What’s the problem?
Millions of people around the world are missing the medicines they need either because they are too expensive or they simply don’t exist.
Without access to affordable, high quality medicine we won’t be able to end infectious disease epidemics like HIV & AIDS.
Why don’t we have the medicines people need at prices they can afford?
Spiralling drug prices are creating unsustainable pressure on patients and health systems around the world, including the NHS, which is spending more and more on medicines every year. Effective but expensive drugs are being rationed or rejected by the NHS and patients are increasingly being forced to crowdfund to pay for them. Meanwhile, the pharmaceutical industry is one of the most profitable industries in the world. While big pharmaceutical companies profit from patenting their medicines and then charging high prices for them, increasingly patients are having to live without access to affordable drugs both here in the UK and around the world. This is a huge injustice in itself but is aggravated further by the fact that globally the British public is fronting up to two thirds of the research bill for these drugs. Last year the NHS spent over £1 billion on medicines that had been financed with taxpayers’ money.
With profit as the primary driver, the current health innovation system ratchets up prices but also leads to severe underinvestment in less profitable medicines. This explains the lack of new treatments for diseases that affect low and middle income countries and how the health needs of children living with HIV are largely neglected.
Globally, only 52% of children living with HIV have access to treatment, without treatment half of all children living with HIV will die before their second birthday. Those children lucky enough to have access are too often forced to take suboptimal treatment, putting them at increased side effects, resistance and treatment failure. Given that the overwhelming majority of children born with HIV living in low and middle income countries, there is no financial incentive to carry out the research and development that is desperately needed to produce more effective medicines for them.
Harvoni (sofosbuvir-ledipasvir) – A highly effective new cure for hepatitis C, a HIV co-infection, was developed with US, EU and UK public funds. Despite this it was launched in the UK with an extortionate list price of £39,000 for a 12 week course. Although approved by National Institute for Health and Care Excellence (NICE), its high price meant it was previously rationed by the NHS to only the sickest 10,000 patients each year.
Perjeta (pertuzumab) – A breast cancer medicine with a list price of around £43,000 per year is still unavailable to patients in Scotland as the drug company, Roche, have refused to drop the price to a level the NHS can afford.
Orkambi (ivacaftor-lumacaftor) – This cystic fibrosis treatment can give vital additional years of life to patients, but the eye-watering £104,000 price tag has resulted in a stand-off between the NHS and its manufacturer, Vertex, who have rejected deals offered by the health service. Meanwhile patients are dying without access.
What’s the solution?
We need a health innovation model that delivers the medicines that people need at prices we can all afford. We need a people’s prescription.
This is a crisis that needs addressing now. The UK government needs to take immediate action to respond to the growing crisis in access to medicines whilst looking ahead to how we can transform the system more broadly.
BETTER ACCESS TO MEDICINES NOW
1. Use our sovereign right to get access to cheaper medicines
High drug prices are caused by patents, which grant pharmaceutical companies an exclusive license to produce a product. In the absence of competition, pharmaceutical companies can then charge whatever price they like, and they do. The rules about patents come from the World Trade Organisation’ Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) but when making these rules the WTO also introduce important flexibilities that could be used in situations where a patent monopoly poses a threat to public health. The UK government should be using these flexibilities to override patent monopolies allowing generic manufacturers the license to produce a medicine, and through the competition created, drive the price of the medicine down.
2. Attach access conditions to all public funding
From new HIV medication to the most effective cancer treatment, UK public funding has played a substantial role in the discovery and development of effective and often life-saving treatments. Public investment in research and development (R&D) should benefit public health. Even when the government and public have funded a large part of the R&D of innovative new drugs, there is no guarantee that the drugs will be available to patients in the UK and beyond. The UK government should attach conditions to publicly funded health R&D to ensure that drugs produced from public research are both affordable and accessible.
TRANSFORMING THE SYSTEM TO DELIVER PUBLIC HEALTH NEED
In the longer term, policymakers must do more than simply treat the symptoms of this fundamentally flawed system, and instead should take the bold steps to create systemic changes that fundamentally shift the system to serve public needs:
- De-link research from high price incentives
The concept of delinkage removes high drugs prices as the incentive for innovation. Instead, innovation is rewarded through grant funding, subsidies or prizes. By ensuring alternative rewards for innovation, the need for patent-backed monopolies is removed, allowing competition to flourish between manufacturers and driving the price of the medicine down. The savings made on these medicines could be reallocated back into direct UK investment in innovation.
2. Attach access conditions to all public funding
UK public funding has played a substantial role in the discovery and development of effective and often life-saving treatments. Public investment in R&D should benefit public health. Even when the government and public have funded a large part of the R&D of innovative new drugs, there is no guarantee that the drugs will be available to patients in the UK and beyond. The UK government should attach conditions to publicly funded health R&D to ensure that drugs produced from public research are both affordable and accessible.
3. Amend corporate governance structures
Short termism and financialisation in the pharmaceutical industry is diverting capital away from long term investments required for truly innovative breakthroughs. Pharmaceutical companies are diverting revenues away from research and into share buybacks which boost stock prices and executive bonuses in the short term. The UK Government should limit share buy-backs, link executive pay to the public value of a product rather than a company’s profits and promote alternative ownership models such as a ‘National Pharmaceutical Service’.
Read more about transforming the system in our briefing.