Zoom Health urges overhaul of New Zealand pharmacy funding

Online pharmacy Zoom Health has called for changes to New Zealand's public funding model for community pharmacies ahead of new prescription rules that expand eligibility for 12-month prescriptions.

The rule change means patients with stable long-term conditions such as asthma and diabetes can receive prescriptions that cover a full year, rather than the current three-month limit. The policy aims to reduce the frequency of GP visits and cut costs for patients through less frequent payment or collection of medicines.

Zoom Health said the change adds uncertainty for pharmacies that already face financial pressure. It said there has been no clarity on how dispensing will be funded under the new settings.

Funding pressure

Zoom Health Director David Taylor said pharmacies needed a model that pays for core healthcare functions without reliance on retail sales.

"Pharmacies need a funding structure that works on the basis of dispensing and clinical services alone," said David Taylor, Director, Zoom Health. "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."

Community pharmacies receive reimbursement for medicine costs. Zoom Health said the dispensing margin remains thin. It said pharmacies face volatility when funding settings change while workload continues to rise.

Rising demand

Data from Te Whatu Ora shows more people are using community pharmacy services. As at September 2025, Te Whatu Ora recorded 1,806,836 New Zealanders using community pharmacy services each month. The figure stood at 1,693,515 in September 2022.

Te Whatu Ora also recorded 98.6 million prescription items dispensed annually over the same period. The figure rose 4.4 percent year on year. Repeat prescriptions grew faster than initial prescriptions.

At the same time, Te Whatu Ora data shows fewer physical pharmacies. It recorded 1,069 pharmacies operating in September 2025. The figure was 1,091 in September 2022.

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

Workforce gaps

Zoom Health also pointed to workforce constraints. It cited industry workforce data that places New Zealand at around 8 pharmacists per 10,000 people as at mid-2025. Comparable figures sit at about 9.4 in Australia and around 11 per 10,000 in countries such as Canada and the United States, according to the data cited.

The per-capita rate declined by around 1.5 percent over the past year, according to the same sources, even as population growth continued.

Zoom Health said regional shortages remain material. It cited Tasman at around 2.5 pharmacists per 10,000 people, with Gisborne at approximately 5.8 per 10,000 and Northland at about 6.8 per 10,000.

Long-term conditions

Demand for ongoing medicine management has also increased. Te Whatu Ora data shows the number of people receiving publicly funded long-term condition medicine management services rose from 144,733 in September 2022 to 170,078 in September 2025.

Zoom Health said patients with chronic illness remain exposed when local access shrinks. It said older people and rural residents face additional barriers when pharmacies close and transport options remain limited.

Zoom Health operates a virtual pharmacy service and said a mix of delivery models would feature more heavily as access to physical sites tightens.

"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," said Taylor. "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."

Market structure

Taylor also pointed to ownership and exit dynamics in the pharmacy sector. He compared pharmacy ownership with general practice, where consolidation has created more pathways for GP owners to sell their businesses.

"General practice has benefited from clear corporatisation pathways that allow GP owners to exit through acquisition or consolidation," said Taylor. "Pharmacists don't have the same options. Many are reaching retirement age with no viable way to sell, which increases the risk of sudden closures rather than planned transitions."

He also contrasted New Zealand settings with Australia's rules on pharmacy locations.

"Australia has long recognised pharmacies as essential health infrastructure and protects geographic access through location rules," said Taylor. "In New Zealand, discounters can open almost anywhere, and community pharmacies simply can't compete on price alone."

Patient impact

Zoom Health Director Din Redzepagic said reduced access already shows up in medicine adherence and vaccination availability. He said the burden then shifts back to other parts of the health system.

"For many of the patients we see, particularly older New Zealanders or those managing chronic conditions, travelling to a pharmacy isn't straightforward," said Din Redzepagic, Pharmacist and Director, Zoom Health. "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."

Taylor said the system would not lose demand if physical sites continue to close.

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

"This isn't a future problem," said Taylor. "It's already happening."