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The NHS Is Paying for Drugs Twice

Private companies are charging tax-payers for drugs that tax-payers helped discover.
(Photo courtesy of Global Justice Now)

It has been revealed that, last year, the NHS spent more than £1 billion on medicines that were developed using significant amounts of public money, effectively meaning the service is paying twice for drugs.

A report released this week by STOPAIDS and Global Justice Now argues that the commercialisation of these medicines by pharmaceutical companies has generated huge private profit from public funds. The report calls for attaching strings to taxpayer funding, greater transparency in drug pricing and for a radical overhaul in the way the research and development of new medicines is funded.


Of the top five most expensive medicines for the NHS, two were developed largely thanks to UK publicly funded research money. This means the public is paying twice over for some drugs: firstly on their research and development, and secondly on the finished product, which is sold back to the NHS by the pharmaceutical companies that have acquired the patent.

Patents give companies exclusive rights to a new drug for 20 years, and this lack of competition often leads to extraordinarily high prices being slapped onto new medicines.

Campaign and patient groups have called this a "scandal" and have accused the pharmaceutical industry of "ripping off" the public. An NHS spokesperson said that while it is "making major investments in new drug treatments, it is also essential that drug companies price their products responsibly".

"At a time when our NHS is already strapped for cash, we must end the scandal of the public effectively paying twice for the same medicine," said one of the report's co-authors, Tabitha Ha, of STOPAIDS.

Globally, the picture is even more troubling, with patients unable to get the medicines they need despite around a third of those medicines originating in public research institutes and two-thirds of all upfront drug research and development costs coming from public funding. The UK government is the second largest national funder of global health research and development, after the US.


"It's not just British patients that are being delayed or denied the medicines they need, either," says Ha. "Patients in the world's poorest countries are being ripped off too, even when generic versions are available at a tiny fraction of the price."

"It's hard to say whether people are dying in the UK as a result of this, but certainly they are worldwide," Morton Thaysen, a campaigner with Global Justice Now and one of the report's co-authors, told VICE.

A closer look at the money spent on different publicly developed medicines reveals the extent to which money is being wasted on a subtle form of privatisation.

Abiraterone is an advanced treatment for prostate cancer that was developed by the publicly funded Institute of Cancer Research. It was later bought by a subsidiary of the big pharmaceutical company Janssen. Even though 37 percent fewer people die when they take the drug, it was deemed too expensive by the NHS for two years. Now, the health service spends £98 per day per patient on it, despite the fact it was developed with public money and despite the fact a generic alternative is available for less than £4 per day, per patient. The NHS cannot buy the generic because abiraterone has been patented.

A FoI request made by the report's authors reveals that, by the end of 2016, Janssen's global sales of abiraterone had reached £7.5 billion. This is in stark contrast to the Institute of Cancer Research, which, despite originally discovering abiraterone, has earned just £137 million in revenues by the end of 2017 – the equivalent of about 2 percent of Janssen's sales.


Or take Alemtuzumab – developed at the University of Cambridge and purchased by a subsidiary of the French pharmaceutical giant Sanofi to treat a form of leukaemia. Scientists at Cambridge discovered it could also treat MS, and it was utilised for this purpose at a cost of around £2,500 per treatment in 2012. The Sanofi subsidiary Sanofi Genzyme then withdrew the drug from the market and re-launched it as an MS medicine. It now costs £56,000 per treatment course – a 22-fold price increase.

Examples of this kind of wealth transfer from the public to the private sphere are legion. In 2014, Melanie was diagnosed with breast cancer and told she had five years to live. Since then, she has spent almost £10,000 on Kadcyla, a "miracle" drug that is giving the single mother a chance of seeing her two children grow up. Produced by the Swiss pharmaceutical giant Roche, Kadcyla is the brand name for trastuzumab emtansine, a monoclonal antibody.

The key science underpinning all drugs in this family was done in the UK with British taxpayer funds, but Kadcyla only became available on the NHS in Northern Ireland, where Melanie lives, a few months ago, after a much-delayed drop in price.

"High medicine prices have affected me very directly," she says. "I had to crowd fund to pay privately for cancer treatment to prolong my life, as these expensive drugs were not available on the NHS at the time I needed them. I felt like I was having to beg for my life."


Many other patients have had to perform similar acts of financial sacrifice, sometimes going bankrupt as a result, in order to afford drugs that are not available on the NHS.

Pharmaceutical industry executives admit that just about every big company benefits to some degree from the public funding of biopharmaceutical research.

Pharmaceutical companies typically justify the high prices they set by pointing to the amount of money they plough into research, while they also tend to admit that they benefit from publicly funded research. Now, companies are beginning to drop the research cost justification and are instead saying their prices are simply based on market demand.

"These companies are not selling iPhones; they are selling essential medicine," says Morten Thaysen. "We are talking about life and death. It's too important to leave up to a profit-driven system." Governments and public institutions commit vast amounts of money into researching medicines for diseases that are not considered marketable by the pharmaceutical industry and then have that research cherry picked from them.

The creeping privatisation of the NHS comes in many forms. Spending large amounts of public money on medicines that were developed with public money is one of the most costly.