Cystic Fibrosis New Zealand says patients are becoming 'medical refugees' from a lack of drug funding.
Chief executive Lisa Burns said Pharmac had 'shattered' hopes of funding for a life-extending drug this year.
Pharmac's own assessments showed Trikafta could give the equivalent of 27 more years at full health, compared to current funded treatments.
However, Burns said this week she was advised the medication had not been moved up Pharmac's priority list.
"The community is devastated," she said. "There has been months and months of what appeared to be really encouraging progress and this is a really disappointing outcome."
The agency said it would like to fund the treatment, subject to available budget.
"We have met with Vertex to reiterate our commitment to making progress towards an arrangement that would secure the public funding of Trikafta, and we will continue to work closely with Vertex staff to try to find a way forward," a spokesperson for Pharmac said.
Burns said New Zealanders with cystic fibrosis were moving overseas to get subsidised access to Trikafta.
"We know of a number of families who have packed up their lives, their careers, they've left their education, their school and in some cases relationships to move overseas to one of the thirty funded countries where Trikafta is available," she said.
Pharmac said the treatment was still on the investment options list, but the ranking - out of 79 - was commercially sensitive.