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New report shows New Zealand is a ‘major outlier’ with lowest medicines investment levels compared to other OECD countries

A comparative analysis of government and compulsory health budgets between 13 similar OECD countries has established that New Zealand has the lowest level of investment in medicines and is seen as ‘extreme outlier’ in its health funding allocations. 

The research undertaken by the New Zealand Institute of Economic Research (NZIER) determined that only 4.9% of New Zealand’s public health budget is spent on medicines. That figure is almost 3 times lower than the OECD country average of 13.3% 

The report notes that this major outlier status and low medicine investment levels are problematic, given the well-established benefits that medicines deliver to public health systems. These include assisting the system and health workforces with efficiency and productivity gains, and in some cases, medicines being able to substitute for health services and infrastructure burden for example, by reducing patient hospitalisation. 

“Medicines are one of the most effective tools we have to improve both patient health outcomes and ease pressure on hospitals and the health system,” said Dr Graeme Jarvis, CEO of Medicines New Zealand. “Our country’s low level of government investment in medicines compared to equivalent OECD nations, means that both patients and the health system and workforce are missing out on these benefits.”

The impacts of New Zealand’s outlier status were examined further in the report which concluded that the country’s population has the lowest share of life lived in good health, much lower than countries like Australia, Canada and the UK.

“New Zealand needs to be acting on opportunities to invest into cost-effective solutions such as those medicines on Pharmac’s numerous waiting lists” says Dr Jarvis. “This would help to reduce the use and cost of health services in New Zealand and most importantly, achieve better health outcomes for patients”. 

 

The full NZIER report Health Priorities? A Comparison of New Zealand’s Public Health and Disability Expenditure Against Selected OECD Countries can be found here.

 

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Medicines New Zealand is the industry association representing innovative biopharmaceutical companies operating in New Zealand. We advocate for the benefits of modern medicines and vaccines as part of a high-quality public health system.

Contact:
Grace Abbott, Communications Advisor, Medicines New Zealand.
Ph: 027 534 6461