Is $130k too much for three extra months of life?


Putting the cancer drug nivolumab on the PBS is no doubt welcome news to terminally ill people with lung or renal cancer.

Minister for Health Greg Hunt says it will allow more than 4500 Australians a year to be given third-line therapy with a drug that would otherwise cost more than $130,000 per year per patient.

It might seem a brutal and heartless question to ask whether this is actually value for money. But it needs to be asked.

Nivolumab (Opdivo) is the first of a new class of ‘checkpoint inhibitor’ antibody treatments that disable the protein barriers that cancer cells use to resist attacks from the immune system.

By inhibiting the activity of the programmed cell death-1 (PD-1) protein on T-cells, they allow the white blood cells to once again recognise and neutralise malignant cells.

In practice, this means that  some people with cancers such as squamous non-small cell lung cancer may gain a few additional months of life.

In the application to have the drug listed on the PBS, the data provided for nivolumab show that it increased the overall survival of patients by about 25% at two years compared with those who took a comparator drug, docetaxel (Taxotere).

You can put this in absolute numbers. For every 100 patients treated, 16 more would be expected to be still alive at 18 months if treated with nivolumab rather than docetaxel.

It’s important to note that the benefit of checkpoint inhibitors is only seen in a subset of people whose cancer cells are positive for the PD-1 protein. In lung cancer the drugs may help about one-quarter of the 10,000 Australians with the condition who die each year.

So in terms of overall numbers, this PBS listing which, according to Mr Hunt, will cost about $100 million a year, is helping a very small number of patients. To put that in context, the PBS annual budget for 20 million Australians is less than $10 billion a year.

However, Mr Hunt is not going it alone with his commitment. He is accepting the recommendations of the PBAC. In very loose terms, drugs are generally not put on the PBS unless the cost of an additional quality-djusted life-year (QALY) is less than $50,000.

With these drugs, the QALY was calculated to be between $70,000 and $105,000. There were other factors — including the “high clinical need” of patients with no alternatives, which meant the PBAC concluded that nivolumab was worth funding at the price eventually negotiated with the drug company.

But it’s interesting to note that the PBAC’s UK counterpart, the National Institute for Health and Care Excellence, rejected the drug in 2016 on account of its high cost.

Australia is fortunate to have an independent expert committee that can take a critical look at the economic benefits and risks for high-cost drugs such as nivolumab.

It puts Australia in a strong bargaining position to be able to negotiate the price of pharmaceuticals at a national level based on evidence, rather than leaving decisions in the hands of pharma companies, health insurers and politicians.

Historically, the huge costs under the PBS have been blockbuster drugs that are prescribed to hundreds of thousands of patients — statins, SSRIs, antihypertensives.

But we are now entering a new era of high-cost drugs for very specialised conditions. It will be interesting to see what this means for the future of the PBS, given its huge importance to the healthcare of all Australians.