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Challenges Facing The Funding Of New Cancer Treatment Drugs

Funding new cancer drugs – good but….

In last year’s election campaign the then in opposition National Party promised to allocate $280 million to fund new 13 cancer therapies (drugs) that had yet to be approved for funding by Aotearoa New Zealand’s drug purchasing agency Pharmac.

Pharmac was a forward-looking creation of the National government of the 1990s which has subsequently had the support of most parliamentary parties, including Labour. Former health minister Bill English deserves specific commendation for its creation.

A key reason for creating Pharmac was to establish, as much as possible, a level playing field in negotiating with powerful international drug companies (‘Big Pharma’).

Pharmac’s independence from political influence or interference in its decision-making was an essential prerequisite to achieve this objective.

The controversy at the time was the allied promise to fund the $280 million by rolling back the universal free pharmaceutical prescriptions that had recently been introduced by the previous Labour government.

Pharmacists were among the strongest critics of this rollback. The government should be take their ‘on the ground’ advice.

Political interference in Pharmac’s independence fear

The controversy over the free prescriptions rollback overshadowed another concern. That was whether the National Party was seeking to politically interfere with what had been considered to be sacrosanct – the independence of Pharmac’s decision-making (within its government imposed funding constraints).

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The context was the decision when the National Party had previously been in office. In 2008, again when in opposition, it promised to fund a 12-month course of the breast cancer drug Herceptin if elected (it was later that year and did so once in office).

Pharmac had previously decided to fund Herceptin for a shorter period of time based on evidence of its effectiveness which proved to be correct.

But a persuasive campaign back by Roche, the company owning the drug, meant that the cost to Pharmac (and revenue to Roche) was greater than it needed to be.  

Two revealing articles

Two revealing articles on the new National led coalition on the implementation and implications of the 13 cancer drugs were published earlier this month.

The first was by Stuff journalist Matt Slaughter (5 March): Government yet to fulfil funding promise for 13 cancer drugs.

The second (paywalled) was by New Zealand Doctor journalist Steve Forbes (7 March): Drugs and politics.

In both cases the journalists included the observations of Professor of Cancer Medicine Dr Chris Jackson (Otago University). Professor Jackson had helped prepare an initial report which picked the 13 cancer therapies selected by National.

Like funding a bus without funding a driver

Slaughter referred to Minister of Health Dr Shane Reti’s affirmation that the implementation of funding for the 13 new cancer drugs was dependent on the savings being made by the rollback of free prescriptions.

However, despite this apparent imperative prerequisite, there has yet to be an announced decision on when this would take effect. Dr Reti acknowledged that this would delay implementation of the cancer treatment funding.

This led the journalist to refer to Professor Chris Jackson for his observations. These are significant not only because of his own specialist expertise in oncology but also because of his earlier contribution to advising positively on the selection of the 13 new drugs.

In observing that funding these drugs alone (which are ‘very high cost’) would not be enough, he made the following cautionary observation:        

Funding cancer drugs without funding the staff is a little bit like funding a bus without funding a driver.

I think what most people want to see, is they want to see balanced investment across the cancer care continuum, in prevention early detection, infrastructure, resources, as well as drugs. And just picking out the cancer drugs and saying ‘I’m going to fund this only,’ I think is actually just picking the eyes out of it and not really looking at the priorities across the continuum in a holistic way.

Jackson added that every oncologist he had spoken to thought the government’s decision to repeal the new smokefree law was “daft” because “smoking accounts for 20% of all cancers.”

In my words, to put it another way, the tobacco industry drives up the demand for cancer drugs!

Drugs and politics

In his paywalled  article Steve Forbes emphasises the politics of the issue. It turns out that three of the new drugs have either been declined or recommended to be declined because they don’t meet Pharmac’s funding criteria.

These criteria are used to differentiate between which of those approved drugs should be funded and which of those should not be. This is because of the government’s too low ceiling on Pharmac funding.

Six of the drugs were on Pharmac’s ‘options for investment list’. That is, Pharmac wants to fund them and would, if and when its budget allows.

Pharmac had yet to receive applications from another three drugs. The status of the remaining drug is unclear.   

Forbes went Auckland University’s Tim Tenbensel, Professor of Health Systems, for comment. His response was that political parties promising to fund new medicines on the campaign trail threaten Pharmac’s independence.


And with this new government, there seems to be a not-too-subtle agenda to undermine Pharmac.

In noting that many of the cancer drugs National had promised to fund have been added to Pharmac’s “endless shopping list of pharmaceuticals it would fund if it had the money”, Professor Tenbensel added:

So, it will be interesting to see how that coincides with the push to rein in government spending. Pharmac as an organisation hasn’t been adequately funded for years.

The health minister was invited to comment on Tenbensel’s above-mentioned concerns but appears not to have done so.

Take-home messages

These 13 new cancer treatment drugs are legitimate. They are evidence-based rather than driven by effective ‘Big Pharma’ lobbying.

Experts like Professor Jackson confirm this as does the Health Quality & Safety Commission which is an independent statutory body. These drugs are also government funded in Australia.

However, while generic, Professor Tenbensel is right to say what he said. If any political party promotes particular drugs for priority funding in an election campaign and subsequently takes office, then there is a real threat to Pharmac’s independence.

This is wrong. One of the practical effects of linking government drug funding to election campaign promises is that it weakens the negotiating position of Pharmac relative to ‘Big Pharma’.

Equally valid is Professor Jackson’s concern about the importance of funding for the workforce as well as the drugs themselves.

You can’t have the latter without the former, if the health benefits of the new drugs are to be realised, just as you can’t drive a bus without a driver.

The way forward is not to focus on specific drugs for priority treatment. Instead ensure that Pharmac is funded to meet the needs of all approved pharmaceuticals that make a substantive difference to the quality of people’s lives and prevents avoidable premature deaths.

In other words, based the funding of Pharmac, along with the resourcing of the regulatory body, Medsafe, through a quality based investment lens.

After all, what makes good quality sense also makes good financial sense!  

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