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An independent review has found Pharmac's current approach is not fit for purpose and has called for an overhaul of both strategy and culture.
Late last year, the board commissioned consultant Debbie Francis to review the drug-buying agency - amid criticism of some of its funding decisions.
The review's executive summary, released Tuesday, says major changes are required to meet the government's expectations - with staff at all levels expressing some scepticism over whether that was even possible.
It says Pharmac needs a clearer idea of its mission, and a set of measurable goals, as well as a complete reset of its operating model.
"The starting point for assessing Pharmac's performance is its statutory objective which is "to secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided".
"While its statutory objective has remained unchanged since Pharmac was established, government and stakeholders expect the agency to evolve and be agile to meet the growing health needs of New Zealanders in a landscape in which new and more targeted drugs are constantly being developed and in demand. Specifically, the latest Letter of Ministerial Expectations for 2024/25 called for changes in organisational culture, roles and responsibilities, and methods and processes to meet these new challenges.
"Through the course of this review, it became clear that meeting these expectations will require a fundamental change in strategy and culture. Staff at all levels of the organisations expressed a degree of scepticism as to whether such a shift will be possible."
The board's chair Paula Bennett said she was confident people will soon see changes as Pharmac adopts a more outward-focused approach.
The Associate Health Minister David Seymour, who holds the Pharmac delegation, said the review was difficult and painful in some ways, but ultimately necessary for Pharmac.
Seymour acknowledged the government had set high goals for Pharmac to be a "brilliant" assessor of medicines and devices, and be more sensitive to patients, within the budget it was set.
"That is challenging, but I believe that it's possible, and I believe after a couple of years people will be able to say Pharmac is in a very different place from the organisation that was often in the headlines for the wrong reasons just a few years ago," he told RNZ.
Seymour said the current board was strong, and changes like a new chief executive would allow Pharmac to achieve more.
"I believe people might be surprised with what Pharmac can achieve, and that might even include a surprise for some of the people within it," he said.
He believed the staff he had met were capable of meeting the government's high performance demands.
"I would be a bit cautious about listening to a limited number of voices claiming that we can't do it. My experience of the average person who works at Pharmac is pretty impressive."
Seymour hinted Pharmac would be in line for increased funding at next month's Budget, with money for upgrades to IT systems.
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