The health sector has raised concerns about the Government's investment into medicine following yesterday's announcement confirming Pharmac will be given $1.7 billion over the next four years - just enough to "keep the lights on", according to Newstalk ZB host Heather du Plessis-Allan.

Associate Health Minister David Seymour revealed the figure that would come from this year's Budget and told Newstalk ZB yesterday that several factors meant extra money to access new medicines would not be provided.

He said while Pharmac had added "substantially" to the number of medicines available to Kiwis over recent years, taking on the cost of Covid-19 treatments had impacted how much would be left over for the government agency.

"In this budget, there's still $165 million, or about 10 per cent of the budget, for Covid immunisations and treatments which carry on - even though we don't hear as much about it," he told du Plessis-Allan on the Drive show.

"And probably most importantly, there's been enormous amounts of inflation over the last three or four years. What affects people's living costs has also affected the costs of medicines that the Government is buying."

But Medicine NZ CEO Graeme Jarvis felt that the figure reflects a continued attitude from New Zealand to refuse to acknowledge how important investing heavily into medicine and treatments is for the country's wellbeing.

As Jarvis explained, the average international expenditure on medicines is typically 1.4 per cent of a country's GDP. In New Zealand's case, it only spends 0.4 per cent. This figure will continue after yesterday's announcement.

However, New Zealand spends more than the OECD on its health services.

"So we just need to say to ourselves that if medicines keep people out of hospitals, which they do, if they keep people productive, which they do, if they make families able to function and people able to go back to work and [help] carers to go back to work, maybe we need to be thinking about how we're slicing and dicing the budget," he told ZB.

"It costs $7000 for every bed that is used per day, which the taxpayers are paying for, yet we're jumping up and down for spending $3000 on a new medicine for one year. Well, do the numbers there - we've got to think about the allocation. Are we doing it right?"

Jarvis said the country has seen two decades of underinvestment into medicine and treatment, he stressed it was not the fault of any one government but continuous neglect over many years. It was because of this, he said, that meant fiscal cliffs existed in the sector.

"So we just have to have that brave conversation as a country - do we actually do the productive and smart thing or keep doing what we're doing?"

Pharmac CEO Sarah Fitt was a guest on The Mike Hosking Breakfast this morning and was asked by host Mike Hosking whether there was a fiscal cliff that, in her view, the Government needed to patch up in the latest budget allocation.

Fitt eventually agreed there was, but it was due to the nature of the time-limited funding that Pharmac receives due to the short funding cycles that the Government provides the agency.

She said without the latest investment, there would have been a material impact on the way Pharmac could operate and provide for the New Zealand public.

"There would have been a drop of $400 million - there's no way we would have been able to achieve savings of that amount in a short period of time," she said.

"So, we would have to look at de-listing medicines or restricting access to medicines already funded, which was obviously something we didn't have to do."

Fitt said yesterday's announcement gave Pharmac certainty. She said since Budget 2022, 30 new medicines have been funded and 38 have been given widened access to the public.

Despite the uncertainty from Jarvis over whether there would be the possibility within the new round of funding for more medicines to be purchased, Fitt said the allocation would provide an allowance for new medicine.

She said among the new purchases would be continuous glucose monitors, which Pharmac has been consulting on recently, as well as more medicines for Myeloma, which has also been under consultation.

"That means we can finish that consultation and take those transactions to our board to make a decision on funding new medicines. But the bulk of this money was really about the given uncertainty on funding the medicines we're currently funding."

Pharmac was in the news last week when it was announced that former Deputy Prime Minister Paula Bennett had been appointed as the new board chair.

She told Newstalk ZB yesterday that while the chair couldn't bring the same level of change as the CEO could, she would be able to provide influence around the culture of the organisation and bring longer-term thinking to medical strategy.

Bennett said Pharmac has many challenges ahead and she backed herself to be the right person for the right time.

"We're struggling to pay for [medical devices] and get access for all New Zealanders to medicines they deserve and need. So the whole organisation and how we look at it ... is going to have to change," she told Hosking on Monday.

Fitt said she met with Bennett yesterday and said she would need to get "up to speed" with the work Pharmac was doing. A meeting with Seymour would be on the cards and a letter of expectations was being drafted up for her and the senior leadership team.

Hosking asked if she was a political appointment, given her previous experience as a National Party MP.

"Well, she's obviously former Deputy Prime Minister, but I think she's going to bring a lot of skill to the board, she's got a lot of experience and I think we're really looking forward to working with her," Fitt said.