Documents reveal meeting National's election pledge to increase access to 13 more cancer treatments would have cost at least $440 million over four years — about $160 million more than the party had estimated in opposition.
The documents also show a scaled-back version of the policy was considered for this year's Budget. This was ultimately rejected.
Documents released to 1News under the Official Information Act shed more light on how money for the policy was left out of Budget 2024 — a decision that sparked significant criticism from patients and campaigners.
About a month after Budget 2024's release, the Government said it would give Pharmac an additional $604 million over four years using funds set aside for next year's Budget.
Around 175,000 people are expected to benefit from additional treatments in the first year. (Source: 1News)
Health Minister Shane Reti said this was enough for up to 26 cancer treatments and 28 other medicines. This included "up to seven" of the 13 treatments promised.
The rest would be "replaced by alternatives just as good or better".
National's original cancer medicines policy, announced in August last year, allocated $280 million over four years for lung, bowel, kidney, melanoma, and head and neck cancer treatments funded in Australia, but not New Zealand.
The party's election policy suggested it would be able to afford it by reversing Labour's universal free prescriptions policy, which would have cost $619 million over four years.
National estimated giving free prescriptions to only low-income earners and superannuitants would cost about $303 million over the same period, leaving it with a net saving of $316 million by 2028.
The Prime Minister said people dying of cancer should blame Labour, not him. (Source: 1News)
But, a Budget document from February 22 put the cost of the 13 medicines at $443 million from 2024 to 2028 — $163 million more than National's election policy anticipated.
Officials advised considering scaled-back option
Officials also said reinstating $5 prescription co-payments for most New Zealanders, with some exceptions, would cover only $116.1 million of the total cost.
By March 8, Treasury officials recommended ministers consider a scaled-back option — one that would cost $116.1 million to match up with revenue resulting from scrapping universal free prescriptions. It is not clear which of the 13 cancer medicines this reduced package would or would not have funded.
Officials said they while "recognise the benefits this initiative would provide New Zealanders, given the recent significant Pharmac investment, we do not think additional funding should be prioritised this Budget".
They said the $1.7 billion in additional Pharmac funding — which Associate Health Minister David Seymour would end up announcing in late April, a month before Budget Day — "partially meets the commitment to provide more cancer medicines (though not one of the 13 specified)".
Further work was needed to understand what it would cost the health system to actually deliver the treatments, officials added.
By March 22, a proposal had been made to forgo the scaled-back option.
Three days later, Budget ministers met and "raised communication risks of not doing something". They also asked Treasury officials for further advice about why costs had increased compared to National's estimates during the election campaign.
Speaking on Breakfast, Christopher Luxon also said he understood there were "major workforce challenges" in the health sector that would deliver these medicines. (Source: Breakfast)
The advice requested was provided to ministers ahead of their final decision not to fund the policy in early April. 1News' requests for this advice were declined on the grounds it would be released in late August.
Ministers considered 'range of options' pre-Budget — Reti
Last year, academics and patient advocates raised concerns Pharmac's bargaining power could have been compromised because National had named the drugs it wanted.
1News asked the Health Minister whether this was a factor in the increased costs.
Reti was also asked about the significant differences between Treasury's figures and National's pre-election costings. In a statement, the minister referred back to the Treasury advice scheduled to be released late next month.
He was also asked about the reasons why the scaled-back package was rejected, and what it would have included.
Cancer treatments are among 54 new drugs funded by the Government, but there’s a shortage of oncologists. (Source: 1News)
The Health Minister said: "Developing a Budget package involves significant back and forth between Budget ministers and Treasury officials as it progresses and includes a range of options and advice that may or may not be progressed."
Reti said the Government had delivered on its promise to help people with cancer with its post-Budget announcement of additional Pharmac funding.
"It was always our intention to fund more cancer drugs but it unfortunately took longer than envisaged."
Seymour, the minister in charge of Pharmac, told reporters last week that work on that announcement hadn't started until after Budget Day.
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