Pharma for the ‘common good’? Calls to end corporate monopoly as figures reveal rising NHS prescriptions bill

Caitlin Logan

New NHS figures reveal average prescription cost has risen nearly 15 per cent in five years

SOCIAL JUSTICE campaigners have called for a shift away from the ‘profit-driven model’ of the pharmaceutical industry as new figures reveal NHS Scotland is facing increasing strain on its budget from prescription costs.

Data published today (25 July) show that the total cost of the NHS dispensing medicine and delivering pharmacy services in Scotland has gone up by 25.7 per cent over the last 10 years to £1.3bn, while the amount spent specifically on medicines has increased by 19.7 per cent over the same period to £1.2bn.

In the last year, the overall cost for medicines went up by 2.7 per cent, while the number of prescriptions dispensed went down slightly (-.0.1 per cent) this year for the first time in a decade. However, the number of prescribed drugs is 20.5 per cent higher than in 2008.

This year, the average cost per item prescribed went up by 29p to £11.27. The average cost of items has increased each year over the past five years, now 14.4 per cent higher than in 2012 and reaching its highest point since 2008, when the average cost was £11.35.

“Scotland should look seriously at the possibility of creating a publicly owned national pharmaceutical company.” Dr Craig Dalzell, Common Weal

Dr Craig Dalzell, head of research at think tank Common Weal has suggested that the financial pressure on the NHS illustrates the need for a radically different approach to how medicine is procured.

He said: “Scotland needs to take a longer term and more strategic approach towards drug procurement. Security of supply should be a priority in a world of Brexit, volatile trade disputes and rising prices.

“Scotland should look seriously at the possibility of creating a publicly owned national pharmaceutical company which could produce key drugs and equipment for NHS Scotland.

“It may also take on the objective of producing patent-free medication for export which could have the effect of reducing the cost of drugs in other countries and disrupt an increasingly restrictive market. This would be a major act of working for a global Common Good.”

The NHS report explains that the rising costs of prescription medicines can be partly explained by “market conditions” such as price increases for items in short supply, the introduction of new medicines, and the fact that high cost treatments are increasingly being delivered in primary care as opposed to hospitals.  

The greater numbers of prescriptions dispensed can, the report suggests, be attributed to an ageing population, more people living with long term conditions, and GPs’ use of guidelines on prescribing.

The Scottish Government has noted that the figures are not adjusted for inflation, which would also account for some of the changing costs.

The Healthcare Financial Management Association (HFMA) has warned that the overall trend of rising medicine costs could mean that “savings will have to be found elsewhere” in NHS Scotland as drugs take up an increasing portion of its budget. Meanwhile, pharmaceutical companies have faced criticism for relaunching the same, or highly similar, drugs under a new brand at higher prices.

READ MORE: ‘Holding patients’ lives to ransom’: Scottish cancer patients call for government intervention as big pharma prices NHS out

Global Justice Now (GBN) has been leading on a campaign to end the influence of “corporate greed” in pharmaceuticals to ensure affordability and availability of vital drugs. Liz Murray, head of Scottish campaigns at Global Justice Now, told CommonSpace that the latest figures revealed the “strain of high cost medicines” for NHS Scotland.

Murray said: “Pharmaceutical companies are charging runaway prices, propped up by monopolies from patents on new drugs. This profit-driven model has made the pharmaceutical industry the most profitable in the world, but at the expense of patients, as the NHS is increasingly having to turn down or ration new effective medicines.

“A prime example of this is the breast cancer drug pertuzamab, which NHS Scotland is not currently able to offer to patients here due to its high cost.

“Drug companies justify high prices by claiming they need to recoup their research and development costs. But nine of the top ten pharmaceutical companies spend more on marketing than on research and development.”

The data release also highlights the 10 drugs which have seen the greatest increase in spending in the last year, with the NHS spending an additional 92.6m on these drugs alone.

Some of these rises were due to a considerable increase in the volume being prescribed, such as viral hepatitis drugs sofosbuvir and velpatasvir, which replaced other treatments and started being dispensed outside of hospital more regularly.

Others, like levetiracetam, which is used to treat epilepsy, saw a volume increase of just eight per cent, but an increase of 161 per cent being spent on the drug. While spending on olanzapine and quetiapine – drugs used to treat schizophrenia and bipolar disorder – increased by 1242 per cent and 215 per cent respectively, the volume prescribed of each only increased by two per cent and eight per cent.

“The UK and the Scottish governments should attach conditions to publicly funded research and development to stop these price hikes.” Liz Murray, Global Justice Now

A report published by GBN last year also revealed that pharmaceutical companies often buy drugs which were developed through publicly funded research and sell them back to the NHS, meaning that the taxpayer effectively “pays twice” for the drugs.

Preventing this practice, Murray said, could be a first step in ensuring such companies don’t profit from “charging extortionate prices while patients are denied access to vital medicines”. 

She added: “The UK and the Scottish governments should take action and attach conditions to publicly funded research and development to stop these price hikes and to ensure crucial drugs are accessible and affordable for all.”

Several major pharmaceutical companies, such as Pfitzer, Flynn Pharma, Actavis and Concordia have faced significant fines in the UK for unfair price increases. GlaxoSmithKline was fined £37.6m this year for “pay for delay”, meaning it abused the market by making deals to delay the launch of a cheaper generic copy of an anti-depressant drug.

Scottish Government health secretary Jeane Freeman said the new figures were “in line with anticipated trends” due to more people being treated in the community, a practice she said will deliver better outcomes and value for money.

She added: “However, we expect NHS Scotland to always look for opportunities to work with pharmaceutical companies to reduce the cost for drugs wherever possible.

“Supply issues, an ageing population, increasingly complex health care needs, more people living with long term conditions, and the impact of the volatility in the value of the pound in recent years are also contributory factors to increased costs.

“Legislation controlling what the NHS pays for medicines and supplies is currently reserved to the UK Government and we are continuing to press them to ensure we can get best value.”

Picture courtesy of Marco Verch