It would seem that for pharmaceutical companies, addiction comes easily. You put the price up steeply one minute, and before the effect has had time to wear off you just can’t wait to give it another shot. Although, like most addicts, they deny their addiction. Or excuse it. There is a row going on in the United Kingdom at present over ownership of the National Health Service, that over-crowded, over-used and underfunded leviathan so much beloved of the British people but possibly – and I stress possibly – up for grabs in a trade deal with the United States once the UK has left the European Union. Assuming it ever does. In fact, a large proportion of the British public are unaware that the NHS has been fighting a constant battle against private enterprise since Aneurin Bevan, Minister for Health and Housing under Prime Minister Clement Attlee, got the National Health Act onto the statute books in 1946. The British Medical Association of the time, which represented doctors, was opposed to it and most doctors refused to cooperate with it. They wanted to retain control over the field of medicine in which they would practice and how much they would earn for it. Bevan accused Dr. Charles Hill, secretary of the BMA, of trying to sabotage the new health service, which was part of Attlee’s promised “new deal” following World War II. According to Bevan, he only got doctors to agree to it by “stuffing their faces with gold”, according to John Bew’s biography of Attlee, Citizen Clem.
Britain’s over-stretched health service, however, remains high in public esteem and politically important, especially its promise to provide health care “free at the point of delivery”. In fact, the NHS already involves a lot of private enterprise, including American health and pharmaceutical companies. In any case, under EU rules, US firms must be entitled to tender for work in the NHS as long as they have a presence in Europe. They will lose that entitlement, ironically, when Britain is no longer in the Union. There are certainly those within Britain’s corridors of power who would have no issue with allowing US corporations to take a larger part in Britain’s health provision but there is an issue that could prove highly contentious from a constitutional point of view. Suppose a US firm won a contract but failed to execute it well. Could a future government take that service back into the public sector without being accused of infringing – even stealing – American corporate property, something of which the World Trade Organisation would disapprove?
In addition, although UK Prime Minister Boris Johnson retains his “loveable mop-head” image despite scandals that occasionally swirl around him, his claim that he would never sell off the NHS is not widely believed. Senior British civil servants have already held talks with representatives of American companies regarding the prices the NHS will pay for US-produced drugs in any post-Brexit trade deal. Johnson’s assurances have also been parroted by, among others, UK Health Secretary Matt Hancock and the International Trade Secretary, Liz Truss. Scotland’s Health Secretary, Jeane Freeman, said Scotland had not been informed of the meetings between British trade officials and US negotiators. And public opinion surveys suggest that fewer than one in three people trust Johnson where the NHS is concerned. An investigation by Channel 4 claimed that the price the NHS must pay for drugs could rise by £27-billion (almost €31.4-billion).
Comparisons between health experiences in the United States and Britain make for interesting reading. Healthcare costs in the US have been spiralling for years and, in terms of a percentage of GDP, can be double the costs in other wealthy nations, although outcomes are often worse. According to the writer Bill Bryson in his book “The Body”, the maternal mortality rate in childbirth is far, far worse in America than in other developed countries. 16.7 mothers out of every 100,000 die, compared with 3.9 in Italy, 4.6 in Sweden, 5.1 in Australia, 5.7 in Ireland, 6.6 in Canada and even 8.2 in the United Kingdom. That puts the US in 39th place in terms of the childbirth death rate of mothers. It is, of course, far better than in the bad old days where home births, inexpert midwives and poor hygiene killed far more, but it’s not a record anyone would wish to emulate. Nor would they wish to see a situation in which millions of people have gone bankrupt because they can’t afford to pay medical bills. As a result, sick people ration their use of drugs and have to balance the cost against paying their rent and buying food. The mother of a 26-year-old man who died through being compelled to ration his costly insulin carried his ashes in a protest against the high cost of the drug outside the offices of the pharmaceutical company Sanofi in Cambridge, Massachusetts.
THIS WON’T HURT A BIT
Pharmaceutical companies do not have a good record when it comes to pricing. They’re rather bad at explaining price rises, too. In information released under a California transparency law, between 2017 and the first quarter of 2019, the median increase in wholesale prices of just over a thousand drugs in the United States was 25.8%, while generic drugs went up by an average of 37.6%. There were some very big jumps in the prices of particular drugs: a liquid generic version of Prozac went from $9 (€8.13) to $69 (€62.32), an increase of 667%. The manufacturer blamed new production costs. There are other, similar examples. But the drug companies are hitting back at those exposing their above-inflation price increases. The industry lobbying group PhRMA, which represents drug makers, has filed a lawsuit in California aimed at overturning the transparency law. They would rather spend their shareholders’ money on obfuscation, so that they can raise prices without anyone knowing, except, of course, the sick people who can no longer afford them. Incidentally, PhRMA has also criticised NICE and other agencies who examine the cost-effectiveness of drugs, arguing that centralised government value assessments create barriers to patient access. Do they mean barriers to the patients’ access to drugs or barriers to the pharmaceutical industry’s access to patients?
In Britain, too, drug prices have soared, although there are mechanisms in place to help control the cost of drugs prescribed on the NHS or accepted for the more common European systems of reimbursement by a health insurer. The Treaty on the Functioning of the European Union states that “Union action shall respect the responsibilities of the Member States for the definition of their health policy and for the organisation and delivery of health services and medical care… and the allocation of the resources assigned to them.” However, the Treaty also allows EU action to ‘complement national policies’, permitting “any useful initiative to promote such coordination, in particular initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of best practice, and the preparation of the necessary elements for periodic monitoring and evaluation.” This means that EU member states are free to set the prices of medicinal products and to decide on the treatments that they wish to see reimbursed.
In the EU (including Britain), the cost effectiveness and cost utility analysis (basically ‘does it work?’ and ‘is it worth it?’) is sometimes shown as the incremental cost-effectiveness ratio, or ICER, either in Euros or Pounds Sterling per Quality Adjusted Life Year, or QALY, which is a measure of the quality and length of life resulting from the use of a particular treatment, compared with any alternatives. The UK has a fractured and complicated system. In England, this assessment is generally undertaken by the National Institution for Health and Care Excellence (NICE), in Scotland it’s the Scottish Medicines Consortium (SMC), in Wales it’s the All Wales Medicines Strategy Group (AWMSG) and the Department of Health (DH) in Northern Ireland. NICE has come in for criticism in the past for not agreeing to allow certain expensive drugs to be funded by the NHS, either because their benefit is unproven or too little to merit the cost. Patients and their families, of course, denied the particular treatment, normally turn to the media to vent their anger.
IF YOU KNOW WHAT’S GOOD FOR YOU
In fact, the pharmaceutical companies often do influence what drugs are used, mainly through funding courses and seminars which help doctors to keep up with the ever-changing field of pharmacological products and what others are thinking. In his 2013 book “Bad Pharma”, the science writer and qualified doctor Ben Goldacre cites an example in which a representative of Lilly, a major drugs company, got annoyed because the diabetes consultant he was with kept prescribing a rival company’s drug. The drugs company rep told the consultant he was being paid to use Novo Nordisk’s insulin, and that the proposed funding for an educational post in the doctor’s institution could be cut when it came up for review as a result of the failure to do so. This matters because elsewhere in the book Goldacre points out that new drugs are often prescribed when generic alternatives would be as good. When the book was written, the NHS was spending around £10-billion (€11.63-billion) a year on drugs, of which around £1-billion (€1.16-billion) was being effectively wasted. Goldacre cites the example of a statin, atorvastin, which many doctors were prescribing, even though an arguably equally effective alternative, simvastin, was out of patent and therefore cheaper. However, even when this was pointed out, many doctors continued to prescribe Atorvastin, costing the NHS an extra £165-million (€191.81-million) a year. There are many other examples. But perhaps it’s less important than we imagine: many drug trials have been severely flawed, with clinical trials in which negative outcomes are not published, and where trials funded by the industry were twenty times more likely to produce a positive verdict than those conducted by independent academics.
An outline of negotiating priorities for any US-UK deal, issued by the office of the US trade representative in February, included a section on “procedural fairness for pharmaceuticals and medical devices” that vowed to “seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for US products”. In a Channel 4 documentary, Stephen Vaughn, a former general counsel for the US Trade Representative’s office, said: “That really goes to the question of what the UK government means when it says the NHS is off the table. I don’t know what they thought they meant when they said that.” As a lawyer, Vaughn played a large part in new US trade deals with Canada, Mexico and South Korea, which saw large increases in the prices paid for US-made medicines in those countries. “I would expect US negotiators to see what we could do in terms of getting increased access to the British market. That’s what we do… I think it’s going to be likely to come up because the US mentioned pharmaceuticals in its negotiating objectives.” Johnson’s assurances seem a little less convincing in the light of that statement.
A PENNY SAVED IS A PENNY EARNED
According to the Channel 4 documentary, the drug Humira (also known as adalimumab), made by US drugs company AbbVie, is used to treat 46,000 patients in the UK who suffer from diseases like rheumatoid arthritis and Crohn’s disease. In the British newspaper “i” it is reported to be “the single most expensive drug for the NHS, costing £450-million (almost €523-million) a year. Last year, the NHS started prescribing cheaper alternatives to Humira that will save the health service £150-million (€174-million) a year.” However, in the United states doctors will not be allowed to prescribe the cheaper alternative until 2023. If Britain were forced to accept US style pricing, with the drug companies allowed to charge their prices unchallenged, the cost for Britain of Humira alone could soar by £2.9-billion (almost €3.4 billion). British trade experts fear that US drug companies will be allowed similar price-fixing arrangements for other drugs in a future trade deal with the UK, costing the NHS an estimated extra £27-billion (€31.36-billion).
The US Ambassador to the UK, Woody Johnson, a member of the Johnson and Johnson pharmaceutical family, has stated that freer access to the NHS will be part of any post-Brexit trade deal. Trade experts fear that should a trade deal be signed with America, then the US administration will force Britain to adopt similar policies, denying access to cheaper drugs so that the primary manufacturer can make a larger profit and for longer. There have been assurances from the British government that, according to the Department for International Trade, “The NHS is not, and never will be, for sale to the private sector, whether overseas or domestic.” The Americans seem not to agree, despite the DIT claiming that “The sustainability of the NHS is an absolute priority for the government. We could not agree to any proposals on medicines pricing or access that would put NHS finances at risk or reduce clinician and patient choice.”
Of course, it could be argued that many drugs are over-prescribed by doctors keen to get patients out of their surgeries feeling happier, regardless of whether they have been helped. In the United States, 75% of the 40-million antibiotic prescriptions issued each year are for conditions that antibiotics do not treat. Alzheimer’s disease costs the NHS £26-billion (€30-billion) a year, according to Bryson’s book, “The Body”, but only £90-million (€104.54-million) is spent on research, while 99.6% of Alzheimer drugs have no effect at all. New ones are tested on mice, which don’t get Alzheimer’s disease unless they’ve been genetically engineered to do so. Researchers found a treatment that reduced the disease symptoms in the genetically-altered mice but were found to make the condition in humans worse. The US patenting system allows pharmaceutical companies to profit from their research but also helps keep prices high. Furthermore, patents last longer in the US than they do in Europe. Lengthy trials are necessary, of course, but the waiting time can be bad for patients desperately in need of new treatments, according to Medicines Law and Policy, a Creative Commons organisation. “These monopolies enable them to reap commercial rewards if they are successful and encourage yet more innovation,” says the report. “But when exclusive rights are granted over medical innovations, the consequences of monopoly pricing can be catastrophic if a high price means that access to the treatment is not provided to patients or is postponed until lower-priced versions of the product are available.” It is especially the US-based companies that gain from the arrangement, and Medicines Law and Policy is concerned. “In pharmaceuticals, the importance of striking the right balance between rewarding innovation and ensuring that medicines are available and affordable is particularly critical: Access to medicinal products can be a matter of life and death, of wellbeing and illness. Unfortunately, this balance has been tipped hugely in favour of private firms and away from maximising the public benefit.”
JUST CHECKING
In the European Union, it is the European Commission that has overall control over the availability of pharmaceutical products, partly, but not exclusively, through the European Medicines Agency (EMA). Under its centralised procedure, drugs approval can be applied for under a relatively simple system. “Companies wishing to market a medicinal product that is eligible for the centralised authorisation procedure, submit their application directly to the European Medicines Agency (EMA). The EMA is responsible for the validation and scientific evaluation of the application,” says the Commission. “The EMA’s Committee for Medicinal products for Human Use (CHMP) carries out a scientific assessment of the application and gives a recommendation on whether the medicine should be authorised or not.” Alternatively, individual member states can assess and approve new drugs under a mutual recognition system. “To be eligible for the mutual recognition procedure, a medicinal product must have already received a marketing authorisation in one EU country. Basic arrangements for implementing the mutual recognition procedure laid down….in all EU countries.” There has been concern that the EU is faster to approve new Drugs and/or Devices (DADs) than America’s Federal Drugs Administration (FDA), which means European patients have access to drugs before those in the United States. In 2016, the US Congress passed a bill to have drugs released in the United States if they have received EU approval. However, patients in the United States don’t always get a good deal, says on-line The Atlantic newspaper. “Abiraterone, for instance, is a drug used to treat metastatic prostate cancer. The Food and Drug Administration initially approved it in 2011 to treat patients who failed to respond to previous chemotherapy. It does not cure anyone. The research suggests that in previously treated patients with metastatic prostate cancer, the drug extends life on average by four months. (Last year, the FDA approved giving abiraterone to men with prostate cancer who had not received previous treatment.) At its lowest price, it costs about $10,000 a month.” Abiraterone is manufactured under the brand name Zytiga by Johnson & Johnson, who argue that the very high price is needed because “We have an obligation to ensure that the sale of our medicines provides us with the resources necessary to invest in future research and development.” Even though it doesn’t work. And in fact the argument, despite convincing many in America, doesn’t really hold water either. According to The Atlantic, the pharmaceutical companies make $40-billion more in profits each year from their twenty best-selling products than the $80-billion they spend on research. Pharmaceutical companies claim their research costs are higher than in other industries, but the company that spends the most on research and development each year is not a pharmaceutical company; it’s Amazon.
The slow and ponderous assessment procedures of the FDA are blamed in part for the runaway increases in prescription drug prices in the United States, something that Europeans (and especially people in the UK) view with some alarm. In fact, in a rare display of cross-party Congressional cooperation, Senators Chuck Grassley (Republican, Iowa) and Ron Wyden (Democrat, Ore) co-sponsored the Prescription Drug Pricing Reduction Act, under which a cap would be applied to drug price increases in Medicare Part D (the optional federal-government programme to help patients pay for self-administered prescription drugs), requiring manufacturers to rebate in its entirety any price increase above the rate of inflation. Republicans on the Senate Finance Committee voted to remove the proposed price cap, claiming it would offend free market principles, despite support for it from within the Trump administration. In the United States, drug companies dictate the cost of drugs and any attempt to limit increases is fiercely opposed by the industry. Pharmaceutical companies even enlisted trades unions to oppose lower prescription charges on the grounds that it would threaten “millions of jobs”. Perhaps unsurprisingly, the Lower Drug Cost Act has been described as “socialist” by Republicans, despite the fact that it only provides the US government with the right to negotiate with the pharmaceutical companies over drug prices. This is the sort of one-sided pro-corporate thinking that many Europeans find scary and make them determined to keep their distance.
However, media reports of soaring drug prices in the United States are firmly refuted by the White House. On its website it says: “Under President Trump, prescription drug prices are decreasing at rates not seen since the 1960s. In the eight years prior to President Trump’s inauguration, prescription drug prices increased by an average of 3.6 percent per year. Fast forward to today, and prescription drug prices have seen year-over-year declines in nine of the last ten months, with a 1.1 percent drop as of the most recent month. In June 2019, the United States saw the largest single-year drop (2.0 percent year-over-year decline) in prescription drug prices since 1967.” However, CBS Moneywatch reports that prices rose on more than 3,400 drugs in the first six months of 2019, by an average of 10.5%, five times the rate of US inflation. CBS claim that around forty or so drugs have increased in price by more than 100%, with one antidepressant, fluoxetine (also known as Prozac) rising by 879%. Pharmaceutical companies blame market conditions.
DRUG PRICE BORDER LOTTERY
Across Europe, despite the European Commission and the EMA, drug prices vary considerably, according to a recent survey of European drug prices by the US National Library of Medicines/National Institutes of Health in its PLoS One journal. An “almost eleven-fold difference was observed between Germany (€1451.17) and Croatia (€132.77) in relation to Interferone beta-1a 22 μg,” it said. “Generally, prices were the highest in Germany. The cheapest drugs were found in various countries but never in the poorest ones like Bulgaria or Romania. Discrepancies in wages were observed too (the smallest minimum wage was €138.00 in Bulgaria and the highest €1801.00 in Luxembourg). Full price of olanzapine 5mg, however, was higher in Bulgaria (€64.53) than, for instance, in Belgium (€37.26).”
But it’s not only the rising price of new treatments that is affecting health care costs, according to the King’s Fund in the United Kingdom. “Primary care prescribing costs grew from £4-billion (€4.64-billion) in 1996 to £8.2-billion (€9.52-billion) in 2006, according to the NHS Information Centre in 2007. This was driven by both an increase in the volume of items provided – from around 485-million in 1996 to 752-million in 2006 – and an increase in the average cost per prescription item – from £8.26 (€9.59) in 1996 to £10.90 (€12.65) in 2006.” Those are old figures but the King’s Fund, in its report, says little has changed. “The most comprehensive snapshot of recent spending on NHS medicines shows that costs, based on list prices, rose from around £13.0 billion (€15.09-billion) in 2010/11 to £17.4 billion (€20.19-billion) in 2016/17 – an average growth of around 5 per cent a year. This compares with an average growth of the total NHS budget (not adjusted for inflation) of around 1.5 per cent a year over the same period.”
Meanwhile, the pharmaceutical companies don’t always play fair. Britain’s Competition and Market Authority (CMA) has taken legal action against three drug manufacturers for colluding to illegally raise the price of a drug to the NHS by up to 1,800%. The CMA has accused the South African drugs company Aspen of unlawfully agreeing to pay two rival companies to stay out of Britain’s market for fludrocortisone acetate tablets. That way, Aspen retained its monopoly. The prescription-only drug is used to treat Addison’s disease, in which the adrenal glands produce insufficient steroids, leading to a lack of appetite, weakness and “poor mood”. According to the NHS, there are around 8,400 sufferers in the UK. Aspen offered to pay some £8-million (€9.26-million) to the NHS and is likely to face a further fine of £2.1-million (€2.43-million) unless it can convince the CMA that it didn’t breach the law. The CMA further alleges that by paying bribes to rivals Amilco and Tiofarma in 2016, Aspen was able to boost the price of its fludrocortisone acetate tablets massively. They rose from £1.50 (€1.74) for thirty in early 2016 to £30 (€34.72) by later that year before settling down to £13.60 (€15.74). The CMA believes much of that price rise is because of the illicit deal. The CMA’s Executive Director of Enforcement said in a statement that “The CMA has today provisionally found that Aspen, Amilco and Tiofarma broke competition law by taking part in an illegal agreement which led to a significant price hike for a lifesaving drug. The NHS should not be denied the opportunity of benefitting from an increased choice of suppliers, and so potential savings on what it spends on essential drugs.” So, one up for the UK government’s price watchdog: it may not last.
AFTER THE DIVORCE
Despite denials from Boris Johnson and (belatedly) Donald Trump, US pharmaceuticals want to change the way NICE evaluates medicines and treatments to ensure “value for money”. It’s been claimed by American PR officials that US pharmaceutical companies are very interested in using a potential trade agreement between Britain and the US to amend the health technology assessment process, valuation and pricing used by NICE and the NHS to set drug prices in the UK. They’re likely to get dearer as a result; patients in the US already pay more. There are other ways in which Britain leaving the EU could impact on health provisions. Professor Jean V. McHale, Professor of Health Care Law at the University of Birmingham, flags up the issue of recruiting and retaining nursing staff for Britain’s NHS from around the EU. “Since the referendum, there has been a huge drop in the number of nurses from EU countries on the nursing professional register,” he says. The Royal College of Nursing has warned that this is a particular issue for nursing staff living and working close to the border between Northern Ireland and the Republic. Up until now, cross-border cooperation has been vital, says Professor McHale. “For example, children’s cardiac surgery is no longer undertaken in Northern Ireland and children are instead transferred to a hospital in Dublin.” It’s by no means certain that Johnson’s deal, in its bid to overcome opposition to an earlier plan to impose a physical border across Ireland, addresses this issue in the event of Britain leaving the EU on 31 January, 2020. “Once no longer part of the EU pharmaceutical regulatory structure,” says Professor McHale, “the UK may no longer be seen by drug companies as a first priority launch market. This would mean that new drugs may be launched later in the UK than other EU countries, and patients could suffer as a result.”
Some people in Britain have begun stock-piling against shortages, but that’s not possible for ordinary citizens with prescription-only drugs, even if it’s what hospitals and pharmacies are doing. The government has also said it will stockpile a six-month supply, although the storage facilities are likely to put up prices for the NHS. Brexit campaigners have dismissed fears, one of them even claiming that prescription drugs can be replaced with over-the-counter generics, not something the medical profession would advise (and not actually possible). Already, private companies are involved in providing care for the NHS, with £13.1-billion (€15.16-billion) being spent on private sector companies, almost 11% of the NHS budget. The fear of some observers is that a Trump-Johnson trade deal could introduce new guarantees about American companies gaining full access to the NHS. The enormous cost of Britain’s health service has been a contentious issue from its inception. In 1950, just two years after the NHS came into being, the then Chancellor of the Exchequer, Sir Stafford Cripps, was warning that spending on it must be reined in because it was too expensive. In doing so, he fell out with its founder, Health and Housing Minister Aneurin Bevan, in a big way.
DEEPER POCKETS
Could drugs become too expensive for British patients? If so, they wouldn’t be alone: approximately one-third of the global population is unable to obtain the necessary medications, argues the PLoS One website, “and the price barrier is indicated as the main reason for this. Moreover, unaffordability of medicines is also related to the course and prevalence of serious and chronic diseases; hence, the World Health Organization (WHO) recommends that healthcare decision-makers should incorporate suitable solutions to administer pricing policies and to ensure access to medicines.”
It seems extremely likely that a United Kingdom outside of the EU will have less clout in international trade negotiations and may be obliged to settle for a bilateral deal with the United States in which US pharmaceuticals gain more access to the NHS and more control over the prices they can charge. Worldwide, spending on pharmaceutical research and development (R&D) rose by 3.9% between 2017 and 2018 to $165-billion (almost €150-billion); the amount spent on promotion, advertising, campaigns to protect market position, persuading doctors to switch to their drugs and so on is harder to pin down precisely, but most experts, including Ben Goldacre in his “Bad Pharma” book, reckon they spend at least as much as they do on research. The 17th century English poet and playwright, John Dryden, wrote:
“Better to hunt in fields, for health unbought,
Than fee the doctor for a nauseous draught.
The wise, for cure, on exercise depend;
God never made his work, for man to mend.”
Unless you’re feeling unwell, that is.
T. Kingsley Brooks
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