NHS - Why no organic pharmaceutical capability in NHS?

Discussion in 'Current Affairs, News and Analysis' started by sanchauk, Aug 12, 2010.

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  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?
  2. Fronty

    Fronty Old-Salt Book Reviewer


    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.
  3. 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?
  4. Don't the Universities get some of their (medical) research funding from UK plc?
  5. 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.
  6. 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.
  7. 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?
  8. 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!
  9. 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.
  10. 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?
  11. 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.

  12. 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?
  13. @ Jarrod. Pharmas make plenty of profit showing that they know how to operate successfully within the risks you mention .
  14. 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.