Prohibitive Cost of Drugs

Exciting new medical developments and advanced research are leading to the creation of excellent new drugs. Unfortunately some of the drugs are very expensive. Not just for the NHS but for private medical insurance companies as well. The recent BUPA Annual Health Debate brought together people from different fields to discuss how we can provide people with the drugs they need.

Said that it is not just Britain who is struggling to provide their people with effective health care but governments from all over the world. Currently the UK spends around $3,000 per person on healthcare. The US spends $7,000, Poland $1,000 and Africa only $10.

The point was brought up that the cost of some drugs is astronomical and that means that some people will not be able to afford them. The National Institute for the Health and Clinical Excellence (NICE) is recommended drugs by the Department of Health and they decide whether they are cost effective enough for the benefits that they bring. The NICE chairperson, Sir Michael Rawlins said, there is a set pot of money available and difficult decisions need to be made.

Simon Jose from GSK Pharmaceuticals said that it is a 'very expensive, time consuming and risky business to develop medicines' and that a great deal of the money goes towards the cost of clinical trials (anything up to £200 million for one drug trial). It was pointed out that regulations for drug trials are unnecessarily complex and could be made easier and much cheaper.

Drug patents mean that a company that develops a product have sole rights to sell it for a period of time. Effectively they can charge whatever the market is willing (or able) to pay for the drug. When the patent runs out other companies can produce similar generic drugs which introduces a more competitive pricing strategy into the market place.

According to Sir Michael Rawlings, companies are set to loose up to 30%-40% of their revenue when some patents come to an end within the next few years.

Some drugs are not authorised under the NICE guidelines as they are considered too expensive. Patients do have the option to top-up their NHS treatment with privately paid drugs. Even within the medical insurance market there are problems with expensive drug costs. As reported in Health Insurance News the expense of some drugs means that cancer cover is under jeopardy and the concern is that some drug companies are 'ripping people off.'

Some companies are offering private health insurance providers incentives to provide certain drugs for their customers. Last year, for example, Roche Products Limited rebate scheme for their colorectal, breast, lung and renal cancer drug, Avastin. The drug costs around £2,400 a month and the average treatment needed is 10 months. The scheme means that Roche rebates the cost of Avastin once a 10,000 mg dosage limit has been reached by the patient in a 12 month period.

The Bupa health debate also talked about the need for cheap medicines for the huge health problems in developing countries. New pricing models were discussed with a view that the pharmaceutical industry should be led not just by economics but should be solution driven. It is clear that developing fantastic life saving and prolonging drugs is essential but if their pricing is prohibitive then only a very few people will benefit from them and ultimately the drug companies will not make as much money as they could.