However, the Green Party has expressed disappointment in that position, saying politicians should not interfere with Pharmac's decision-making, which is based on the best evidence available.
Pharmac chief executive Steffan Crausaz, in an interview on TV3's The Nation this weekend, said nine senior cancer doctors in New Zealand helped the agency review Keytruda.
"The committees have reviewed the evidence, and in their view Keytruda hasn't been proven to help people live longer lives. It does have some effects on tumour size and tumour progression, and that's important, but what they really want to see is whether it actually helps people live longer and live better."
Mr Crausaz said about 20 other drugs are in the high-priority category, meaning they would likely be funded before Keytruda if more money was available. They include medicines for infections, vaccines and other cancer drugs.
Mr Crausaz said another melanoma drug, Opdivo, would likely be ready shortly, and Pharmac would study its effectiveness in the coming months.
"It will have a new data set that will help us, I think, unravel some of these questions about -- do these treatments actually extend survival?"
The Government has all but promised that a melanoma drug will be funded by Pharmac after the drug-buying agency gets a boost in funding with the May Budget.
Health Minister Jonathan Coleman met melanoma survivors, patients and supporters outside Parliament this week, and helped accept an 11,000-signature petition calling on the Government to boost Pharmac's funding so it can fund melanoma treatment.
Patients are having to raise hundreds of thousands of dollars to pay for drugs, and some of those present at the petition hand-over pushed for greater urgency.
Petition organiser and melanoma survivor Leisa Renwick, of Tauranga, said people were desperate, and at present the poor could not give themselves a shot at survival.
She was told last May that she had only weeks to live but is now in remission after an expensive, private treatment of pembrolizumab (Keytruda is the commercial name).
Keytruda is state funded in Australia and England.
The Government does not pay for any of the new treatments for melanoma that have become available over several years. It pays only for chemotherapy, which is widely considered of little benefit against inoperable, advanced melanoma.