The High Court in Wellington has begun hearing a case that could affect the asthma inhalers used by about 20,000 people.
Drug firm Astrazeneca is challenging plans by the Government's drug-buying agency Pharmac to reduce the subsidy on combination inhalers to match the subsidies in a deal it has done with a competing firm.
In a cost-cutting move known as parity pricing, Pharmac plans to reduce subsidies on combination inhalers by Astrazeneca to match those of rival GlaxoSmithKline, the maker of Seretide.
If it goes ahead from February next year as planned, people using the Astrazeneca inhalers Symbicort and Vannair face either changing to the fully-funded Seretide or paying a new charge of at least $3 for their current inhalers.
Astrazeneca says Symbicort and Seretide are not equivalent and it sought the judicial review to see whether Pharmac can take this step based on a confidential deal with GlaxoSmithKline.