Proposal to change Pharmac’s policy principles for funding rare disorder medicines

Have your say

We propose to change the definition of rare disorder used by Pharmac from 1 in 50,000 to 1 in 2,000. This will bring Pharmac’s definition in line with the Aotearoa New Zealand Rare Disorders Strategy 2024 | Ministry of Health(external link).

The proposal will allow more medicines for rare disorders to be assessed for funding before they are Medsafe approved.  

Pharmac’s rare disorders policy principles make it easier for rare disorders medicines to be assessed by Pharmac.

Pharmac’s funding process

Have your say by email consult@pharmac.govt.nz consultation closes Friday, 29 August 2025 5pm.  

What would the effect be?

From the date the policy goes into effect, the definition of a rare disorder will be:

“a clinically defined disorder that affects an identifiable and measurable patient population of less than 1:2,000”. All three principles will still need to be met for an application to be assessed via this pathway.

This change will allow Pharmac to assess more funding applications for medicines for rare disorders.

The policy principles allow Pharmac to assess funding applications before the supplier applies to Medsafe for regulatory approval.

We want to hear from:

• People with rare disorders, their whānau, and caregivers
• Health professionals who work with patients with rare disorders
• Pharmaceutical providers
• Medsafe, Health NZ, the Ministry of Health
• Support and advocacy groups

Why Pharmac treats medicines for rare disorders differently

It is harder for a rare disorders medicine to get funded.

• Due to the typically limited data and smaller clinical trials, medicines for rare disorders require a different lens when evaluating evidence.
• These medicines are often expensive, in part because of a lack of competition and limited market opportunity due to small patient populations.
• New Zealand is far away and has a small population. It might not be profitable for a pharmaceutical company to bring the medicine to New Zealand.

Difficult to assess medicines for rare disorders

Pharmac is required to get the best health outcomes for New Zealand while staying within our budget. This means we cannot fund every medicine we want to. We use our prioritisation process to help us decide which ones to fund.

It can be difficult for Pharmac to assess the value of funding a medicine for a rare disorder. The small number of affected people means research supporting the medicine can have small study groups or may make claims of long-term benefits from short-term results.

About Pharmac’s prioritisation process

Small population and distance make it more expensive

The very small patient population at times provides little incentive for suppliers to come to New Zealand. The costs of regulatory approval and to supply a medicine are high, without government funding there is no guarantee of a return.

This issue is not unique to New Zealand.

Rare disorders strategy

This proposal helps align our definition of a rare disorder with the Aotearoa New Zealand Rare Disorders Strategy.

In 2024, the Ministry of Health released the Aotearoa New Zealand Rare Disorders Strategy. While the need for a strategy has been advocated for some time, recent impetus for it came from a recommendation in the Government’s review of Pharmac in 2022. Pharmac worked closely with the Ministry of Health helping develop the Strategy and is committed to supporting it.

Aotearoa New Zealand Rare Disorders Strategy | Ministry of Health(external link)

How the rare disorders policy principles help funding applications get assessed

The rare disorders policy gives Pharmac a mechanism to consider a funding application before an application is lodged with Medsafe.

The role of Medsafe(external link) 

Currently, funding applications for rare disorder medicines need to meet the following:

1. Medsafe, or an approved international regulatory authority, has approved the medicine for the specific indication or condition.
2. The disorder is a clinically defined disorder that affects an identifiable and measurable patient population of less than 1 in 50,000 people in New Zealand.
3. The medicine is only regulated to treat the rare disorder. If it is registered for other disorders (or is part of phase three clinical trials for other disorders), those other disorders must meet principle 2.

Changing the definition of a rare disorder would allow more funding applications to be considered by Pharmac.

What happens after a funding application is accepted

The Rare Disorders Advisory Committee, or other relevant advisory committee, considers the funding application. The committee reviews the evidence using the Factors for Consideration and make a recommendation to Pharmac.

Pharmac’s Factors for Consideration

If the committee makes a positive recommendation, Pharmac then ranks the funding application against all other funding applications to determine the next best investment.

About Pharmac’s priority lists

As with all medicines, if the committee recommends the application be declined, Pharmac may not progress the application any further.

Medsafe approval still needed

If Pharmac decides to fund the medicine, it still needs Medsafe approval before it can be listed in the Pharmaceutical Schedule.

Increase in number of applications may be small

The absolute number may be small. However, we know there are medicines that are currently not being considered which could be if the definition of a rare disorder is changed.

We will continue to work on how we can operationalise this change

We expect that the increase in applications will be relatively small however it may be more than we think. Recently we have received more applications than the Rare Disorders Advisory Committee could consider at one meeting. We are working work through options for how we could operationalise this change. This may mean more  Rare Disorders Advisory Committee meetings or using other Committees to support this work.

Changing the definition of a rare disorder demonstrates that Pharmac is:

• continuing to explore what more it can do for people with rare disorders
• responding to an issue identified in the Pharmac Review
• preparing to meet the intent of the Medical Products Bill,
• following the direction given in the Minister’s Letter of Expectation.

Specifics of our proposal

The rare disorders policy settings would be amended as follows (additions in bold):

To give feedback

Send us an email: consult@pharmac.govt.nz by 5 pm on Friday 29 August 2025.

All feedback received before the closing date will be considered by Pharmac’s Board (or its delegate) prior to making a decision on this proposal.

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