Associate Health Minister David Seymour has told Pharmac he wants the drug-buying agency to lean harder on artificial intelligence so it can fund more medicines, more quickly, for more New Zealanders. The instruction sits inside his annual letter of expectations to the agency, released this week, which sets out what the Government wants Pharmac to deliver over the 2026/27 year.
Pharmac is the Crown agency that decides which medicines and medical devices the public health system pays for, working within a fixed budget. Seymour has asked it to keep investing in data and digital infrastructure, and to explore using AI to support analytics, reporting and decisions across its core work. One area he singled out is horizon-scanning, the job of working out which new medicines coming onto the world market could be useful here.
The minister was careful to frame the technology as a help to staff rather than a replacement for them. Speaking to RNZ, Seymour said, “I don’t see it as replacing humans. I see it as a force multiplier for the time and talents of the staff that we have.” He noted Pharmac had already started using AI for tasks such as writing meeting minutes, summarising documents and sorting medical devices into categories, which he called “a very good start”.
Seymour said he could see the agency taking the technology further. “I can see them going further, using it to analyse the benefits of medicines and compare the benefits,” he said. He added that if the approach proved durable rather than a passing fad, the payoff would be real. “If they can make that work and it’s not just a fad, there’s genuine benefits that we can get more medicines to more patients faster, then I think that’s got to be a positive.”
The other big theme in the letter is money, and specifically how Pharmac argues for more of it. New Zealand’s medicines budget has long run below those of comparable countries, and the minister wants the agency to build a stronger case for closing that gap. “If we’re going to wrestle up that medicines budget, which is lower than comparator countries, I’m interested in how Pharmac makes the case to close that gap,” he said.
His suggested route is to count the savings a medicine creates elsewhere. A drug that keeps someone out of hospital, slows the progress of diabetes or kidney disease, or lets a person stay in work all carries value beyond the price on the box. Seymour wants Pharmac to work with the Social Investment Agency to put numbers on those longer-term fiscal and social benefits, accepting that some of them take years to show up.
The minister was keen to stress how far the agency has already come. In a statement accompanying the letter, he said Pharmac had shifted “from focussing solely on managing their fixed budget to an agency that seeks collaboration and advocates for further funding”. He pointed to the spending behind that shift, saying, “Patients are reaping the benefits. With that money, Pharmac has made 135 decisions to fund or widen access to medicines, including decisions on 47 cancer medicines.”
The figures the Government is leaning on are large. Pharmac now has its biggest ever budget, $7.2 billion over four years. That includes a $54 million uplift over four years announced in Budget 2026 and a $604 million uplift over four years made back in June 2024, on top of a $1.77 billion time-limited investment from Budget 2024. The Government says more than 680,000 patients are expected to benefit in the first year from medicines that have been funded or had their access widened.
Seymour did not shy away from the stakes for ordinary people. “For many New Zealanders, funding for pharmaceuticals is life or death, or the difference between a life of pain and suffering or living freely,” he said. At the same time he made clear the budget itself remains capped. “My expectation is that Pharmac continues to deliver for Kiwis within its fixed budget,” he said, which is the central tension the agency lives with. Every funding decision it makes is a choice about who gets help and who waits.
That tension is also why the AI push will be watched closely. Using software to speed up assessments and rank the benefits of competing medicines could shorten the wait for treatments that patients and their families have campaigned hard to get funded. It could equally raise questions about transparency, and about how much a machine should shape decisions that are, in the minister’s own words, a matter of life or death. The letter leaves the detail of how far AI goes to Pharmac itself, which has signalled it intends to keep human judgement at the centre of its calls.
Medicines funding has been one of the more emotive areas of health politics in recent years, with cancer drug access a frequent flashpoint at the ballot box. With the general election set for November, how the Government talks about Pharmac, and how quickly patients see results, is likely to feature in the campaign. Readers weighing up where the parties stand on health and other issues can compare their own views with party positions using Newswire’s voting tool.
What do you think? Should Pharmac be using AI to help decide which medicines get funded, and would a broader measure of a drug’s value help close the gap with other countries? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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