Life Sciences Blog

New Zealand’s Pharmac finally reimburses Keytruda, to cancer groups’ delight and disgust




After vociferous lobbying by patient groups and medical associations, New Zealand's Pharmac has finally agreed (provisionally) to fund Merck & Co’s melanoma drug Keytruda.

The news has been greeted with a mixture of relief and cynicism: while patients have rejoiced at the prospect of a second – affordable – innovative treatment option for melanoma, the decision has also prompted accusations that reimbursement decisions are “always about the money.

The reason for the scepticism is due to the short-lived horse race between Keytruda, which received marketing authorisation in New Zealand in September 2015, and Bristol-Myers Squibb’s Opdivo, which came to market only in April this year. Both drugs are programmed cell death-1 (PD-1) inhibitors – game-changing immunotherapeutics which might change the standard of care for cancer around the world.

In New Zealand, patient groups had been lobbying the government for over 18 months to authorise and then reimburse Keytruda, taking inspiration from Australian campaigners who argue that patients there wait almost two years longer for subsidised access to breakthrough drugs than in other developed countries.

Still, despite New Zealand having the highest rates of melanoma in the world, Pharmac held off on approving and then reimbursing Keytruda by arguing that more clinical evidence was required.

While they waited for Pharmac to reach a decision on Keytruda, patients and medical associations complained that the delay was costing people’s lives. Cancer Society medical director Chris Jackson said, “…there've been real people who've missed out while the commercial negotiations have been undertaken and those real people have suffered and some have died while waiting for this announcement to be made.” Media reports also circulated alluding to a “row” between Merck & Co. and Pharmac.

However, in May Pharmac swiftly and unexpectedly granted reimbursement to BMS’ newly-authorised Opdivo. The decision followed a May Budget announcement that the government would grant an extra NZD39 million in funding to Pharmac. At the time, the government said Pharmac would have the ultimate say on which drugs to back with the extra funding.

Critics say that it was clear that the government expected Pharmac to use the extra funding to back Keytruda, in order to alleviate public criticism. Cancer Society’s Chris Jackson also argues that Pharmac is conflating clinical effectiveness and cost-effectiveness, and that Pharmac, which in theory has statutory independence from the government, should let experts rather than political lobbying influence their decisions. At the same time, Pharmac has also been criticised for playing Merck & Co.’s Keytruda off against BMS’ Opdivo, in order to reach the “commercially favourable” provisional agreement reached with Merck & Co. last month.

Controversy aside, patient groups are now rejoicing over the sudden reimbursement of not one but two innovative PD-1 melanoma drugs. After the consultation period on Keytruda ended on July 12, if all goes well the drug will be fully reimbursed in September.

Pharmac’s decision will save lives, said Melanoma New Zealand CEO Linda Flay. But she underlined that during the protracted negotiation process, people have suffered. “There’s been a lot going on behind the scenes, a lot of campaigning, a lot of advocating for an effective drug.”

Sophie Cairns is a Life Sciences Senior Analyst at IHS
Posted 1 August 2016
 

About The Author

Sophie Cairns is a senior analyst in the IHS Life Sciences practice, covering the Asia-Pacific region. Sophie holds a Master of Science degree in Public Health from the London School of Hygiene and Tropical Medicine and prior to joining IHS worked in several consulting and analytical roles, focusing in particular on pricing and reimbursement issues in China. Sophie also worked as a journalist for seven years, mostly as a foreign correspondent for Reuters newswire in Hong Kong, Shanghai and Paris. She is fluent in Chinese (Mandarin and Cantonese), French and German.