16937 (2026). Hon Dr Ayesha Verrall to the Associate Minister of Health

16937 (2026). Hon Dr Ayesha Verrall to the Associate Minister of Health: Further to reply 12357 (2026), given that Pharmac does not own the stock of funded medicines excluding vaccines, what enforcement mechanisms, if any, apply if a supplier fails to hold the contractually required stock level, and how many times, if any, has such a breach occurred in the past two financial years?

Hon David Seymour: I am advised that Pharmac has contractual arrangements with suppliers to hold certain amounts of stock in the country. Typically, this is two months for medicines. If a suppliers’ stock fall below these levels they are contractually obligated to notify Pharmac. If the supply issue would result in the medicine going out of stock the supplier is contractually obligated to source an alternative product. The alternative needs to be an acceptable substitute for the medicine that is going to be out of stock. Pharmac works closely with suppliers to manage and mitigate supply issues. This may include directly sourcing an alternative product on behalf of the supplier if required. If additional costs are incurred by Pharmac from a supply issue, there are provisions in the agreements for recovering these from the contracted supplier. Pharmac cannot comment on the specific terms of individual contracts due to commercial confidentiality.