So is Labour still vowing to over-ride Pharmac?

December 20th, 2015 at 2:00 pm by David Farrar

Stuff reports:

The makers of Keytruda have been forced to amend trial data given to doctors, after overstating the benefits of the melanoma drug. 

The ground-breaking new cancer drug is at the centre of a major PR campaign, by both the drug company and terminal cancer patients, to gain public funding through Pharmac. 

Made by Pharmaceutical company Merck Sharp and Dohme (MSD), Keytruda is the brand name for Pembrolizumab – a biologic drug for terminal melanoma patients, that has produced promising results in early clinical trials.

Keytruda branding was understood to be a major feature of a recent New Zealand Society of Oncologists conference, where slides showing some of the latest clinical trial data were presented.

In a letter to conference attendees, Merck’s oncology clinical director Colin Yeoman said the headline on one of the slides was misleading.

It was able to be interpreted that 100 per cent of patients that had received the drug as a first-line treatment had had a postive response.  

“MSD was concerned that using the heading from the presentation… ‘Duration of Response in First Line’ could be misinterpreted as the response in all first line patients,” said Yeoman in the letter.

“Our intent was therefore to clearly communicate that only the responding patients were represented in the [right-hand chart].

“Despite our best intent, having reviewed this and in the absence of published updated duration data for this patient cohort; the information on this slide does not support the 30 months claim. It does however, support that in responding first-line patients, the responses were durable.”

That unsupported claim was that “most patients that responded to first-line treatment were still responding at 30 months”.

So Andrew Little has vowed to over-ride Pharmac and fund this drug at a cost of possibly $100 million – and all on the basis of an incorrect PR campaign. He should be embarrassed.

National got it wrong

December 12th, 2015 at 12:00 pm by David Farrar

Stuff reports:

Health Minister Jonathan Coleman has conceded the Government was wrong to override Pharmac and fund breast cancer drug Herceptin in 2008, as it comes under continued pressure to step in over “game-changing” melanoma drug Keytruda.

Keytruda is the brand name for Pembrolizumab, a biologic drug for terminal melanoma patients that has produced promising results in early clinical trials.

But Pharmac has described Keytruda as a low priority option for funding, saying there is inconclusive data on its effectiveness.

Health Minister Jonathan Coleman has declined to intervene over Keytruda, despite the incoming National Government making a similar decision with Herceptin when it came to power in 2008.

Asked by TV3’s Paul Henry whether overriding Pharmac on Herceptin was “the right thing to do”, Coleman said: “I don’t think it was actually, and I think history has shown that.

“The research shows that nine weeks which were funded previously is actually just as good as 52 weeks, but I think lessons have been learned.”

So it was a fairly expensive bribe which possibly didn’t even improve health outcomes. Hopefully the lesson has been learnt.

How Pharmac works

December 9th, 2015 at 12:00 pm by David Farrar

A very useful post on Facebook by Pharmac build members Jens Mueller:

Let me see if I can help with some of the background to the discussion of whether PHARMAC should make its own decisions as to the funding of new, expensive and largely unproven-but-promising medicines, or be overridden by political agendas. Firstly, everyone at Pharmac wants to do the right thing. The more than 150 people working there, supported by more than 100 specialist clinicians in NZ and overseas, and the community advisory members throughout this country, ALL want to see New Zealanders have access to the best medicines.

Secondly, the money Pharmac spends comes from the DHBs, not from some slush fund politicians have available to shower over the country in momentary benevolence, and so the $900 Million Pharmac spends each year to buy medicines that would otherwise cost us more than $7 Billion on the open market, comes from the same fund that serves all DHB patients nationwide. If Pharmac spends more money that it has been allocated (a sum that increased well over the past 8 years), it comes from the money DHBs have for their patient care work. Note that this is an environment where No One, Never has All the money they would want to cure All ills.

Thirdly, decisions made by Pharmac are not made by administrators, but based on expert advise by highly esteemed clinicians in their field, who give time, in many cases a lot of time, to evaluate research submitted by drug makers, to review patient histories and to determine which medicine offers better outcomes than those we might already have, or other competing ones. When I contrast these serious efforts with the hype from commercial marketing firms working on behalf of the pharmaceutical makers of new drugs, I know where I would place my trust!

Fourthly, once Pharmac makes a decision to fund a medicine for a specific illness, it must make the same medicine available for all patients of the same illness, and it cannot withdraw after a year or so ‘because it hasn’t worked’. Anything else would simply not be fair and just. That means a decision to fund a $150,000 medicine for one patient for one year, means that the other 200+ patients with the same illness, and then for the lifespan of the patients, possible a decade or more, get the same access. This means a $150,000/patient/year decisions means that there is a flow-on effect of more than $100 Million, which is money otherwise used for new investments for thousands of New Zealanders for other medicines. To put this in perspective, Pharmac, in the 5 years I have served on the Board, has never made a decision to not fund a medicine solely on fiscal grounds. The primary reason to decline funding for the few exceptionally costly applications we get each year has always been based on expert advise that the benefits are either overstated by the pharmaceutical marketing firms, or not yet proven to the point of being expected as a standard, or that an equivalently effective medicine is already available.

Fifth and last, we do not make decisions to decline funding lightly. Board meetings are intense, and decisions are based on substantial submissions from the medical expert advisors. We read every line of the hundreds of pages of submissions for each meeting, and we understand the suffering of some, when their lives are affected by illnesses for which there is no conventional treatment. It has happened that our CEO and staff have travelled to the home of a patient’s family to explain personally how the process works, and why we have declined to fund. It has happened that we have referred our decision-making process to an external independent arbitrator to make sure we have a pathway in place that is transparent and fair.

This is a country where we stand together often. We have a high rate of volunteers who support thousands of causes. In health, we have thens of thousands of non-profit staff supporting our patients. Pharmac is all about doing the best job, a world class job, for ALL New Zealanders, including but-not-only those few who might be struck by a devastating illness and believe only a newly advertised medicine might help. When the TPPA opponents made Pharmac an ill-informed argument for their cries, doctors, patients, and many others rallied to support Pharmac. When the TPPA trade negotiators pushed the whole agreement to the wire for not agreeing to any degradation of the Pharmac operation, the country as a whole was relieved. It is this spirit of community that helps Pharmac do its job, free from the momentary swings of opinion, but rooted firmly on an impartial assessment of clinical science, need and outcomes.

It is an organization I believe in full-heartedly, and I have great admiration for our outstanding staff, who make incredibly challenging decisions every day – knowing that they affect the well-being of nearly 5 Million New Zealanders.

Thank you.
Prof Dr Dr Jens Mueller, MNZM, Pharmac Board Member since 2010
(and this is not an official communication from Pharmac, it is my personal view).

I’ve bolded the parts that I think are most pertinent. Good to see a board member engaging the public.

Hague is right

December 7th, 2015 at 7:09 am by David Farrar

Stuff reports:

Patients wanting access to groundbreaking drugs that are still being tested would get Government funding if Labour gets into power.

Opposition leader Andrew Little said “by and large” he didn’t have an issue with Pharmac, the national drug purchaser, but he was in favour of an early-access funding scheme, similar to the United Kingdom.

Health Minister Jonathan Coleman has ruled out providing early funding for new drugs where results appear to be promising, but there may not be sufficient data to justify full funding.

Green Party health spokesman Kevin Hague criticised Little for his comments that politicians should get involved in decisions around what drugs Pharmac funds.

Hague said it was a “shame” that Little said Labour would fund Keytruda, a potentially life-saving treatment for melanoma sufferers.

“Political decision-making on medicines a very bad idea,” he posted on Twitter.

I agree. I never agreed with National’s promise to fund a longer dose of Herceptin when Pharmac wouldn’t, and likewise don’t think Labour’s promise to fund Keytruda is a good idea.

They both play into the hands of large multinational pharmaceutical companies who learn that whipping up public support for a drug is a better method than convincing scientists and doctors that the benefits of a drug outweigh the costs.

2,300 get melanoma a year in NZ. This drug costs $150,000. So Andrew Little has just promised $345 million a year for this one promise.  He’s promising to spend as much on this one drug as 40% of the overall budget for all other drugs.

UPDATE: Might only be used for those at Stage IV, but that is still 330 a year and an extra $50 million.

Herald is right – leave it to Pharmac

December 5th, 2015 at 12:00 pm by David Farrar

The Herald editorial:

Theirs is an invidious task, never more so than this week when it had to tell us it would not fund a drug for melanoma, Keytruda, that is being hailed as a breakthrough in the treatment of this cancer. Clinicians say it is the only treatment that seems to be effective against advanced inoperable melanoma. Chemotherapy and other regular cancer treatments are not.

Keytruda is state-funded in Australia and England but here Pharmac’s assessment committee has marked it low priority for funding, because of uncertainty about its benefits and extremely high cost. A course costs around $300,000, which anyone given a terminal diagnosis would pay if they could. Some can and do. But it is beyond the means of most and beyond Pharmac’s budget when it weighs up all the demands on its funds.

There was a hint yesterday that the Government could come to the rescue. “Watch this space,” said one of its MPs, Judith Collins, on breakfast television. She compared it to the breast cancer drug Herceptin, that was not accepted for funding by Pharmac but in 2008 the National Party promised to fund it if it came to power, and duly did so. Pharmac does “a great job”, said Ms Collins, “but every now and then something comes along and you’ve just go to say, something has to give on this”.

The Labour Party had been even quicker to take the decision out of Pharmac’s hands. “We would fund it,” said its health spokeswoman, Annette King. With politicians like these, who needs professionals to assess efficacy against costs?

If a Government provides additional funds to cover the costs of a particular drug, it does not upset the careful decisions that Pharmac has to make about the best use of its budget. But each time a Government does so, it reduces the integrity and fairness of the public health system. It is easy to make emotional decisions, especially where cancer is concerned. And of all cancers, melanoma may be the most scary.

I agree with the Herald. We set Pharmac up so medical and other professionals could assess which drugs provided the most benefit for their cost. This is the right way to do things with a limited budget, and MPs should not step in over them to fund additional drugs based on the success of a lobbying campaign.

Drug subsidies

November 16th, 2015 at 12:00 pm by David Farrar

Thomas Lumley blogs at Stats Chat:

There are new, very promising treatments for some cancers, which work by disabling one of the safety mechanisms in the immune system so that it can attack the tumour. These treatments have been approved in the US for melanoma and the most common type of lung cancer, and they look better than anything we’ve seen before.  The problem is the price, more than NZ$200,000.

In New Zealand, roughly 2000 people die of melanoma or lung cancer each year. At the current market prices, a course of treatment for each of them would absorb more than half of Pharmac’s budget.

It would cost $400 million a year for the one drug.

There really are people whose disease completely vanished, but only about one in sixteen. Two thirds didn’t see any response. Even for the people who have no detectable disease we can’t yet know if the benefits will last a few years or a lifetime.

Pharmac is not going to fund these treatments at anything like the current price in the current budget. That’s not a matter of debate or public pressure. It’s just not happening. It won’t add up. Conceivably, the government could decide to come up with the money to fund the treatments outside the current Pharmac budget. I don’t think that would be the best way to spend the money, but I’m glad to say this is the sort of decision I don’t get to make.

$400 million for a 1 in 16 cure rate is unlikely to occur.

Over the next few years, other companies will introduce treatments that attack the same or related immune checkpoint targets, and competition will make the price fall. At some point, it will be worthwhile for drug companies to make Pharmac an offer it can accept, as happened recently with Humira, Pharmac’s current top spend (which turns off the immune response in a somewhat similar way to how the new cancer treatments turn it on).

Five years ago, you couldn’t get these treatments if you were a billionaire. In ten years or so, I expect these or similar treatments will be effectively free to New Zealanders. At the moment, we’re in the painful transition period, where the manufacturers can afford to target only the wealthiest individuals and insurance companies.

Exactly. There is always that transition period from no one can afford it (as the average cost of a new drug approved by the FDA is $4.5 billion) to when governments can subsidise it for most people.

Incidentally Pharmac’s budget has increased 25% since 2008 – from $636 million to $795 million. In real terms that’s an 11% increase.

The difficult decisions of rare disorder treatment

September 2nd, 2015 at 2:00 pm by David Farrar

Stuff reports:

A Masterton woman who has flown almost 400,000 kilometres to get life-saving treatment for a rare disease is angry that New Zealand is now the only developed country that does not fund treatment for it.

Mother of three Allyson Lock has Pompe disease, a rare degenerative disorder that can be fatal if left untreated.

As of Tuesday, Australia has begun spending A$40 million ($43.8m) over the next five years on funding treatment for the disease – leaving New Zealand “dragging the chain”, Lock said.

“When you’re on treatment you can plan a life, you can plan things. But when you’re not, all you can plan is your funeral.”

A medication called Myozyme is available for Locke and 10 other known Kiwi Pompe sufferers, but it costs about $500,000 a year and is deemed too expensive by the government drug-buying agency, Pharmac. 

Unless you believe money grows on trees, there is a limited health budget. On a compassionate level I think most of us want people with treatable disorders to get that treatment, and are happy to pay taxes for it.

However there obviously has to be some threshold at which the opportunity cost is too high – that the money you spend on one individual, means dozens of others don’t get their treatment funded.

I’m not sure what the threshold is. I’m glad Pharmac has to make those calls, not me. And it’s awful for those who can’t get their treatment funded.

But if 40 years of treatment will cost taxpayers $20 million, is that affordable? It is for one person, but then does that mean every treatment for every person must get funded? And what if the $20 million only expands life expectancy by five years?

As I say very hard decisions.

Difficult cases

January 21st, 2014 at 11:00 am by David Farrar

Stuff reports:

Access to costly but life-saving treatment for rare diseases comes down to looking cute on TV or knowing a politician, sufferers say.

Allyson Lock is one of only eight Kiwis diagnosed with Pompe disease, an incurable degenerative disorder. Untreated, it can be fatal, but Mrs Lock of Masterton and other sufferers have been refused treatment because of its cost.

A medication called Myozyme is available, but it is expensive and gets no funding from government drug-buying agency Pharmac. Costs vary according to a patient’s age, weight and severity of illness, but in Mrs Lock’s case have been estimated at $575,000 a year.

She said patients with similarly unusual illnesses had obtained funding for expensive treatment, which was unfair. “They say it’s too expensive, but there are other treatments that cost more. If your family can get you on TV, if you’re a little kid, if the public gets into an uproar, you get funded. That’s what it comes down to.”

It’s probably true that public sympathy plays a role in decisions. But regardless, these are difficult decisions. There is obviously a limit at which the Government can fund treatment, as every dollar spent on one treatment is a dollar not spent elsewhere. $575,000 a year is hugely expensive.  I’m not saying what the limit should be, as fortunately not my decision. And you can only have empathy for those with such conditions that need hugely expensive treatments.

New Zealand Organisation for Rare Disorders executive director John Forman raised the prospect of legal action against Pharmac’s funding refusal, and said it was unacceptable every other developed country was treating its Pompe patients, except New Zealand.

I’m not sure that is quite correct. In some countries I believe it is funded for juveniles only, which is a different variation of the disease.

It would be interesting to know what are the most expensive treatments that are funded by Pharmac. Is there a hard limit, or is it a combination of price and effectiveness?

Goff knows you don’t do unilateral bottom lines in trade

May 31st, 2011 at 11:51 am by David Farrar

Phil Goff was Foreign and Trade Minister for many years, and most would say he was a very good trade minister. The China FTA is a huge credit to him (and Clark).

He also knows that one rule to trade negotiations is that the parties do not publicly lay out bottom lines, or rule things out. The reason for this is simple – doing so destorys negotiations. The moment one country says publicly “we will never ever agree to this”, it means all the other countries will do the same. And then you have nothing to negotiate.

So reading the Andrea Vance story:

New Zealand’s drug-buying agency should not be sacrificed for a trade deal with the United States, Labour leader Phil Goff says. …

But Mr Goff said yesterday: “We should not be trading Pharmac off for a free trade agreement with the US.” The agency was an “absolute bottom line and we should not be trading it away”.

You need to understand Goff is saying something in Opposition, he would never ever say in Government.,

For the record as a fiscal conservative, I think Pharmac is great and keeps the cost of drugs down for the NZ taxpayer. I find it hard to imagine that the US could offer us something so good that the Government would consider major changes to Pharmac. But again to have negotiations proceed in good faith, you can’t lay down unilateral bottom lines in public.

Personally I’m sceptical that the US will offer anything greatly worthwhile in terms of trade access. Their rhetoric is much stronger than their commitment to free trade.  However there are strategic advantages to the US in concluding an agreement, so maybe they will actually offer something decent.

Editorials 26 April 2010

April 26th, 2010 at 11:00 am by David Farrar

The Herald looks at Pharmac:

The drawing up of free-trade agreements is always an exercise in compromise. Sometimes, unpalatable concessions have to be made with an eye on the bigger picture. …

At the forefront of American concerns will be two issues – the strength of our dairying industry and the role played by Pharmac, the Government’s drug-buying agency.

The US farming lobby will want little conceded, while American pharmaceutical companies want Pharmac’s role drastically reduced.

The drug companies say an end to New Zealand’s anti-competitive drug-funding system would give its people quicker access to new and expensive medicines.

US drug companies can introduce these new and expensive medicines at any time. Whether or not they gain a subsidy from the state is another issue.

Trade Minister Tim Groser has described Pharmac as “an outstandingly successful public institution”, which has saved taxpayers hundreds of millions of dollars. The estimated savings in a five-year period are enough to have built the Starship hospital.

Mr Groser has also said that, as the principal economic adviser at the Ministry of Foreign Affairs and Trade, he had negotiated with the US on Pharmac 10 years ago and had seen no need to make concessions.

That is reassuring. But the issue will doubtless be raised again, as New Zealand covets a free-trade agreement with the US. Hard choices will have to be made.

The Government has already bowed to pressure and allowed some slippage in Pharmac’s integrity. With the taxpayer uppermost in its mind, it should hesitate before venturing further down that path.

I agree Pharmac is of great value to New Zealand. The gains from a free trade deal would have to be significant for us to agree to changes to Pharmac.

The Press remembers ANZAC Day:

The history of Anzac Day remembrance has been shaped by memory and ideals – memories and ideals that have changed over the decades since the landing on the Gallipoli Peninsula in 1915.

The commemoration therefore has reflected the great alterations that New Zealand has undergone in those 95 years.

Yesterday’s services saw the men and women of World War II and will continue to see many of them in future years. But their number is dwindling and thoughts thus turn to the Anzac Days of the future. …

Voices last week were raised, predicting a decline in turnout over the coming decades, but that is unlikely to eventuate. The respect for what our fighting men and women achieved and the honour they brought us is now deeply and uncontroversially embedded in the nation’s psyche.

The Press pages on New Zealand’s military history, which we printed in the lead-up to Anzac Day, are but one example of this. They were prized by readers, and schools have taken them in large numbers. A hunger exists for hearing again the old tales of valour and service.

The men and women who performed those deeds will not be forgotten and Anzac Day will live on in their honour.

While on TV, once again I found Maori TV did best.

The Dominion Post looks at Fiji’s proposed media restrictions:

The primary function of Fiji’s proposed new media regulator is “to encourage, promote and facilitate the development of media organisations and services”. It sounds reasonable.

There is just one problem. In order to perform its duties the Media Industry Development Authority is being given the power to fine and lock up journalists, editors and publishers, censor news reports, search premises, seize documents, and shut down news organisations.

Coating a dictator’s iron fist with a veneer of legality does not soften the blow.

The commodore is labouring under a misapprehension. The misapprehension is that he is the big man in the Pacific.

He is not. He is a tinpot dictator who has gained power at the point of a gun and is destroying his country’s economy and prospects and the institutions, already weakened by three previous coups, that underpin good government.

The news media is one of them. Journalists, editors and publishers will bear the immediate brunt of the latest restrictions, but the real losers are the Fijian people, who have already lost the right to learn what is happening because of “emergency” regulations put in place last year.

Free speech is a fundamental pillar of democracy. “Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter,” said Thomas Jefferson, the author of the American Declaration of Independence.

Another great Jefferson quote.

Frog on Pharmac

December 1st, 2008 at 2:00 pm by David Farrar

Frog has an interesting post on Pharmac. I disagree with Frog about banning advertising and the conspiracy theory about the drug companies writing the story in the SST about Pharmac and drugs it won’t fund.

However I do agree that the Pharmac model is fundamentally a good one, and the best way to get further drugs funded is to increase the budget for medicines (which National is doing) rather than try and reverse Pharmac decisions on particular drugs.

There is always a limit though to the ability of the public health system to fund every medicine we would like. This is why I think peopel should be encouraged to have their own health savings accounts which can be used to meet exceptional health care costs. The Singapore model is one worth investigating.