There’s good money in cancer, but this makes for bad politics. National’s pledge to fund 13 new cancer treatments was a foolish election promise, which it then failed to deliver in its first Budget. Now, the government is desperately trying to circumvent the normal drug-approval process while furious cancer patients and advocacy groups denounce it for betraying the dying. A sequence of poor political decisions is metastasising throughout an already sick coalition, and it will take deft political surgery to keep this government alive on the table.
The problem – as usual – is funding. For decades, the primary treatments in oncology were similar across cancer variants: surgery, radiotherapy, chemotherapy or some combination of the three, all of them agonising, even when they worked. And all too often, they did not work at all.
But over the past few decades, new forms of cancer medication have entered clinical practice. New-generation drugs are miracles of molecular biology: more targeted, more effective, less toxic – and so ruinously expensive that public health systems around the world are struggling to pay for them. A recent report by the Cancer Control Agency Te Aho o Te Kahu found that the median survival time for colorectal cancer doubled between the 1990s and early 2000s – at a 340-fold jump in cost.
That same report, published in April 2022, identified 13 new cancer treatments that are funded in Australia but not New Zealand. Last August, National announced its now-infamous election promise to fund those drugs at a rate of $280 million over four years, paying for them by reinstating the $5 prescription fee waived by the previous government. But it then failed to include the drugs in the Budget.
This is not how drug-funding decisions are supposed to work. The Pharmaceutical Management Agency (Pharmac) is (theoretically) an independent body designed by the National government of the 1990s to depoliticise one of the most fraught problems in healthcare: who lives and who dies when there isn’t enough money to save everyone. The agency functions as a monopsony – the sole drug purchaser for the entire public health sector – which gives it extraordinary leverage when negotiating with drug companies and other vendors but no leverage whatsoever when buying expensive new drugs that an incoming government has loudly promised to fund for a specific amount.
Blame pharmac
There are problems with the Pharmac model. Over the years, successive governments have taken advantage of this arms-length arrangement to systematically underfund the agency and then insist that the unavailability of drugs in the public health system are due to operational decisions made by mean old Pharmac. Nothing to do with the government!
The agency itself carried its independence too far – it is often referred to in the health sector as “the independent republic of Pharmac”. It is famously opaque, often refusing to elaborate on the reasoning behind its decisions, and has been caught lying to the media. A recent review found “deficiencies in the nature of the decision-making process (from the board down) and the quality of the decisions that came out of it”.
There are reasons for the agency’s isolationist tendencies. The pharma industry hates Pharmac. Drug companies would rather market their products directly to physicians, flying them to conferences at tropical resorts or hiring them as consultants, all to help them conclude that the company’s most expensive new products are the best thing for patients.
Instead, industry sales teams are forced to negotiate with cold-hearted bureaucrats who prefer to fund low-cost generic drugs. Big Pharma has waged a sustained public relations war against the Pharmac model for decades, partly via the industry’s lobbying body, Medicines New Zealand, partly via a sequence of devastatingly effective media campaigns organised around cancer patients who tell teary-eyed breakfast TV hosts they will literally die unless the government urgently funds an innovative two-year monoclonal antibody treatment at the modest cost of $80,000 per patient per month.
Previous governments have responded to these campaigns by quietly asking Pharmac how much it might cost – purely hypothetically – for a new drug to be funded, then increasing the Budget by exactly this amount.
National has foreclosed this option by blurting out a list of 13(!) drugs, some of which have already been declined, others yet to be submitted for approval, with no guarantees they’ll meet Pharmac’s criteria. National has politicised cancer drugs before: in 2008, it campaigned on a promise to bypass Pharmac and increase funding for Herceptin. But it was only extending the treatment period for a single drug that had already been sanctioned, not an extensive Christmas list of unapproved therapies.
Problematic promise
National blames its failure to keep its promise on the previous government leaving it a fiscal cliff. It was probably unwise to announce $4 billion for fixing potholes immediately after advancing this claim. The real reason behind the breach is, almost certainly, that the policy was announced on the campaign trail, but in government National has realised it cannot be fulfilled without breaking the Pharmac model and making ministers accountable for future decisions.
PM Christopher Luxon and Finance Minister Nicola Willis have pledged that the drugs will be available soon, promising an announcement by the end of the year, but have yet to indicate how they’ll keep this promise. Who will review the clinical evidence and negotiate these deals? Associate Health Minister in charge of Pharmac David Seymour has indicated he’s a strong supporter of the agency’s independence. For good reason: funding choices will only get harder in future. Cancer is many diseases and the biotechnology targeting different variants gets more sophisticated – and more expensive – every year.
The original list from the Cancer Control Agency that kicked off this debacle cited drugs that were funded in Australia but not New Zealand – but the nation across the Tasman is now significantly wealthier than us. Its public health system can afford to be more generous; a political bidding war to keep up with it is doomed to fail.
It’s a hard problem to solve, made harder by the government inflicting grievous political wounds upon itself.
