Dunne Speaks

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

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