Is the NHS be­ing held to ran­som by big pharma?

The ris­ing price of treat­ment has been a bit­ter pill to swal­low for pa­tients, re­ports Iain Withers

The Sunday Telegraph - Money & Business - - Business - Tele­graph The Sun­day

Late last year Bri­tain’s com­pe­ti­tion watch­dog slapped a record £90m worth of fines on US drugs gi­ant Pfizer, and British man­u­fac­turer Flynn, for jack­ing up the price of an anti-epilepsy pill by more than 2,000pc. To crit­ics of big pharma, it was a clear and egre­gious ex­am­ple of “price goug­ing” – hik­ing the price of a prod­uct in a mar­ket you dom­i­nate in or­der to rake in big profits.

But for Pfizer and Flynn – who em­bark on an ap­peal against the de­ci­sion later this month – it was a jus­ti­fied in­crease to en­sure con­tin­ued sup­ply of a drug they claim had pre­vi­ously been loss-mak­ing.

As the ar­gu­ments are heard at the Com­pe­ti­tion Ap­peal Tri­bunal in the com­ing weeks, it will once again shine an un­com­fort­able light on the ten­sion be­tween drug mak­ers and the health ser­vice over ris­ing medicine prices.

But one place this bat­tle will not be played out is at the High Court, af­ter it this week threw out a ju­di­cial re­view chal­lenge by in­dus­try trade body the As­so­ci­a­tion of the British Phar­ma­ceu­ti­cal In­dus­try (ABPI) against NHS drug pric­ing pow­ers.

These pow­ers en­able the health ser­vice to ra­tion the use of medicines ex­pected to cost more than £20m in any of their first three years of use – some­thing the ABPI com­plained would limit pa­tients’ ac­cess to cut­ting-edge treat­ments.

How­ever the chal­lenge came to noth­ing and the ABPI said it would not ap­peal against the de­ci­sion. None the less, both clashes bring into sharp fo­cus the ques­tion of whether pa­tients get a fair deal on drug prices. Is big pharma rip­ping us off ? Or should we spend more on drugs?

It’s an is­sue that di­vides drug firms and pol­i­cy­mak­ers. The in­dus­try points to var­i­ous in­di­ca­tors sug­gest­ing British pa­tients are get­ting a raw deal as pub­lic bod­ies try to save on the na­tion’s £15bn medicines bill while ar­guably not pri­ori­tis­ing ac­cess to the lat­est life-sav­ing ther­a­pies.

Dr Richard Tor­bett, ex­ec­u­tive di­rec­tor of the ABPI, says: “If we look at com­pa­ra­ble coun­tries, Bri­tain pays some of the low­est prices for medicines but has some of the low­est ac­cess – mean­ing pa­tients ul­ti­mately miss out.” The Gov­ern­ment’s own com­pet­i­tive­ness in­di­ca­tors show that for ev­ery 100 pa­tients in France, Spain and Ger­many that get ac­cess to a medicine in the first year af­ter ap­proval, just 18 get it in the UK.

Mean­while, the ABPI’S can­cer com­para­tor report in July, en­dorsed by Can­cer Re­search UK, found that on av­er­age British pa­tients had lower lev­els of ac­cess to six lead­ing can­cer medicines than EU coun­ter­parts.

Drug mak­ers say they also have an agreed sys­tem in place with the Depart­ment of Health to cap in­creases in the lion’s share of NHS’S over­all branded medicines bill to no more than 1.1pc a year. The sys­tem has re­sulted in more than £2bn be­ing re­bated since 2014. But it does not cover all medicines and is up for re­newal in early 2019.

Cru­cially it also does not cover so-called “generic medicines”, where a drug’s patent has run out, al­low­ing firms to in­crease its price through a process known as “de­brand­ing”.

Noel War­dle, at law firm Charles Rus­sell Speechly, be­lieves the “de­brand­ing” process lets the sec­tor down. “If you view the mar­ket as a whole then the NHS gets a good deal in terms of medicine prices,” he says.

“But there are anom­alies that cre­ate head­lines and cause con­cern where money is spent un­nec­es­sar­ily.”

It was a generic drug, anti-epilepsy medicine Epanutin, that got Pfizer and Flynn in hot wa­ter with the Com­pe­ti­tion and Mar­kets Au­thor­ity (CMA). Once a patent has run out, a loop­hole in reg­u­la­tions al­lows firms to work with a dis­tri­bu­tion part­ner to re­brand it and in­crease its price.

The price of Epatunin, pheny­toin sodium cap­sules used to con­trol seizures in 50,000 pa­tients, went from £2.83 per pack to £67.50 overnight.

In a year the NHS’S bill for the same prod­uct leapt from £2m to £50m when all that changed was the name and the method of dis­tri­bu­tion.

Pfizer is com­mit­ted to ap­peal­ing against “all as­pects” of the CMA de­ci­sion but de­clined to go into de­tail.

The US firm stressed the drug had been “a loss-mak­ing prod­uct” and the deal with Flynn “rep­re­sented an op­por­tu­nity to se­cure on­go­ing sup­ply of an im­por­tant medicine for pa­tients with epilepsy, while main­tain­ing con­ti­nu­ity of sup­ply”.

It also said the re­tail price for Epatunin was set at up to 40pc less than an equiv­a­lent prod­uct, although the hard tablet form in­di­cated, crit­ics say, is not a strict equiv­a­lent given doc­tors are re­luc­tant to change pre­scrip­tions to even dif­fer­ent forms of the same drug for epilepsy suf­fer­ers given the del­i­cate brain chem­istry at play. Flynn de­clined to com­ment.

The CMA fines for Pfizer and Flynn came ahead of a change in law in April de­signed to help close the loop­hole.

Once en­forced, it will make firms sub­mit de­tailed fig­ures for how much it costs to man­u­fac­ture a drug and the profit be­ing made on it, with gov­ern­ment given pow­ers to claw back profits it deems as ex­ces­sive.

But its im­ple­men­ta­tion has been de­layed due to lack of par­lia­men­tary time fol­low­ing the snap elec­tion, sum­mer re­cess and party con­fer­ence sea­son. A con­sul­ta­tion is fi­nally ex­pected to be­gin next month ahead of the pow­ers start­ing in early 2018.

In the mean­time,

has seen ev­i­dence that the prac­tice of steep drug price rises through the “de­brand­ing” route is still hap­pen­ing. Ben Mer­ri­man, a phar­ma­cist from Cum­bria who sits on a lo­cal NHS com­mis­sion­ing group, says he has iden­ti­fied around 90 drugs over the last few years that have had steep price in­creases through de­brand­ing that he be­lieves were for “no good rea­son what­so­ever”.

“The prac­tice is still go­ing on and it’s a big is­sue cost­ing the NHS hun­dreds of mil­lions of pounds a year,” he says.

Charles Rus­sell Speechly’s War­dle says the prob­lem with “de­brand­ing” price hikes is that firms can get away with price in­creases where they ef­fec­tively hold a mo­nop­oly on that ther­apy area. “There’s not usu­ally the com­pet­i­tive ten­sion that drives down prices. So they can in­flate the price of these prod­ucts.” He says the new reg­u­la­tions com­ing through “will have teeth” but ac­knowl­edges there is a risk the trans­parency regime could be open to ma­nip­u­la­tion due to its re­liance on firms dis­clos­ing cost and profit fig­ures. On the wider pic­ture of over­all and branded drug prices the de­bate will rage on. The ABPI said this week af­ter its High Court chal­lenge fell through that work­ing with gov­ern­ment and the NHS “we must now fo­cus on find­ing real, work­able so­lu­tions to help NHS pa­tients get fast ac­cess to the medicines they need”.

But the back­drop is of ris­ing costs for next gen­er­a­tion treat­ments, in­clud­ing per­son­alised and ge­netic ther­a­pies for dis­eases like can­cer, putting po­ten­tially more pres­sure on the health ser­vice.

Pol­icy spe­cial­ists point to stud­ies sug­gest­ing the NHS al­ready pays ex­ces­sively for drugs, in­clud­ing a Uni­ver­sity of York re­search pa­per two years ago that con­cluded the health ser­vice should get bet­ter value.

Drug pric­ing pres­sure is an is­sue that’s here to stay. But the Gov­ern­ment has a chance to help stamp out “price goug­ing” if it can only roll-out the new pow­ers it has de­cided on quickly.

‘Bri­tain pays some of the low­est prices for medicines but has some of the low­est ac­cess – mean­ing pa­tients miss out’

Pfizer’s Vi­a­gra pill pepped the mar­ket, above, and profits from its medicines power new re­search, such as at this Pfizer cen­tre in China, be­low, but crit­ics say the cost is too high

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