If Labour wants to save the NHS, it needs to cut out Big Pharma

The NHS is being used as a cash cow by a profit-hungry pharmaceutical industry, writes Nick Dearden

October 27, 2017 · 6 min read

The NHS is being used as a cash cow by a pharmaceutical industry more interested in boosting profits than researching vital new drugs. In the last 5 years the cost of medicines to the NHS has increased 29% – that’s more than the total NHS’s deficit.

It’s often said that Britain hasn’t had an industrial strategy since the 1980s. But that’s not entirely true. Apart from massive support to the arms industry, we give serious subsidies to pharmaceutical corporations through the NHS. So great are the costs of some life-saving drugs today that the NHS can’t even afford to buy them. Some patients have resorted to crowd funding to get the latest cancer treatment.

It gets worse when you realise that some of these drugs which the NHS pays top dollar for have been researched using taxpayer funds. In fact the government has recently spent up to £2.3 billion a year developing pharmaceuticals, many of which end up in the hands of big corporations, free to charge whatever the market will bear.

Giant drug companies – ‘Big Pharma’ – have become the ultimate symbol of  a broken corporate model. They live off monopolies on medicines discovered many years ago, extending those monopolies by making tiny changes to medicines wherever they can, to keep patents fresh. Despite taking public money, they push prices to eye-watering levels. Rather than invest in research for a new generation of vital medicines, they prefer to play the financial market – buying up smaller companies that do genuinely innovative research, and returning massive returns to shareholders. No wonder they’ve become one of the most profitable sectors in the world.

A new report by Global Justice Now and Stop AIDS has examined some of the most expensive new drugs on the market. Advanced prostrate cancer drug  abiraterone also used taxpayer funds to pay for critical research. But the NHS had to restrict use due to the extortionate cost. Corporate owner, Janssen (part of Johnson & Johnson) has raked in £7.2 billion in sales, while some patients who could have benefitted from the drug have been unable to access it.

Alemtuzumab was originally developed at Cambridge University and used for the treatment of leukaemia. Scientists later found the drug was also useful in treating multiple sclerosis (MS), in lower doses. As this new use of the drug carries the potential to net higher profits, the corporate owners removed the drug from the market and re-launched it, specifically as a medicine for MS. This allowed the company to ramp up prices, so that using the drug to treat MS spiralled from £2,500 per treatment before re-issue to £56,000 after – a 22-fold increase.

The examples go on and on. One patient, Mel Kennedy from Northern Ireland, was forced to crowdfund to pay for kadcyla, a breast cancer treatment made by Roche which made the company £50 billion in sales, before a public outcry lowered the cost.

Another patient, from London, was forced to wait for three years to get hepatitis C cure, sofosbuvir, as the NHS couldn’t afford Gilead’s £39,000 price tag, despite the fact that the drug can be made and sold – at a profit – for around £100. The price today has dropped to a ‘mere’ £10,000 per patient – still many hundreds of times the cost of production.

At the heart of this broken system is the monopoly status given to new drugs, often underwritten by 20-year-plus patents. Corporations claim they need these patents to recoup their research costs. Yet the same companies spend far more on marketing than they do on research. More recently they have also started spending more simply buying back shares to keep their stock price high, than they have on new research.

For those without access to an NHS, the effects are even more severe. Globally, it is estimated that the public pays for two-thirds of all upfront drug research and development  costs. Unsurprisingly that’s the most risky stage of research. Around a third of all new medicines originate in public research institutions.

Yet essential medicines for diseases which kill millions of people are still under-researched. Only two new tuberculosis (TB) drugs have been developed in 50 years despite two million deaths per year, because people who contract TB are generally poor. Similarly, we all now face an ‘antibiotic apocalypse’ because it’s not profitable for the pharmaceutical corporations to develop new ones.

Labour must promise to take on Big Pharma if it wants a fairer system – both here and globally. It has the tools it needs. Where public research funds go into a medicine, the government can easily apply conditions to that money, ensuring public access to medicines at reasonable prices. Governments have every right, under international trade rules, to break monopolies where there’s a need. They can issue a so-called compulsory license to produce a drug generically. Trying it out would give Big Pharma real pause for thought. And rather than trying to block developing countries who do the same, Labour should promise to stand by them, and stop pushing trade deals onto countries which hands Big Pharma the even greater monopoly rights they are pushing for.

We need to rethink medical knowledge and research from the bottom up. Given the money being spent on research, there’s nothing to stop the establishment of fully socialised medical research. To complement this, if a Labour government felt there was also a need for private competition, it could offer cash prizes, rather than monopoly rights, to innovators of new medicines. The final product remains free for anyone to manufacture – part of  technological ‘commons’ which could take medical knowledge to new heights.

Former Goldman Sachs chief economist Jim O’Neill has warned that Big Pharma risks a public backlash similar to the one experienced by the big banks in the wake of the financial crash if they fail to arrest antibiotic resistance. He right. This broken system risks taking medical practice back nearly 100 years, threatens NHS budgets already stretched to breaking point, and, globally, means millions of unnecessary deaths every year. If there is one area where serious public intervention could make a difference, it’s got to be here.   

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