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Research shows new cancer medicines pay for themselves

Research shows new cancer medicines pay for themselves

23 August 2016

Research by prominent American economist, Professor Frank Lichtenberg, proves New Zealand’s investment in cancer medicines reduces hospital spending, contributes to improved survival rates and decreases premature mortality rates.

This is the first study to analyse the impact of new cancer medicines on patients and the health system in New Zealand in this way.

Professor Lichtenberg concludes early investments in cancer medicines saved at least 10,556 years of life for cancer sufferers in 2011.

Hospitals also saved $28 million as a result of new medicines – almost matching the total investment in all cancer medicines dispensed in that year alone.

“This comprehensive study shows that taxpayers and patients are getting value for money when PHARMAC invests in new medicines” said Medicines New Zealand Chair, Hon Heather Roy.

“However, the impact of new cancer medicines in New Zealand could have been much greater” said Professor Frank Lichtenberg, Columbia University.

“Over the time analysed, New Zealand had both a smaller number of these cancer medicines funded and a larger waiting time for medicines to be funded, compared to other countries.”

“For every dollar invested in a new cancer medicine, one dollar is saved downstream in the healthcare system” said Professor Lichtenberg.

Professor Lichtenberg is guest speaker at Medicines New Zealand’s annual Parliamentary Dinner on 23 August 2016, hosted by Minister of Health, Hon Dr Jonathan Coleman.


Findings from Professor Frank Lichtenberg’s research:

Access to new cancer medicines improves survival rates, increases life expectancy and reduces hospital costs in New Zealand[1]

New medicines have helped people with cancer improve their chance of survival

• Between 1998 and 2010, the 5-year survival rate for all adult cancers increased by 5.6%

• Between 1998 and 2010, the 5-year survival rate for all childhood cancers increased by 12.9%

• In the absence of new cancer medicines, the 5-year survival rate for all adult cancers would not have increased- it might even have decreased slightly.

Not all cancers are impacted equally by new medicines

• 5-year survival rate for prostate cancer has increased by 9.2%

• 5-year survival rate for Hodgkin lymphoma has increased by 1.5%

• An increase in 5 year survival rate is strongly related to the number of new medicines that are available to treat New Zealand patients.

Access to one new medicine makes a significant difference to reduced cancer mortality and reduced hospital stays

• Funding one new medicine for any particular cancer reduces cancer mortality by 5%

• Funding one new medicine for any particular cancer reduces hospital stays by 5.6%.

Far fewer New Zealanders are dying early in life

• Premature mortality occurs when people die before age 70

• Cancer medicines approved from 1986-1997 are estimated to have reduced the number of life-years lost to cancer before age 70 in 2011 by 10,556

• If there had been no new cancer medicines, premature mortality would have been 29% higher in 2011 alone.

Use of new cancer medicines saves taxpayers money

• If no new medicines were approved from 1991-2002, the number of cancer-related hospitalisations in 2011 would have been 23% higher

• This would have seen increased hospital expenditure of $28 million on cancer patients

• This potential expenditure was almost the same as the total investment in all cancer medicines dispensed to cancer patients below age 70 in 2008

• For every dollar invested in a new cancer medicine at least one dollar was saved downstream in healthcare systems

• New cancer medicines are a cost-effective intervention that increases patient longevity, decreases annual hospitalisation rates and saves the New Zealand healthcare system money.

1 Source: Frank R Lichtenberg and Jenni Williams-Spence, the Impact of Pharmaceutical Innovation on the Longevity and Hospitalisation of New Zealand Cancer Patients, 1998-2012, 2016

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