Time for Big Pharma to stop hiding behind “R&D” to justify astronomical costs

Campaigners are pushing moves to challenge the secrecy and broken model of drug pricing. But will governments have the political will to back them, and make life-saving medicines affordable for all?

Heidi Chow
8 May 2019, 9.34am

Imagine knowing there is a drug that could cure your illness or extend your life, but it is so expensive that that you cannot access it. This is the heart wrenching situation that parents of children with cystic fibrosis are facing. Despite years of price negotiations between the government and the drug-maker, Vertex, the drug Orkambi is still not available on the NHS because the company is charging a staggering £105,000 for each treatment.

The NHS is increasingly having to reject or ration drugs because of high prices, leaving patients without access to effective treatment. The NHS drugs bill was a staggering £18.2 billion last year, an increase of 4.6% from the previous year. Even with the financial boost announced for the NHS, the drugs bill is still rising faster than the NHS budget.

Rising prices in the UK can also have a ripple effect around the world as other countries reference their prices to the UK. And Donald Trump and the US big pharma lobby are setting their sights on the NHS and its ability as a centralised buyer to negotiate prices with big pharma in a future US-UK trade deal. This trade threat could exacerbate the high prices that the UK already faces and worsen the global crisis of high drug prices, with deadly consequences.

That's why a meeting convened by the World Health Organisation and the South African government last month offers new hope. The Fair Pricing Forum brought together governments, academics, industry and civil society to discuss and explore options to tackle this crisis. Hosting this forum in Johannesburg was significant. Hundreds of thousands of people died from HIV AIDS in South Africa in the 1990s/ early 2000s at the height of the HIV AIDS epidemic - simply because they could not access the US$10,000 per year treatment. It was a pricing scandal of epic proportions, created by big pharma.

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Today, the fight in South Africa is for access to cancer drugs that are also now prohibitively expensive. Patient-led campaigning group, Fix the Patent Laws, protested at the forum to show delegates that the issue of high drug prices is not an academic conundrum but a matter of life and death. Salome Meyer from the campaign powerfully declared, “Nothing about us, without us” in a speech delivered to the plenary, underscoring the importance of patient voices on this crucial issue.

With so much at stake, how can we tackle these high prices? To do this we need to understand what is driving high prices. New drugs are awarded patents which means no one else can make or sell that drug for a 20-year period. With no competition, drug companies can effectively charge whatever they want. This system has delivered big profits for the industry but through high prices and unequal access. And patients are losing out.

Big pharma argue that high prices are needed to recoup research and development costs but there is no transparency around these costs. In fact, there is very little transparency around the prices that drug companies charge for medicines or the amount of public investment in drugs. All this means that it’s hard for governments to assess what a fair price is and creates a big information asymmetry in price negotiations.

Civil society groups urged governments at the forum to support a resolution on transparency proposed by the Italian government ahead of the World Health Assembly in May. If passed, this resolution would be a significant global acknowledgement that the current lack of transparency in the system is a barrier to fair prices. It would urge governments to require companies to disclose their annual R&D costs, production costs, prices and profit margins of pharmaceuticals, vaccines and health technologies. Although there was vocal support for this resolution from civil society and academics at the forum, it is governments whose support will be crucial to ensure the resolution passes in Geneva later this month.

Sticking to the current system will never lead to universal access for medicines. It hasn’t achieved it so far. And without universal access, this means that some patients get to live and others don’t. Instead of trying to regulate and tweak around the edges of a monopoly-based system, we need a different system instead.

Civil society groups around the world have been pushing for a new system where we pay for innovation upfront through prizes and grants rather than through high prices. This is known as ‘delinkage’ as high prices are disconnected from R&D costs. In other words, high prices are no longer used to incentivise innovation. Jamie Love from Knowledge Ecology International who has campaigned on these issues for decades, has called for a multi-country feasibility study into delinkage for new cancer medicines as a first step to transform how we develop and produce medicines.

Delinkage could revolutionise how we develop drugs in the long term. For now, as an immediate remedy to mitigate the highest prices, governments have the legal right to override a patent in the interest of public health. But when governments - especially in the global south - have used this legal tool, they have been faced with pressure, bullying and threats from big pharmaceutical companies and rich countries. The South African health minister who opened the forum on the first day, called on governments around the world to respect the use of these legal tools.

Transparency, delinkage and using existing legal mechanisms were recurring themes pushed by civil society during the forum and also featured in the civil society statement that was delivered to the final plenary. And it’s important that we as civil society stay in these spaces to keep pressing governments to take up this agenda. The debate continues as the World Health Organisation announced an online consultation and new working groups to continue the discussion. Governments already have the legal tools they need to override patents and the ideas are there to transform the system. All we need now is the political will to make things happen.

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