Pharmac supporters say New Zealand's public health system will suffer if the government buckles to US political and pharmaceutical industry demands.

Trade Minister Tim Groser on TV ONE's Q+A programme yesterday refused to rule out the government making changes to the drug buying agency as it tries to negotiate a free trade deal with the US.

Pharmac supplied nearly $700 million worth of prescription drugs to a record 3.2 million New Zealanders last year.

The agency is charged with reining in New Zealand's drug bill by taking a hard line on price during negotiations with drug companies.

Pharmac Chief Executive Matthew Brougham told ONE News that New Zealand would have spent an extra $1billion over the past 11 years if it didn't have Pharmac.

But the agency is proving to be a problem for the government as it attempts to negotiate the Trans Pacific Partnership with the United States and seven other nations.

The pharmaceutical industry and its political backers claim Pharmac threatens American business interests and free trade.

A special trade report from the office of the US Trade Representative expressed concern about: "...the transparency, fairness and predictability of the Pharmac pricing andBrougham said would be "a disaster" for New Zealand if the agency is forced to make its negotiating strategy public.

"There's only one piece of information that we don't freely provide and that is our negotiating strategy," he said.

Pharmac supporter Gareth Morgan also thinks it would be bad for New Zealand.

"The worst thing we could do is to make it transparent to the drug companies, that just wouldn't work. You'd lose all your buying power."

Groser said the government would not negotiate Pharmac's "fundamentals," but would not expand on what those fundamentals were.

The next round of trade talks in November is expected to result in an interim agreement reimbursement regime..."

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