Gordon Campbell on Pharmac’s indefensible stance on the new melanoma drugs

One of the interesting line items in this month’s Budget will be the one that sets out the increase – if any – in Pharmac’s base funding, to enable it to meet the huge cost of the new class of so called ‘biologics’ drugs for treating advanced skin cancer.

To date, Pharmac has withstood the intense public relations campaign that has been waged by the Merck, Sharp & Dohme (MSD) drug company to force Pharmac to commit to Keytruda, the first of these PD-1 immune system-driven, cancer inhibitor drugs to reach the market.

Recently, Keytruda’s main rival – Opdivo, from the Bristol Myers Squibb (BMS) drug company – has been approved for use in New Zealand.

Theoretically, this creates the situation that Pharmac has been angling for – whereby it has two rival products on the market that could supposedly be induced to compete against each other on price, thus enabling Pharmac to gain savings on the vast cost involved in subsidizing them. If that’s the tactic, it won’t happen soon enough to provide much relief. Overseas, both Opdivo and Keytruda have sustained sky-high prices, even while in competition.

It seems more likely – for a variety of moral and political reasons – that Pharmac will not be able to live in denial for much longer that these new drugs do indeed offer a life-saving, breakthrough form of treatment. If Pharmac continues to stonewall in order to save money it – and its political paymasters – will be consigning a considerable number of New Zealanders to preventable deaths, and the health system in New Zealand will be officially relegating itself to Third World status. Australia began funding these PD-1 immunological drugs last year. Pharmac won’t be able to obtain much in the way of price reduction – if any – before it will be forced to follow suit.

Overseas, there is some evidence that Opdivo (while second to market ) may be the likely eventual winner, if this remains only a two drug race.

The U.S.-based company rolled out Keytruda for advanced melanoma in September 2014, about three months ahead of Bristol-Myers Squibb’s ($BMY) rival PD-1 therapy Opdivo, and the two drugs have been racing for new indications ever since. But though the two drugs may have begun neck-and-neck, Keytruda is expected to lag behind the BMS medication in the long term, sales-wise.

Just witness the analyst projections in this ranking, which put Opdivo in third place, but Keytruda in 17th. Keytruda’s 2020 sales projection of almost $5 billion isn’t shabby at all, of course, surpassed as it is by Opdivo’s $8 billion.

The push by Merck Sharp & Dohme to force Pharmac’s hand and get it to commit to Keytruda has to be understood in terms of this battle for global market share. Over time, the future of Keytruda could prove to be as a “combo” or “cocktail” drug used in combination with other drugs, for a range of conditions apart from advanced melanoma :

…..Merck is studying Keytruda for a variety of other uses, including multiple myeloma, lymphoma, and breast cancer. The company has 160-plus Keytruda trials going, covering more than 30 different tumour types. About half of those trials are testing Keytruda in combination with other cancer meds, including other immunotherapies.

In that respect, it is interesting to note that the registration for Opdivo in New Zealand is on four grounds : as a standalone melanoma treatment, as a ‘combo’ melanoma drug, and as a treatment for two different lung cancer conditions, one of them post-chemotherapy. Undoubtedly, melanoma is a serious problem in New Zealand. But it would be easier for Pharmac to justify putting so many of its funding eggs in this particular basket if there was at least a potential for wider applications for these drugs. Equally expensive biologics treatments for other serious conditions are, after all, also coming up over the horizon.

In the medium term, Pharmac could ultimately achieve its desired opportunities for price reduction when this field ceases to be a virtual duopoly operated by MSD and BSM, and as other competing drugs enter the market :

Soon, the PD-1/PD-L1 immunotherapy market won’t be a two-drug race, however. Roche’s atezolizumab is expected to go to the FDA for approval this year, and more rivals are coming down the pike, including avelumab from Pfizer ($PFE) and Merck KGaA, which won the FDA’s “breakthrough” designation in November 2015.

That’s still well in the future. In 2016, Pharmac has to climb down off the fence and fund one – or both – of these drugs. In Australia, there are anecdotal stories like this one below, of lives being saved by Opdivo :

….Susan Barlow watched her own mother die from a melanoma but has become a two time survivor of the disease herself thanks to a breakthrough new $170,000 treatment that will be subsidised from today….Susan’s doctor told her treatments for her advanced cancer were few and far between but he signed her up to a clinical trial for a breakthrough new drug Opdivo, which uses the body’s own immune system to fight cancer.

Susan responded well to the new treatment.“All my tumours have shrunk a fair bit, they’ve put me down as stable, the cancer is not progressing,” she says.

The treatment makes her feel tired, she has lost pigment in her skin which now has white patches and she has had a rash and joint aches and pains. However, she says she’s feeling good and has had none of the side effects that would have come with chemotherapy, such as hair loss and nausea.

“This drug has given me a chance to see my new grandkids,” says the Adelaide resident. Susan says there is no way she could have afforded the $170,000 treatment and she is pleased it is now subsidised. “Other people will get a chance and a hope,” she says.

However, once these PD-1 drugs are subsidised here and the floodgates are opened, how will our health system ration the access to these very expensive treatments? Quite simply, more money has to be allocated to Pharmac. Perhaps the government needs to treat the cost of saving the actual lives of New Zealanders with as much urgency as it treats
the cost of countering the imaginary threats to this country.

Finland, Post Office of the Future.

The steep decline in traditional postage is not confined to New Zealand. The US Postal Service lost $5.1 billion in 2011, and is reportedly due to lose a further $2 billion this year. Some of this is for the usual reasons (a) digital media carving into the profits from the traditional stamp-and- letter business and (b) businesses cutting back on their formerly lucrative ( to the Post Office) volume advertising mailouts.

In the US, such problems have been compounded by a Congress seemingly intent on breaking up the government –owned postal service so that it can be profitably cherry picked by the private sector. To speed up that process, Congress passed a bill in 2006 requiring the US Postal Service to pre-pay 75 years of employee retirement plans inside 10 years, at a cost (by 2012) of $21 billion, all paid into a special retirement fund, from the profits from its daily postal operations. (Seen in that light, that previous $5 billion deficit doesn’t look as bad.) Needless to say, the private sector will not face similar burdens, if and when this engineered ‘failure’ of state provision takes full effect.

Can anything be done to rescue the traditional postal service? In Finland, postal workers facing redundancy as a result of falling mail volumes have suggested a novel solution. They’ve suggested offering other services, such as mowing peoples’ lawns, on the side :

Posti Group, the main state-owned Finnish mail service, has an idea to make some extra cash fast: Starting May 17, they will mow people’s lawns once a week for up to 130 euros (about $148) a month. And, it’s tax-deductible. “The idea for the lawn mowing service came from mail delivery employees,” Anu Punola, Posti’s director, said in a statement. “We believe many customers will be happy to outsource lawn mowing when we make it convenient for them to do so.”

With it’s already wide reach, Posti hopes this lawn mowing pilot program, running through August, will help transform the postal company into a more service-oriented company. Finns will have the option between two services, either 65 euros (about $75) for 30 minutes every Tuesday or 130 euros (about $149) for 60 minutes every Tuesday. They picked Tuesday because it is a traditionally light mail delivery day.

Indiana Wants Them, Can Have Them

And in Indiana today, Donald Trump will try to wrap up the Republican nomination over Ted Cruz – whose tag team deal with John Kasich will either go down in history as the worst idea since New Coke, or the best idea since penicillin. Most people will be betting on the former, given the results of this poll taken on Sunday, which showed huge voter negatives for the Cruz/Kasich non-aggression pact.

Most of us though, will just double down on the dread of the Donald.

If a man ever needed dyin’ he did

No one had a right to say what he did….

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4 Comments on Gordon Campbell on Pharmac’s indefensible stance on the new melanoma drugs

  1. “Quite simply, more money has to be allocated to Pharmac. Perhaps the government needs to treat the cost of saving the actual lives of New Zealanders with as much urgency as . . . . ”

    Ever heard of PRINTING (targeted) money, instead of just borrowing it, Mr Key? Go talk to your buddy Obama if you need advice on this approach to fiscal policy. “Quantitative Easing” certainly worked for Wall Street (at least in the short-term). So why wouldn’t it work for Pharmac?

  2. Our family is attempting to fund $88,000 for our sister’s Vemurafenib drug treatment. She has stage 4 metastatic melanoma. Pleas to Govt ignored. The results for our sister in just 10 days have even amazed her specialist – one of the best in Australasia.
    Before she started on these drugs she struggled to get in and out of a car or to walk very far. After 5 days on these pills, she walked up and down Baldwin Street in Dunedin!!!
    Long story short: as soon as we run out of funds, the supply of the drugs will stop. That means we return to the original prognosis: imminent death.
    Last financial year I was told Pharmac returned $9 million back into the Govt coffers – unspent funds.
    Cold comfort for our family and hundreds of others that are living a nightmare!

  3. Pharmac’s resistence to new/ newish and heavily promoted drugs is laudable. Many, including some of which made it onto the Pharmac list after intense political lobbying (from both corporate and public interest), are of questionable effect and questionable benefit to New Zealanders. We have another cancer drug which is currently funded, which for the approximately 100 beneficiaries costs the equivalent of around 150,000 free doctors visits for children. The drug was, at the time, still highly experimental, of questionable effect, and benefited few at the cost of a lot. After what in effect was a publically funded pilot project, the drug is still proving to be near ineffective.

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