Bitter Pills: Why the NHS can’t swallow big pharma’s profiteering
Big Pharma prices are breaking the NHS
The strain on Britain’s National Health Service is plain for all to see. Serious under-investment, under-staffing, ill-conceived part-privatisation schemes and strategic failure in related areas like social care have all played an enormous role in this crisis. But one further driver of the crisis is less reported on: the spiralling cost of new medicines.
The manufacturing costs of these medicines is actually very low, yet the NHS is being charged astronomically high prices for them by pharmaceutical companies which have often only played a relatively minor role in their development.
In this report, we document how serious this aspect of the crisis is by looking at the amount NHS England spends on the top ten most expensive drugs. We find the service spent an eye-watering £13 billion on just these ten medicines in the ten years up to 2022.
Total NHS medicine spending is far in excess of this, likely amounting to hundreds of billions of pounds over the same period, though exact figures are hard to ascertain. But here, we focus on just the most costly medicines in order to show that the problem of super-expensive drugs is a rapidly growing problem.
Big Pharma rarely invents the drugs we use
The second part of this report examines the role the companies profiting from these medicines have played in creating them. Advocates for the existing model of pharmaceutical innovation would have us believe that, yes, medicines are expensive, but that’s because they are costly for drug companies to research and develop. They want to convince us that, unless we pay these prices, we will have no new medicines at all.
Drug companies often claim high prices are justified by the high costs of inventing new drugs. But we find that each of the 10 drugs analysed in this report benefited from work by scientists from public institutions, from public funding, from charitable funding or in some cases a mixture of all three. Very few of these drugs could reasonably be said to have been fully invented by the companies that now market them.
We’re paying for profit
Finally, this report looks at the amount the NHS could save if measures were taken to reduce the profiteering of Big Pharma corporations.The process by which pharmaceutical corporations set their prices is notoriously opaque. It has regularly been found that actual research, development and production costs bear no relation to the final price of a medicine. Rather, thanks to the monopolies these corporations enjoy over new medicines, they can charge whatever they think they will be able to get away with.
Actual costs of developing and producing drugs to the company concerned are shrouded in secrecy, and so calculating potential NHS over-payment is far from an exact science. However, based on the information we have, and detailed studies of previous drug pricing, we estimate that the cost being paid by the NHS is massively inflated and that the service could save between £11.9 billion and £12.6 billion over 10 years if it was able to pay the real cost of manufacture for these medicines.