments that Pharmac has assessed as having some level of priority but has not yet funded.

The coalition dynamic matters. Seymour holds the Pharmac portfolio but is one of three party leaders in the coalition government. A policy that has not been through the coalition process carries no automatic weight across the wider government. Whether National and NZ First would countenance the fiscal implications of ramping Pharmac's share to 12% of health spend by 2033 is a separate question entirely from ACT's proposal.

The costings tell their own story. The use of two Treasury models to bracket the fiscal impact gives the policy a degree of analytical rigour, but the spread between the lower and upper bounds is substantial: by 2033/34, the difference between the Long-term Fiscal Model projection and the Overlapping Generations projection is roughly $6 billion in total health spend and $700 million in medicine expenditure. That range reflects different assumptions about how health costs evolve over the next decade, and it means the actual fiscal cost of the policy would depend heavily on which trajectory the economy and health system follow.

For political watchers, the decision to release this without coalition sign-off is consistent with ACT's pattern of using its ministerial portfolios to push public discussion on issues where the broader government may not be ready to move. The Pharmac proposal sits alongside other ACT-driven policy work in areas where the party has sought to shift the Overton window within government. Whether it translates into Budget bids, coalition agreements, or actual appropriations will depend on negotiations that have not yet begun.