Pharmac could be getting a significant funding boost to allow it to fund the melanoma drug Keytruda, Prime Minister John Key has hinted.

Labour has said it would direct Pharmac to fund the drug, but Mr Key today indicated any potential decision would be left largely up to the agency.

That would mean a large amount of extra funding would be needed, as Pharmac had other priorities for any extra money.

"I don't think it is impossible to get Pharmac to fund Keytruda. I think the issue is that Pharmac would say that if we give them a bit more money, there are other drugs that they would see where the efficacy is higher - not in melanoma, but in other areas."

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[Health Minister Jonathan Coleman] has got advice from his officials and ultimately from Pharmac.

As it currently sits, they would say there are other, bigger priorities, and they are not ruling out, and we are not ruling out, potentially them getting the resources to do that.

"Pharmac's experts committee last week granted Keytruda [pembrolizumab] low-priority status because of uncertainty about its benefits and its high cost - about $300,000 a patient for two years' treatment.

Labour leader Andrew Little and health spokeswoman Annette King have said a Labour Government would direct Pharmac to fund the drug if they won the election in 2017.

Pembrolizumab was used in Jimmy Carter's treatment for the four spots of cancer in his brain. He declared today that his latest MRI shows him to be cancer-free.

It is state funded in Australia and in Britain.

"It is heart-breaking reading correspondence I have received from people with melanoma who are desperate for treatment or from people who know someone with it and are begging for help," Mr Little said.

"That shouldn't be happening in a country that once prided itself on its world-leading health system."

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In May, it was confirmed that Pharmac's combined pharmaceutical budget (CPB) would be increased by $5 million to $800 million. In the previous year's Budget it was kept at $795 million

The $5 million increase was less than the $11 million Pharmac had asked for.

As well as the pharmaceutical budget, Pharmac says it uses $40 to $60 million of new funding each year, which is freed up through price concessions.

Mr Key said Keytruda was part of the wider development of biologic drugs, which were both extremely effective and expensive.

The advancements would necessitate a close look at Pharmac and its budget, he said.

"It is a great thing, it extends our life ... but the costs for the Crown are rising, and they will continue to rise."

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Melanoma is New Zealand's fourth most commonly registered cause of cancer with 2300 new cases each year. 350 people die of it each year.

National politicised the funding of Herceptin in the 2008 election campaign, promising to fund a 12-month course of the dug used in the treatment of breast cancer instead of the nine-week treatment Pharmac was previously funding.

Pharmac's combined pharmaceutical budget for the year ended June 30

• 2016 - $800 million
• 2015 - $795 million
• 2014 - $795 million
• 2013 - $783.6 million
• 2012 - $777.4 million
• 2011 - $706.1 million
• 2010 - $693.8 million
• 2009 - $653 million
• 2008 - $635.4 million