A drug to treat a rare stomach and bowel cancer will be subsidised after being listed on the Pharmaceutical Benefits Scheme.

People suffering from advanced gastrointestinal stromal tumour will be able to buy the drug Qinlock for at most $41.30 per script from December, Health Minister Greg Hunt announced on Sunday.

Previously, it could cost more than $179,900 for each course of treatment.

The condition is a rare type of cancer found in the gastrointestinal tract. Tumours are most common in the stomach and small intestines but can be found in any part of the digestive system.

The oral medication will be available to people whose condition is worsening despite other treatment, or who cannot tolerate other therapies already listed on the PBS.

It works by slowing down the growth or spread of tumour cells.

The listing is the first for this condition in over a decade.

Oncologist John Zalcberg, who heads up Monash University's Cancer Research Program, said the therapy can "buy patients more time".

"The market price of this therapy has meant that until now, it has been out of bounds for most people," he said. "This PBS listing will be welcomed by many Australian patients and their families."

Rare Cancers Australia chief executive Richard Vines described the occasion as a "red-letter day" for those suffering from the cancer.

Patients previously had no more treatment options once other therapies failed, he said.

"Qinlock offers hope, it offers time and it offers a future that otherwise they would not have had," Mr Vines said.