Eye-watering prices for cancer drugs are driving an unprecedented disparity between treatment for the rich and poor in New Zealand. In the first of a three-part series, Donna Chisholm investigates the human cost.
She was 44, and her children were nine and 11, when she was diagnosed with breast cancer in 2004. The nearly $300,000 she’s spent on unfunded cancer drugs at various times over the past six years has allowed her to see her children grow up. It’s given them their mum.
“It’s the most wonderful feeling – it’s the gift I’ve given them. If and when I die, I’m okay with it now, because my children have had a mother. They’ll miss me, and it would be nice if I could be around, but they’ve grown up.”
While Manins is sanguine about the financial sacrifice, she’s upset that had she lived in Australia, where everolimus – one of the drugs she has paid for – is funded, she’d be almost $200,000 better off. “I didn’t realise you didn’t get drugs like Australia did. I thought if Australia got it, we’d get it. I really think people should understand that if you get cancer, you cannot expect best treatment in this country.”
When everolimus (marketed as Afinitor) stopped working for her in 2016, she switched to palbociclib (Ibrance), a new treatment that is not yet funded in Australia, either. She paid $70,000 for the first seven months of treatment in 2017, before the price dropped to around $5000 a month.
To pay for the drugs, Manins, a music and English tutor, and her husband Elisha, who manages a fish company, sold an investment property and spent the money they’d saved for retirement.
For most of this time, former Prime Minister John Key was her local MP and she repeatedly sought his help. “He was ineffective. He just said, ‘That’s sad,’ or ‘That must be hard.’ I’m not interested in that, I just wanted a result.”
New Zealanders have long taken pride in the quality of the public health system. We’ve accepted that health insurance will buy treatment for chronic conditions much more quickly than for those on hospital waiting lists, but when it comes to serious or life-threatening illness, we once believed that for rich or poor, the best care would be available for free.
Increasingly, that is no longer true, particularly when it comes to medicines. The lucky ones may get onto a clinical trial, where the drugs are provided free. The wealthy pay for them. Poor people die.
“If I were in the public sector,” says Manins, “I’d be dead.”
The breast cancer with which she was diagnosed in 2014 is in her bones and, at 61, Marsters says she’s trying to fill the rest of her days with joy. Paying for an unfunded drug might extend her life but “it’s just not an option for me”.
“I could mortgage the house, and it might get me more time.” But she doesn’t want to leave her three children, aged 18, 25 and 27, who live at home with her, in debt. “They’ve lost their dad and I worry about them. I want to leave whatever I’ve got for my kids.”
She says after her husband Fred drowned when the fishing boat he was on capsized crossing the Kaipara bar in 2016, “dying doesn’t worry me”.
“I said to my girls the other day, I don’t even want to be here because I miss him so much. I’m happy to be here with my kids but there’s just a big hole. And it’s inevitable – I’m going to die of it [cancer]. There is no cure, and I could throw a whole lot of money at it but it’s not going to get me much further… maybe six weeks or six months, who knows?
“If it was available and funded, I’d be on it like a shot. I hesitate to say I don’t think my life is worth it, but I’d rather spend $7000 a month loving my life. I don’t know how long I’ve got – things could go pear-shaped tomorrow.”
She doesn’t want to think too much about the politics of it all, about the treatments she’s missing out on and the future she may not have. Antidepressants take the edge off the panic she fears may otherwise consume her, allowing her to focus instead on her books, her collections of colourful hats and scarves and costume jewellery – and on the canaries she’s babysitting that have laid three eggs.
“Life’s for living and you’ve got to find the joy. I try to do that as much as possible, I can look at my garden, I can look at the sky. And I can be happy.”
It is the sort of debate that should galvanise society, but apart from isolated controversies – for example, when the National government overruled drug-funding agency Pharmac to extend access to breast-cancer drug Herceptin in 2008, and the outcry over melanoma drug Keytruda in 2016 – many people accept that delayed access to drugs, and an unknown number of patient deaths, is simply the price we have to pay to keep prices affordable and pharmaceutical companies accountable.
But is it?
In this three-part series, North & South will examine the issues facing funders, clinicians and patients, ask whether pharmaceutical companies are villains or heroes, and, finally, lay out possible solutions for fairer access to, and cost-effective analyses of, stratospherically expensive medicines.
Northern Cancer Network director, oncologist Richard Sullivan, works in both the public and private sector, specialising in lung cancer and head, neck and brain tumours. He says while the quality of medical care is on a par, the disparity in access to medicines in the public and private sectors is wider now than it has ever been “and it’s only going to get worse”. He wants a public debate on the issue, saying most people do not fully understand the extent of the difference.
Certainly, drug-funding agency Pharmac has successfully muddied the waters, producing a paper in 2016 that ostensibly compared outcomes for Australian patients where 124 cancer medicines were funded, compared with 102 in New Zealand. Nearly 90 drugs were funded in both countries, 35 funded only in Australia and 13 were funded only in New Zealand. It concluded only three medicines funded in Australia but not in New Zealand produced meaningful gains in progression-free survival times and overall survival.
But oncologists say the “deeply flawed” study used a framework for measuring benefit that didn’t consider quality of life or side effects of treatment. Worse, if a drug was funded in both countries, the paper treated that as equal access when medicines are funded according to cancer types, and New Zealand may fund the same drug for only two types of cancer, while Australia will fund it for six.
They said that they warned Pharmac about the study’s shortcomings, but it published the paper anyway – promoting its findings in its annual report – in what the specialists regard as a deeply cynical move. “Pharmac’s use of the inferior tool [to measure benefit] has not helped ease suspicion of their motives for undertaking the study,” says Cancer Society medical director Chris Jackson.
The study rated pemetrexed for lung cancer as “providing no clinically meaningful health gains”, and it was near the bottom of their list in terms of priority. Yet Pharmac began funding the drug on September 1.
“This to me raises the question of whether Pharmac considers factors other than health gains to be important when funding a drug – presumably yes, as they have funded it. If so, why did they publish an analysis that didn’t consider the factors they deem to be important when considering funding?”
Pharmac argues it’s as transparent as it’s possible to be, given the confidentiality of the pricing deals it does with drug companies, and points to the 15 “factors for consideration” it takes into account. Applications are considered by two specialist committees (the first is made up of cancer specialists; the second, the Pharmacology and Therapeutics Advisory Committee, or PTAC, is a broader range of experts) and allotted a priority. Specialists cannot vote on an application if the medicine is used in their clinical area.
You might think a high-priority recommendation means a drug is “first cab off the rank” for funding, but North & South investigations suggest that’s not the case. For example, cetuximab, a medicine to treat head and neck cancer, gained a high-priority recommendation from the cancer specialists in 2013 and a high priority from PTAC in February 2014. Four years on, it still isn’t funded. Likewise, crisantaspase, a drug for acute lymphoblastic leukaemia, received two high-priority recommendations in 2016, and remains unfunded.
Surely that means the system isn’t working well, but, unsurprisingly, Pharmac’s director of operations Sarah Fitt disagrees. “We’ve got other medicines ahead of it that have better cost effectiveness, improved health outcomes, and are meeting a need that is not currently met. We have to look at the whole population – when we get enough money, we will fund them.”
From a political perspective, Pharmac, which was created in 1993, has been a dream come true for governments, distancing politicians from emotive funding issues and, for the most part, operating within a tightly capped budget without returning to Treasury asking for “more please”. In the past, it did that by generating around $50 million a year in savings – usually when drugs come off patent and prices drop dramatically – to fund new drugs.
That changed recently, when the agency twice applied for more money, winning an extra $184 million over four years in the last two Budgets. In 2016, this enabled it to fund the melanoma drugs Keytruda and Opdivo, and also the remarkably effective hepatitis C drug Harvoni.
But Jackson says there’s a popular perception that if Pharmac does not fund a drug, then the drug can’t be worth it. Pharmac drives that perception by repeatedly alluding to a lack of evidence for effectiveness when the latest therapy du jour fails to win funding, when that simply isn’t true, he says. The immunotherapy drugs Keytruda and Opdivo were given a low priority for funding in November 2015 before both were suddenly funded just seven and eight months later.
The problem is, says Jackson, we can’t see Pharmac’s analyses to test the truth of their claims.
“Their transparency is poor and their decision-making time frames are opaque… you’ve got a group of patients who if they don’t get the drug in a timely fashion, they die. So those unnecessary delays have quite a lot of consequence. If you’re haggling over which blood pressure drug you should fund, that’s not going to make that much difference. If you’re haggling over whether a person with melanoma gets a new therapy or not, those people die. Pharmac is very good at high-volume, low-cost drugs, but I don’t think they’re very good at low-volume, high-cost drugs.”
Given how much we lag in access, it’s surprising the sense of public outrage isn’t greater. Jackson attributes it to the national traits of being low-key and pragmatic, even among patients whose future is dire. “New Zealanders are a pretty phlegmatic bunch, pretty happy to accept their lot. I really enjoy working with my patients and they understand the limitations on the system.
“I don’t know what conversations they have when they go home, I don’t know how ripped off they feel. They say, ‘Should I spend all my energy raging against that machine, or just get on with the time I’ve got and make the most of it?’ And I think people end up reconciling themselves to that, mostly.”
So, are we too accepting? “You could say that.”
Do you? “I think you make different decisions when you’ve got cancer than when you don’t. I don’t know what decision I’d make if I were in that situation. I know what I’d do if it were my wife, but not if it were me.”
Part of the reason for a largely muted response to our lot is the fact Pharmac is highly regarded as getting a very large bang for every buck of its $870 million annual budget. Fitt says in some cases, New Zealanders pay 95% less for drugs than they cost in other countries.
“Companies get very paranoid about that price being known. Because New Zealand is tiny – we’re only about 0.1% of the market – we can get away with it. We have to hide the pricing, which is why we have quite significant rebates.”
The confidential rebates – which top $200 million a year – apply not just to the drug being funded, but across a drug company’s whole portfolio, and it’s part of the reason New Zealand’s medicine spend, as a proportion of the health budget, is so low (3.6%), compared with 10% in Australia and 11% in the UK.
Fitt points to a study published in the BMJ, formerly the British Medical Journal, in October that found most new cancer drugs authorised by the European Medicines Agency between 2009 and 2013 came onto the market without clear evidence they improved the quality or length of patients’ lives. Recent studies have called into question the outcomes of Britain’s Cancer Drugs Fund, set up in 2010 to speed up regulatory approval of the medicines, with researchers calling the fund a “massive health error”. One study, out of York University in 2015, found Britons would have had better health outcomes overall if the then £230 million spent on cancer drugs had gone into the wider National Health Service instead. So not only did the fund not help, it actually did harm, says Fitt. However, the York research was before the era of the new immunotherapy treatments widely regarded as being revolutionary in cancer care.
“There’s never going to be enough money and it’s never going to happen quickly enough for most people – particularly if you’re a patient, when everyone wants access to everything immediately,” says Fitt. “And that’s completely understandable. People get frustrated, but we are genuinely trying to do the best we can. We are not sitting here thinking, ‘Who can we be mean to?’”
Delayed access, she says, is part of the price we pay for the Pharmac model. She adds that some drugs are funded much more quickly than they are overseas.
On average, however, the Pharmac funding process is notoriously slow. A 2015 report by Medicines Australia, a lobby group for drug companies, showed that between 2009 and 2014, it took Pharmac an average of 579 days after registration to fund a new medicine – ranking us 19th out of 20 OECD countries. The UK’s 119 days ranked it fourth, Australia’s 383 days put it 13th.
Research by Auckland University cancer epidemiologist Mark Elwood, published in 2016, found that if cancer survival in New Zealand was the same as Australia between 2006 and 2010, about 12% of cancer deaths would have been avoided. It’s not possible, however, to say how much of that difference is related to medicines access.
Graeme Jarvis, the general manager of Medicines New Zealand, the lobby group for pharma companies here, believes there’s still a general lack of awareness about the gap that’s opened between us and comparable countries. “When you ask, ‘Do you think you get the same medicines as people in Australia?’ they say, ‘Yes, we do.’ When you say that actually, we’re not even close, they get quite surprised and concerned.”
A report commissioned by the group showed that in February 2017, 94 medicines awaited funding following positive recommendations from PTAC, albeit most with low or medium priority. Twelve were cancer medicines.
But even Jarvis concedes Pharmac does a “very good job” of their remit, which is to get the best health outcomes for the money it has. “Imagine what they could do with more funding and access to innovative drugs.”
While the most recent drug funding controversies have swirled around diseases such as melanoma and breast cancer, conditions such as bowel cancer, which has a lower profile, and an older age group of patients, do arguably worse.
Just ask gastrointestinal cancer specialist Dragan Damianovich. He practises in the public and private sectors, and says “the majority” of his private patients are paying for unfunded drugs.
Breast cancer specialist Vernon Harvey, who’s in the same private practice, says only around 10% of his patients do so.
Damianovich says most of his patients would pay for either bevacizumab (Avastin) or cetuximab (Erbitux), which are both funded in Australia for bowel cancer. Although the funded drugs “all have very good science behind them, the new ones give you a little bit extra”. Erbitux, for example, gives an overall survival advantage of three or four months, but in some cases, that increases to 10 to 11 months.
With Avastin, pharmaceutical company Roche gives the drug free after 11 cycles, which cost patients up to $30,000 for the medicine alone. “With the best [funded] chemotherapy drugs we use for bowel cancer, the maximum median overall survival is about 21 months. The majority of my [private] patients live longer than three to four years.
“It’s a conflict. Part of the reason I wanted to go into private was to have the full satisfaction of not being restricted to the limited number of chemotherapy options we have in public.”
Patients sometimes talk about mortgaging their home to pay for the drugs, which can cost up to $10,000 a month.
“I usually try hard to dissuade them, because I don’t think that’s the right thing to do – especially if they’re younger patients with young kids, for example. You use common sense, tell them what they can gain, and then ask, is it worthwhile? You need to be brutally honest in that situation. It’s hard.”
Damianovich also tries to counter patient perceptions that drugs are “lifesaving” when usually, they only buy time.
Richard Sullivan says apart from unfunded drugs, the differences between public and private cancer care are not usually profound in major centres, with treatment delays in public hospitals much reduced. In the northern region, delays are now “days rather than months. The difference between public and private care in reality is parking, and personality. In private, you get to choose your clinician and you get a more consistent model of care.”
Insurance companies are recognising the market potential of policies that offer six-figure sums for cancer. In May 2017, the country’s largest health insurer, Southern Cross, launched Cancer Assist, which its members can add to their policy to receive a one-off payment of up to $300,000 after a qualifying cancer diagnosis. Its Critical Illness cover is similar, offering one-off payments of up to $100,000.
Its chief of healthcare partnerships, Rebecca Ogilvie, says annual growth in cancer drug costs is expected to reach between 7.5% and 10.5%. She won’t say how many people have bought the policies, but says the average amount the insurer paid out for radiotherapy and chemotherapy last year was about 35% higher than in 2011.
NIB health insurance chief executive Rob Hennin says about a quarter of policyholders have coverage that pays out up to $200,000 or $300,000, and that option has been available for several years. Although there haven’t been large numbers of payouts, there have been big ones, including $250,000 over two years for a patient with melanoma. The coming tsunami of new cancer drugs with stratospheric price tags doesn’t alarm him. “If you can treat these diseases well with pharmaceuticals, you probably need less surgery, and that’s particularly exciting.”
While a fortunate few will have adequate cover, most of those privately insured have more standard policies, the most common of which is Southern Cross basic cover, which offers only $10,000 for non Pharmac-funded drugs.
A North & South online survey of nearly 670 people found only half had any form of health insurance. Most didn’t know whether their policy covered non Pharmac-funded medicines, and only 6% had policies that did cover them. More than a quarter of respondents said they’d consider increasing their coverage or changing their policy to one that paid for those drugs.
Insurance premiums become increasingly costly – and for some, unaffordable – as people age. This was the case for Anne Marsters, who we met at the start of this story. “When Fred was alive, we were members of Southern Cross and the premiums were half-funded through his job. I wanted to continue the policy for me, but they don’t make it easy. I cancelled because it was going to cost me $73 a week to keep it going. Lots of my elderly neighbours have cancelled theirs, too.”
Christine Manins had an AIA policy, which covered Pharmac-funded drugs administered in private, and that paid for the $20,000 it cost her to have Taxotere in 2005. The policy, which she bought about a year before her cancer was diagnosed, doesn’t cover medicines not funded by Pharmac.
Manins says her husband has never questioned her wish to get the best treatments, at whatever cost.
“Bless him, he just said, ‘I don’t know what you’re worried about – we’ll just sell the house.’” She told him that when he reached 65 in a year or so, “I’m not making you go to work anymore.” He told her, “Don’t be ridiculous.”
“He and I could have retired, but that’s all gone. I’m not complaining. We were upper middle-class and had all the dreams and expectations for retirement, but those are out for us, now. I won’t buy new clothes – I can’t do it when I’m spending all this money on me. I’m lucky, friends give me clothes and say they don’t fit them anymore. They’re probably lying, but I’ll take it and I’m grateful.”
Some have suggested she start a Givealittle page for donations, as so many do, but she refuses. “Why should I get donations when there are kids with brain tumours? If you’re going to say who needs it more, I’m not at the top. I feel so lucky to have lived this long and I can’t justify asking people to give up money when I can have a cup of coffee and live in a house I own.”
She wishes Pharmac would fight as hard for patients like her as she is fighting for herself. “If they looked at comparable countries, they’d find they are woefully behind. How do they justify that? I don’t think staying within their budget is their job – although I know that’s how they see their job. I thought their job was to try to get the best possible care for me and everyone else.”
- Next week: A family’s cancer curse, and the blockbuster drug that rescued a flagging pharmaceutical giant.
The Australian Advantage
Oncologists have compiled for North & South a list of cancer drugs funded in Australia, but not New Zealand. They say the majority of cancer treatments for advanced illness are still chemotherapy-based, for which New Zealanders have nearly equivalent access. These are mostly old, cheap and fairly effective.
The newer generation of targeted therapies or immune therapies – which are usually still on patent and far more expensive – are where the differences really stand out. Drugs with names ending in “mab” are monoclonal antibodies. Monoclonal antibodies are molecules made in the laboratory that serve as substitute antibodies to help the body’s immune system fight cancer.
Herceptin (before an operation)
Denosumab (modest benefit only)
Liposomal doxorubicin (toxicity advantage = less toxic)
Panitumumab or cetuximab
Raltitrexed (toxicity advantage)
Bevacizumab (sub-set of high-risk patients only)
Liposomal doxorubicin (toxicity advantage)
Head and neck cancer
Denosumab (modest, fewer disease complications rather than survival gain)
Dabrafenib in combination with trametinib
Chronic Lymphocytic Leukaemia
Acute Lymphoblastic Leukaemia
Sandostatin or lanreotide
User Pays – and Pays
After Jansz researched his cancer online, he asked for the test. The results were “90% positive”, indicating he would be likely to benefit from the immunotherapy treatment pembrolizumab (Keytruda).
Jansz is paying $68,000 for eight cycles of the drug, which remains unfunded by Pharmac despite burgeoning evidence of its effectiveness as a first-line therapy in metastatic non-small-cell lung cancer. In addition, he has to pay another $20,000 to have the three-weekly infusions given at a private hospital, because public hospitals will not administer drugs that Pharmac doesn’t fund.
“I am not permitted to purchase the medication, at full cost, from a community pharmacy and have it administered to me in the public hospital. I find this stricture not only utterly bizarre but fundamentally punitive.”
He says putting an intravenous drip in a patient is an elementary service. “We’re not asking for some remarkably expensive favour – all I am asking is for the most basic of hospital functions to be performed for me as should be my right as a taxpayer, and a long-serving employee of the district health board.
“I’m afraid we are seeing a fundamental shift of emphasis in the delivery of healthcare which will make us accept, with a helpless shrug, deficiencies that even Third World countries would view with concern.”
Patients who had no choice but to stay in the public sector would have to make do with standard chemotherapy – a decidedly inferior choice. “It’s a terrible position in which to find yourself: to have to deny yourself superior forms of therapy which not only hold out reasonable hope for better survival, but also have far fewer side effects. I feel patients have been let down disgracefully by the health system in which they have – and have a right to – put their faith.”
This was published in the January 2018 issue of North & South.