Hope and Despair: the Funding of Herceptin

Sharron Cole
Issue 25, August 2008

Since its arrival with much fanfare at an Oncology Conference in Florida in May 2005, the drug Herceptin (Trastuzumab) has scarcely been out of the news. It was, said its lead British investigator, "the biggest treatment development in breast cancer ... for at least the last 25 years, perhaps as big as anything we've seen". It is now a publicly funded drug, available in many countries, to women with HER2 positive breast cancer. But the funding of Herceptin has been, and continues to be dogged by controversy in many of those countries, particularly in New Zealand. Why is this and are there lessons to be learned?

In New Zealand, Pharmac is charged with oversight of government expenditure on pharmaceuticals and is the agency which negotiates the cost and availability of drugs with pharmaceutical companies on behalf of New Zealanders using public health services. The Consumer Advisory Committee is an advisory committee to Pharmac which "provides input from a consumer or patient point of view". It neither makes funding decisions about pharmaceuticals nor does it act as advocate for consumer interest groups. As a member of Pharmac's Consumer Advisory Committee, I have followed the debate about Herceptin with much interest.

Roche, the manufacturers of Herceptin, applied to Pharmac in December 2005 for twelve months sequential treatment for HER2 positive early breast cancer. The application was considered by Pharmac's Pharmacology and Therapeutics Advisory Committee (PTAC) and its Cancer Treatments Sub-Committee (CaTSOP) in early 2006. Every medicine considered for funding by Pharmac and its sub-committees is subjected to the same decision-making process and decision criteria. [1] These are:

  1. The health needs of all eligible people;
  2. The particular health needs of Maori and Pacific peoples;
  3. The availability and suitability of existing medicines, therapeutic medical devices and related products and related things;
  4. The clinical benefits and risks of pharmaceuticals;
  5. The cost-effectiveness of meeting health needs by funding pharmaceuticals rather than using other publicly funded health and disability support services;
  6. The budgetary impact (in terms of the pharmaceutical budget and the Government's overall health budget) of any changes to the Schedule;
  7. The direct cost to health service users;
  8. The Government's priorities for health funding, as set out in any objectives notified by the Crown to PHARMAC, or in PHARMAC's Funding Agreement, or elsewhere; and
  9. Such other criteria as PHARMAC thinks fit.

After applying these criteria, PTAC considered there was insufficient evidence to justify funding for the twelve month treatment and in June 2006, Pharmac announced its decision that it would not fund Herceptin at that time but it would continue to keep the drug under review.

Not only did PTAC consider there was insufficient evidence to justify the funding of Herceptin, it also expressed some concern over Roche's preferred twelve month sequential treatment. It considered that the data from the FinHer and "Sledge" studies showed that the concurrent use of Herceptin with chemotherapy (with taxanes [compounds derived from the yew tree] but prior to post-anthracyclines [effective anti-cancer compounds derived from bacteria but with high rates of adverse effects of heart damage]) was more effective than the sequential treatment. It had concerns around the cardio toxicity data and also questioned whether continuing Herceptin for twelve months following chemotherapy added any additional benefit. It advised that research was needed to compare the benefits and risks of twelve months treatment with nine weeks.

Some eight months later in February 2007, Pharmac subsequently committed to supporting the SOLD clinical trial [2] the aim of which is to compare the twelve month and nine week treatment regimes. Before a study such as SOLD is approved by an Ethics Committee, there must be a state of "clinical equipoise". In other words, there must be genuine uncertainty about which of the treatment options is superior. That the study was approved and is in progress indicates that there was insufficient evidence to indicate which duration of treatment is optimal. In April 2007, Pharmac approved the funding of Herceptin for nine weeks' treatment for HER 2 positive early breast cancer.

Funding Implications

Herceptin is one of a relatively new class of drugs called monoclonal antibodies that target individual cancers which means they can work more effectively than traditional cancer treatments. The fact that Herceptin-style targeted drugs are designed using high technology molecular biology techniques explains why they are very expensive. They also cost more because they are focused on small patient populations which means the development costs are not able to be spread over a larger disease group and thus the amount of revenue the drug can earn the manufacturer is reduced accordingly.

While PTAC and CaTSOP had definite concerns over the clinical benefits and risks of Herceptin, there was also concern over the budgetary impact if Herceptin were to be funded for twelve months. At the time, the total New Zealand cancer drugs budget was $50 million and the estimated cost of Herceptin for the twelve months treatment was $30 million. Funding Herceptin would mean either increasing the cancer drugs budget by 60% or a drastic reduction in available funds for other cancer drugs under consideration.

Some clinicians stated that other cancer patients would suffer if Herceptin patients received year-long treatment involving seventeen or eighteen intravenous infusions each. Association of Cancer Specialists Chairman Dr Andy Simpson estimated that for every one Herceptin patient treated for a year, three other chemotherapy patients could have their treatment delayed as a result. This delay would result from the additional costs and investment of staff time in pathology testing, cardiac monitoring, pharmacypreparation, and drug administration of Herceptin. Nationally, that would work out to more than one thousand other cancer patients having life-saving treatment compromised. [3]

The issue here has to do with the fair allocation of health resources as the costs of the Herceptin-style targeted drugs have the potential to overwhelm the health budget. In the immediate future, New Zealand, along with all other health services around the world, is going to have to make some difficult decisions on how it spends its pharmaceutical dollars. Herceptin is one of the forerunners in a myriad of designer drugs that have a high cost per person per year. For any of these drugs to be cost effective large health benefits will need to be proven. Even then, it has been said that they will not be economically viable unless there is a significant drop in the price of the drugs.

Given that the cost of Herceptin currently varies hugely from country to country and even within a country, [4] it appears there is room for negotiation over price. Pharmac has already proven itself to be good at this. Paradoxically, however, it is this varying price, and the ability and readiness of countries like New Zealand to negotiate over prices, which makes it difficult to assess the need and then work out the cost of that need; the true costs to the pharmaceutical companies and therefore a "fair price" are simply not known.

One solution to the problem of expensive, targeted medicines may be pharmacogenetics, the study of how genes influence an individual's response to drugs. It seems sensible to identify which individuals with what particular genetic signatures respond to what drugs so that money is spent wisely. But pharmacogenetics also raises many ethical questions. Should money be spent on such research when millions around the world are still dying from lack of access to drinkable water? Will it be the case that only the wealthy will have access to the necessary testing? Will there be intrusions on privacy and the loss of autonomy? Will individuals be excluded from health insurance, employment, and even the right to be born because of what their genetic testing shows?

The Media Influence

While Pharmac was considering the funding of Herceptin, there was a sophisticated and sustained campaign in NZ and around the world which extolled the benefits of Herceptin while simultaneously presenting emotionally charged stories of women who were desperate for access to the 'wonder' drug. The New Zealand Parliament was told " Herceptin could prevent at least one cancer death a day." [5] Decision makers in Pharmac were accused of being "Tight fisted holders of the Pharmac [public] purse." [6] Overseas, in England, The Sentinel ran the headline: "How many more women must die before the decision is made to license Herceptin?" [7]

A British woman, Ann Marie Rogers was quoted as saying: "I feel the refusal [to fund] of Herceptin is as though I have been given a punishment like a death sentence. With my prognosis, waiting for the cancer to return is like waiting on death row. Herceptin has given me my life back and enabled me to look forward without having a constant fear when the cancer is coming back." [8] Statements claiming that patients had a 50% chance of their cancer not returning if they had Herceptin and that they had an 80% plus chance of dying from cancer if they did not receive it were commonly seen.

The researched facts are somewhat different to the media claims. Of every one hundred women treated with HER2 positive breast cancer, seventy seven without Herceptin will be alive and disease-free two years later and with Herceptin, eighty six. Statistically this means that of the twenty three women who would have had a return of their cancer, nine would be disease-free if they had Herceptin – in other words, a 39% risk reduction. But as 77% of the women would not have had a return of their cancer anyway, the absolute risk reduction is 9%. Because it is not known which nine women will benefit, all one hundred women must be treated, at the average cost of $70,000 per woman if the Roche twelve month treatment is accepted.

Kate Law, Cancer Research UK has stated that "It's essential not to create a climate of false hope for women, where Herceptin is seen as a miracle cure suitable for everyone with breast cancer." [9] But it seems that this has in fact happened. The publicity has done little to help women with HER2 positive breast cancer to understand their own chances of survival. In fact, in many cases it has given false hope by overstating the level of protection offered. Even with Herceptin, there are still fourteen women in one hundred who will have a recurrence of their breast cancer within two years. And it has brought despair to those women who have not received Herceptin because they believe they have been handed a death sentence whereas the facts show that seventy seven out of these one hundred women will still be disease-free in two years.

The way in which the debate about Herceptin was presented in the media has been carefully scrutinised. New Zealand journalist Gordon Campbell argues that the media approach to reporting Herceptin has been characterised by the personalisation element. [10] Rather than analyse policy to ascertain the balance between Herceptin's costs and the benefits it may deliver, it tells the story by way of accounts of personal tragedy. Campbell describes this approach as the relentless pursuit of the human interest angle, one which elevates personal anecdotes above policy, puts victim narrative ahead of analysis, and focuses on outcomes far more often than it does on causes.

Likewise, an article in the Journal of the Royal Society of Medicine [11] analysed the United Kingdom national newspaper coverage of Herceptin and concluded:

Newspaper coverage of Trastuzumab has been characterized by uncritical reporting. Journalists (and consumers) should be more questioning when confronted with information about new drugs and of the motives of those who seek to set the news agenda.

A similar analysis [12] of the role played by the media in the subsidisation of Herceptin in Australia found that the most common news frame was "desperate, sickwomen in double jeopardy because of callous government/incompetentbureaucracy". The article discusses Jonsen's 'rule of rescue' where people feel compelled to rescue identifiable individuals who are facing avoidable death without thinking too much about issues such as opportunity costs. It concluded:

News frames invoking key tenets of the 'rule of rescue'dominated television discourse on Herceptin. Clinicians, patients,their families and patient advocacy groups invoking the ruleof rescue can increase the likelihood of achieving their objectiveof gaining access to expensive healthcare such as pharmaceuticals.Rational, criteria-based public health policy will find it hardto resist the 'rule of rescue' imperative.

A media approach characterised by the personalisation element, an uncritical acceptance of drug information, a poor understanding of relative and absolute risk, and a blurring of the difference between non-recurrence and survival has meant that despite the huge publicity around Herceptin in New Zealand, relatively few people can separate the myth from the reality of this drug.

The "Squeaky Wheel" and Equity issues

The advocates for the funding of Herceptin in New Zealand are articulate, well organised, well resourced and well connected and they have used these assets to conduct an effective campaign. This is what any lobby group would be expected to do. Any single disease group has a right in a democratic society to promote the interests of its members and decision making bodies such as Pharmac have a responsibility to listen to them.

Pharmac, however, has to make decisions on behalf of all New Zealanders. Many disease sufferers in New Zealand have no interest group lobbying on their behalf and even if they do, few have the assets of the breast cancer lobby group. Linda Thornton, the long time crusader for the funding of growth hormone to treat Prader-Willi Syndrome said: "We're a small group and not noisy and not cute. Fat's not sexy. We haven't got a limp or a wheelchair that might pull at the heartstrings". [13]

So how can New Zealand meet the diverse, growing and often competing health needs of New Zealanders? There is the argument that health funding, especially that of pharmaceuticals, is inadequate and that it needs to be further increased. The massive costs of the Herceptin-style targeted drugs and the fact that they often treat small patient populations has already been mentioned. New Zealand has an aging population and there are exponentially growing costs in both treating age-related conditions such as osteoarthritis and cataracts and in providing care for the aged, both in the community and in residential care.

There is also the burden of disease associated with the rise in obesity, and the not unreasonable argument that the cost of a stomach-stapling operation at $25,000 would easily be recouped by the saving on the health care costs associated with obesity-related diseases such as diabetes and high blood pressure. Indeed, it has been estimated that about 200,000 people would benefit from the surgery. This is a number far in excess of the New Zealand health service capacity to treat, let alone fund.

Decisions about health funding all involve difficult tradeoffs and whoever controls health funding needs to make these hard decisions. When decisions are made to fund or not fund a particular drug such as Herceptin and for a particular length of time, the issue is never just about "saving" money; it is about distributing money fairly. As Dr Daniel Hind, research scientist at Sheffield University has said: "Remember, every time [the] health care system pays for one person's treatment, they are denying a treatment to somebody else. This is the principle of 'opportunity cost'. [14]

The Debate Continues

In February 2008, eight women dubbed the 'Herceptin Heroines' took a case to the High Court, challenging on twenty eight grounds Pharmac's decisions on the funding of Herceptin. The judgment of Justice Gendall [15] dismissed all the challenges to Pharmac's decision bar one; the fact that Pharmac had not consulted adequately on its initial decision of 26 July 2006 to decline twelve month funding of Herceptin. Gendall concluded that Pharmac should re-open consultation which it subsequently did. On 7 August 2008, Pharmac announced that it had again declined the application from Roche to fund Herceptin for the twelve month treatment on the grounds of clinical efficacy, cost effectiveness and patient safety. However, it remains open to re-evaluating its position if new evidence becomes available, particularly the results of the SOLD study. [16]

Despite the equipoise of evidence between treatment of Herceptin for either twelve months or nine weeks, the High Court decision, the funding of Herceptin for nine weeks for the treatment of early stage HER2 positive breast cancer and Pharmac funding support for the SOLD trial, feelings remain high over the twelve month treatment not being publicly funded in New Zealand. Communities continue to be asked for money to fund women for the longer treatment periods - and they continue to respond generously.


As a member of Pharmac's Consumer Advisory Committee, it is not my role to push the interests of lobby and single disease interest groups. It is part of my role, however, to see that Pharmac remains transparent and as true to its decision-making criteria as is possible. If in New Zealand we revert to the squeaky wheel principle of funding, we would be visiting a great injustice upon all those other people in the community whose case for funding is at least as meritorious as the Herceptin one but who lack the funding, the compellingly sympathetic cause, the pharmaceutical company support and publicity skills to pull heart strings, generate media publicity and jump funding queues.

The story of the funding of Herceptin has been an interesting and controversial one. It is a story of competing health interests, of threats to public health funding by skyrocketing pharmaceutical treatments and of huge media interest, characterised by the "rule of rescue". It is also a story of hope and despair, too often founded not on fact but on myth. It should also remind us of how important it is to maintain a rational pharmaceutical funding policy, not one where we allow the media, single interest groups or pharmaceutical companies to prioritise either health care issues or funding.


Sharron Cole has an extensive background in health research ethics and community health.

She is a current member of Pharmac's Consumer Advisory Committee.


[1] http://www.pharmac.govt.nz/healthpros/PTAC

[2] http://www.pharmac.govt.nz/2008/05/05/Herceptin%20timeline.pdf

[3] Sunday Star Times 4 March 2007 "Pharmac's lone path"

[4] Sunday Star Times 18 May 2008 "Patients forced to hunt drug bargains".

[5] NZ Herald, 6 April 2006

[6] North and South, March 2006, "Making the medicine go down"

[7] The Sentinel, 29 September 2005

[8] BBC News Channel, 6 February 2006, http://news.bbc.co.uk/1/hi/health/4677086.stm

[9] http://news.bbc.co.uk/2/hi/health/5058952.stm

[10] Bruce Jesson Memorial Lecture 2006, Gordon Campbell, 21 November 2006, http://www.brucejesson.com/lecture2006.html

[11] http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=2270248

[12] http://jrsm.rsmjournals.com/cgi/reprint/101/6/305

[13] North and South, March 2006, "Making the medicine go down"

[14] Sunday Star Times, 4 March 2007, "Pharmac's lone path"

[15] Walsh vs Pharmac, Judgment of Gendall J, 3 April 2008

[16] Herceptin media release, 7 August 2008, Pharmac