Who controls how much we pay for our drugs and why it matters
Writer: Tara Spasojevic
Editor: Maja Bronowska
Artist: Priyanka Peres
The most expensive drug in the world is Zolgensma. It costs £1.79 million per dose. It is a gene therapy for infants under 2 years old with spinal muscular atrophy, which is a rare and often fatal disease. As many as 80 babies and children could benefit from this per year in the UK. Imagine if you or a loved one needed Zolgensma. Luckily, UK citizens benefit from the National Health Service (NHS), which spends about £18 billion a year on drugs.
A drug can be simply defined as a chemical that when administered to the body produces a change or biological effect in the organism. A medication is a drug used to prevent or cure disease. Medicines or pharmaceuticals are produced by pharmaceutical companies which will then sell them to the rest of the world.
Drug prices are constantly changing based on multiple factors. Newly released drugs are protected by patents, thus, other companies are unable to manufacture the same therapeutic agents. However, after 20 years, the patents expire. At this point the drug can be snapped up and produced by any other pharmaceutical company.
Such drugs are known as generics and they work in the exact same way as the brand-name drug. Manufacturing generics eliminates the need for lengthy and expensive preclinical and clinical trials, including animal testing. This dramatic reduction in research costs means that, crucially, the generic drugs are sold at much cheaper prices ‒ around 85% less than the brand name. Nurofen costs almost 5 times more than Boots’ own brand ibuprofen which retails at £0.03 per 200mg tablet ‒ both have the same effect and the same active ingredient.
Generic drugs have saved the NHS around £320 million a year. Adalinumab (Humira®), a biological drug, administered for the treatment of Crohn’s disease and rheumatoid arthritis, used to be the most expensive drug used in NHS hospitals. Nonetheless, in 2018, Humira came off patent allowing the production of biosimilars (this is the ‘generic’ form of biological drugs which are somewhat more complicated). This is expected to save the NHS at least £150 million a year.
The NHS is the major buyer of pharmaceutical products in the UK. There is a set price for NHS-prescribed drugs that was introduced in 1949, and in recent times all prescriptions have been made free of charge in Scotland, Wales and Northern Ireland. Whereas in England, the prescription charge rose by 20p in April this year to £9.35 per prescription item. There is an exemption from the prescription charge, which, in England, encompasses 40% of the population ‒ including all over 60s and full-time students below 18 years old (sadly not university students). As a result, over 90% of prescription medications are actually being dispensed free of charge.
When a pharmaceutical company develops a new drug for the UK market, they first must face the dragon guarding the gold ‒ better known as the Medicines and Healthcare products Regulatory Agency (MHRA). The MHRA regulates the pharmaceutical market based on the significance and benefit of the new drug compared with the existing options with respect to the price of the new drug. In the US, the story is different. The Food and Drug Administration (FDA) regulates the safety and effectiveness of drugs but has no authority on cost-benefit regulation. This means that every drug approved by the FDA goes on the US market at the price the manufacturer sets.
Although it seems handy to have access to a wide range of drugs, the US has the highest drug prices in the world. Hence, many people simply can’t afford prescribed medication. Humira® costs twice as much in the US as it does in the UK. What’s more, studies have found that drug prices are higher in pharmacies in less affluent postal codes, further exacerbating disparities in drug access.
Insulin is ten times more expensive in America compared to the rest of the world and its cost has risen by over 1000% since 1999. Patients with type I diabetes need insulin to survive and will pay large amounts for it, which is easily exploited in a system with no regulations. Unfortunately, not all are able to do so. In some cases, patients have attempted to ration their insulin supplies to make their ‘money go further’, which has resulted in their untimely deaths.
Overall this sounds pretty horrific, although there is a catch. High drug prices in the US have meant more money being pumped into drug research. The more research, the more new or improved treatments are discovered, which benefits the rest of the world. The US contributes to 43.7% of novel drug discovery.
Drug demand is rising, but so are prices. What’s more, a post-Brexit UK-US trade deal could add additional costs of £519 million per week ‒ that’s £27 billion on top of what the NHS is already paying per year, in the worst case scenario. Does more money spent on drugs mean lighter pockets for individuals and governments alike, or does it mean more drug discovery? Hopefully the latter will hold true.