UPDATED: 5.45PM An new generation melanoma drug is likely to be funded by Pharmac after a $39 million boost for the drug-buying agency’s budget was confirmed for next year.

LISTEN ABOVE: Health economist with Otago University Dr Tracey Sullivan talks to Rachel Smalley

Prime Minister John Key and Health Minister Jonathan Coleman confirmed an increase in funding in a pre-Budget announcement at Pharmac's offices in Wellington this morning.

Pharmac also announced it was opening consultations on seven new treatments across a range of health areas, including on Opdivo, a drug for advanced melanoma.

It now has the money to fund all seven treatments in the long-term, Pharmac confirmed. About 350 patients a year will have Opdivo funded for them each year, it expects.

Health economist with Otago University Dr Trudy Sullivan told Rachel Smalley the extra money means more drugs for more people.

But said it depends on how far those extra dollars will go.

"But if say Keytruda had been funded that might have been $30 million a year, so 39 million isn't going to go too far. So it really depends on the drugs that Pharmac are looking at and the cost they can get it at."

Budget 2016 will boost Pharmac's budget by $124 million over four years. The Government said DHBs would also give an extra $11 million towards Pharmac's budget next year.

"The Government's extra investment gives Pharmac more options on new medicines it can fund. It's up to Pharmac to make these decisions," Dr Coleman said.

But Labour's health spokesperson Annette King said figures from Treasury show that isn't enough.

"It should be 103 million. If you take into account the cost pressures there've been and also the demographics."

Other drugs to be consulted on by Pharmac include for hepatitis C infection and brain tumours. Funding could kick in as early as July 1.

Today’s announcement confirms earlier statements by the Government strongly hinting that Pharmac would be getting more money in the May 25 Budget, which would enable a drug like Keytruda to be funded.

Labour has said it would direct Pharmac to fund a melanoma drug, but Mr Key has previously said any potential decision would be left largely up to the agency.

That would mean a large amount of extra funding would be needed, as Pharmac had other priorities for any extra money.

Dr Coleman met melanoma survivors, patients and supporters outside Parliament in March, and helped accept an 11,000-signature petition calling on the Government to boost Pharmac's funding so it can fund melanoma treatment.

Patients are having to raise hundreds of thousands of dollars to pay for drugs, and some of those present at the petition hand-over pushed for greater urgency.

Petition organiser and melanoma survivor Leisa Renwick is formally presenting the petition to Parliament’s health committee today.

Keytruda is state funded in Australia and England.

The Government does not pay for any of the new treatments for melanoma that have become available over several years. It pays only for chemotherapy, which is widely considered of little benefit against inoperable, advanced melanoma.

Last week Opdivo (also called nivolumab) was approved for the treatment of advanced melanoma and two types of lung cancer.

Opdivo is the rival of Keytruda, the melanoma drug which some New Zealanders are paying tens of thousands of dollars to receive because state drug-funding agency Pharmac has decided that funding Keytruda is a low priority. Keytruda does not work in all patients, but some say it has saved their lives.

Both drugs take the same biological approach, which has been described as "taking the brakes off the immune system". They interfere with a tumour's ability to hide from the immune system, allowing the immune system to get on with its job of recognising and killing cancer cells.

NEW MEDICINES CONSIDERED

Following a funding boost by the Government, Pharmac has opened consultation on funding:

# Opdivo (nivolumab) for advanced melanoma

# Harvoni and Viekira Pak for hepatitis C infection

# Azithromycin for bronchiectasis in children

# Temozolomide for brain tumours and neuroendocrine tumours

# Rituximab for nephrotic syndrome in children

# Oestradiol patches for menopausal women