Drug Companies Are Ripping Off The NHS. Here’s How To Fix It

“I felt like I was having to beg for my life.” Those are the words of Melanie Kennedy, who had to crowdfund to pay for her cancer treatment privately as the drugs she needed were deemed too expensive for the NHS. Now in better health, she has become a patient advocate for Just Treatment and is speaking out against the scandal of high drug prices.

While the cash-strapped NHS is unable to afford key medicines, drug companies are recording some of the biggest profits in the world. It’s not only NHS patients that are denied the medicines they need, but patients living with HIV, diabetes and other conditions across the world. The pharmaceutical industry has always justified high drug prices by pointing to astronomical research and development costs they invest. But we have always suspected that this was only partly true.

Now, with the release of STOPAIDS’ new report written together with Global Justice Now, we are finally able to shine a light on the level of public money going into the development of many high-price medications – undermining their central price justification.

In fact, last year the NHS was charged £1 billion for drugs that were discovered thanks to substantial amounts of public money. This includes drugs like abiraterone, used to treat prostate cancer, which was discovered and developed by the primarily publicly funded Institute of Cancer Research. Later bought and put on the market by a subsidiary of Johnson & Johnson, the advanced prostate cancer treatment was deemed too expensive for the NHS for years. The NHS now spends £98 per day per patient on the drug, despite a generic alternative being available for less than £11 per day per patient.

Hearing drug company representatives tell patients that ‘it’s not that simple’ is simply not good enough when people’s lives are at stake.

The methods for setting prices are shrouded in secrecy, making it difficult to attribute the precise contribution of public money, or indeed any level of research funds, into the development of each new drug. We do have a sense of the scale of public funding though, with up to two-thirds of all up-front drug research and development costs coming from public funds. While we recognise that it takes a lot of resource to develop medicines, if drug companies want to win our trust back there must be explicit recognition of the important role of public funding in the final price of drugs. There is no longer any justification for setting high prices and hiding how you got there.

In the short-run, there are some initial steps we can take to ensure the situation improves. There needs to be greater transparency on research and development costs so that we can track the flow of money and see for ourselves how much it has contributed to the final price. We also want to see strings attached, or public interest conditions, to taxpayer funded research. This includes ensuring that drugs developed with public funds will be affordable and the data behind it is accessible to the public too.

But in the long-run we must have a radical re-think about the way research and development of new medicines is funded.

At the moment, we rely on 20-year patent monopolies to provide incentives to drug companies to invest in research. So, in theory, they front-load the investment and then get their returns for a guaranteed period of time by effectively being able to charge whatever price they think they can get away with.

The problem with this in practice is that prospective drugs that aren’t deemed profitable enough are simply not invested in. Our system is dictated by profit instead of by health needs. What we’ve learnt in the HIV and AIDS response, is that we need to challenge the patent model in order to secure affordable drugs that save lives and prevent the epidemic from spreading.

We can change our model for researching and developing medicines through an idea called de-linking. It’s an idea that’s been gaining traction across the world, particularly in discussions around antimicrobial resistance and by the likes of the United Nations. De-linking offers an alternative incentives for undertaking research and development through other means like research grants, prizes for pre-defined objectives and the pooling together of intellectual property.

We were delighted to hear on BBC Radio 5Live’s Investigation on the topic yesterday that NHS England are not shying away from the complexity of this issue and are calling for further regulatory action. Finally, momentum is building behind reforms.

The exact system we go with could focus heavily on one or all of these things. But the time to start seriously considering this radical overhaul is now. As we’ve exposed in our report, the pharmaceutical industry’s claim that their own high research and development costs are the reason for high prices is rarely accurate. We all have to be able to see just what the real picture is and then fix the broken parts of the system that allows the interests of pharmaceuticals to trump those of patients.