The NAAR process follows the highly flawed Health New Zealand (HNZ) approach to the recognition of reasonable cost pressure adjustments for the 2024/25 process.
Every year there is an ICPSA contractual obligation for HNZ and provider representatives to consider reasonable cost pressure adjustments as part of the NAAR process. Community pharmacy cost pressure uplifts have been ‘reasonable’ when compared to the uplifts received by others in primary and community care, and available Crown funding, since the ICPSA was established in 2018/19, and through the end of 2023/24. However, for 2024/25 and 2025/26 to date this has certainly not been the case.
Community pharmacies are effectively cross-subsidising HNZ’s higher-than-reasonable cost pressure recognition for general practice. We see this does not align with the government’s fiscal policy intentions for fairly allocated cost pressures funding, the ICPSA’s reasonable cost pressure obligations, and working together in good faith.
HNZ’s recent inadequate recognition of community pharmacy cost pressures, favouritism towards general practice, and failure to develop a sustainable community pharmacy funding model, despite this being validated as a pressing need by Sapere in 2020, is a major and growing source of concern.
HNZ’s recent practice for cost pressures recognition is unsustainable and does not support maintaining access to medicines and vital community pharmacy services for all New Zealanders. Community pharmacies are progressively downsizing, through a combination of a reduction in staff, opening hours, service levels, and some stores being forced to close altogether.
Increasing awareness and recognition of this pressing access sustainability concern at key decision-making levels has become a significant focus for the Guild during 2025, in order to address this unwelcome impact on access to essential services.
It is pleasing to note there has been Ministerial support for the Guild to work actively with the Public Service Commission’s Health Assurance Unit leadership and senior responsible HNZ leadership to promptly address this major concern.
As at the time of writing, this remains underway. We will keep members updated as this work progresses.