Return on investment, in terms of money and time, from scientific research can be accelerated through sharing unpublished data.
PhD Student, Institute of Pharmaceutical Studies
King's College London
Brexit has been an issue that has created clear factions for and against since its proposal and consequent referendum, with neither holding a clear majority. This is evident in the referendum results with 51.9% voting to leave and 48.1% to stay (1). The factions are not just apparent with Britain but all over the world due to how far reaching the social, political and economic implications could be. Given the reach of Brexit, it is no surprise that both the European Union and the United States of America have expressed their own stances while attempting to quell the worries within their own jurisdictions. The negotiations of the Transatlantic Trade and Investment Partnership (TTIP) that have consequently arisen between the United States of America and Britain in the wake of Brexit has great scope to affect many systems with the National Health Service (NHS) being no exception. This opinion piece will specifically focus on the Pharmaceutical Price Regulation Scheme and how the current economic and health policies being negotiated could impact the consumer and pharmaceutical companies.
The Pharmaceutical Price Regulation Scheme, as currently practiced, is a voluntary initiative between pharmaceutical companies and the Department of Health. The pharmaceutical companies that are currently eligible for involvement include those in Britain and overseas. The control of drug pricing within the NHS through the Scheme was initially restricted through profit control and price cuts. Profit control pertains primarily to novel or more recently released drugs in which research and development costs would detract from the overall profitability. Pharmaceutical companies are allowed to price drugs when they are not in excess of the cap.
Furthermore, there are cap concessions to aid in recouping research and development costs. Price cuts are focused on drugs that have established their presence on the NHS and are closer to or have become off patent. The aforementioned methods were superseded in the revision of the Pharmaceutical Price Regulation Scheme by Return on Capital (ROC) and Return on Sales (ROS), including the ratio between the two (2). Under the revised Scheme, the ceiling figures include ROS that cannot exceed 6% and ROC 21% (3). A price increase can be approved under the Pharmaceutical Price Regulation Scheme if the profit is beneath 50% ROC/ROS, with no increase giving greater than 65% ROC/ROS (3). Despite a shift in price calculation method, there are still allowances made for research and development, marketing and information dissemination costs associated with a drug launch. Allowances and concessions for such measures are to ensure ongoing innovation in drug development, which is keeping with one of the many goals of the Scheme (3). Another goal within the NHS and the Scheme is to increase the use of generic drugs where possible to decrease costs. Subsequently, this would effectively precipitate financial losses for pharmaceutical companies that do not specialise in the manufacture of off patent generics (2).
In the context of TTIP, the NHS and the Pharmaceutical Price Regulation Scheme are being placed in a precarious position. While much of the negotiation is currently ongoing, legal advantage is expected to be given to companies in the agreements they hold with government when signed. The tribunal system that would emerge could ultimately erode government jurisdiction over health policy and undermine those previously enacted within the NHS specifically through the investor-state dispute settlement (4). Within the context of the Pharmaceutical Price Regulation Scheme, this opens an avenue for international pharmaceutical companies to challenge the returns in capital and sales brackets and allowances. Depending on the recognition and precedence set by the claims that could be brought forward, the NHS may be put under further financial difficulty. This financial difficulty would ultimately be felt most by patients who may be facing a shrinking subsidised formulary.
The TTIP will aim to increase the potential for privatisation within the NHS, which had begun prior to Brexit. What may not be apparent to patients and healthcare consumers is many services currently being provided under the public system have been privatised to some degree already. As it stands, there are general practitioner practices that are administered through companies such as Care UK. The hospital system is not exempt to such changes, as evidenced in both the amount of privately provided ambulances and public patients seen in a private hospital (5). Over the last few years, there has been a steady rise in the percentage of privately provided sources being used with an increased cost that is burdening the already strained NHS (5). If the TTIP includes the NHS, it will pave the way for a higher rate of privatisation. With privatisation is an expectation that the quality of the NHS service will decline. At the core of the quality decline is the choice to cost cut in an attempt to increase revenue. This is ironic considering the steep cost of these services when contracted by the NHS (5). From another economic perspective, the Partnership will also have implications for the everyday Brit. In the long term, there is a potential outcome where the ordinary worker in Britain could have a lower wage to the projected deficit of €4200 or approximately £3300 when the report was published, increased rent and a loss of work opportunities (6). Across Europe, the total loss of work opportunities is estimated to be 0.6 million (6). The Partnership may increase socioeconomic disparity between strata and lower the quality of living for many, all the while motivated by increasing trade and profitability for private enterprise (6). It is evident that if the TTIP was ratified, adoption of the imposed capitalist structures similar to in the United States would not clearly benefit British society or socialised systems like the NHS.
The TTIP, if implemented, will have a clear impact on the Pharmaceutical Price Regulation Scheme via the potential push towards capitalist systems and values. The destabilisation can be a secondary effect stemming from the socioeconomic outcomes of the Partnership. With the projected increase in unemployment and contraction in wages, there would be less scope for the government to collect tax revenue that would meet the necessary amount allocated for the NHS (6). In turn, less financial resources means there would be less money accessible within the Scheme to fund measures such as concessions and allowances. Pharmaceutical companies could then retaliate through the TTIP authorised tribunal, leading to greater financial repercussions for the British government. Alternatively, drugs may be taken off the subsidy list under the Pharmaceutical Price Regulation Scheme due to the decrease in funding. This option would be borne primarily by the public who may be financially struggling themselves as a result of the TTIP with additional stress placed on a foreseeable privatisation of health services and full commercial pricing of prescription medication. For the everyday person, the TTIP will ultimately strip them of the ability to fully contribute to maintaining the shrinking social healthcare system and then victimise them by making the supplementation of their health needs through accessible private care almost impossible to afford.
Brexit may have initially derailed negotiations for the TTIP but they have continued after the referendum. Both Brexit and the TTIP share many characteristics outside of their ability to polarise and the uncertainty of their long term outcomes. They also pose a huge scope for change in the healthcare system from both patient and policy perspectives. The focus on the Pharmaceutical Price Regulation Scheme was used as a point of reference when it became clear that the negotiations after Brexit in the TTIP may encapsulate this policy. The strong capitalist sentiment from TTIP may erode the effectiveness of the current method for pricing, leaving fewer drugs on the formulary. With fewer subsidised drugs, the patient is the person who may experience worse health outcomes and may need to rely on a poorer quality privatised system, which is increasingly unaffordable. Privatisation and focus on private enterprise would be key capitalist outcomes the post-Brexit TTIP could put to the forefront of negotiations. Brexit and TTIP may be easily sequestered as political and economic topics, yet it is paramount to note that both have social implications, which reiterate their importance in a contemporary and future capacity.