From July 1 this year Pharmac is taking over management and buying of all hospital as well as community medicines – a move it estimates will save nearly $200m over four years.

In a statement released to coincide with the Budget Pharmac said that overall the Combined Pharmaceutical Budget for 2018-19 will increased by $114.2 million over last year’s levels to a record $985m.

Pharmac says it estimates that due to its buying power – and the shift to using the Pharmac model over all government-funded medicines – that it was likely to provide future savings of around $200 million over four years for Vote Health.

This estimate has been built into the Budget appropriation with $29.3m of reprioritised money from the Pharmac Budget being used to help fund other health spending in 2018-19 year and future years with total of just under $200m over the next four years.

National’s finance spokesperson Amy Adams said on Radio New Zealand this morning that the Budget was cutting Pharmac’s budget by $200 million.

But Finance Minister Grant Robertson responded by saying actually more funding was going into the Combined Pharmaceutical Budget.

“What is happening is that Pharmac is taking over responsibility for buying pharmaceuticals for all district health boards,” Robertson said on Morning Report this morning. “As a result of their bulk-buying power they estimate they are going to make around $200m in savings on that budget over four years.  So actually we are going to get value for money for people and the same medicines will be provided, in fact more medicines will be provided.”

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