Key Takeaways
Non-Pharmac medicines in NZ are medicines that have been approved for use but are not publicly funded, so patients pay the full cost themselves. For some cancer treatments that cost can be very significant, which is why non-Pharmac cover is one of the most important features to check on a health insurance policy.
- Pharmac decides which medicines are publicly funded, working within a fixed budget set by the Government.
- Medsafe approves medicines as safe and effective. Approval does not mean a medicine is funded.
- Newer cancer treatments are the most common reason New Zealanders face non-funded medicine costs.
- Many health policies offer non-Pharmac cover, often as an option, with an annual or lifetime limit that varies by policy.
- Trauma cover can complement health insurance by paying a lump sum that can be used towards treatment costs.
What does Pharmac do?
Pharmac is the government agency that decides which medicines are publicly funded in New Zealand. It manages a fixed budget and compares funding applications against each other to decide which medicines offer the best health outcomes for the money available. According to Pharmac, the community medicines budget was nearly $1.7 billion in 2024/25, and new medicines can only be funded when there is room in that budget.
Pharmac does not approve medicines. That is Medsafe's role. Medsafe checks that a medicine is safe and works as intended. Pharmac then decides whether the public health system will pay for it.
Why some medicines are approved but not funded
Because Pharmac works within a fixed budget, it cannot fund every medicine that Medsafe approves. A medicine may be waiting for a funding decision, may have been assessed as lower priority than other applications, or may be funded only for certain patients who meet specific criteria. If a medicine is not funded for your situation, your specialist may still recommend it, but you or your insurer would need to pay.
Unfunded cancer drugs in NZ
Cancer treatment is where the non-Pharmac question comes up most often. Newer targeted therapies and immunotherapies can be expensive, and some are funded only for particular cancers or stages, or not funded at all. A specialist might outline a funded treatment pathway alongside a non-funded option that could suit the patient better.
Facing that choice after a diagnosis is stressful enough without wondering how to pay. Non-funded courses of treatment can run over many months, and costs can include the medicine itself plus the cost of administering the treatment privately. Knowing what your policy covers before you need to claim removes part of that pressure.
It is not only cancer
Non-funded medicines can also come up in other areas, such as some autoimmune and rare conditions. The principle is the same: the medicine is approved, but the public system is not paying for it in your circumstances.
Non-Pharmac cover on health insurance
Many health insurance policies in New Zealand include non-Pharmac cover, or offer the benefit as an optional add-on. This benefit helps pay for Medsafe-approved medicines that are not funded by Pharmac, subject to the policy terms.
| Feature to check | Why it matters |
|---|---|
| Is non-Pharmac cover included or optional? | On some policies you need to add the benefit separately, and some base plans exclude the benefit. |
| The limit | Limits vary widely between policies and may apply per year or per lifetime. |
| Which medicines qualify | Most policies require Medsafe approval and use in line with approved indications. |
| Treatment setting | Some policies cover only medicines given as part of covered treatment, such as cancer care. |
| Interaction with cancer cover | Check whether non-Pharmac costs share a limit with other cancer treatment benefits. |
| Pre-existing conditions | A condition diagnosed before cover starts is usually excluded, including related medicines. |
How much non-Pharmac cover do you need?
There is no single right number. People often weigh the level of limit against the extra premium, their family history, and their ability to fund treatment from savings. A higher limit usually costs more. An adviser can show you the limits available across insurers and help you decide what balance fits your budget. For more on what drives cost, see our guide to how much health insurance costs in NZ.
Check the health insurance non-Pharmac limit on your current policy
Many people hold policies that were set up years ago, when limits were lower and some newer medicines did not exist. Pull out your policy schedule and look for the non-Pharmac or unfunded medicines benefit. If you cannot find one, or the limit looks low, it is worth asking whether an upgrade is possible. Be aware that upgrades can involve new health questions, and changes made after a diagnosis will not usually cover that condition.
How to find out whether a medicine is Pharmac funded
Pharmac publishes the Pharmaceutical Schedule, which lists the medicines that are funded and any criteria that apply. Your specialist or pharmacist is usually the best first port of call, because funding can depend on the specific condition, the stage of illness and previous treatments. If a medicine is funded only under special criteria, your specialist can tell you whether you meet them.
If a medicine is not funded for you, ask your specialist about the expected cost, how long treatment is likely to run and whether a funded alternative is suitable. Then contact your insurer or adviser before starting, so any claim can be assessed and pre-approved where the policy requires it.
Non-Pharmac cover on work and family policies
Employer group schemes do not always include non-Pharmac cover, and where they do, limits can be lower than on an individual policy. If you rely on a work scheme, check the scheme summary and ask whether you can top up cover personally.
For families, the non-Pharmac benefit usually applies to each insured person, but some policies apply limits differently, so read the wording. If you are reviewing family cover more broadly, our guide to health insurance for kids and families explains what else to check.
How trauma cover can help alongside health insurance
Health insurance pays for treatment, up to the policy limits. Trauma cover works differently. Trauma cover pays a lump sum if you are diagnosed with a condition listed in your policy, such as many cancers, a heart attack or a stroke. You can use that money however you need, including towards non-funded medicines, travel for treatment, or time off work.
Many people hold both. Health insurance covers the medical bills, and trauma cover gives financial breathing room. Read our guide on what trauma insurance is and whether trauma cover is worth having to see how trauma cover works.
Questions to ask before you buy or change cover
- Does this policy include non-Pharmac cover, and if not, can I add the benefit?
- What is the non-Pharmac limit, and is the limit annual or lifetime?
- Does the limit cover the cost of administering the medicine as well as the medicine itself?
- Do non-Pharmac costs share a limit with other cancer benefits?
- Will changing my policy trigger new health questions or exclusions?
If you are thinking about moving to a new insurer for better non-Pharmac cover, read our guide on switching health insurance providers first, as moving can mean conditions are treated as pre-existing.
How SHARE - The Advisory can help
We compare non-Pharmac limits and wording across insurers, explain how the benefit fits with cancer cover, and help you weigh the cost against the protection. If you ever need to claim, we can help you through pre-approval and paperwork. Find out more about our health insurance advice or contact us to review your current policy.
Conclusion
Non-Pharmac medicines in NZ are approved for use but not publicly funded, and the cost can be significant, especially for newer cancer treatments. Pharmac's fixed budget means not every approved medicine will be funded, so private cover is the main way many families protect themselves against that cost.
Check whether your health insurance includes non-Pharmac cover, what the limit is and how the limit applies, and consider trauma cover alongside for extra flexibility. This article is general information only and is not personalised advice.
Frequently Asked Questions
What are non-Pharmac medicines?
Non-Pharmac medicines are medicines approved by Medsafe for use in New Zealand that are not funded by Pharmac for your situation. If you use them, you or your insurer pay the full cost.
Does health insurance cover non-Pharmac drugs?
Many policies do, either as part of the base cover or as an optional add-on, up to a set limit. The limit and rules vary by policy.
Why doesn't Pharmac fund all medicines?
Pharmac works within a fixed budget set by the Government and prioritises the medicines it expects to deliver the best health outcomes for the money available.
Are unfunded cancer drugs expensive in NZ?
Some can be very expensive, particularly newer targeted therapies and immunotherapies used over many months. Costs depend on the medicine, dose and length of treatment.
Can I add non-Pharmac cover to my existing policy?
Often, yes, but adding or increasing the benefit may involve health questions, and conditions diagnosed before the change are usually excluded. Talk to an adviser before you change anything.