Co-payment policy
We have advocated for co-payment removal since 2018. Working closely with successive Health Ministers. In 2023 we pivoted our co-payment removal focus from improving patient access and outcomes, to helping with cost-of-living pressures – given the political focus. Key advocacy activities in 2023 included:
- Writing to the Minister of Health and HNZ Chief Executive with co-payment removal advice in February
- Meeting with HNZ National Commissioning Director in February
- Meeting with the Minister of Health in March – then providing indicative costings for targeted and full co-payment removal
- Providing a submission on co-payment removal to the Petitions Committee in March.
The Labour government announced universal co-payment removal from 1 July 2023 as part of the Budget. The Guild’s work in making this happen was acknowledged in writing by Health Minister, Dr Ayesha Verrall.
In response to the National and Act Party’s announcing targeted co-payment policies during the 2023 election campaign, we:
- Wrote to Christopher Luxon, Nicola Willis, David Seymour and Brooke van Velden
- Developed tools to help members lobby local MPs and candidates
- Spoke to and emailed regularly with National health spokesperson Dr Shane Reti regarding co-payment policy, sharing analysis and costing info
- Provided a detailed briefing to the incoming Health Minister reiterating our support for universal co-payment removal and our concerns about the possible unintended consequences of targeted removal.
Prior to the re-introduction of a targeted $5 co-payment removal for super annuitants and low-income earners we raised a range of concerns with the government including:
- the unwanted return of discount pharmacy chains absorbing the $5 charge to entice customers into store, impacting the sustainability of the pharmacy network, resulting in service coverage issues
- pharmacists would return to being ‘tax collectors’, reducing time for providing health advice to patients
- significant administration burden, both time and cost, with eligibility checks for patient exemption.
We raised a range of possible options/solutions for the government to consider:
- extending the eligibility criteria to qualify for a Community Services Card and/or allowing for specialist
- prescriptions ($15) to also be free for Community Services Card and Super Gold Card holders
- adoption of a compulsory prescription charge policy setting for those not eligible for free prescriptions
- embedding an IT-enabled eligibility checking system prior to implementation for efficiency
- ensuring that community pharmacy is fairly reimbursed for the additional administration time and costs incurred under targeted removal.
Sector sustainability
Our analysis shows that community pharmacy dispensing fees have grown at around half the rate of inflation over the last 16 years, while general practice capitation fees have grown at around the rate of inflation, and average hospital staff costs per employee have grown at close to twice the rate of inflation. We have consistently highlighted this to government and officials and also that there is no longer an ability to rely on retail cross-subsidisation to financially sustain community pharmacy services.
Our advocacy led to DHBs/HNZ agreeing to an independent review of the community pharmacy service and funding model in 2020. In May 2024, HNZ presented a draft plan for their proposed pharmacy design workstream over the next 18-24 months. It includes an end-to-end review of the medicines supply chain, review and development of models of care and funding models, and a new provider policy.
We believe that HNZ’s focus is on pharmacy services redesign, not on addressing sustainable funding shortfalls – which is the pressing problem around business viability and workforce sustainability. In April 2024, we shared our plan for developing and implementing a sustainable service and funding model with HNZ. We covered:
- Previous commitments to develop and implement a sustainable service and funding model.
- Outline of key steps/activities for inclusion in a jointly agreed workplan.
- Indicative high-level timeline for key steps to deliver a sustainable funding model by 1 July 2026.
We continue to advocate to progress the development of a sustainable community pharmacy funding model during discussions with the Minister, officials, and at NAAR meetings. This has included:
- listing “addressing material unfunded community pharmacy service cost pressures” as a key sector issue in our briefing to the incoming Minister of Health in November 2023, and raising this during our first meeting with him in February 2024
- raising community pharmacy sustainability and cost pressures in our briefing to the incoming Minister of Health in February 2025
- in this briefing we requested that the Minister ask his officials to work at pace with the sector to update the earlier independent review work on wage cost pressures and the sustainable funding model by June 2025, to support a financially sustainable community pharmacy sector.
Workforce sustainability
We have consistently provided evidence that wage cost pressures represent the single largest unmet cost pressure facing community pharmacy and that this is driving concerning workforce sustainability issues.
We noted this was in addition to other material unmet cost pressures, which have led to growing financial viability challenges.
Our advocacy led to DHBs/HNZ agreeing to an independent review of wage cost pressures in 2020. This review vindicated our concerns and demonstrated material unmet cost pressures, finding remuneration gaps
relative to the general market for all community pharmacy roles, ranging from 12%-42% below market (in 2020). Service delivery and availability will be impacted if community pharmacies are not able to recruit and retain sufficient staff through appropriate levels of pay.
Our advocacy has included:
- Advocated for pharmacists in rural and regional communities to be included in the Voluntary Bonding Scheme to help address severe recruitment challenges, workforce burnout and geographical shortages.
- Wrote to HNZ in October 2023 about the hospital pharmacy pay equity offer and its impact on the community pharmacy workforce.
- Included workforce sustainability as a key sector issue in our briefing to the incoming Minister of Health in November 2023, and raised this during our first meeting with him in February 2024.
- Conducted a community pharmacy workforce survey in April 2024 to better understand the true number of pharmacist, technician, and retail staff roles currently vacant.
- Shared the workforce survey data with HNZ so the next Health Workforce Plan could accurately reflect the workforce pressures community pharmacy is experiencing, meaning our sector is acknowledged alongside others in the health sector.
- Raised community pharmacy workforce sustainability, and the need to attract and retain more pharmacists and technicians, in our briefing to the incoming Minister of Health in February 2025.
- In this briefing we requested that the Minister and his officials actively engage with the sector and key stakeholders on the development of a comprehensive community pharmacy workforce plan to address our sector’s current shortages and future pressures.
- The Community Pharmacy Leaders Forum, which the Guild leads, committed to developing a comprehensive workforce plan in April 2025.