Better diabetes drugs are set to be publicly funded - a breakthrough that will help keep tens of thousands of New Zealanders in good health and alive longer.

Pharmac has announced it wants proposals from pharmaceutical companies for the supply of new medicines to help Kiwis living with Type 2 diabetes.

The drug-buying agency's deputy medical director Dr Peter Murray said patients and clinicians had been asking for the new medicines to be funded.

"Evidence suggests these medicines do more than just reduce sugar levels in people with Type 2 diabetes. They can also help address related complications like kidney and heart disease.

"We hope to fund at least one of these medicines by negotiating with medicine suppliers and running a competitive pricing process."

The new medicines are called SGLT-2 inhibitors, GLP-1 agonists and DPP-4 inhibitors, and the Pharmac process could take several months. Pharmac issues a request for proposals (RFP) when more than one medicine is available to treat a condition, such as when there are multiple brands or when different medicines have a similar therapeutic effect.

About a quarter of a million Kiwis have diabetes, and another 100,000 are thought to be undiagnosed. Around 90 per cent have type 2, the sort mostly brought on by lifestyle and linked to obesity.

Today's announcement comes after an ongoing Herald investigation into the growing toll of diabetes, with amputations now topping 1000 every year as clinicians and patients struggle with the worst range of funded diabetes drugs in the developed world.

Responding to those findings in October last year, Associate Health Minister Peeni Henare revealed talks with Pharmac about funding better drugs, and said he personally supported tough measures, including warning labels on junk food and a sugar tax.

Last night, Henare said Pharmac's announcement was "a positive step in the right direction" and the medicines had the potential to benefit about 120,000 New Zealanders living with type 2 diabetes and at risk of further complications.

"The number of New Zealanders with diabetes is growing and the burden of this disease disproportionately falls on people living in deprived communities, as well as Māori, Pacific and Indian people," Henare said.

"A wide range of tools and approaches are needed, including prevention - lifestyle changes, diet, physical activity, and early intervention to turn this tide."

Heather Verry, chief executive of Diabetes New Zealand, which has petitioned for the funding of some of the medicines, said the drugs would make a significant difference for patients, and help them avoid the worst complications of diabetes, which would provide a massive whole-of-Government saving.

"They are a really good, modern drug, which is what we have been needing for a long time...both of them are a weight management assistance tool as well, which is one of the things people need to do to try and reverse their diabetes.

"It will help a lot of people to put off, delay or stop complications from happening. One of the risks is cardiovascular, another is kidney disease - 52 per cent of people with kidney disease is due to people with diabetes - and then you have lower limb amputations, and blindness."

Diabetes happens when the pancreas stops making enough insulin, or insulin can't be properly used. Without insulin, glucose (sugar) from food cannot get from the bloodstream into cells to produce energy.

Over the long term, too much glucose in the blood ravages nerves, organs and tissue, risking heart attack, stroke, amputation, kidney failure and blindness.

Controlling blood sugar levels greatly reduces the chance of complications, and can slow or stop illness that's already taken hold. That can be done through medication, insulin injections, and by improving diet and exercise levels.

Māori and Pacific New Zealanders are at much higher risk of developing Type 2 diabetes and Murray said Pharmac hoped funding new medicines would help close health gaps between those groups and the rest.

A recent analysis of 25 years of medical data found the fight against diabetes in New Zealand has gone backwards in crucial areas, including by failing to have more diabetics keep blood sugar levels as close to normal as possible.

Professor David Simmons, an international diabetes expert who analysed the Auckland GP clinic data, told the Herald that better drugs were desperately needed.

"We have new medicines now which reduce weight gain and can actually lead to weight loss," he said. "And we have medications that can reduce mortality in diabetes. But those drugs are not available in New Zealand."