Anger at cancer drug tax
‘‘There must be hundreds of us around the country on these sorts of drugs that are not funded.’’
John Mitchell, cancer patient
A Nelson man with a rare cancer is concerned that the Government is taking millions of dollars in tax on expensive unfunded medication that many patients like him need to stay alive.
John Mitchell noticed while paying for two months’ worth of cancer medication recently that the GST component on his $14,800 bill was $1900.
‘‘I thought, ‘Cheeky blighters, this is actually outrageous,’’ Mitchell said. ‘‘Not only is the Government not funding the drugs, but they are creaming off quite a significant sum.’’
Mitchell has mantle cell lymphoma, an aggressive, rare cancer of the white blood cells. After his tax discovery, the 78-year-old has been lobbying the Government for a tax exemption on unfunded drugs.
He said he didn’t want to highlight his own case, but knew there were others who were struggling to afford medication that wasn’t funded, in order to survive.
‘‘There must be hundreds of us around the country on these sorts of drugs that are not funded by Pharmac or by anybody else, from whom the Government is making millions of dollars in GST.’’
In the last 10 years, Mitchell and his wife have spent roughly $130,000 on the drugs needed to fight his lymphoma. In the last year alone, they forked out $88,800 for the targeted treatment Ibrutinib, and $11,582 of that was tax.
Mitchell wrote to several ministers, including Prime Minister Jacinda Arden, Health Minister David Clark and Revenue Minister Stuart Nash, to ask about a GST exemption on unfunded medication.
‘‘Not only is the Government not funding this treatment, but it is, in a sense, benefiting from the considerable GST it is levying on each transaction,’’ he said.
He was shocked to receive a response from Clark a month later, saying he had been advised by Inland Revenue officials that allowing an exemption for one type of goods or service, such as cancer medication, would lead to other such requests. ‘‘Allowing exemptions would also likely lead to an increase in taxes elsewhere to recover the loss of revenue,’’ the letter read.
Mitchell said he thought that was an ‘‘utterly outrageous statement’’, as it implied that the Government
was dependent on tax from people who were ‘‘otherwise doomed’’.
He said the Government could at least offer a concession to those who were still income earners, by making the GST able to be claimed on an annual tax return. A spokesman for Clark said it ‘‘would not be appropriate for individual ministers to weigh in on tax policy’’.
The advice about the impact on the tax base in Clark’s letter referred to the effect of multiple exclusions, rather than single exclusion for cancer drugs, the spokesman said.
A spokeswoman for Nash said there were no plans to change the GST system.
‘‘People will have differing views about what goods or services merit exemption from GST. Applying GST with minimal exceptions ensures that the tax is as fair as possible, as it applies equally to everyone.’’
Mitchell was diagnosed with stage four mantle cell lymphoma in 2009. He had several rounds of chemotherapy, which gave him temporary respite, but he was told to expect relapses and that he might live for another five years.
More than 10 years on, Mitchell has outlived that prognosis but has relapsed on four occasions. The drugs become ineffective as the cancer progresses, so with each relapse, a different drug or combination of them is
required to gain further temporary remission.
The drugs he is currently on, Venetoclax and Ibrutinib, are funded for certain conditions, but not relapsing mantle cell lymphoma.
Mitchell said that at a cost of $1300 a day for private patients, Venetoclax was ‘‘fiendishly expensive’’ and ‘‘impossible to contemplate’’.
His haematologist successfully made an application to the manufacturer for Mitchell to take part in its compassionate treatment programme. He receives the drug at no cost provided his cancer’s progression is recorded in the company database for research.
Ibrutinib costs $14,800 a month, and Mitchell is also on a compassionate programme that offers a 50 per cent reduction in the cost.
‘‘If the companies can’t be persuaded by your doctor, then you are out in the cold. You either cough up the dough or you fade out.’’
In September, the Government announced an extra $60 million for Pharmac to fund new medicines, including cancer treatments. It has since funded five new cancer drugs – but neither of the drugs Mitchell needs were covered. He said there were still
‘‘vast gaps in the system’’.
Pharmac director of operations Lisa Williams said Pharmac did not have data about medicines funded in New Zealand by third parties.
If a certain treatment was not funded for a patient, doctors could apply to Pharmac for that individual to receive it, she said. They must have ‘‘exceptional clinical circumstances’’ and have tried all existing funded alternative treatments, and the treatment must not have already been considered for funding.
Venotclax is currently funded for untreated and relapsed chronic lymphocytic leukaemia.
Ibrutinib is not currently funded. There are three current funding applications, one of which is for relapsed and refractory mantle cell lymphoma.
Williams said Pharmac could not provide a time frame on when a decision would be made on the funding of ibrutinib for use in patients with refractory mantle cell lymphoma.
‘‘The amount of funding available, the health benefits, the success of negotiations with suppliers, and the priority of other funding applications being considered, all influence the relative priorities of funding decisions.’’
Leukaemia & Blood Cancer New Zealand CEO Peter Fergusson said he was aware of blood cancer patients who had relapsed and were self-funding their medication, but the exact number was not known.
For Mitchell, the drugs have given him a quality of life that enabled him to continue working over the last decade.
He and wife Hilary are historians and run a social research consultancy. Between them, they have published a number of books, including a four-volume history of Ma¯ ori in Nelson and Marlborough.