Pharmac to get extra $39M

Pharmac to get extra $39M

Access to a drug to fight melanoma could be a step closer, with more funding in store for the Government's drug-buying agency.

Pharmac will get an extra $39 million over two years in this year's Budget, Prime Minister John Key and Health Minister Jonathan Coleman announced this morning.

Pharmac says it's excited by the boost, and has opened consultation on seven new treatments -- including one for melanoma.

No specific drugs were mentioned, but the Government has been under pressure to fund Keytruda or rival Opdivo, touted as wonder-drugs in the fight against melanoma. New Zealand has the worst rates of the cancer in the world.

"Pharmac will be the sole decision-maker of what those drugs are," says Mr Key. "The Government in no way wants to interfere with the independence of Pharmac, but it is giving it greater optionality by providing it more funding."

Pharmac is consulting on nivolumab, marketed as Opdivo, in the same treatment class as Keytruda.

Opdivo has been approved for use against melanoma by New Zealand's medicines regulator MedSafe.

"We've taken the data package for Opdivo through our clinical experts and they've advised us the clinical data is of good quality, well-structured and gives greater confidence that there is a survival gain for patients that receive it," Pharmac chief executive Steffan Crausaz says.

"On that basis, and because of the commercial arrangement we've entered into with Bristol-Meyers Squibb -- the manufacturer of Opdivo -- that we're proposing to progress to consultation on that treatment for melanoma."

A decision on Opdivo could be made as soon as July 1 this year, and if approved, Pharmac would be able to fund it long term.

In all, Pharmac will get an extra $124 million over four years, bringing its annual budget up to $850 million.

On top of the extra $39 million over 2016/17, $11 million will be injected into Pharmac's annual budget by DHBs, Dr Coleman says.

"Pharmac works within a fixed budget and has to make tough decisions. It looks for the best health gains for the greatest number of New Zealanders."

Last year, more than 70,000 New Zealanders benefited from 41 new medicines. Around 3.5 million New Zealanders got a funded medicine in 2014/15.

Mr Crausaz says the consultation follows today's pre-Budget announcement.

"This increase comes after a robust medicines budget process, during which Pharmac advised that there are a number of good medicine funding opportunities, to significantly increase health outcomes for New Zealanders," Mr Crausaz.

The Green Party applauds the extra money, but says the Government must release Pharmac's advice on how much it actually needs to run including the cost pressures under the Trans-Pacific Partnership.

"The Government knows that the TPPA will push pharmaceutical costs up for Pharmac, and its likely today’s funding increase will not be enough to cover the extra costs incurred by the Government," health spokesman Kevin Hague says.

"The TPPA will extend drug patents, which means Pharmac is delayed access to generic medicines, such as for biologics that patients need. This will push pharmaceutical costs up for Pharmac."

He says Pharmac has been short of funds for years, so the extra money will be a help, though it isn't know if it will be enough.

Labour's health spokeswoman Annette King says she's pleased Pharmac will be getting more money, but it should have received $103 million taking into account cost pressures and population growth.

"It's a drop in the bucket to what the Government receives in taxpayer funding for overall expenditure. Then it comes down to what priority do you put on the lives of New Zealanders and New Zealanders' health?"

Ms King believes the Government finally caved and congratulated the public who kept the pressure on.

She says it is unclear what the effects of the TPP would be for Pharmac and the health sector.

"Our big concern, and I have raised it on a number of occasions, if the patent on these new biologic drugs is extended under TPP and we don't get access to biosimilars in a timely fashion it will have a big impact on New Zealanders.

"I've been asking those questions. I haven't had satisfactory answers," she says. 

The seven drugs up for consultation are: