Reject pharma lobbying: Open letter to Victoria Atkins
Date: 20 November 2023
Dear Victoria Atkins,
We welcome you to your new role as Health Secretary. Your appointment comes at a pivotal moment for the NHS. We write as parliamentarians, economists, health experts and organisations concerned about the acute pressure that drugs pricing is putting on the NHS and the prospect of even higher bills for the UK’s health service.
As concerns grow about funding of health services in the UK, spending on prescription medicines by the NHS has reached a record high of £17.2bn a year, as costs rise and pharmaceutical companies push expensive new products. Since 2018, NHS spending on branded medicines has been increasing at a rate of over 5 per cent per year, excluding Covid-19 vaccines and treatments.
In this context, it has been alarming to see pharmaceutical companies lobbying the government for new rules which would force the NHS to pay an extra £2.5 billion a year to access medicines. Proposals made by the Association of British Pharmaceutical Industry (ABPI) seek to replace the current voluntary scheme for branded medicines pricing and access (VPAS) with a much lower tax regime. These demands represent a severe threat to the NHS. Not only that, but any concessions over price hikes in the UK could have a chilling effect on governments seeking to stand up for fair pricing globally. The UK must not make any agreement that allows the drug bill to rise even faster than it is already.
The VPAS agreement, which currently caps growth of the NHS drugs bill to 2% per year, plays an important role in keeping the cost of medicines under a degree of control. Conversely, the proposal made by the pharmaceutical industry could send drugs spending through the roof.
Any further rise in the NHS drugs bill would be impossible to justify. Research assessing the impact of different pricing levels on current and future health innovation suggests that current pricing levels in the UK are already too high.
Pharma companies argue that reducing their revenues would mean less investment in drug development and the discovery of new medicines, but study after study shows that this is not how the industry spends its money: most pharma companies spend more on share buy backs, or on selling, general and administrative activities, than they do on research and development.
Even more worryingly, pharmaceutical companies are already drifting away from investing in truly innovative drugs, with over 50% of new drugs that reach the market failing to represent a therapeutic advance for patients.
A large proportion of the risky, early-stage research into new medicines is carried out with support from the public sector. Of the ten drugs that cost the NHS most per year, each has benefited from significant public or charitable support.vi In many cases, this effectively means that the public ends up paying twice for drugs. For example, Abiraterone, a prostate cancer drug, was developed at a largely publicly funded UK research institute, yet the drug was licensed to a company which used its monopoly over the drug to charge such high rates that the NHS was forced to limit access to it.
Additionally, approval thresholds for new medicines have become disconnected from the opportunity costs of the healthcare system. In the context of NHS underinvestment, these high costs mean that opportunities to fund medical assistance for people become underfunded elsewhere in the healthcare system.
The NHS drugs bill is already far higher than it ought to be. As the government seeks to reach agreement on a new VPAS deal, we urge you to reject any proposals that would increase the NHS drugs bill further.
Longer term, if we are to protect the NHS, we will need to build a new system that ensures fairer prices, more investment in drugs that truly represent breakthroughs, and strong public return for the research and development costs spent by the state of medical research. This may include exploring new ways of managing intellectual property, for example by drawing on the ideas of Nobel Prize winning economist Joseph Stiglitz to reward innovation with prizes not monopoly patents.
The public should also have more control over the medicines it funds and has a right to know exactly how its taxes are spent. This could be achieved by applying strict conditions on publicly funded research and medicines, ensuring that sharing of technology and value for money is a key component of all taxpayer support. With drug prices rising in tandem with an increase in managed access agreements, the government should also use ongoing VPAS negotiations to ensure greater transparency of R&D costs, processes, and prices, to ensure the public is getting value for money.
Alongside these measures, the UK should also consider a significant reduction in NICE’s approval threshold, in order to prevent resources from being diverted away from other vital services in the NHS.
With the UK’s health service already under significant strain from the escalating cost of drugs, we hope you will consider the measures outlined in this letter and act now to protect the NHS.
Global Justice Now
We Own It
Keep Our NHS Public
Universities Allied for Essential Medicines
People’s Health Movement UK
Caroline Lucas MP (Green)
Chris Law MP (SNP)
Clive Lewis MP (Labour)
Clive Lewis MP (Labour)
Dr Philippa Whitford (SNP)
John McDonnell (Labour)
Kate Osborne MP (Labour)
Mick Whitley (Labour)
Nadia Whittome MP (Labour)
Patrick Grady MP (SNP)
Rebecca Long-Bailey (Labour)
Zarah Sultana MP (Labour)
Dr Rhiannon Mihranian Osborne, Junior doctor and researcher
Professor Karl Claxton, University of York
Dr James Lomas, University of York
Professor Mark Sculpher, University of York
Charles Ebikeme, Visiting Fellow LSE
Beth Woods, Senior Research Fellow, University of York
Dr John Puntis Consultant Paediatrician (retired)
Prof JS Bamrah CBE, Consultant Psychiatrist
Melissa Barber, Postdoctoral Fellow for School of Medicine, Yale University