KEY POINTS:
The cost of Herceptin under the latest bid rejected by Pharmac would have been at least $2 million less than the first proposal for 12 months' treatment.
This is based on calculations drawn from a Pharmac staff paper, obtained by the Herald under the Official Information Act.
The figures are disputed by the drug's supplier, Roche Products NZ, although the company will not publicly release its own cost estimates.
The paper was before the Pharmac board in July when it decided against extending funding for the controversial and costly breast cancer medicine.
Pharmac and district health boards last year started funding Herceptin for women in the early stages of so-called HER 2-positive breast cancer (it was already funded for women in the advanced stages of this disease), but only for nine weeks, contrary to the general practice in developed countries of 12 months' therapy.
Pharmac had rejected the bid from Roche for 12 months' funding, although some women may get this duration of treatment anyway under a trial to compare nine weeks with 12 months.
The July paper lists the 2009 cost of the nine-week regimen at $5.9 million, plus $3 million for the 12-month arm of the trial, $7 million to extend usual treatment to 12 months, $1.4 million in extra DHB costs delivering the 12-month regimen, and $1.1 million for an unnamed other drug - a total of $18.4 million.
Pharmac said the extra costs arising from the Roche offer would have decreased from $9.5 million in 2009 to $9.1 million in 2010, and then have risen annually, to $19 million in 2017.
Achieving state funding for the unnamed drug was central to the Roche offer, under which the company also reduced the cost of Herceptin for early and advanced breast cancer.
The paper said Roche had under-estimated the cost of its bid to taxpayers.
"In the view of Pharmac staff, it is difficult to justify the cost of funding 12 months' treatment, rather than nine weeks' treatment, in terms of cost-effectiveness, clinical benefit or safety."
Agreeing to the Roche bid would prevent the state from investing in other, more effective health interventions, the paper concluded.
Roche sales and marketing director Stuart Knight said yesterday that because Pharmac had not sought clarification from the company and had deleted portions of the paper, it was unclear which Roche assumptions Pharmac disagreed with.
"As a result, we cannot explain why Pharmac's cost projections would be significantly higher than our own."
Nor could he understand why the cost of Herceptin would rise after the three-year contract proposed by Roche. He would have expected price reductions at each three-yearly negotiation.
THE PRICE
* If Pharmac had approved the recent bid to extend funding of Herceptin in early breast cancer to 12 months, it is estimated the total cost would have been around $18 million next year.
* The previous bid for 12 months' treatment would have cost between $20 million and $25 million.
Source: Pharmac documents
