Don’t Blame Pharmac

Keytruda is a new immune-oncology drug to treat advanced melanoma released recently by Merck Group at a cost of over $10,000 per month, per patient. Yet again we have a new cancer treatment that is prohibitively expensive released onto the market. Yet again we have clamouring for the government via Pharmac to shell out the extortionate amount of money required to procure the drug.

Of course the government should fund the drug, as it should fund any treatment proven to be effective in treating illness or disease. However the money will have to come out of an already stretched health budget or increased taxes. And it is totally unnecessary. The drug, like most new and effective treatments, is grossly overpriced in relation to the cost of production.

Those pressuring the government should spare a thought as to why the drug is so expensive in the first place. Merck Group, the company with the marketing rights to Keytruda, reported an after tax profit of 1.2 billion Euros in 2014, according to their annual report. This should be a clue.

Merck Group, as with other pharmaceutical companies, exist not to advance public health, but to make money for their shareholders and directors. They buy or develop life-saving drugs because they can make money out of them.

And this is nothing to do with free trade or market forces. These big corporations have managed to rig the system. They have successfully lobbied for a patenting system for new discoveries which is virtually a license to print money. No one else can use the knowledge until the patent expires, and even then only slight changes to the drug can see it patented for a further lengthy term.

Merck Group did not develop Keytruda. They bought the rights to this drug off Pfizer for (US) $850 million because it was a financially sound investment.

It is worth noting that with most medical research, the preliminary research is done in publicly funded universities and research centres. The big players only step in when something becomes commercially viable.

This is a situation that has been exacerbated by the so-called ‘trade treaties’ New Zealand insists on signing up to. These treaties have precious little to do with trade. They are about securing legislation that protects monopolies rights to make a profit out of anything and everything – around the globe.

The bad news is that the costs of new medicines will only get worse under the latest agreement – the proposed Trans Pacific Partnership. The text of the TPP contains enough ambiguity in its Intellectual Property provisions to result in countries being pressured to provide market exclusivity for more products, or to lengthen the period of protection. And the longer the patent period, the more expensive medications are for governments and patients.

So don’t blame Pharmac. And don’t blame the government either, except for buying into the patenting scam and signing us up to deals like the TPP.

Insist that the government reject the TPP. Insist that knowledge and information that affects the common good is placed in open source so that it is available to anyone anywhere free of charge. That way we will be able to afford new cancer treatments and so will everybody else.

Otherwise get used to the idea that the most advanced medical treatments will only be available to those who can pay. This is already the case in some parts of the world. It is an entirely preventable tragedy and there is no excuse for it.

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