Pharmacy Funding Reform Needed as 12-Month Prescriptions Increase Pressure on Community Pharmacies

Growing demand for medicines combined with policy changes allowing 12-month prescriptions is placing new financial pressure on New Zealand’s pharmacy sector, prompting calls for urgent pharmacy funding reform.

Industry experts say the current model, which requires pharmacies to rely heavily on retail sales to support core healthcare services, is becoming increasingly unsustainable. As prescription volumes continue to climb and pharmacy numbers decline, sector leaders warn that without structural changes the long-term stability of community pharmacy services could be at risk.

The issue has already attracted national media attention, with the story appearing in outlets including the NZ Herald and Stuff as debate grows around the sustainability of primary healthcare infrastructure in New Zealand.

Why Pharmacy Funding Reform Is Becoming Urgent

From February 1, 2026, New Zealanders living with stable long-term conditions such as asthma and diabetes can obtain prescriptions lasting up to 12 months rather than the previous three-month limit. The reform aims to reduce unnecessary GP appointments and make it easier for patients to manage ongoing medication needs.

However, pharmacy sector leaders say the change has been introduced without clear detail on how dispensing services will be reimbursed under the new system.

“Pharmacies need a funding structure that works on the basis of dispensing and clinical services alone,” says Zoom Health director David Taylor. “Relying on retail margins to keep essential health services viable is no longer sustainable, particularly for New Zealand-owned community pharmacies that lack the scale or offshore backing of large discount operators.”

Rising Demand for Pharmacy Services Across New Zealand

Recent figures from Te Whatu Ora highlight the growing reliance on community pharmacy services across the country.

By September 2025, around 1,806,836 New Zealanders were accessing community pharmacy services each month, compared with 1,693,515 in September 2022. This represents an increase of more than 113,000 patients within just three years.

Over the same period, pharmacies dispensed 98.6 million prescription items annually, representing a 4.4 percent year-on-year increase. Repeat prescriptions in particular are rising faster than initial prescriptions, reflecting the growing number of people living with long-term health conditions.

According to the New Zealand Ministry of Health, chronic diseases such as diabetes, asthma and cardiovascular illness are becoming more prevalent as the population ages, further increasing demand for ongoing medication management.

Fewer Pharmacies Serving More Patients

While demand continues to grow, the number of community pharmacies operating across New Zealand is gradually declining.

Te Whatu Ora data shows there were 1,069 pharmacies operating nationwide in September 2025, down from 1,091 in September 2022.

“Pharmacies are doing more work with fewer outlets,” Taylor says. “That reduces resilience, particularly in communities where the loss of even one pharmacy can have a significant impact.”

The workforce situation is also tightening. New Zealand currently has about 8 pharmacists per 10,000 people, compared with approximately 9.4 in Australia and around 11 in countries such as Canada and the United States. This places New Zealand between 15 and 30 percent below comparable developed health systems.

Regional Communities Facing the Greatest Risk

The distribution of pharmacists across the country is uneven, with several regions already facing limited access to pharmacy services.

Tasman currently has only around 2.5 pharmacists per 10,000 people, while Gisborne has approximately 5.8 and Northland around 6.8. In regions with limited workforce capacity, the closure of even a single pharmacy can significantly affect access to medicines and healthcare support.

These challenges are particularly concerning for patients managing chronic conditions who depend on regular access to medicines.

The number of people receiving publicly funded long-term condition medicine management services increased from 144,733 in September 2022 to 170,078 by September 2025. This represents growth of nearly 18 percent in just three years.

New Delivery Models Emerging in the Pharmacy Sector

Digital health services and online pharmacy platforms are beginning to play a larger role in maintaining patient access, particularly for those living in rural areas or facing mobility challenges.

“As access to community pharmacies and general practice becomes more constrained, the health system will increasingly need to rely on a mix of delivery models to maintain patient access,” Taylor says. “That will require better recognition of the clinical work pharmacies already provide, alongside greater use of virtual and remote services for patients who can’t easily reach a physical site.”

For patients managing chronic illnesses, reliable access to medication remains critical.

“For many of the patients we see, particularly older New Zealanders or those managing chronic conditions, travelling to a pharmacy isn’t straightforward,” Redzepagic says. “When access becomes harder, the risk isn’t just inconvenience. It’s missed doses, delayed treatment and avoidable deterioration in health. Pharmacies have also become an essential provider of vaccination services, so reduced access can mean fewer people getting immunised and more pressure pushed back onto an already stretched primary care system.”

The Economic Reality Facing Community Pharmacies

Despite increasing demand for medicines, pharmacy owners say the sector faces mounting financial pressure.

Dispensing margins remain extremely thin, and many pharmacies rely on retail products to cross-subsidise healthcare services such as dispensing prescriptions, clinical consultations and vaccination programmes.

Without a stable funding model that properly recognises these services, industry leaders warn that more pharmacies could close.

“If pharmacies continue to disappear, the demand pressure doesn’t vanish,” Taylor says. “It shifts even further into hospitals, emergency departments and, ultimately, into people going without care.”

“This isn’t a future problem,” Taylor says. “It’s already happening.”

Supporting Healthcare Innovation Through Strategic Communication

Healthcare policy debates and sector reforms require clear communication to ensure patients, providers and policymakers understand the real-world impact of change.

As one of the PR agencies new zealand organisations rely on to communicate complex healthcare issues, Impact PR has extensive experience working with medical providers, health technology companies and pharmaceutical organisations.

The agency regularly supports campaigns that translate technical health policy developments into accessible stories for national media audiences. This includes helping organisations highlight patient outcomes, workforce challenges and healthcare innovation while maintaining strict compliance with regulatory frameworks.

With deep relationships across New Zealand’s major newsrooms and specialist health reporters, Impact PR helps ensure important healthcare issues receive accurate coverage. The agency also assists clients in navigating sensitive policy discussions where public awareness can influence decision making and resource allocation.

As healthcare systems evolve and new technologies reshape service delivery, effective public communication plays an increasingly important role in ensuring communities remain informed and engaged.