What does the future hold for innovative medicines in the NHS?
December 2019 saw the Conservative Party deliver its largest majority since Margaret Thatcher’s historic win of 1987, and while the Opposition insists that this was a ‘Brexit election’, the NHS also played a central role in both main parties’ election campaigns.1 This is unsurprising given suggestions in early December that the NHS was heading into the winter in ‘unusually bad shape’.2
With Boris Johnson’s unexpectedly comfortable win, the Government will have freedom to implement much of the health policy it set out in its manifesto. This includes writing into law the first multi-year funding settlement for the NHS, abolishing hospital car parking charges and introducing a £500m funding pot for innovative medicines.3
“leaked documents show an intent from the US to discuss the prices paid for medicines in the NHS with the UK Government, with a view to negotiating greater pricing freedom”
During the run up to the election, the Conservative Party was taken to task on a number of its health policy pledges, with most of the criticism batted away relatively easily. However, one accusation that Johnson has failed to shake was the suggestion that the price the NHS pays for drugs could increase under the terms of a trade agreement with the US.4 Labour claimed that the NHS would ‘be forced to pay £500m a week to US corporates for drugs’ under a Tory Government, which would easily eat up the funding ring-fenced in the Conservative manifesto for innovative medicines.5
This has been shown to be a highly unrealistic and extreme scenario. Indeed, it would be naïve to think that there would be no push back from the National Institute for Health and Care Excellence (NICE) or NHS England at the prospect of a hike in drug prices.6 It is highly probable that both independent organisations would mount a robust challenge to Government in such a situation. Nevertheless, leaked documents show an intent from the US to discuss the prices paid for medicines in the NHS with the UK Government, with a view to negotiating greater pricing freedom.
This raises an interesting issue – a dichotomy lies at the heart of British attitudes to healthcare: there is a belief that NHS patients should be able to access the most innovative, clinically-effective therapies free at the point of use, but also that the NHS should resist paying higher prices for these treatments.
In the meantime, the cost to companies hoping to launch medicines in the UK has increased in the past year, with the introduction of charges for NICE appraisals (regardless of whether the medicine is recommended) and the voluntary and statutory rebate schemes, which see companies returning a growing percentage of revenue to the Treasury each quarter.
Contrary to popular belief, the spend on medicines has actually decreased by about 0.4% year on year over the past five years, when adjusted for inflation. This is in contrast with the 3.3% increase in spending that the rest of the health service has enjoyed.7 One has to consider whether this constant squeezing of drug spend isn’t rather short-sighted, if the NHS is to continue to pioneer the best and most innovative healthcare in the world.
The UK has, in the past, managed to balance both the interests of the taxpayer and patients, by keeping spend on medicines low, whilst ensuring access for most patients. This has prompted accusations, notably from the US, that this is at the expense of patients elsewhere in the developed world.8 When questioned by the Senate on why America spends 160% more per capita on prescriptions than the UK, the leaders of several large multi-national pharmaceutical companies posited that America was carrying the cost of research and development (R&D) for the rest of the world, as they are unable to recoup costs elsewhere.9 The Prime Minister may yet be cornered on this as Donald Trump bids for re-election on a platform including a promise to reduce drug prices for American patients.10
Trump’s rhetoric may firmly put pharmaceutical prices at the forefront of the public consciousness. Yet it remains the case that it is increasingly challenging to launch new medicines in the UK. This is ultimately to the detriment of patients and wider society.
As Johnson embarks on his first 100 days in office, setting the tone for the rest of the term, he will wish to put to bed the concerns about an increased medicines bill. Allowing unbridled spending on all medicines would not be a fair or popular use of Treasury funds. But if he is to deliver other aspects of his vision – investment in R&D, delivering a first class NHS and encouraging inward investment in life sciences – he will also need to ensure that the true value of medicines is recognised and that the UK is seen to be a life sciences friendly jurisdiction.
Only by doing this will the concerns of multinational companies be addressed to prevent de-prioritising the UK as a primary launch market. The £500m Innovative Medicines Fund may be a good start, but there is more to do in order to ensure the patients get access to new medicines at prices reflective of the value delivered to the NHS and society.
Claudia Forsyth is a consultant at Decideum. Go to www.decideum.com