Claims are being made that we're hundreds of millions short in our medical funding.

An NZIER report, commissioned by Medicines NZ, found there's a $682 million hole in government funding for drugs in our public health system.

The report said PHARMAC needs a major boost to restore spending to 2007 levels while accounting for population growth and inflation.

General manager of Medicines NZ Graeme Jarvis said Kiwis are missing out on important medication.

"There are three different types of diabetes medicine that the rest of the world gets. There are medicines that are available to Australian arthritis patients that are not available in New Zealand."

Jarvis said bolstering PHARMAC would help the health system in general.

"Improving the budget for these cost effective solutions would actually be beneficial not just to the patients but to the health system and the broader economy because your allowing people to go back to work."