Page last updated at 23:07 GMT, Tuesday, 11 August 2009 00:07 UK

'Pharma companies aren't profiteering'

David Fisher
By David Fisher,
Association of the British Pharmaceutical Industry

New medicines "cost millions" to develop

Drug costs are regularly criticised as being too high - and the pharmaceutical industry attacked for not making them cheaper.

But David Fisher, commercial director for the Association of the British Pharmaceutical Industry, says companies are unfairly attacked.

No one can fail to be moved by the experiences of cancer patients who are literally dying for the latest medicines.

My own father succumbed to cancer in 1993, and everyone who has been through that experience knows how patients and families are desperate for any help which will provide them with hope for the future.

But tough decisions have to be made - by the National Institute for Health and Clinical Excellence (the NHS drugs watchdog), NHS executives and patients and their families who wonder if they should use up their life savings paying for medicines which have been rejected by NICE.


The pharmaceutical industry, the people who discover and make the medicines which can add precious months and years to the lives of terminally-ill cancer patients, face a different kind of angst.

They risk millions upon millions of pounds in order to find new medicines to treat people who are sick and dying and for whom there is currently no treatment.

The odds of success are almost "impossible".

If they are successful, the companies have to make enough money to recoup their investment and then fund increasingly expensive research and development in order to find the medicines of the future

UK prices are low, total spend is low, and the cost per prescription is low and falling

In the process, they are often vilified as profiting from ill-health.

As an executive within the pharmaceutical industry, I want to stand up for my colleagues.

There is often concern about the price of medicines and their cost to the NHS in relation to the other calls on its £100 billion budget.

Department of Health figures show that 12% of total NHS expenditure goes on medicines, yet it sometimes feels like this is the area which gets all the attention.

We are fortunate in the UK, that the existence of a national health service allows us to "pool" or share our risk (or cost).

This means that we can balance the high cost of some medicines, particularly those for rare diseases, against the lower cost for the majority of medicines.

'Significant hurdles'

It is the Department of Health's (DH) role to control prices, and this is done by what is known as the Pharmaceutical Price Regulation Scheme (PPRS).

In short, this limits the profit that pharmaceutical companies can make and the department has the ability to implement periodic price cuts.

The price of medicines in the UK has been reduced by 7% in 2005, a further 3.9% this year, and will decrease by a further 1.9% next year.

Each 1% reduction in the price of branded medicines saves the NHS roughly £80m per year.

Under this scheme companies are in theory free to set prices for some new medicines when they are first licensed, but NICE sets significant hurdles for prices.

Prices in the UK are amongst the lowest in Europe, and we spend far less on medicines than our European neighbours.

Revlimid, a treatment for bone marrow cancer, was a good example (and there are others) where manufacturers have shown flexibility in pricing in the UK, despite the fact that the same medicines are widely available to patients elsewhere in Europe and often at higher prices.

No-one is arguing that pharmaceutical companies should not demonstrate the value for money which their medicines deliver so that NHS can strike the right balance. That is perfectly proper.

But when it comes to considering the balance to be struck, we need to remember that recent price cuts have contributed billions to NHS savings, and in comparison to other countries where new medicines are often more readily available to patients, UK prices are low, total spend is low, and the cost per prescription is low and falling.

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