Here are the Government’s options for fulfilling its cancer drugs promise

Tuesday, 11 June 2024

Steve Maharey, the past chairperson of Pharmac, says the 13 cancer drugs National promised will likely cost significantly more than $280 million.

The immediate past chairperson of Pharmac says the Government has created an almost impossible problem for itself in its cancer drugs promise, which it failed to deliver in the Budget.

Steve Maharey, a former senior Labour minister, chaired Pharmac’s board for five years before quitting in December.

In an interview with The Post, Maharey said the 13 cancer drugs National promised would likely cost significantly more than the $280 million it budgeted for, and buying them would come at the expense of “everything else”.

National leader Christopher Luxon on the campaign trail last August, where he announced National would fund 13 specific cancer drugs if elected.

“The health system itself is screaming out for money, for workforce, for hospitals, for whatever … where does the money come from for them to do more than this, now that they've spent all their money on cancer drugs?”

The Prime Minister, health minister and finance minister have all repeatedly said since Budget day that National would honour its promise and fund the medicines.

Maharey said there were three ways the Government could do this:

Option 1: Order Pharmac to buy the drugs, breaking Pharmac’s model

Pros: This would likely be the fastest way to procure the medicines. It would also allow negotiations to take place with drug companies and Pharmac’s negotiators.

David Seymour, who is the Associate Health Minister responsible for Pharmac, backs the agency’s arms-length independence.

Cons: This would bypass Pharmac’s usual process of seeking consultation and expert advice. This model exists to get the best value for medicines that its network of 400 health professionals deem to be worthwhile investments, from a fixed budget.

The Minister responsible for Pharmac, David Seymour doesn’t appear to be a fan of this: “I’m a strong supporter of the arm’s-length, independent Pharmac that we have,” Seymour told The Post.

Option 2: Ask another agency, such as Health NZ — Te Whatu Ora to buy the drugs

Pros: Politicians wouldn’t be telling Pharmac what to do, which would better honour the independent Pharmac model

Cons: “Health New Zealand doesn’t have the money either,” Maharey said. Also, no other agency has the negotiators or negotiating power that Pharmac has, so this method is likely to be expensive, time-consuming and inefficient. “They’d probably want to go to Pharmac and say, do the work for us.”

Option 3: Give Pharmac a substantial increase for medicines and let Pharmac take care of it

Pros: This would give the Government the most cost effective deals on the cancer medicines and would allow other medicines to be funded alongside cancer medicines.

Cons: “If they do that, they have to shove a whole lot more than $280m and these drugs don’t sit one, two, three four and down to 13 on the options for funding list. The [drugs] that are available are scattered through that list,” Maharey said.

In other words, this method would require providing funding for every medicine that Pharmac has assessed and ranked for funding ahead of any of the cancer drugs. This ranking has always been secret.

One option would be giving Pharmac a “substantial increase” and letting the agency work its way down its options for investments list.

“Unless the Government wants to be sat down and told exactly what's on that list, which, until today, has been unknown for both governments… they’d have to give an undisclosed glob of money to Pharmac and say, see how well you can do.

“And of course, not all the drugs are on the list,” Maharey said.

Some of the treatments have failed Pharmac’s scrutiny in the past.

One of the treatments, cetuximab as a first line treatment for bowel cancer, was recommended by an overarching medicines committee to be declined in 2018 and 2020.

Dr Shane Reti speaks to The Post health reporter Rachel Thomas.

National also promised to fund cetuximab as a second line bowel cancer treatment. Pharmac declined a funding application for this in February 2022.

Another treatment, BRAF/MEK inhibitors for unresectable melanoma was recommended for decline in June 2017.

Maharey said this doesn’t mean Pharmac couldn’t reopen a funding application if there is new evidence about a drug’s efficacy.

As of March, Pharmac had not received applications for nivolumab for head and neck cancer, nivolumab for melanoma, or dabrafenib with trametinib for melanoma.

Whichever option the Government lands on, Maharey said he could not see a way forward that wouldn’t irreversibly damage the independent Pharmac model.

“I imagine there's quite a lot of soul searching going on amongst [Pharmac’s experts] who … may start to wonder ‘why do we do all this work?

“They have to pay for these drugs, but ideally, they also need to leave Pharmac intact. So it's going to be a delicate balancing act over next few months.”