Question: Is it time to revisit prescription charges in New Zealand?
In New Zealand and elsewhere, there are socioeconomic disparities in the use of medicines, and these are likely to exacerbate inequities in health status. Compared to other barriers to accessing and using medicines appropriately (e.g. geographical distance from healthcare, patient knowledge and beliefs), prescription co-payments are easily amenable to policy change.
In NZ, co-payments are low ($5 per item with an annual ceiling of 20 items per family, after which co-payments are waived) but there are no exemptions for people with low income or severe chronic disease. Māori and Pacific people and those living in more deprived areas are at higher risk of being unable to afford their prescription medicines.
Prescription co-payments were first introduced in the 1980s, and by the 2000s the cost had risen to double-digits. The then Labour-led government reduced the charge to $3, which rose to $5 in 2013 under the following National-led government. The then Health Ministry defended the $5 cost hike, which would amount to a $20 million saving in the first year and $40 million in subsequent years, saying the money would be invested back into the health sector.
In recent years big-box pharmaceutical retailers have started absorbing that cost, essentially making prescriptions free and giving them an advantage over smaller, locally owned outlets.
Removing the co-payment altogether would not only help smaller pharmacies with a community focus stay in business, but help with the government's stated goal of easing cost of living pressures.
The Pharmacy Guild is currently in a legal battle with Te Whatu Ora, over former district health boards giving operational licences to pharmacies that offer zero-free prescriptions.
A recent NZ health survey found 3.3% of adults reported going without medicine because of costs. This was more common for Māori and Pacific peoples, and those living in areas of high deprivation.
Across the ditch, in September last year, Australia outlined a plan to deliver cheaper medicines, albeit covering a small proportion of medicines listed on the Pharmaceutical Benefits Scheme (PBS). There is a co-payment of $6.80 required for concession card holders and $42.50 for general patients. From January 1, 2023, that reduced to $30 for general patients.
Just under 7% of older Australians said they didn’t buy their prescribed medications because they were too expensive, a higher proportion than other similar countries.
This is a problem because people who cannot afford to buy essential medicines have worse health and higher mortality. Forgoing medicines may also lead to more health costs in the future, as conditions go untreated and complications arise, leading to emergency care and hospital visits. Reducing the price of prescription medicines will mean more people will be able to afford them, with the health and other benefits it brings.