You are chancellor of the exchequer , what do you cut

[Man On The Clapham Omnibus]

It occurred to me a while ago that pharmaceuticals is a business that is bound to boom. Nobody wants to be ill and good drugs are priceless to some. The pharma companies know this and milk it for all they're worth. Perhaps British universities could be paid by government to develop pharmaceuticals for the NHS - it would both fund the universities and save the NHS a lot of money. Sale of rights outside UK would bring in yet more money. For the amount spent on the Olympics it's not inconceivable that a decent drug for a common condition (you choose) could have been developed.

[Norman Verona]

As far as I can tell, the UK lead the world in cancer drug treatment. However, I'll bet a pound to a penny the USA will make all the huge profits. All they do is not give our products licence and "copy" the drug and then sell to all and sundry at lowere prices as they haven't spent the billion dollars in R&D.

I also think the NHS may pay more for their drugs then the French do. I was never prescribed Metformine for diabetes. My French doctor was surprised and prescribed them. 4000 mg per day. The cost was 18€ per month At that time I had to pay in full as the UK tax people didn't think that 49 years tax and NI wasn't enough to grant me a cert to get into the French system. The cost was circa £2500 pa. A lot less than me using the NHS would have cost. Then I was told that the UK doctors won't prescribe due to cost.

Did you see the report last week about the difference in price health authorities pay for the same item from the same supplier. Why, oh why aren't we setting up a professional buying ministry staffed with professional buyers to do all state buying, for health, schools, government, armed forces etc. Probably too simple and worthhile.

[markcoopers]

Perhaps the proportion of ones taxes normally reserved for benefit claimants should be paid direct, once the claimant has satisfied the payer (to a sensible level) that they have contributed to society that week. Sounds a bit bitter i know, but i don't mind paying taxes or even helping others down on their luck or not given the same opportunities in life, but i do struggle with the notion that they are entitled....i have to earn mine.

[jim_l]

In defence of big pharma, where I have to declare an interest, times are tough, all of the big players are cutting tens of thousands from their headcount, cutting pay and closing pension schemes.  Three main reasons:

 

1) You don't just discover drugs in a lab then put them on the market, in fact the journey from discovery to market costs a billion dollars per drug if you factor in that 9 out of 10 fail to make it thorough clinical trials AFTER 100 million has been invested in finding out whether they are safe and effective. Of those that get to market only 1 in 3 recover their development costs.

2) The blockbuster drugs that could finance that kind of R&d are a thing of the past, the existing ones coming off patent and being made by generics , companies that copy them having not spent a penny discovering them..

3) Governments everywhere in the world are applying heavy downward pressure on prices.

Drug prices are a prime target, even though many drugs are keeping people out of hospital, and hospital cost in excess of £500 per day, many drugs are keeping people alive, others keeping people in work when they would otherwise be incapacitated and needing benefits and care.

 

So,Big pharma milking it is an overly simplistic view, because the shareholders want a return on the VERY high risk investments they are making?  beware...stifling innovation means that the drugs you need tomorrow won't be there...

 

As it happens I work in the animal health arm of big pharma, you know - increasing crop yields and fattening up animals...I hear the scorn building as you unload your organic shop from Tesco...but bear in mind there are a billion or more people in the world that wont get enough to eat today, add a billion more over the next few decades...You might want big pharma on your side..

   Enough said I think, no doubt some people have their minds made up already.

 

PS. The US, being the least price constrained country in the world in terms of drug products, is currently financing drug discovery for the whole world, if that changes, get worried.

[jim_l]

Poor big pharma, 100 years spent increasing life expectancy from about 40 to what it is now, and increasing the quality of that life. 100 years of putting life and planet threatening diseases in their place,  only to become the whipping boy...

 

point to note:  don't get the impression I am fully subscribed to every breath big pharma takes, we have come up short ethically on occasions, but on balance I think some credit is due.

[Martin Keene]

Norman's suggestions are where I'd start, except I'd go even further, DVLA would be scrapped entirely, diving licences can be covered by the passport office, possibly intergrating into one document, after all they both need renewing every ten years now. Registered keeper changes can be covered by a web site similar to the current tax disc system, this just leaves a small office required to cover new registrations, other v5 changes and IVA's.

The other one, and this is controversial, is I'd scrap child benefit entirely. Why? It stops people on benefits breeding to increase their income, and if you can't afford children, you shouldn't have them. Hopefully in a few years time this would also reduce the need for councils to tale children into care because they are not cared for properly.

[Norman Verona]

Jim, I can but agree with your view about the R&D budgets. However I cannot agree about the pricing. The drug companies should judge the sale volume and set a price. Why should the NHS pay more than the French for the same item? Because we haven't got professional buyers? 

 

Why should millions die of aids in the "third" world because they can't afford the drugs?

 

Drug companies should get a fair reward for the risk in spending on R&D. But they shouldn't charge far more to one entity than another.

[GDH]

I go skiing most years and kept bumping into a particular individual nearly every year.  While he was very p******** one night I asked what he did ...... the answer he is on full time benefits !    He has  not worked  for 17 years  and usually goes skiing two or three times a year  and perhaps a couple of summer holidays as well !! He did admit  he was in the black economy.  He was very interesting on how this life style was achieved.  He said that every new benefit change was shot full of holes and the first people on any new scheme usually made mint. 

I did not shop him as he but a symptom of the system.

What would I do ... Use his talents to find  people like him self by cutting all his benefits and pay him commission  for finding further individuals like himself in them benefits system .  

[s2rrr]

I had a mate who was very good at using the benefits system in Scotland. He was so good at engineering the system that the local benefits office asked him to advise other claimants as to what they were "entitled" to. Some of his deals were beyond belief and apparently within the rules.

 

Bob

[Norman Verona]

I knew someone like them. He was drawing over £400 per week in benefits. That was in the 90s. As a builders labourer he just could not afford to get a job.

 

But as you say, it's not him, it's the system that to blame.

 

That's why I think we should have a flat benefit all get and those in work pay back. No huge admin costs and a lot less fiddling as there will be nothing to fiddle.

 

There was a programme on daytime BBC some time ago about benefit cheats. A pair of sisters just rang the benefit office to say that yet another of their children had been diagnosed as autistic. With no checks the office just increased their benefits. All done with one phone call.

[jim_l]

It seems to me Norman that on the one hand you are suggesting drug companies set a global price, agreeing that they should get a fair return on their billion dollar investment , and on the other hand asking why people in Africa can't afford the drugs, seriously?

 

  Global pricing is exactly what happens with food, with produce traded as a global commodity, and a billion people go hungry..
  80% of the patients for an AIDS drug (i.e. sub saharan Africa) cannot afford the drug, even at cost or a fraction of the cost.

 

Nobody, as far as I know, is asking western farmers to ship their produce to Africa rather than sell it at a profit, because if they did the farm would not be viable and next year there would be no crop. Pharma is no different.

 

I am not sure what you expect drug companies to do, operate at a loss and go bust? putting an end to the research that is currently happening into Alzeimer's, cancers,other killer and debilitating diseases? or perhaps just not develop the loss making drug in the first place.

 

What we do is develop the drug, try to recover development costs in wealthier countries and work with the WHO, charities and governments worldwide on how the drug gets to poor countries.

 

In fact people in sub saharan Africa, where the vast majority of AIDS deaths happen, are not just dying because they can't afford the drugs. Tackling AIDS requires:

1. a) Education for prevention, all the drugs in the world will not solve the problem if the spread isn't contained.
2. The infrastructure, hospitals, doctors and nurses, to diagnose sufferers and administer the drugs.

We often provide drugs free to the World Health Organisation, they end up stockpiled as the infrastructure isn't there to get people diagnosed or administer the drugs, or they are used ineffectively as poor education and transport systems make it difficult to get people to attend a clinic for a full course of treatment.

 

The image of big pharma raking it in is a thing of the past, look at their shares, and look at the tens of thousands of job cuts, yet, in the face of that, two of the worlds leading drug companies are spending 10 Billion EACH on R&D...

 

 If you have a alternative workable model I would be happy to hear it.

With regard to pricing in Europe, it is negotiated with government bodies, some countries hold pharma companies to ransom and won't license a drug until pharma's profit is nailed to the floor... other more enlightened governments know that this will stifle R&D,

 

      Jim

[Norman Verona]

Jim, Yes, I agree with you about the price of drugs to Africa, I got a bit mixed up in trying to show haw different pricing can be.

 

In my business we have one price list and will gladly send a price to any serious enquirer. Most of our competitors only provide a total price when they have visited the dealership and felt the wealth.

 

That's what I think happens in the drug world, but I'll accept your assurance that they set a price based on market forces and it's the same for everyone.

[jim_l]

Not sure I have explained myself very well Norman, we don't set the same price for everyone - there is an extent to which we 'feel the wealth'  We negotiate with governments and we do charge more and recover more of the development costs from wealthier countries.

 

That might seem unethical to you, but a flat price model would simply make the products unavailable in most of the world.

 

I work for the company that first produced insulin on a large scale, back when Diabetes was a death sentence...the same company that first mass produced Penicillin,  the same company that has put hundreds of millions in and made massive strides in understanding how we will prevent and treat Alzeimer's

 

Yet to recover a penny of that hundreds of millions incidentally , but when we try to no doubt we will be everybody's whipping boy...

[Norman Verona]

I understand that the R&D budgets need paying for. I understand that the drug companies need profits. I have never critiscised anyone for making profits.

 

Only the way those profits are made.

 

I know what the price of the drugs I take are in the UK and what I pay in France. The price in France is there for all to see, we can see the price and our subsidy from the Social Services (Carte Vital)

 

I wouldn't want to curtail the R&D and I wouldn't want to stop reasonable profits (based on the risk factor and a good return on funds).

 

I can understand that different countries will have different pricing but this is usually to do with local taxes which inflate the end user price. My experience is based on car pricing.

 

But, what I can't understand is such a big difference in price between France and the UK where the taxes are about the same. A few bob here or there is OK, but 60% is difficult to justify. 

 

Maybe my example is a bad one. 

[jim_l]

Metformin has been around for decades Norman and will be made by generic, rather that research based, drug companies.  It is widely available for pennies per tablet, so I am not sure why you are being told what you are being told about getting it in the UK.

 

Either way you are quite right, procurement for the public sector should be done centrally by professionals, sheer scale should have a massive impact on costs. There is nothing that irritates me more than wastefulness in the public sector, we just can't afford it.