NHS - Why no organic pharmaceutical capability in NHS?

#1
Current media reports are warning of increased resitance to anti-biotics. One of the issues highlighted was a resistance (geddit!!??) by pharmaceutical giants to invest in drugs with a short product life (due to resitiance forming) and short prescription period (ie you're not on them for life).

That got me thinking, why does UK plc not have a pharmaceutical wing? Surely that would; allow research proirities to be based on patient demand - not market demand, reduce NHS drug bills and give you a bargaining chip with the private sector for licence sharing?

Any ideas?
 

Fronty

Old-Salt
Book Reviewer
#2
Money

researching drugs takes a lot of it, and the companies that do it like to have a lot of return on the investment. Alos, UK PLC can't pay much, but Roche et al can because of said return.

An alternative would be a law telling drug companies what they have to do, but they would probably just ignore that.
 
#4
Money

researching drugs takes a lot of it, and the companies that do it like to have a lot of return on the investment. Alos, UK PLC can't pay much, but Roche et al can because of said return.

An alternative would be a law telling drug companies what they have to do, but they would probably just ignore that.
I'm not sure I buy that. NHS Budget is £100 Bn, £60 Bn goes on personell, £20 Bn on drugs. Now, compare that with GSK whose revenue is £28Bn, at a cost of sale of £7 Bn and at an R&D bill of £5 Bn. Doesn't seem out of the NHS's scale to play in that market?
 
#6
So it looks like we fund discrete pockets of research. I was thinking more of the likes of a state owned version of GSK. Rather like we have state owned banks that operate as commercial entities, but with shareholder driven expectations.
 
#7
So it looks like we fund discrete pockets of research. I was thinking more of the likes of a state owned version of GSK. Rather like we have state owned banks that operate as commercial entities, but with shareholder driven expectations.
Because the state never runs business ventures correctly, we would need "specialists" like diversity managers, one legged lesbian support managers and all the other trappings that come with state intervention.
The lifecycle of a new drug is often over 20 or 30 years, mostly spent on research, for a 10 year return when they finally do go to market. Added to the risk of lawsuits when things dont work properly (look at the fiasco over Thalidomide and other drugs that have unforseen side effects).
Would the poor suffering UK taxpayer be able to afford to fund 20 years of research for 10 years return on sales, with the likelihood of expensive court cases lurking in the future?

Its not like we dont have enough demands on our taxes.
 
#8
Because the state never runs business ventures correctly, we would need "specialists" like diversity managers, one legged lesbian support managers and all the other trappings that come with state intervention.
The lifecycle of a new drug is often over 20 or 30 years, mostly spent on research, for a 10 year return when they finally do go to market. Added to the risk of lawsuits when things dont work properly (look at the fiasco over Thalidomide and other drugs that have unforseen side effects).
Would the poor suffering UK taxpayer be able to afford to fund 20 years of research for 10 years return on sales, with the likelihood of expensive court cases lurking in the future?

Its not like we dont have enough demands on our taxes.
But surely we pay for the drugs with our taxes and we also pay profit factor to the pharmas with our taxes. Surely we would ultimately pay less tax if we paid less percentage of the budget to reward private investors?

Was looking at CERN as an example of world class research under a European flag. Most EU countries have a socialist take on public health and we could all benefit from public sector research?
 
#9
Sanchauk, who would pay for the research that never makes it to the market place? There is plenty of that. Added to the fact that a drug manufactured by a company here will be sold worldwide, requiring that drugs have to be approved by numerous governments, and marketed in the various languages across the world. Creating new drugs is a multi billion business, I'm not sure its something we should entrust to governments and civil servants.

Yes we do pay for the drugs with our taxes, and this is one area currently being examined by the Coalition government as the NHS is being seen as potentially a closed market for the Drug Companies, allowing them to charge top dollar prices for their drugs.

CERN will never be required to turn a profit as it is funded by contributions from member governments, but ultimately what will it do for you and me, who are expected to pay our taxes to fund such ventures? Will we see a return on our investment, probably not!
 
#10
Lobbying.

We have to remember the pharmacutical industries provided a rapid drum beat of new drugs for the entire history of the NHS the costs have only really spiralled over the last 10 years. Pharmacutical companies began taking advantage of patent protection in the late 60s (its a new drug because we have added a bulking agent that does nothing, patent retained!) and spectacular price increases which are outside of reasonable R&D costs - given that the seed research especially in Europe trends to be at the university level which is partially or wholly state funded.

This has led to a situation where they can claim rather easily through interested parties that they warrant the charges they put forward and any central state operation would fail.

However from a few people I know in the field this myth is perpetrated for two reasons,

1. The last government was wholly ignorant of scientific research and corporate management. The last 13 years have seen a mix of trade unionists, lawyers and long term political employees - no specific scientific specialities in ministers. They have sought to ignore non-populist scientific advice (on drugs, vaccines etc.) and have politicised scientific bodies such as NICE through special advisors and non-specialist management.

2. There are many private sector methods around the ludicrous expenditure rates we engage in that several other nations have already taken (we follow on the coat tails of the yanks who are also beholden to the pharmacutical industry due to lobbying and low mental calibre of politician). These range from legislative - preventing price gouging of drugs, preventing too similar druge being granted renewed patents (this is key as it means everyone can then make it and price falls down to a reasonable level) to more pro-active, such as a rolling state franchise for licensed pharmacutical production within certain price boundaries.

Here UK based pharmacuticals companies compete for rolling two year contracts to produce the drugs the NHS needs - pharamacutical companies have a huge UK footprint already, this would lead to a increase in employment in the relevant area and economies of scale in these firms by focussing on drug demand that the NHS wants. As production in the industry has already been made as a fully adaptive fixed capital investment changing what they make is not an issue.

Chum of mine did his post-doctoral pharmacy thesis on medical pharmacutical productive reform, we could save billions over night by spending centralising drug licensing with that state and awarding a franchise for production. Also emergancy measures such as vaccines and other druge we suddenly need (if we need them....) can then be made for a pittance.
 
#11
Thanks for that ASICarrot. So I guess you are advocating an approach that would secure our stategic requirement for resilience (eg vaccine, anti-virals etc, clinical demand led research) and reduce short -term costs.

It soumds similar to a lot of the business models in my business - oil. What is perceived as private sector is in many cases globally driven by public sector companies.

In summary, you are proposing a step up from my GSK-esque enterprise to a government regulated pharma sector?
 
#12
Lobbying.

We have to remember the pharmacutical industries provided a rapid drum beat of new drugs for the entire history of the NHS. Pharmacutical companies began taking advantage of patent protection in the late 60s (its a new drung because we have added a bulking agent that does nothing, patent retained!) and spectacular price increases which are outside of reasonable R&D costs - given that the seed research especially in Europe trends to be at the university level which is partially or wholly state funded.

You are quite right that changes are made to try to extend the patent life, usually by changing delivery method and release characteristics, some add to the product some don't. However the patent is from the time a new molecule is isolated not from when that product hits the market and, even while on patent parallel imports can damage income (yes, I know it's shooting one's own foot and can be construed as proof of overpricing).


This has led to a situation where they can claim rather easily through interested parties that they warrant the charges they put forward and any central state operation would fail.

The Government legislates and reality dictates that much of a drug company's income is returned in R&D. A company has to be innovative in order to survive, they also have to be extremely diverse. Whether one section of a huge Government owned conglomerate would be as diverse is open to conjecture. I personally believe that much of the niche research would be binned for the high (political) interest areas.


However from a few people I know in the field this myth is perpetrated for two reasons, 1. This government is wholly ignorant of scientific research and corporate management. The last 13 years have seen a mix of trade unionists, lawyers and long term political employees - no specific scientific specialities in ministers. They have sought to ignore non-populist scientific advice (on drugs, vaccines etc.) and have politicised scientific bodies such as NICE through special advisors and non-specialist management.

2. There are many private sector methods around the ludicrous expenditure rates we engage in that several other nations have already taken (we follow on the coat tails of the yanks who are also beholden to the pharmacutical industry due to lobbying and low mental calibre of politician). These range from legislative - preventing price gouging of drugs, preventing too similar druge being granted renewed patents (this is key as it means everyone can then make it and price falls down to a reasonable level) to more pro-active, such as a rolling state franchise for licensed pharmacutical production within certain price boundaries.

Here UK based pharmacuticals companies compete for rolling two year contracts to produce the drugs the NHS needs - pharamacutical companies have a huge UK footprint already, this would lead to a increase in employment in the relevant area and economies of scale in these firms by focussing on drug demand that the NHS wants. As production in the industry has already been made as a fully adaptive fixed capital investment changing what they make is not an issue.

Chum of mine did his post-doctoral pharmacy thesis on medical pharmacutical productive reform, we could save billions over night by spending centralising drug licensing with that state and awarding a franchise for production. Also emergancy measures such as vaccines and other druge we suddenly need (if we need them....) can then be made for a pittance.
You can argue a strong case for generic production although the truth is that most generic production occurs outside of the UK. The NHS prescribing guidelines already demand generic scripts wherever possible and the drug tariff helps control prices to an extent.

Most NHS research posts (Registrars) are funded by pharma companies or charities or both. Most original drug research is initiated and developed by pharmaceutical companies and what they do with much of their profit is shaped by legislation. I would argue that extending patent life would do more to reduce branded drug costs than mass generic production forcing wasted research on different delivery systems or tandems.

The pharmaceutical system is an easy target for Governments who do little to tackle the enormous wastage in the biggest bulk of the NHS budget; wages. Make huge waves about 5% of the overall budget and hope no one sees how overstuffed your non-medical wages bill is whereby the top earners in a hospital or trust are non-medical personnel.

BTW would be interested to read your friend's research if he has published yet, would be grateful for a link.

Cheers
 
#13
Markintime,

I can't help but agree with your premise that it would be easy targeting to squeeze pharmas to reduce £20Bn, when the NHS wage bill is £60 Bn.

However, referring to the opening posts comments on profit led rather than clinical demand led R&D and with reference to ASICarrot's comments on emergency vaccine production, in an increasingly globalised world how does the current status quo provide for ther UK's strategic needs?
 
#15
Markintime,

I can't help but agree with your premise that it would be easy targeting to squeeze pharmas to reduce £20Bn, when the NHS wage bill is £60 Bn.

However, referring to the opening posts comments on profit led rather than clinical demand led R&D and with reference to ASICarrot's comments on emergency vaccine production, in an increasingly globalised world how does the current status quo provide for ther UK's strategic needs?
With most vaccines huge stocks are manufactured and it's NHS buying patterns that limit supply. As for research based solely on the NHS needs that would never produce enough revenue, even for a nationalised pharmaceutical industry, to even get one product to market.
Whilst you have private pharmaceutical companies you have the Government to keep them from cutting corners and fudging data. Merge the two and who will act as watchdog? More to the point do we really want a pharmaceutical industry that is run as efficiently as the NHS?
Thanks for the data Jarrod. Bear in mind that's 12-15 years of a 20 year patent gone. It doesn't leave much time to recoup R&D costs for that product let alone continue funding the on-going projects.
 
#16
They are very squeezed now, many are merging, loads of reps been made redundant, the conferences that used to be full of free champagne and gifts are really dried up now. To get funding from drug companies to attend conferences is really hard. I used to be able to pick and choose where and when I went. The companies were so rich at one point some GP's here ate out everynight with a different drug rep or sponsored event with a meal.
Now that made me chuckle. It's a classic recession tactic. The reason that it has dried up is that they see no value in entertaining you, so under the banner of a recession they pull the plug on it. The last thing anyone does in a recession or tough times is cut sales expenditure that is perceived as valuable.
 
#17
Mark I was not suggesting a merged government produce I was advocating a rolling franchise - the competition for the slot would force economies of scale plus other strategic benefits (as Jarrod is pointing out). It is not so much about running it like the NHS, it is forcing it to provide for the NHS needs. Chinese and Indian pharmacutical high end research and production... christ even Sinapogrean university research in wholly funded government departments is blowing the Western R&D model (in particular its costs) to pieces. I know they have major shortcuts the Chinese and Inains can make in ethics, patents etc. which save millions but they seem to be avoiding the hyper inflation in prices at every level pharmacuticals has seen in the last 30 years.

I am also not suggesting this franchise operated as a supply monpoly, sorry for not making this clear, this franchise would be the day to day drug demands and production of the NHS plus a strategic production capacity for vaccines etc. The NHS would be free to pursue research and purchase drugs from other providers.

I think with some of the mid range players taking a beating at the moment there is scope for having mid market firms already based in the UK re-rolling to compete for a general clinical led research and licensed productive franchise rather than trying to compete at the bun fight level of research. The legislative point was not for a government to change terms of returns on R&d etc. but to sidestep a number of the issues associated with licensing and soverign production.

I will give Dr Shileds a bell to see where he is at with it, as Jarrod implies, like the whole sector, he has taken a clobbering on grants (as have the publically funded post-graduate sector....)
 
#18
Current media reports are warning of increased resitance to anti-biotics. One of the issues highlighted was a resistance (geddit!!??) by pharmaceutical giants to invest in drugs with a short product life (due to resitiance forming) and short prescription period (ie you're not on them for life).

That got me thinking, why does UK plc not have a pharmaceutical wing? Surely that would; allow research proirities to be based on patient demand - not market demand, reduce NHS drug bills and give you a bargaining chip with the private sector for licence sharing?

Any ideas?
The main reason that resistance to anti-biotics is increasing is down to ignorance, by both patients and prescribers. Any new anti-biotic becomes useless because patients stop taking it too soon. Education about evolution could keep anti-biotics effective for a lot longer than they are at the moment.
 
#19
Mark I was not suggesting a merged government produce I was advocating a rolling franchise - the competition for the slot would force economies of scale plus other strategic benefits (as Jarrod is pointing out). It is not so much about running it like the NHS, it is forcing it to provide for the NHS needs. Chinese and Indian pharmacutical high end research and production... christ even Sinapogrean university research in wholly funded government departments is blowing the Western R&D model (in particular its costs) to pieces. I know they have major shortcuts the Chinese and Inains can make in ethics, patents etc. which save millions but they seem to be avoiding the hyper inflation in prices at every level pharmacuticals has seen in the last 30 years.

Many of the cost increases are due to increased H&S legislation on what was already a highly regulated industry. Many of the cost saving devices that can be used by any other industry cannot be employed within the health care industry, plastics, for example must be virgin and not recycled. Disposable equipment once past use by date cannot be resterilised. I have seen the standard of many of the generics that have come from Asia and it doesn't fill me with confidence although I'm not aware of their R&D models but am happy to take your word for it. I have a friend who is an Obstetrician/Gynaecologist in the States and he tells me that, statistically he will lose a multi-million dollar lawsuit every three years, I wonder what the figures are for pharmaceutical firms?

I am also not suggesting this franchise operated as a supply monpoly, sorry for not making this clear, this franchise would be the day to day drug demands and production of the NHS plus a strategic production capacity for vaccines etc. The NHS would be free to pursue research and purchase drugs from other providers.

Strangely enough much original vaccine research and manufacture of strategic vaccines occurred at David Bruce Laboratories which the Government deemed no longer necessary. The fact is that almost all vaccines are readily available and readily producible in this country from existing manufacturers, certainly many may be foreign owned but I can't see the Government being able to produce a viable production company for such a relatively small amount.

I think with some of the mid range players taking a beating at the moment there is scope for having mid market firms already based in the UK re-rolling to compete for a general clinical led research and licensed productive franchise rather than trying to compete at the bun fight level of research. The legislative point was not for a government to change terms of returns on R&d etc. but to sidestep a number of the issues associated with licensing and soverign production.

Many of the mid-range pharmaceuticals have moved over to generic or branded generic production (there's a clever little tool to hook those greedy dispensing GPs). Pharmaceuticals know that their income will plummet once the generics hit the market then, when perhaps the drug has gone out of fashion and is just used on a historical maintenance basis then the only ones who are left manufacturing are the original or subsequent patent holders who are obliged to do so. I still maintain that a longer patent life is the key. BTW those different compounds to extend the patent? Often they are there to get round mass generic prescribing. Voltarol Retard written as diclofenac SR is still going to be issued as Voltarol because the generic manufacturers rarely manufacture versions of the original that include expensive delivery systems, often because their manufacturing plants are not sophisticated enough to do so. Napp Laboratories have made a fortune out of their efficient Continus release system (as well as cleverly trademarking MST as a brand). Astra's PPI earned over a million a day within weeks of launch but it still never completely covered its full research costs. Boots were almost brought to their knees when their post-MI drug was withdrawn a year after launch and that was only because the higher strength (only) increased mortality

I will give Dr Shileds a bell to see where he is at with it, as Jarrod implies, like the whole sector, he has taken a clobbering on grants (as have the publically funded post-graduate sector....)
Unfortunately everyone in a recession tightens their belts. Regulations dictate that so much of a drug company's profits must be spent on R&D and so much on marketing (education). That money is still spent on marketing, it has to be by law, but it is spent in other ways and drug companies are a bit more keen to see results for their outlay than they were before.
 

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