Providing new cancer medicines extends lives, keeps people out of hospital and saves taxpayers' money, a new study has found.

These findings are in line with what would be expected in the New Zealand health system, in which the Government's drug buyer Pharmac requires greater health benefits and/or cost-effectiveness of the medicines it approves.

The new study comes after Pharmac has started paying for the expensive new drugs Opdivo and Keytruda for patients with advanced melanoma.

The new analysis quantifies the extent of health and cost benefits of new cancer medicines across the spectrum of the disease.


Pharmaceuticals industry group Medicines NZ commissioned US economist Professor Frank Lichtenberg, of Columbia University, and Jenni Williams-Spence to make the new measurements.

They found that between 1998 and 2010, new cancer medicines in New Zealand had increased the survival rate at five years from diagnosis by 5.6 per cent for adults and 12.9 per cent for children.

"In the absence of new cancer medicines, the five-year survival rate for all adult cancers would not have increased; it might even have decreased slightly," says the report, to be discussed at a dinner at Parliament tonight hosted by Health Minister Jonathan Coleman.

The study found wide variations between different types of cancers' five-year survival rates. In prostate cancer, for instance, the rate had increased by 9.2 per cent, while for Hodgkin lymphoma, it had increased by just 1.5 per cent.

Funding of one new medicine for any particular cancer reduced cancer mortality by 5 per cent, and hospital stays by 5.6 per cent.

Cancer medicines approved from 1986 to 1997 are estimated by Lichtenberg and Williams-Spence to have reduced the number of years of life lost to cancer before age 70 - the age below which death is considered premature - in the New Zealand population by 10,556.

"If there had been no new cancer medicines, premature mortality would have been 29 per cent higher in 2011 alone.

"If no new medicines were approved from 1991-2002, the number of cancer-related hospitalistations in 2011 would have been 23 per cent higher."

This would have seen increased hospital expenditure of $28 million on cancer patients. This potential expenditure was almost the same as the total investment in all cancer medicines dispensed to cancer patients below age 70 in 2008.

"For every dollar invested in a new cancer medicine, at least one dollar was saved downstream in healthcare systems."

"The impact of new cancer medicines in New Zealand could have been much greater. However, over the time period analysed, the country had both a smaller number of these new cancer medicines funded and a larger lag period before the new funded cancer medicines became available to patients and clinicians compared to other countries."

An Australian study last year found that New Zealand was 20th of 20 OECD countries in terms of timely access to state funding of new medicines. OECD data puts New Zealand's spending on drugs well below the average of developed countries.

But Pharmac said a study it commissioned found New Zealanders are getting access to the best cancer medicines available. "Most of the additional medicines funded in Australia but not in New Zealand don't offer health gains that would be considered clinically meaningful by international cancer specialists in recent research."

Medicines NZ chair Heather Roy said, "We are delighted to host Professor Lichtenberg, whose ground-breaking research demonstrates the overwhelming benefits innovative medicines have on patients and the healthcare system."