Democratic public ownership in the UK pharmaceutical sector

September 2019

Working paper by Global Justice Now, Just Treatment and The Democracy Collaborative

Today we have a public healthcare system that relies on privatised medicines (developed with public support) that are developed for the areas of greatest financial return rather than the areas of greatest public health need. They are then priced at extortionate levels and protected by patents that prevent affordable pricing. And instead of ploughing profits back into research and development, many drug firms spend more in marketing or share buybacks than on R&D. This is not a sustainable system — socially or financially — as patients are being denied access to essential treatment and the NHS cannot sustain paying extortionate drug prices. It is an economically inefficient system that is not delivering the drugs we need at prices we can afford.

Greater democratic, public control over the research, development, production, and sale of medicines would help the government fulfil its obligations to ensure the right to health for all. It would also be consistent with, and reinforce, the principles of the NHS. Delivering universality and equity in accessing medicines is crucial to ensuring that our public healthcare system is accessible for all. And it could increase the amount of secure, high quality jobs in our economy. There is scope for greater public, democratic control in the R&D of new medicines. Public funding is often directed at the earlier (and riskier) stages of research, with later-stage clinical trials funded by the pharmaceutical industry. This enables pharmaceutical companies to patent medicines developed with public funds, creating monopolies that enable them to charge high prices. It also makes it harder for public institutions to impose conditions around access, pricing, or transparency on publicly funded innovation, as there is a reliance on industry to carry out late-stage clinical trials.

Public involvement in the later stages of clinical trials is a good place to start as it could drive up standards — addressing inherent bias in industry-funded trials as well as forcing pharmaceutical companies to accept conditions around pricing and patient access if they want to secure licenses to promising research. There is also scope for democratic, public control over drug production. Across the world, countries including Brazil, Thailand, Cuba and China have invested in the public production of medicines to ensure consistent supply. By investing in similar public production capacities, public funds would be directed toward the most critical public health needs and prioritised medicines. Public manufacturers could also be designed to ensure any profits are used to offset the cost of drugs that are more expensive to produce, or invested in public health interventions that can improve health outcomes. These public companies could be linked to the existing network of publicly funded R&D facilities and processes of democratic participation and accountability could create greater transparency in the industry as a whole.

This working paper identifies how the key principles of public ownership can apply in pharmaceutical sector (part 2). It then provides more details that show the need for public ownership in two aspects of the drug development continuum: R&D (part 3) and drugs production (part 4), and sets out a vision of what democratic participation, engagement, and transparency would look like as well as the implications for governance and operations.

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