With a US Trade Deal Threatening NHS Drug Prices, could Public Pharma Save Us From Big Pharma?

by Sammy Luney

27 February 2020

(Anna Shvets)

With Britain officially having left the European Union at the end of January, and with trade negotiations currently underway, we should all be worried about the impact a deal with the United States could have on NHS drug prices.

The US pharmaceutical industry has long resented the fact that the NHS pays far less for its drugs than providers of healthcare in the States. Insiders have indicated that Donald Trump may demand this changes as a condition of any deal, in a move that could make medicines up to seven times more expensive to the NHS.

With this in mind, it is imperative that we continue to demand increased public involvement in pharmaceutical provision. During the 2019 election cycle, Jeremy Corbyn’s Labour party provided a blueprint for what this might look like, we must make sure this is not forgotten.

The NHS spends over £18 billion a year on pharmaceuticals, with more than 80% of this going on generic medications (those which are no longer covered by patent). This is a substantial portion of the total predicted £134 billion NHS budget for 2019/2020.

Although the NHS’s enormous drug spend offers plenty of lucrative opportunities to big pharma, the public health service isn’t as lucrative as the industry would like. The NHS benefits from cheaper drug pricing than other first world countries for multiple reasons, but mainly because it negotiates as one powerful central body. It is also free to prioritise generic or cheaper medication when necessary. For example, the local NHS trust in which I work as a junior doctor has recently switched from Apixaban, a blood thinning daily medication, to the equally effective but far cheaper Edoxaban. 

(Lily A/ Flickr)

The problem with big pharma.

Despite its negotiating advantage, the NHS is far from spared the global issues that privatised pharmaceutical provision entails.

Big pharma follows the profit-seeking logic of any private firm. One of the contradictions of free market capitalism as a system of allocating resources is that what is socially useful and what is privately profitable do not always overlap.

A relevant example of this is the lack of innovation – ironically, one of the buzzwords used to justify private sector dominance in pharmaceuticals – when it comes to desperately necessary medications such as antibiotics. We have not had a novel antibacterial mode of action developed for 35 years, which is unbelievable in a time of advancing antimicrobial resistance and superbugs. But far from redoubling their efforts in this area, pharmaceutical giants such as Pfizer and Novartis have started downsizing or even completely closing their antibiotic divisions, simply because they’re not very profitable. Given the impending threat, this development should be terrifying to the public.

Antibiotics are unpopular with a profit-seeking pharmaceutical industry because if they are successful, they are not needed again. A course of antibiotics lasts between three and seven days – it’s not exactly a money spinner. Instead, the industry focuses on chronic illnesses and lifestyle diseases that affect the far more lucrative markets in the global north, such as combination inhalers for chronic lung conditions.

Another branch of pharmaceuticals that are sorely needed, yet now being ignored after decades of failure, is antidepressants and antipsychotics, with big firms again simply disbanding and underfunding these divisions, because they lack the powerful backing of charities and public-private lobbying groups that instead tend to focus on diseases such as cancer, heart disease and dementia. Without adequate financial backing, vulnerable patients who could benefit from innovation, risk being ignored.

Instead, big pharma turns its attention to shorter term profits rather than riskier novel medications. It focuses on so-called ‘me-too’ drugs – new medications that are biochemically similar to successful existing medications – with the aim of convincing licensing bodies and healthcare professionals to use a newly patented medication as opposed to older, cheaper generics. Doctors and medical students are often invited to ‘teaching sessions’, in which pharmaceutical representatives try to flog these new drugs.

(Anna Shvets)

Medicines for the Many.

The Labour party made headlines last September when it released a Medicines for the Many document. The release was well timed, coming shortly after news broke that Luis Walker, a young boy with cystic fibrosis, was denied the medication Orkambi because the US pharmaceutical manufacturer refused to supply the NHS unless it agreed to a higher fee

This document outlined the party’s vision for a public producer of generic medication, using the lever of licensing to reward innovation, and utilising our globally revered scientific and university sectors to direct research and development into socially useful medicines. 

A public sector producer of generic medications has the potential to save the NHS money, with less disappearing to private profit and more being invested into British industry and science.

At the moment we lack the infrastructure to publicly produce medications based on the ground-breaking research conducted in Britain and funded by the public sector. Instead, this valuable work is handed over to the private sector with limited benefit to the public. Labour’s document outlined a bold plan to change this, by using state investment banks to fund the creation of a UK-based, democratically controlled pharmaceutical company, in keeping with a model used already in countries such as Cuba, China and Brazil

This public body – free from the logic of sheer profitability – would be more able to direct research and development funding to socially useful projects, such as antimicrobials and psychiatric medications. The direction could be set by key stakeholders, such as public health professionals, patient groups and researchers. The new public body could also use the NHS’s negotiating power to purchase medications we can not easily produce ourselves from the private sector. And it could utilise crown or compulsory licensing to authorise alternative manufacturers, in the event of big pharma companies withholding new medications behind prohibitively high prices. 

A priority for the left.

Any healthcare professional in the NHS will tell of frequent national shortages of the medications we administer daily, with patients having to substitute medication that has helped them for years for a possibly inferior alternative. There are further fears around medication availability after Brexit, most famously in the case of insulin. With a national public pharmaceutical provider, we would be better placed to ensure in-house production of vital medications and to prioritise continued delivery.

A public pharmaceutical producer could also be of benefit to the global south, if coupled with a sympathetic government. Although publicly-produced medications would bring potential new export opportunities, it is important to consider that two billion people worldwide are unable to access basic day-to-day medications that we take for granted. The World Health Organisation (WHO) – criminally underfunded and focussed on public-private partnerships – only ever seems to consider market incentives as a viable solution to this issue. Hopefully a future government with a focus on social justice would utilise a public pharmaceutical sector to make these medications available to those in the global south. 

With Boris Johnson’s massive majority and amid the chaos of post-Brexit trade negotiations, it is imperative that pharmaceuticals remain a priority for those on the left. I fear that Labour’s inspiring report of only a few months ago will be dismissed by the likely incoming leadership of Keir Starmer, who happily employs a former private healthcare lobbyist amongst his campaign team, amidst a turn back to the “electable” centre. The discussion amongst the Labour leadership contenders has so far focussed on the possible renationalisation of post, energy, water and transport, with no mention of pharmaceuticals.

All is not lost, however, with grassroots movements such as Labour for a Green New Deal successfully propelling socialist alternatives to seemingly insurmountable problems into the mainstream of the Labour party’s consciousness. Groups such as Keep Our NHS Public and Doctors in Unite, among others, provide a small but committed basis from which a future campaign or pressure group could emerge. I believe it is imperative that these ideas remain at the forefront of our understanding of healthcare provision and where we move to next. 

Sammy Luney is a junior doctor based in Essex.

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