Source: New Zealand Government
Good evening and thank you for the opportunity to be here today.
This Government’s approach to health starts from a simple belief: every New Zealander deserves timely access to care that works, is effective, is affordable, and utilises the latest innovation.
Health is not a cost to be managed, but an investment in people’s ability to live well, contribute to their communities, and participate fully in our economy. A healthy population is the foundation of a strong, productive nation.
Our job is to build a system that puts people and outcomes first. That means removing the barriers that slow down innovation, making decisions faster, and working closely with those who are creating solutions – like many of you in this room.
I believe the public and private sectors can work together to achieve greater outcomes. I see so much innovation in this room, it’s incredible. If everyone could see what’s being achieved by the exhibitors here today, then the next question would be – why don’t we get to use most of this stuff?
We’ve got massive problems in our health system, around us right now is part of the solution. When we can harness this technology we not only improve individual lives, we will strengthen our collective future.
Medical devices
That’s the lens through which we are looking at the medical devices system, and it’s the reason why fixing the current uncertainty is a priority for me.
I know there’s frustration. You’ve waited far too long for clarity on the future of medical devices in New Zealand.
When I arrived, we were already 11 years into the idea that Pharmac might take the lead. Then Health New Zealand came along, the system changed again, and everything stalled. That’s not good enough.
We are working to give you a solution. Not as fast as I’d like, and I acknowledge the process hasn’t been good enough either. But we are close now, and when a decision is made my focus is to make sure it doesn’t just create more red tape.
Right now, we’re clarifying who should take responsibility for hospital medical devices procurement.
Over the past year, the Ministry of Health engaged independent advice for the Director-General on the future of the medical devices programme. The initial recommendations weren’t sufficient for Ministers to reach agreement, so more information was requested from both Pharmac and Health New Zealand, including potential costs, savings, and system benefits if the function moved entirely to one agency.
That advice, again, fell short. We have now commissioned further work to explore a modified status quo, recognising that some devices likely sit best with Pharmac, others with Health New Zealand.
This will identify where each agency adds the most value, outline which devices are best procured at a national level, and consider how both agencies can deliver better patient outcomes.
The aim is to have a decision by the end of the year and certainly by the end of this term, as I said at the Health Select Committee earlier this year.
What are the stakes?
This work is mission critical for the long-term viability of our health system. If we want to aspire to having a first world health system for generations to come, something has to change.
If nothing changes, long-term modelling shows that publicly funded healthcare will steadily consume a larger and larger share of our national income, rising from about 7% of GDP today to 12% by 2060. That means health and superannuation together will be taking five times what we spend on education, compared to just over twice today.
On the current track, this means debt climbing towards unsustainable levels, passing $1 trillion by 2057, unless we choose from a handful of paths.
So what options does that leave with us with?
- Raise taxes significantly. No thanks, New Zealanders are already paying a huge amount, too much in my opinion.
- Cut other services like transport, defence, and law enforcement to the bone. That’s obviously not viable.
- Tighten superannuation settings. I don’t think we should have to rely on this.
There’s another option, and it involves all of you. My preferred path is to improve productivity in health, so we get better results without runaway cost growth.
The reality is that structural reform to lift productivity in health could keep government debt close to today’s levels and spending sustainable, but only if we act now. And that is why innovation is not just a “nice to have”, it is the key to ensuring our system can deliver for the future without breaking the bank.
Why this matters
If our healthcare system keeps going as it is, we will overwhelm our hospitals and go broke in the process. We need to change how we do things, and that means we need the innovators and the change-makers. The people in this room today.
We’re already spending well above the OECD average on health. The challenge and the opportunity lies in making every dollar work harder. Simply spending is not enough; the real measure of success is how effectively we turn that investment into better outcomes for patients.
Innovation is the answer. I’ve taken this approach in my Pharmac portfolio when it comes to medicines, which this Government has increased funding for more than any other. Take Trikafta, since it has been funded, lung transplants in New Zealand have fallen off a cliff. I don’t know how much a lung transplant costs but I’m guessing it’s one of the most expensive things that the New Zealand healthcare system can do. I think we need to think about how innovation can save the Government money overall.
I look at the technologies showcased as part of the exhibition around me. These aren’t just clever ideas, they are life-changing innovations. And they’re proof that when we clear the road for innovation, patients win.
Too often the health conversation becomes about which department signs which form, instead of the real reason we’re here: improving lives.
Pharmac must be part of the solution. It needs to be faster, more responsive, and more connected to the people on the ground. Right now, it too often acts as a bottleneck. I want it to become a bridge between innovation and the patients who need it. We’re seeing massive changes in regard to medicines, and I hope we can make the same improvements for your technology as well.
Letter of Expectations for Pharmac
That’s why, in my Letter of Expectations to Pharmac, I’ve made it clear: we need to innovate and optimise so we deliver the greatest value to the largest number of New Zealanders.
We must improve access to new medicines and medical technologies, update our assessment methodologies, and make sure patients, carers, and families have a real voice in decision-making.
I’ve said to Pharmac:
- Evaluate your statutory objectives and functions with a view to updating them to reflect broader fiscal and societal outcomes.
- Update assessment methodologies to include how wider economic and social impacts are factored in.
- Streamline technology assessment and procurement so they’re fit-for-purpose.
- Make timely budget requests that support additional investment.
I’ve also directed Pharmac to strengthen partnerships, including with the medical devices industry, to improve horizon scanning, enable process efficiencies, and plan for emerging technologies.
Cultural change is part of this too. This is happening now, and I’d like to give a shoutout to Pharmac’s Chair Paula Bennett for her outstanding work in this area, which I’m sure will be complimented by the incoming Chief Executive Natalie McMurtry.
Pharmac has completed a culture review and is implementing the review recommendations, renewing their organisational culture.
They’re also developing a new vision and strategy by mid-2026, investing in data and digital infrastructure for better decision-making, and, crucially, delivering the agreed outcomes from the medical devices review in collaboration with Health NZ, the Ministry of Health, industry, and other stakeholders.
My challenge to you
Here’s my challenge: Tell us. What’s the fix? What’s the one change that would get innovation into people’s hands faster and deliver better care?
We want to be the advocate for innovation, not the barrier to it.
I’ve got no interest in putting up roadblocks for you getting your innovation into the health system, what we need from you is to show us the benefits, show us why this technology is going to improve our health system, why it’s going to save money in the long run if we invest now.
That’s why innovation matters. The question isn’t just how much we spend, but whether we’re clearing the road for new ideas that make care faster, more accurate, and more accessible. If we remove the barriers to medical device innovation, we can turn comparable spending into world-leading results, delivering better health, greater productivity, and a stronger future for all New Zealanders.
Thank you.
