Melanoma drug 'extortionate' - ex-pharma chief

11:47 am on 11 March 2016

The price being charged for the drug Keytruda is extortionate and unacceptable, a former New Zealand head of a drug company says .

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The comment comes as the government promises to increase the health budget to help cash-strapped drug-buyer Pharmac afford a costly melanoma drug.

Pharmac estimates Keytruda (pembrolizumab) from drug-maker Merck, could cost up to $30 million a year for up to 300 patients with advanced melanoma that cannot be treated with surgery.

It has given funding the immunotherapy drug a low priority over cost and a lack of evidence of long-term benefit to patients.

Lance Gravatt, chair of a family-owned New Zealand pharmaceutical company Te Arai BioFarma, and former chief executive of drug firm AstraZeneca in New Zealand, said with a capped $800 million budget, Pharmac could not afford the drug.

"It has a budget that's capped, and there's no growth in that budget. What other answer can you give other than no? And then try to justify it so you don't embarrass your political masters. And that's the reality of what they do."

Dr Gravatt said politicians, including the health minister and the prime minister, who had suggested extra funding would be found in Budget for health allowing Pharmac to fund a melanoma drug had not helped.

"I think the politicians should keep those comments within Cabinet. Otherwise all you're doing is signalling to the pharmaceutical company, just hold on for a few more months boys and we'll pay whatever it costs".

Keytruda's maker, Merck, has confirmed the global arm of the company spent more on marketing and administration in 2015 than it did on research and development, at $10.3 billion and $6.7 billion respectively.

But Merck New Zealand director Paul Smith said the vast majority of the marketing investment was spent on medical education.

"I don't think that's bad at all. It's appropriate that a pharmaceutical company who owns the data that sits behind the clinical trials properly educates the doctors globally on the best use and most appropriate use of the medicines we've discovered."

Dr Gravatt disagrees.

"I think that's just total rubbish. A drug like Keytruda isn't a GP product, it's a specialist product, and I don't believe you need to be educating the oncologists of NZ who've probably been involved in some of the clinical trials on Keytruda and how best to use it.

"And even if you did have to give them some support it doesn't justify the exorbitant price they're charging."

Asked what he made of some oncologists and cancer researchers' saying that Keytruda was a step-change in cancer care, Dr Gravatt said he personally would fund it, but not at the price being asked.

And because oncology "is littered" with cases of products that have shown great promise but failed to deliver, he would "be prepared to revise my access criteria to the drug once the overall survival data was available".

He urged Pharmac to cease subsidies to paracetemol, ibuprofen and aspirin - saving Pharmac $10 million a year - to boost spending on important new medicines.

"I think it's just a total waste of Pharmac money. You can get these products at, I think, a reasonable price at the grocers, at the supermarkets."

Pharmac dismisses call

Pharmac director of operations Sarah Fitt said the saving would represent a tiny fraction of its overall budget, and it had other methods capable of saving bigger sums, such as tendering.

She also said it got the painkillers very cheaply and if doctors could not prescribe them they may prescribe other more expensive alternatives.

"If these medicines weren't funded, the cost would be passed on to patients by having to buy medicines themselves - they may not go and buy those medicines.

"The other risk is more expensive medicines would be prescribed to these patients as a funded alternative, so it could actually lead to a loss of health outcomes and increase the overall cost of the health system."

Medicines New Zealand, representing local drug firms, said Pharmac was grossly under-funded.

General manager Graeme Jarvis estimated a budget boost of between $200 million and $300 million was needed to enable Pharmac to buy cost-effective medicines that were unfunded.

"There are currently 81 cost-effective medicines, and I emphasize the words cost-effective medicines, waiting for funding, for an average time of about three years, some of them up to 10 years actually.

These are for a range of conditions, including diabetes, asthma, also arthritis and some cancer medicines as well."