Pharmac's decision to backtrack on funding Keytruda is a major blow for equality in New Zealand's health system, a leading oncologist says.
Lung cancer is the most fatal cancer in New Zealand, taking about 1800 lives a year, but immunotherapy drugs like Keytruda have been proving effective.
Medical oncologist Laird Cameron said while they were not miracle cures and did not work for everyone, immunotherapy drugs could double survival rates for patients with advanced lung cancer.
"That's why for the first time ... with the introduction of this class of drugs, we are having cases of five-year survival with advanced non-small-cell lung cancer, and outside of types of therapy, that's just never achieved with chemotherapy, which is our current standard in that group."
On 22 April, RNZ's In-Depth team and Checkpoint revealed Pharmac had withdrawn its request for proposals (RFP) for companies to pitch prices for the drug. The drug-buying agency said it could not afford Keytruda, with medicine costs rising as a result of Covid-19.
Dr Cameron is a spokesperson for a group of lung cancer specialists and said life and death decisions were made every day the medicine was not funded that often came down to who could afford to buy it privately.
"Every clinic that I have with my lung cancer patients there will be a patient I am caring for and I'll say 'look, I would like to give you immunotherapy. It is not funded and with the price, it's just not an option'.
"For those where it is an option, there is the impact of their own financial burden and trying to decide 'do I spend money to try and live longer, or do I not?'"
It meant increased inequality in New Zealand's health system, Cameron said.
"When there's an effective treatment available but only to those who can pay for it, the gap widens."
Pharmac chief executive Sarah Fitt last week said increased costs for medical supplies during the pandemic were putting pressure on the agency's budget, which is capped at about $1 billion."
There's been quite significant impacts on manufacturing and supply chains, and we already see significant price increases coming through freight," Fitt said.
"As you can imagine with the airline situation, freight is becoming a huge issue. So it's actually getting stuff into the country is proving challenging, but also the costs associated with it."
Those claims are now being challenged by Merck Sharp and Dohme, the company that makes Keytruda.
Its New Zealand managing director Paul Smith said the company was not able to raise prices without giving a lot of notice because it had fixed contracts with Pharmac.
Those contracts also meant the drug companies had to bear any increase in freight costs.
"Whilst we as a company have seen some dramatic increases in costs, we just have to absorb that, as our contract term requires us to," Smith said.
He also challenged a claim by Pharmac that funding a drug like Keytruda would have cost about $200 million over the next four to five years.
He said that estimate was based on the list price, or the standard market price. But in confidential agreements between drug companies and Pharmac, rebates were offered, significantly lowering the price.
"We never divulge those prices, and they don't. But there are rebates in place, which brings that down," Smith said.
The cost to Pharmac would, therefore, be significantly less than $200m over four to five years, he said.
Keytruda is funded for lung cancer in 54 countries. The reason it costs about $100,000 to fund privately is due to the amount of testing and development, he said.
"We have over 1000 clinical trials currently with Keytruda globally, and they all cost millions of dollars to run. So it's a complex product, there is a huge investment in it."
Lung Foundation chief executive Philip Hope said the fact that New Zealand was not one of those countries funding the drug meant about 30 patients a week were dying prematurely.
He released a letter Health Minister David Clark wrote to him in November saying a crucial aspect of New Zealand's cancer plan was equity for Māori, especially given they had the highest rates of lung cancer.
There was a gap between the rhetoric and the reality, Hope said.
"How is that fair? When we have a government which pledges to be guided by equity, to be guided by fairness and wellbeing. We're not seeing it for our most vulnerable patients."
The minister's letter pointed out that Pharmac was independent of the government, which could not interfere in the drug-buying agency's decisions.
It also said Pharmac spent about $220m on cancer medicines last year, and the agency could use some of the extra $60m the government recently made available to fund new drugs.
For now, Keytruda for lung cancer is not among them.