Big Pharma’s Obscene Profits, Not Striking Nurses, Are Killing the NHS

Yves here. I naively thought that everywhere else in the world with a moderately large and high income population drove a hard bargain with Big Pharma on its national system drug buys. Silly me!

I must add, and I would be curious to get UK reader input, that there were many warnings before Brexit that the NHS would lose 10% of its nurses and 5% of its doctors if Brexit went into effect since they worked in the UK only by virtue of EU free movement of labor. Some left early due to open displays of xenophobia. Does anyone have a sense of if and how much Brexit-induced NHS staff reductions have played into nurse demands?

By Tarun Gidwani, a research student in philosophy at King’s College London; specialising in the ethics of international trade. Originally published at openDemocracy

Imagine a disability almost disappearing if you flew out of the Global South. I have severe haemophilia, a genetic condition that interferes with the body’s ability to clot after bleeding. When left untreated, anything – even a bruise or merely sitting down – can trigger a bleed, internally or externally. Anti-clotting injections can stop this.

However, outside the advanced West, these injections are sold at exorbitantly high prices. When I was a child in India, my parents couldn’t afford such treatment, so they’d bury my bleeding joints under piles of ice to freeze them. Almost all the bleeds I experienced in India were left untreated, resulting in permanent damage to my joints and internal organs. In the UK, the NHS home-delivers me these injections twice a month.

This global medical apartheid is created and perpetuated by pharmaceutical monopolies. Treatment pricing pursues a single sacrosanct goal: making profits. Trade laws allow corporations to keep most of their recipes secret, so that no one else can sell the same medicines at a cheaper price. Then the very same logic of capital menaces governments into withdrawing welfare nets – leaving families absolutely at the mercy of the market.

When a friend recently sent me news about a supposedly “miraculous” new treatment for haemophilia, I was pessimistic. The new intervention replaces the need to inject yourself every other day, which would be revolutionary to many lives. And trials to date have been very positive. But our current pricing and trade regime will inevitably ensure it is out of reach for those who most desperately need it – just as it did with the Covid-19 vaccines.

Profits Before Patients

Not all is quiet on the Western front, however. In its search for ever-greater profits, Big Pharma is strangling healthcare in richer countries too. The same monopoly pricing and trading mechanisms that keep those in the Global South from accessing care are eating up access in the Global North too.

Between 2011 and 2017, the cost of medicines for NHS England grew from £13bn to £17.4bn – a 5% rise every year. In 2020, this reached £20.9bn. Yet the government is currently considering trade arrangements, leaked documents show, that will increase this cost even further by forcing the NHS to buy from pharmaceutical monopolies instead of buying generic medicines.

By contrast, the US pharmaceutical giant Pfizer recorded profits of $21bn last year. That amount could fund the nurses’ wage demand twice over – while also bringing in more revenue, through tax and spending, than corporate profits do. That should put the nurses’ demands in perspective. It’s not striking health workers who are holding the NHS at gunpoint – it’s the corporate compulsion to squeeze and extract.

Ending the global medical apartheid necessitates ending pharmaceutical monopolies. Saving the NHS also necessitates this. These monopolies suck up public money for the development of drugs and then suck it up again by selling those same drugs back to the public at high prices.

Studies have shown that new drugs for rare diseases can be developed at costs up to £1.2bn cheaper than claimed by corporations. Organisations such as Global Justice Now have pointed this out repeatedly.

Take the development of abiraterone, for instance, which treats advanced prostate cancer. Its development was publicly funded, but once released to the market, the NHS was forced to ration it because it was exorbitantly expensive. Meanwhile, the corporation that sold it, Janssen, made £7.2bn in sales.

The NHS spends billions buying treatments that were developed using public funding. In 2018, the UK spent around £500m on cancer drugs that were developed through publicly funded institutions. Things have only gotten worse. Prices more than doubled for several drugs between July 2018 and October 2020. A pack of 28 risperidone tablets, a commonly prescribed antipsychotic medicine used for treating mental health disorders, went from £2.68 to £49.21 – an increase of 1,736%. Drug prices in the UK are not subject to controls. They are negotiated behind closed doors.

There’s so much hoo-ha about the fiscal consequences of nurses resisting pay cuts, but profiting by corporations isn’t deemed an issue. British prime minister Rishi Sunak claims that paying minimally decent wages to nurses is “obviously unaffordable”, while saying nothing about all the extra cash being handed to pharma companies that have a stranglehold on NHS spending.

Some battles are between forces larger than those visibly involved. The NHS strike against dramatic wage cuts (not for outrageous wage demands, as the government would have it) is one of them. The struggle of NHS workers can strike at the heart of the forces that profit from a segregated global health system.

This is a system that is only interested in making nauseating profits. Even if the pharmaceutical giants lost 20% of their profits, they’d still outperform 75% of other industries. They are also avoiding billions in taxes, according to a 2018 report by Oxfam – money that could otherwise expand the ever-shrinking pool of public-sector healthcare workers.

These profits, by the way, are by definition on top of what is spent on research and marketing. Taxing these profits will not only bring their profitability down to less nauseating levels. It’s the only way to curb treatment prices – and bring dignity to NHS workers. The bonanzas to corporations come at the cost of our health. And they come at the cost of decent wages for healthcare workers.

Big Pharma isn’t patriotic. These corporations don’t love the NHS. They may operate in the UK (and the US), but they suck the life out of working people around them.

But working people in the Global North, especially workers in the NHS and in the pharmaceutical industry, hold legitimate power over Big Pharma because they foot the bill for its profiteering. They can demand price controls and transparency. Therefore they play an important role in taming the beast that has come back West to stalk Frankenstein. The NHS strikes should be seen as a manifestation of this larger struggle.

There is a Himalayan distance between the healthcare that people receive in the Global South and in the Global North. I know – I have lived this distance first-hand. But we are united in being subjected to the same systemic forces. Everywhere, the same corporations are hollowing out people’s ability to exercise their right to health; a right that is foundational to the meaningful exercise of any other right.

What the nurses are up against when they go on strike should unite us all.

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  1. digi_owl

    Hardly unique to UK, sadly. Norwegian media ever so often cover how someone or other can’t be provided with some new medication thanks to the price demanded by the pharma company with the patent. Usually because the illness medicated for is so rare that maybe 100 people nationwide has it. And the one reason pharma is interested at all, is that it is a treatment but not a cure. So the person will be on the medication for life. And you can bet your behind that the actual chemical structure is so simple it could be made by just about any medical factory the world over. But patents…

  2. timbers

    Big Pharma is big in Massachusetts and getting bigger. And the salaries change every year – a few years ago entry level pharma manufacturing was in the mid to high 20’s dollar/hour now they are in the mid to high 30’s. If you are not willing to job hop, you get paid less as companies generally don’t fully adjust at least not easily. Head hunters report there is a shortage of applicants.

    I just changed jobs, having done 6 interviews with 4 companies in a week and receiving 2 offers on the same day. One is moving slow no response yet, and my Moderna interview was a disaster as the agency sent them a grossly inaccurate resume, as soon I realized all my relevant experience was missing I started sharing and the 2 hiring dudes perceptively lost interest so I expect they wanted newbies they could “mold” not inferior contaminated experienced folks, but, like Bristol Myers, Moderna gives off a messianic cultish vide as in we are better than everyone else swag and requires everyone to lite at 5000% radiance every second, which I don’t like. One company (Siemens) is trying to get me to reconsider if they offer me more $. The Pharma business in Massachusetts is rolling along with no sign of recession, and it’s not hard to figure out it’s being done by feeding off off the rest of the economy with rising medical expenses.

    Bet UK leaders are happy to mimic US drug pricing policy.

    1. digi_owl

      > gives off a messianic cultish vide

      That seems to be the go to thing in management these days.

      Every other silicon valley company seems to give off that vibe as well.

      Either that or a mafia. Both love to talk about “family” after all…

      1. timbers

        Both (Bristol Myers and Modera) are into cancer cures. Seems if you can cure cancer, you can talk the talk of being on a Godly mission and can swag accordingly. Moderna is talking about having a cancer vaccine soon.

        1. Pat

          I will wait to see if it is a Covid shot or a smallpox vaccine type of cancer drug before trying to determine if they should be indulging messianic thoughts.

          Their history says no.

          1. timbers

            I was told by the agency representing Moderna, they are working on one vaccine for both Covid AND Cancer!

        2. petal

          Moderna(and investor Merck) just received good clinical trial results in a phase IIb back last week for their mRNA vaccine against melanoma when combined with Keytruda, an anti-PD1 antibody. Efficacy was proved, so now they can move forward and expand.

    2. petal

      timbers, I’m in immuno R&D & lab management and keep getting invites from headhunters, probably twice a week, for 6 figure jobs(at least 3-4x my current salary) down in the Boston area. Some are large companies, some start-ups. Been mostly start-ups most recently. There’s been no drop off in invites, so things for pharma must be good. Would rather pick beans than work for that lot of devils. Have old colleagues in leadership positions in smaller but well-known pharmas down there so could walk in tomorrow but have zero interest in getting involved with MA pharma. I look at it and think “that’s a lot of what’s wrong with the world.” So much damage for so many reasons.

    3. timbers

      I stand corrected. Moderna just extended a job offer. Apparently I misread their quick ending of the interview after I added my experience as being a negative yet actually they were not turned off by it but instead liked it.

  3. Mr Robert Christopher

    Come on People!

    In the UK, in 1948 the government nationalised the country’s health system, and put it into a centrally controlled, state run system, that was managed by politicians, that are, to coin a phrase, here today, and gone tomorrow. It was what the voters wanted, then. :)

    And ever since, any attempt to change it in any way, usually by the Conservatives, has resulted in the Left shouting ‘privatisation by the back door’, usually by Labour, with the help of the BBC. With the unions in control in such a labour intensive industry, there was no need for change. And the higher paid ‘doctors’ went along for the ride. When administrators were added to the mix, it only made things worse, more expensive and left those dedicated to Health, of which there are many, in despair. The normal control, normally found in Business, revenue vs costs, didn’t exist as there was always more taxpayers’ money, every year.
    And when suppliers came on board, there was no guarantee that the costs would be controlled, because the expenses were often not understood.

    It’s the responsibility of any business to be responsible for every aspect of its activity, and the NHS does not do this. If BP can be held account for the Gulf Oil Rig Explosion and the aftermath, when it had negligible day to day knowledge of what was occuring, the NHS needs to be held account for it’s costs. And that means running it as though it were a business, because it is.

    The NHS shouldn’t be stealing foreign trained medical staff from other countries. Roughly equal traffic, both ways, is a different matter, but not stealing. And there are plenty of willing volunteers to be recruited. And this policy of making nursing a degree only career makes it be big, expensive, career move, while the old career path allowed a common start, helping on the wards, and moving up, educationally and career wise.

    I’m sure I heard, long ago, that the NHS was training fewer doctors and nurses because the new anti-racist laws would mean the newly trained would lose out to overseas job applicants.

    And, lastly, a Labour supporter told me this: Labour were more concerned with people who were ill (I ignored the judgement :) ) so made it a National Problem. It’s insoluble, as illness needs to be local, and it’s very labour intensive, and it used to be in the family domain [but with women going out to work …..] and they needed a solution.
    Well, who should come along but the pharmaceuticals, many based in the UK, with their pills, which is where we are now, still!

    Labour wasted £12billiion trying to put in IT, but I expect the problem was they wouldn’t change working practices, or couldn’t because it’s such a mess.

    1. Grebo

      The NHS is not a business it is a public service. It was not originally managed by politicians but by doctors and nurses.

      Now it is managed (into the ground) by Tory donors and cronies. New Labour continued and intensified the Tory policy with ‘internal markets’ and other Neoliberal crapification.

      The IT debacle was entirely due to this same process. They should have hired an internal team instead of outsourcing to the highest briber.

      1. Mr Robert Christopher

        An organisation that consumes over £100 billion/annum is a business. It has always been the responsibility of politicians. That has always been the problem, though, in the early days, there wasn’t so much to go wrong, and Medicine kept the miracles happening.

        A business can only survive if it serves its customers. The NHS isn’t doing that: it is serving those within the NHS, and elsewhere, that don’t want change. And dedicated workers and patients suffer.

        Party politics are irrelevant. You prove that point by mentioning New Labour, as though they weren’t connected to the Labour Party. They are, like so many, working to a different agenda.

        “They should have hired an internal team.”
        That is my point: they didn’t. And they didn’t because the current management ensures competent managers are discouraged from staying. It’s true in the corporate world as well: its just that they have competition that encourages small, but continual adjustment, not massive reorganizations, invented by those at the top.

    2. playon

      If BP can be held account for the Gulf Oil Rig Explosion and the aftermath, when it had negligible day to day knowledge of what was occuring…

      Sorry but this is lame. BP didn’t know what was going on because they outsource everything to subcontractors like Halliburton etc. They are unlike other oil companies who generally have their own equipment and don’t rely on leasing etc. BP was at fault as it was their negligence and lack of oversight that allowed the disaster to happen. The buck stops with them.

      1. Mr Robert Christopher

        Yes, that was my point, so there’s no sorry about it. Even though they “outsource everything”, it’s their responsibility, though their subcontractors weren’t blameless, either.

        Ditto, the NHS.

        And it was BP, not British Petroleum. :)

    3. TimH

      The NHS shouldn’t be stealing foreign trained medical staff from other countries.

      You appear to misunderstand the EU’s free flow of labour.

      1. Mr Robert Christopher

        The UK voted to leave the EU, and Britain has left, though NI is still in limbo.

        There are other countries in the World, other than those in the EU, many of whom train up medical professionals at great expense and, for them to have a net loss of them is detrimental to those countries’ well-being.

    4. Ben

      The reason the UK does not train doctors is because the cost of the training is higher that the student payment limit and the government does not want to make ip the difference.

  4. Carolinian

    It’s grifters out to the horizon day. Sure am glad we won the Cold War against all those Commie socialists.

    When it all collapses at least we read about it here first. Bubble world on the other hand may not recover from the shock.

  5. Stephen

    I used to work for a pharmacy operator that was affected by this and so we used to keep careful tabs on what was going on. Drug inflation was good for our business owing to the impact of a fixed percentage margin, of course. That was many years ago though so I am out of date on the details but the principles are still similar.

    The UK has a system for an overall negotiation with the ABPI, as the representative of the industry. For many years (even decades) it was called the PPRS but is now known as the Voluntary Scheme for Branded Medicines Pricing and Access. The broad principles are similar although the language for the latter talks more about getting new drugs to market quickly.

    My understanding is that the latest 2018 deal includes a 2% cap on overall branded annual sales growth by the industry. Any excess above that is paid back to the Department of Health as a rebate. One therefore has to be a little careful when looking at individual prices in the way that the article does. Clearly, some internal “gaming” of prices must go on to create different incentives for usage and approvals but theoretically the 2% cap applies across the full portfolio. If we believe what is published. The Labour Party report that is referenced alludes to some of this by referring to the rebate being repaid to the DH and not to individual hospitals.

    What I do not know is whether the cap is working effectively. Nor what other games are being played, or whether there are “exceptions”. The article could potentially address this context in order to go to the next level with the analysis. Traditionally, the Department of Health (they do the deal, not the NHS) prided itself on how effectively it used its monopsony power. They would, of course. While at the same time saying that they want to maintain the UK as a centre for pharmaceutical innovation! The scope for regulatory capture is clearly immense.

    So am not arguing that the whole construct is value for money nor that pharma company profits are justified. I am also quite cynical that so called new wonder drugs are anything other than a way to make more money based on highly questionable and even biased clinical trials. Showing this needs us to go a little deeper though.

  6. paul

    Having, with my family,friends and neighbours used the NHS for all of my life, it is a pretty good institution, with good outputs, of which I have heard little criticism.
    It’s a large, stable employer, something rare these days.
    Of course, nothings perfect and there is always room for improvement.

    I have used it very little, but when I have done, I have had no complaints. I am also happy to have seen its benefits for others, especially those close to me.

    However, throughout my adult life, it has been the object of animus for those with little better to do and no more direct or honest way of advantaging themselves.

    The odious wes streeting is just the latest carpetbagger.

    Its current difficulties, staffing,training and costs are a direct result of this process.

    National health care is a good idea. The UK NHS, esp the less privatised ones in its colonies, are excellent platforms for improved progress.

    1. dandyandy

      My family member was almost killed when the NHS “Bait and Switched” the 30+ years experience consultant scheduled for an invasive investigation, for a trained monkey “expert nurse” who went to carry out the procedure instead. Obviously, without informing anyone of the switch. NHS’ endeavour to save a few tens or hundreds of pounds through employing a monkey instead of a doctor has resulted in a permanent disability for an unsuspecting tax paying member of public and tens if not hundreds of thousands of pounds in the legal action that is currently under way.

      For the last six years I was being misdiagnosed by an ailment I didn’t have. When NHS “nurse doctors” (this is a new workplace definition, it means a monkey posing as a doctor), insisted I should undergo a potentially fatal, invasive and yet totally unnecessary investigations that I felt I didn’t want to engage in, I was told and written to that if I discharged myself (as I did), I was likely to die, imminently. I then went to pay for private consultation where a proper doctor established a completely different cause of problems. Together with the overnight stay in a NW8 hospital and world class surgeon performed procedure, this set me back some £5k. Good price to pay for not getting dead or disabled for life, I think.

  7. Mickey Hickey

    Politicians of all stripes have to be rewarded in order to do something, Presently the very wealthy, special interest groups, in some countries unions, main street media dominate election processes. Democracy works only when it cannot be bought and in some countries systems are designed to be easily and risk free bought.

  8. Adrian D.

    Brexit has caused problems for the NHS, but I think only to the extent that the circulation of EU nationals coming to work for a while in the NHS was acting as a sticking plaster anyway. it’s one thing coming over for a few years in an under-staffed, constantly maligned, increasingly stretched system in deteriorating infrastructure at wages that won’t get you adequate (let alone decent) long-term accommodation – another thing entirely trying to make that your career. You can stick it for 4 or 5 years, but beyond that then that’s a different matter.

    My ICU nurse friends (one an Icelandic national, one a Botswanan, both with families here now) didn’t see an increase in hostility towards them – at least not one that would raise it above the ‘noise’ pre-2016 (although I’m in ‘nice’ Hove). They both said that the biggest exodus of people were just those who simply decided it was ‘time to go home’ rather than being driven off – and of course there was nowhere near sufficient plans made to keep or replace them (a failure of all levels of management).

    So Brexit is a factor , but it’s in the list with failure to invest in training, the housing crisis, student debt and demographic changes in the workplace that are affecting different areas of the NHS workforce differently (For instance GP practices are seeing a generation of older, experienced, mostly full-time staff retiring to be replaced by a generation much more likely to want to work part time – and there does appear to be a gender associated difference here).

    FWIW I think the UK would never have had any impetus to sort out the training had we stayed in the EU – always able to skim from the other nations and proper wages and conditions were always going to be supressed under FoM – and it’s about time we dealt with this.

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