Comments and Insights on politics from Hon Peter Dunne
Thursday, 5 May 2016
The debate about the melanoma drug Keytruda is an important one, with some very familiar elements to it.
At its most basic level, the question is should or should not Keytruda be funded by Pharmac so that affected patients
can potentially benefit from it. So far, Keytruda has been registered by Medsafe, the medicines regulator, as a
pharmaceutical product that can be legally prescribed in New Zealand. Its clinical efficacy has been confirmed by PTAC,
the pharmacology and therapeutics committee which advises Pharmac.
The problem is that Pharmac has declined to subsidise Keytruda as yet, partly because of its high cost, partly because
the manufacturer has not sought to have it funded, and partly because it has apparently been keeping an eye on other new
medicines that may become available in this space, and which may be as, or even more effective, as Keytruda is reported
to be. Only this week Medsafe approved a second melanoma drug, Opvido, which, although very expensive, Pharmac has
agreed to fund from July, presumably because it considers it likely to more effective than Keytruda.
But basically the issue is a funding one. If there was more funding available to Pharmac, the argument goes, it would be
more likely to be able to fund drugs like Keytruda. While the government’s announced injection of $124 million into
Pharmac’s budget over the next four years to fund new medicines will undoubtedly help in this regard, it is not
necessarily the end of the argument. In one sense, it could be argued that more funding could make the circle a more
vicious one and increase the intransigence of rapacious pharmaceutical companies to hold out for the best prices for
their products before making them available. That is clearly unacceptable, but it is not something over which
governments have much control.
All of this goes to the heart of why we have a medicines funding system like the Pharmac model. It used to be the case
that the government simply paid whatever price the drug companies demanded for new and existing medicines, and was
effectively held to ransom by them, in the interests of providing free low cost medicines to patients. The very notion
of part-charges to help meet some of these costs was strongly resisted as not the way we did things in New Zealand,
further increasing the power of the drug companies to demand the price they wanted. That was clearly unsustainable.
Equally unsustainable was the proposition that governments should be left to decide what medicines should and should not
be made available on the basis of what they could afford to pay. So the current medicines registration system, including
the development of Pharmac, as the independent medicines purchaser and price negotiator, was established. This system
has generally worked well over the years, and despite the specific noise from time to time about particular medicines,
there is no general political appetite for fundament change to It.
While the system is largely free from political influences, which means medicines decisions are based primarily on
medical efficacy, a fundamental problem still remains. The power of the international drug companies means they can
still effectively hold countries over a barrel on the prices they will accept for their products, which means that some
medicines are simply too expensive for countries like New Zealand to afford. The issue with drugs like Keytruda and
Opvido, therefore, will often come down to the deal that Pharmac can negotiate.
However, the answer is not to meekly surrender to the drug companies’ demands and pay their prices, as all that will do
is encourage them to become even more obstinate when it comes to new and more innovative medicines, with a potential for
more patients to be denied access to them on affordability grounds. Rather, just as countries have grouped together to
break down trade barriers through multilateral free trade agreements, like-minded countries should consider working in
concert to break down the stranglehold of the international drug companies by an international pricing mechanism which
ensures that potentially life-saving medicines are available to those that will benefit from them, not just those who
can afford to pay for them.
Otherwise, the Keytruda debate is likely to be but one among many yet to come. Science is giving us the power to conquer
illness and disease as never before. It is surely the responsibility of nations to ensure that power is captured for the
good of their peoples, not just the profits of the multinational drug companies.
ENDS