It costs about $400,000 a year if bought privately.
Director of operations Lisa Williams told Morning Report nusinersen - branded as Spinraza - has been on the options investment list for two years and with the large Budget increase for Pharmac this year it was now able to be funded.
It would be used for all forms of spinal muscular atrophy for those under 18 as well as babies who were symptomatic.
Asked about relief for those aged over 18 who have had to travel to Australia to access the drug, she said if treatment had already started and they met the criteria they would be considered for a waiver.
Negotiations had gone well with the drug company, Biogen, which was also offering a discount on some of its other medicines, Williams said.
Asked why the decision hadn't been made sooner to alleviate the suffering of many, she said: "I do want to acknowledge the time that many people have put into advocating for those who live with spinal muscular atrophy".
She said it was exciting to share the news of the decision to one advocate yesterday.
However, the drug was not being funded because of effective lobbying - Pharmac looked at the impact of the disease on those who had spinal muscular atrophy.
As for the auto-injectors for those at risk of anaphylaxis, Williams said adrenaline has been available for those needing it via syringes, however, the Budget funding had prompted the decision to look at the more accessible auto-injectors.
"The key thing that people have been telling us over the years is that having an auto-injector is far more suitable."
She agreed 25 years had been a long time for New Zealanders to wait but Pharmac had got a great deal and with the extra Budget funding it was in a position to go ahead with funding.
Feedback on the proposed funding of nusinersen can be submitted until October 24. If approved, funding would start from January 1.
Feedback on the proposed funding of adrenaline auto-injectors is due by October 11.
'It may have taken a while'
Asked about the fact it has taken 25 years to fund adrenaline auto-injector pens, Health Minister Andrew Little said Pharmac had to make independent clinical decisions on many drugs and could not afford to pay for every treatment.
"It may have taken a while. I think what it really highlights is the need to ensure with Pharmac funding we are keeping ahead of what is needed."
A review of Pharmac's operations concluded that it needed to do better in helping people with rare disorders.
Little said the decision to fund nusinersen was a response to the review as well as the extra funding the Government had provided in the Budget.
"There's still work to do. I think Pharmac will be working closely with the Ministry of Health now to work up a proper coherent rare disorders strategy and engage with the relevant community as well. But obviously the additional funding helps as well."