The Government's drug-buying agency Pharmac says new kinds of medicines will pose special challenges for it in the future.
Chief executive Steffan Crausaz spoke to medicine experts meeting in Auckland on Tuesday.
Mr Crausaz said biologic medicines - created from living cell organisms rather than a chemical process - have had a profound effect on health in rheumatology, inflammatory conditions and cancer.
Fifteen percent of Pharmac's drugs budget is already spent on biologics, including herceptin.
But Mr Crausaz says the technology will pose future challenges when biosimilar - or generic - options become available.
"The real challenge there for Pharmac is to work with regulators, clinicians, patient groups about what's going to be acceptable in terms of the type of biologic biosimilar that can be used to introduce competition so that we can get the gains from the new treatments that are constantly being developed."
