American James Allison and Japan’s Tasuku Honjo have won the 2018 Nobel Prize for Physiology or Medicine for game-changing discoveries about how to harness and manipulate the immune system to fight cancer.

The scientists’ work in the 1990s has since swiftly led to new and dramatically improved therapies for cancers such as melanoma and lung cancer, which had previously been extremely difficult to treat.

“The seminal discoveries by the two Laureates constitute a landmark in our fight against cancer,” the Nobel Assembly at Sweden’s Karolinska Institute said as it awarded the prize of nine million Swedish crowns $US1 million ($A1.4 million).

“Allison and Honjo showed how different strategies for inhibiting the brakes on the immune system can be used in the treatment of cancer,” it said.

The treatments, often referred to as “immune checkpoint therapy”, have “fundamentally changed the outcome for certain groups of patients with advanced cancer”, it added.

Medicine is the first of the Nobel Prizes awarded each year.

The prizes for achievements in science, literature and peace were created in accordance with the will of dynamite inventor and businessman Alfred Nobel and have been awarded since 1901.

The literature prize will not be handed out this year after the awarding body was hit by a sexual misconduct scandal.

Allison and Honjo’s work had both worked on proteins that act as brakes on the immune system – preventing the body and its main immune cells, known as T-cells, from attacking tumour cells effectively.

Dr Allison, professor at the University of Texas in the United States, worked on a protein known as CTLA-4 and realised during his work that if this could be blocked, a brake would be released, unleashing immune cells to attack tumours.

Dr Honjo, professor at Kyoto University since 1984, separately discovered a second protein called PD-1 and found it too acted as an immune system brake but with a different mechanism.

The discoveries led to the creation of a multibillion-dollar market for new cancer medicines.

In particular, drugs targeting PD-1 blockade have proved a big commercial hit, offering new options for patients with melanoma, lung and bladder cancers.

US drugmakers Merck & Co and Bristol-Myers Squibb currently lead the field after winning drug approvals in 2014 but Roche, AstraZeneca, Pfizer and Sanofi are also fielding rivals.

Sales of such medicines, which are given as infusions, are expected to reach $US15 billion this year, according to Thomson Reuters’ consensus forecasts and some analysts see eventual revenues of $US50 billion.

Thomas Perlmann, Secretary of the Nobel Committee of the Karolinska Institute told the news conference he talked to Honjo by phone just before the announcement.

“Honjo sounded extremely pleased,” Mr Perlmann said. “He seemed rather surprised and expressed very clearly how pleased he was with the prize and also … with sharing the prize with Allison.”