ACT has pledged to lift Pharmac's budget to 12 percent of total health spending by 2033, more than doubling the medicines agency's share from its current 4.9 percent. ACT leader David Seymour announced the policy, framing it as a path to a more efficient health system rather than simply more spending. (RNZ)

Pharmac is the government agency that decides which medicines are publicly funded and negotiates hard with pharmaceutical companies to keep prices down. Seymour said Pharmac would not stop being "hard-ass negotiators" under the policy, pushing back at the suggestion that a substantially larger budget would weaken that approach. He acknowledged that directing more funding toward Pharmac means other areas of health would miss out, but said nothing that currently exists will be cut. The increase would come from the growth in overall health spending over time, not from reductions to existing services.

The policy sets a specific trajectory. ACT's costings project overall health spending between $33.4 billion and $36.6 billion in 2027/28, with Pharmac's medicines budget at between $2 billion and $2.2 billion. By 2033/34, Pharmac's funding would reach between $5.4 billion and $6.1 billion out of total health spend projected at $44.9 billion to $51 billion. ACT has stated New Zealand currently spends about $34 billion on health, with the medicines budget at roughly five percent, or approximately $1.7 billion. (ACT)

Seymour pointed to Pharmac's funding of Trikafta, a drug for cystic fibrosis, as evidence that spending on medicines can reduce downstream costs in the wider health system. He said lung transplants for cystic fibrosis patients became "nearly unheard of" as a result of that funding. He speculated that funding drugs like WeGovy could, over a decade, lead to less obesity, less diabetes, less kidney disease, less dialysis, and fewer kidney transplants, saving money across the system.

The announcement comes against a backdrop of uneven budget allocations for Pharmac. In the 2024 Budget, Pharmac received $604 million in additional funding. In the 2026 Budget, the health system received a $1.5 billion funding uplift, but Pharmac got just $13.5 million of that. The reduced Budget operating spending was announced on 25 July 2026. (NZ Herald)

Seymour has acknowledged that advocating for increased government spending on Pharmac was once considered "Act Party sacrilege." According to NZ Herald reporting, $2.4 billion has been mainlined into Pharmac over recent budgets. (NZ Herald)

ACT has previously said it will create a dedicated strategy for ensuring access to medicines, a commitment dating back to October 2023. (ACT)

Pharmac has been preparing its own Budget 2026 bid. The agency proactively released its 2025/26 Budget bid documents, including initial options for the medicines budget and Pharmac's operational budget, provided to Seymour as Associate Minister of Health. (Pharmac) Its November 2025 Letter of Expectations progress update states Pharmac will continue to work with the Minister to put forward budget bid requests for Budget 2026. (Pharmac) Pharmac's Consumer and Patient Working Group had scheduled a meeting for 14 August 2025 to discuss the agency's 2026/27 budget bid. (Pharmac) The agency also publishes a list of ministerial briefings that includes a "Budget 2026 preparation update" for Seymour. (Pharmac)

ACT has also claimed it provided $1.774 million in extra money to Pharmac to fill a fiscal hole left by Labour. (ACT)

The broader context here is the gap between ACT's stated ambition and recent Budget outcomes. The $13.5 million Pharmac received in Budget 2026, set against a $1.5 billion health uplift, sits well below the trajectory ACT is now proposing. Reaching 12 percent of health spend by 2033 would require sustained annual increases to Pharmac's budget that far exceed what the agency has received in either of the last two Budgets, even accounting for the large 2024 allocation. Whether a future government, coalition or otherwise, would commit to that scale of redirection within the health envelope is the central political question the policy raises.