Letter of Expectations progress update - November 2025

Strengthen partnership work to ensure stakeholders understand how Pharmac operates, that its legitimacy, credibility, and trust is enhanced, and that feedback and ideas are dealt with respectfully & valued

Ongoing

We have focused on increasing the transparency of Pharmac’s work as a way of building trust with stakeholders. Key improvements included updates to our website to make information more accessible, and the proactive publication of material of public interest, such as Named Patient Pharmaceutical Assessment (NPPA) outcome data.

We have also explored ways to engage earlier with consumers, patient groups, clinicians and wider health sector when considering funding decisions, for example our engagement around hormone replacement therapy (HRT).

In November 2024, two independent consumer engagement workshops were held, commissioned by the Pharmac Board. These workshops aimed to strengthen partnerships with consumer and patient groups. A resulting report released in March 2025 outlined several recommendations, including the establishment of a consumer reference group - which has been implemented.

This expectation continues under the “Building Productive Partnerships” theme.

Our focus in 2025/26 will be continuing to strengthen partnerships with consumer and patient groups. We will continue to seek advice from and work closely with our Consumer Advisory Committee alongside the Consumer and Patient Working Group to implement the recommendations from the Consumer Engagement Workshop Report, as well as other improvement initiatives to reform Pharmac.

We will establish a new consumer relations team to strengthen our engagement and work with consumer and patient groups.

Identify and pursuing any opportunities to work collaboratively and collectively with other entities, government and non-government, where this partnership will result in process improvements, health gains, or enable efficiencies

Accelerated and ongoing

Pharmac has prioritised initiatives to build and enhance collaboration across the health sector, recognising the value of working in partnership to achieve better outcomes. We participate in a wide range of collaborative work across the health sector, government and non-government entities to deliver and support Pharmac’s work.

Key activities in 2024/25 included:

• working with our partner agencies to establish the Health Sector Implementation Group to support the successful rollout of the medicines funded from the June 2024 Budget uplift.
• collaborating with the Vote Health Team on joint budget bid development to capture the broader impact on the health sector.
• establishing the Sector Equity Working Group to align efforts on improving equity across the system.

This expectation continues under the “Building Productive Partnerships” theme.

Our focus in 2025/26 will be on identifying and pursuing new opportunities for collaboration across the health sector, while continuing to evolve and strengthen the existing initiatives already underway.

Pharmac regularly reports to me on how it is tracking in relation to organisational culture and stakeholder sentiment, and what actions are being undertaken to address any issues identified.

Expanded metrics and reporting, continued improvements planned

Pharmac continues to track progress in building public trust and stakeholder sentiment through quarterly performance reporting and annual performance measures, as detailed in our Annual Report.

Regular engagement with the Minister also supports transparency and accountability. The Board Chair and Chief Executive meet with the Minister throughout the year, supported by monthly updates.

To support a positive and inclusive organisational culture, the Pharmac Board commissioned a review by organisational expert Debbie Francis in late 2024. The purpose of the review was to explore what a thriving culture could look like in five years and identify the steps needed to achieve it.

This expectation continues under the “Continuous Improvement of Organisational Culture” theme.

Our focus in 2025/26 will be on implementing actions from the Pharmac Culture Review report. This includes developing a compelling new organisational vision and establishing measurable strategic objectives to guide and support its delivery. These efforts will help embed a positive, inclusive, and high-performing culture across the organisation.

Executive staff are providing the right information to enable the Board to make strategy decisions, and to undertake assessment and learning activities to improve the performance of your Board members in their important role.

Completed

The Pharmac Board receives timely and relevant information to support strategic decision-making through its meeting papers. This practice is well embedded and supports the Board’s ability to fulfil its governance responsibilities.

Regular meetings between the Board Chair and Chief Executive take place, providing a valuable forum for discussing key issues and priorities.

In addition, there is a well-established and constructive dialogue between the Pharmac Board and the Senior Leadership Team, contributing to strong alignment and shared understanding across strategic and operational matters.

This expectation is not included in the 2025/26 Letter of Expectations.

How the current statutory objectives and functions of Pharmac could be updated to ensure that the organisation is operating in a way which ensures the optimisation of health outcomes which can be provided by medical technologies.

Assessed and refined, implementation planning ongoing

Pharmac began reviewing its statutory objectives and functions in late 2024, following advice from the Ministry of Health that no substantive changes to the Pae Ora Act were planned until 2027.

In May 2025, we became aware that the Minister of Health intended to introduce amendments to the Act. These changes were publicly announced in mid-June, and the Healthy Futures (Pae Ora) Amendment Bill was introduced to Parliament in July 2025.

Although Pharmac was not formally invited to propose amendments to its objectives and functions, we proactively engaged with the Ministry of Health and Minister Seymour’s office throughout May and early June. This engagement focused on our interest in contributing to legislative updates.

As a result, we provided initial advice in late June to both the Ministry and the Minister’s office, outlining proposed changes and identifying the need for further work on section 68 of the Act, which defines Pharmac’s statutory objective.

This expectation continues under the “Improving access to medicines and medical technology” theme.

Ministers will consider whether amendments are proposed to the Bill when the Bill is introduced at the Health Select Committee stage. This may include amendments pertaining to Pharmac.

In early October the Health Select Committee (HSC) sought advice from Pharmac on submissions received pertaining to Pharmac in the Healthy Futures (Pae Ora) Amendment Bill.

The HSC is scheduled to report back to the House on 24 November 2025, on its recommended amendments

Would New Zealand’s needs be better served by a clear delineation of the roles of value assessment and procurement in medical technologies.

Completed

Pharmac provided a Ministerial briefing in November 2024 on assessment and procurement in medical technologies. The topic was discussed with the Minister’s office and no further action was required.

This expectation is not included in the 2025/26 Letter of Expectations.

The role that Pharmac is playing in the value assessment and procurement of medical devices.

Established medical devices arrangements with Health NZ, progressing implementation

In October 2024, the Ministry of Health commissioned a review of medical devices procurement, with Pharmac actively contributing to the process. This included providing Ministerial briefings to clarify and inform the respective roles of Pharmac and Health New Zealand in the assessment and procurement of medical devices.

This expectation continues under the “Continuous Improvement of Organisational Culture” theme.

Cabinet made decisions in September 2025 to deliver a more integrated approach to the procurement of medical devices. This will see Health NZ and Pharmac each take responsibility for the procurement of medical devices that are most focused on their particular capabilities and expertise.

A cross-agency oversight group will oversee implementation, monitor performance, resolve issues, and align procurement with system priorities.

How can Pharmac put forward medical technology budget requests to its responsible Minister in a manner which maintains independence but supports additional investment.

Completed

Budget 2025 work is now completed.

The 2025 Budget bid submissions were proactively released on Pharmac’s website in July 2025 to increase transparency of the budget work.

This expectation continues under the “Improving Access to Medicines & Medical Technology” theme.

Pharmac will continue to work with the Minister to put forward budget bid requests for Budget 2026.

Has appropriate processes and methodologies for ensuring that those living with a disease, and their carers and families, can participate and provide input into the decision-making processes. This should include the involvement of patient groups.

Accelerated and continually improving

Pharmac has prioritised initiatives to strengthen consumer and whānau participation in decision-making, recognising the importance of lived experience in shaping better health outcomes. Key activities in 2024/25 included:

• regular consultation with the Consumer Advisory Committee on a range of strategic initiatives and implementation matters to better respond to consumers.
• establishing the Consumer and Patient Working Group to support provide structured input into our improvement work
• expanding the use of consumer and expert advisory networks to increase participation across Pharmac’s assessment and decision-making
• improving transparency through faster publication of clinical advice records.
• adding an additional public consultation step for potential brand changes through the annual tender, with a particular focus on seeking feedback from consumers/consumer groups.
• involvement of consumer groups in the development and evaluation of procurement processes.

This expectation continues as part of the “Improving Access to medicines and medical technology” theme.

Pharmac will continue to enhance its processes and methodologies to ensure meaningful participation from people living with a disease, their carers, families, and patient groups in decision-making.

This work is expected to be a key focus of the Pharmac Reset Programme and will be further supported by the input of the Consumer Advisory Committee and the Consumer and Patient Working Group.

Continues to act in accordance with the Code of expectations for health entities’ engagement with consumers and whānau.

Programme of assessments established; ongoing. 

Pharmac completed two self-assessments against the Code of expectations for health entities’ engagement with consumers and whānau during the year—one in September 2024 and another in March 2025. These assessments support our commitment to meaningful engagement and continuous improvement. The results are publicly reported by the Health Quality and Safety Commission, which coordinates this activity on behalf of the health sector.

This expectation is not included in the 2025/26 Letter of Expectations.

However, Pharmac, like all health entities, is required under the Pae Ora (Healthy Futures) Act 2022 to report on progress against the Code of Expectations for Code of expectations for health entities’ engagement with consumer and whanau.

We will continue to report on progress and will undertake two self-assessments during 2025/26.

Reports publicly, at a minimum annually, on how it is progressing in relation to numbers 9 and 10 above.

Completed

Progress was captured in our quarterly performance reports, which were reviewed and agreed by the Pharmac Board before being submitted to the Minister. These reports are publicly available on Pharmac’s website.

Work is currently underway to prepare the 2024/25 Annual Report, which will include a summary of progress and is scheduled for publication in late 2025.

This expectation is not included in the 2025/26 Letter of Expectations.

Pharmac will however continue to report on progress as part of its statutory performance reporting.

Updates its decision-making and evaluation models to include the wider fiscal impact of funding or not funding a medicine or medical device to the whole of government and has tools to consider the wider societal impact.

Improving models, data quality and evaluation

Pharmac is exploring how a societal perspective could help to better demonstrate a treatment’s value to society. Work undertaken to date includes:

• researching international best practice for alternative assessment models that consider societal impacts
• engaging with internationally recognised experts, including those in the Netherlands, to explore methodologies for assessing societal impacts
• commissioning pilot societal impact assessments through iMTA at Erasmus University, Netherlands.

To support this work, Pharmac submitted a Budget 2025 bid to progress a societal impact pilot for the medicines budget but unfortunately this was not successful. We proactively released documents related to this Budget bid in July 2025.

This expectation continues as part of the “Improving Access to Medicines and medical technology” theme.

We will continue to explore how a societal perspective can better demonstrate the broader value of treatments. Planned activities for 2025/26 include:

• commissioning further societal perspective assessments from the iMTA in the Netherlands, representing significant potential investments
• training staff on how to incorporate societal impacts into estimates of economic value and budgetary impact, so future budget bids can reflect costs and savings of new pharmaceutical investments to other government budgets and wider society.
• updating our assessment tools and processes to better account of how we consider wider fiscal and societal impacts.

We will use the findings from this work to inform and support the Budget 2026 process.

Publishes in a timely manner agendas and minutes for all meetings of the Board, advisory committees, and other relevant groups.

Accelerating timing of public release of wide range of material, ongoing

We publish all agendas, records and minutes from Pharmac Board meetings, expert advisory committee’s meetings and other relevant groups on our website.

Work is underway on our 2024/25 Annual Report, scheduled for publication in late 2025. This report will include an update on our annual performance measure regarding the average time to publish records from the Pharmacology and Therapeutics Advisory Committee (PTAC) and Specialist Advisory Committees (SACs).

This expectation continues as part of the “Building Productive Partnerships” theme.

We will continue to publish all agendas, records and minutes from Pharmac Board meetings, all expert advisory committee meetings, Consumer Advisory Committee and other relevant groups on our website.

In addition to our existing performance measure for the timely publication of records from PTAC and SAC meetings, we have introduced a new performance measure. This new target aims to publish provisional recommendations from our advisory committees within 30 days, further strengthening transparency.

Publicly provide reporting on timeliness from the receipt of an application for a medical technology, its assessment period, and then placement on one of the three priority lists.

Refined reporting metrics, more underway

We have an existing performance measure that tracks the average time to assess and rank new funding applications.

Progress against this measure is reported in our quarterly performance reports. These reports are publicly available on Pharmac’s website.

Work is underway to prepare progress reporting through our 2024/25 Annual Report, which will be published in late 2025.

This expectation continues as part of the “Building Productive Partnerships” theme.

We will continue work to improve the time to assess and rank new funding applications.

To improve overall timeliness, Pharmac is actively working to reduce the backlog of funding applications awaiting ranking. A new performance target has been introduced for 2025/26 to reduce the backlog to 150 applications, down from approximately 350 in 2024/25.

Outline how you will give effect to the Government Policy Statement on Health 2024 – 2027.

Tightening focus, organisational performance and delivery, ongoing

Government priorities, including those outlined in the Government Policy Statement on Health (GPS Health), have been incorporated in our 2024/25 – 2027/28 Statement of Intent and 2025/26 Statement of Performance Expectations.

This expectation continues as part of the “Continuous Improvement of Organisational Culture” theme.

Pharmac will give effect to relevant actions outlined in the GPS Health and support the delivery of targets across priority areas where applicable.

The three actions specific to Pharmac in the GPS Health are:

• improve the availability of and access to cancer medicines in New Zealand.
• enable faster access to medicines by improving the timeliness of processes related to accessing new medicines.
• continue to develop Pharmac’s model to ensure patient voice and wide-ranging societal consequences are taken into account.

Consider how you can support the progress against the Government’s targets in focus areas. I note that improving child immunisation rates will be critically dependent on Pharmac’s role in vaccines.

System engagement widened and ongoing

Pharmac has actively participated in cross-sector arrangements for the funding and management of vaccines, alongside the Ministry of Health and Health New Zealand.

This expectation continues as part of the “Continuous Improvement of Organisational Culture” theme.

We will continue to contribute to cross-sector arrangements for vaccines.

Work with Health New Zealand as it develops the New Zealand Health Plan.

Completed

We provided input, as required, into the development of the New Zealand Health Plan.

This expectation continues as part of the “Continuous Improvement of Organisational Culture” theme.

The New Zealand Health Plan was launched on 1 August 2025. Pharmac will support and contribute to the delivery of relevant actions in the plan.

Work with the Ministry of Health as it develops the rare disorders strategy.

Completed

Pharmac contributed to the development of the Rare Disorders Strategy, led by the Ministry of Health. The strategy was officially published in July 2024 and reflects a collaborative effort to improve outcomes for people living with rare disorders in New Zealand.

Supporting the implementation of the rare disorder’s strategy continues under the “Building Productive Partnerships” theme.

The Ministry of Health is leading the coordination of next steps for implementation, with Pharmac actively contributing where relevant.

Following analysis and consultation, Pharmac in October 2025 amended its policy settings for rare disorders. This involves bringing Pharmac’s definition of rare disorders into line with that in the Rare Disorders Strategy 2024, including changing what counts as a rare disorder from 1 in 50,000 to 1 in 2,000. In practice, this means that more rare disorder medicine applications will be able to be assessed by Pharmac without prior Medsafe approval.

Draft a new Statement of Performance Expectations for 2024/25, with a revised draft to be provided to your contact at the Ministry of Health by 1 July 2024.

Completed

Pharmac’s revised Statement of Performance Expectations (SPE) was agreed by the Minister and published in December 2024.

The 2025/26 SPE was completed in June 2025. The SPE will be tabled in Parliament in late 2025 alongside Pharmac’s 2024/25 Annual Report.

This expectation continues under the “Continuous Improvement of Organisational Culture” theme.

The SPE is an annual statutory document required under the Crown Entities Act 2004. We will develop the 2026/27 SPE over the coming year, with completion scheduled for June 2026.

An update to your Statement of Intent to reflect the new priorities of this Government. An updated Statement of Intent should be provided to your contact at the Ministry of Health by 31 October 2024.

Completed

Pharmac’s revised Statement of Intent (SOI) was agreed by the Minister and published in December 2024.

This expectation continues under the “Continuous Improvement of Organisational Culture” theme.

The SOI is a statutory document required under the Crown Entities Act 2004 and is typically produced every 3 years. We will develop a revised SOI over the coming year, with completion scheduled for June 2026.

Continue to outline how Pharmac is implementing the 2022 Pharmac Review including implementation timelines.

Completed

Pharmac prepared a status report against all items from the 2022 Pharmac Review, identifying actions for closure and outlining next steps. This report was published on Pharmac’s website in July 2025, providing transparency on progress and future commitments.

This expectation was not included in the 2025/26 Letter of Expectations.