Labour: the world urgently needs a fair price for medicines

Every year, 100 million people across the world are pushed into poverty because of out-of-pocket healthcare expenses.

While gains have been made in reducing the price of treatment for diseases such as HIV, there is still a long way to go to ensure people can access the essential medicines they need.

The continued high price of drugs for major deadly diseases such as TB, hepatitis C, diabetes and cancer is a major barrier to people accessing the treatment they need, particularly in low-income countries.

But people being left without the treatment they need is not only a major concern in the Global South. The high cost of treatments in the UK means many are left struggling to get the lifesaving drugs they need. The cystic fibrosis drug Orkambi is one such example. Thousands of children and young people still don’t have access to this vital drug because after three years of fruitless negotiations with the drug company Vertex, it is still not available on the NHS due to the unaffordable £100,000 ($131,000) price tag.

If one of the richest countries in the world struggles to negotiate with drug companies to reduce drug prices, then this problem will only be compounded for governments with even tighter purse strings.

Global leadership is urgently needed to loosen the corporate grip on patients’ access to medicines. This crisis has motivated the World Health Organization and South African government to co-host the Fair Pricing Forum this week in Johannesburg to discuss what constitutes a fair price for medicine and what action can be taken to achieve this.

Pharmaceutical companies have been able to get away with charging high prices because of the system of patenting new medicines. Companies are essentially given a monopoly on any newly created drug for 20 years. This means, without any competition, they can arbitrarily charge the highest price that the market can bear. If one of the richest countries in the world struggles to negotiate with drug companies to reduce drug prices, then this problem will only be compounded for governments with even tighter purse strings.

Whether it’s the £100k price tag for Orkambi or charging £19,418 ($25,475) for breast cancer treatment in Peru – a country where the average annual income is a mere £5,000 ($6,559) – the pharmaceutical industry’s justification for charging extortionate prices is that they need to recoup the initial investment that was made into the research and development of the drug.

But, according to the campaign group Stop Aids, there is no transparency to verify these costs, and there is a growing body of evidence that shows that pharmaceutical companies spend more on marketing and buying back their own shares than they do on research.

Even more worrying is the fact that this lack of transparency hides the investment made from the public purse toward research and development. Globally it is estimated that the public are fronting one third of these costs. Meaning citizens are effectively paying twice over for their medicines.  

Transparency of research and development costs will be a focus at this week’s Fair Pricing Forum. This is essential to ensuring that all governments, including the UK, can have an informed understanding of the costs involved, meaning they are in a better position to decide what a genuine price should be. It is only with this full transparency that governments can enter into fair negotiations about the prices of treatment. 

The Italian government is already leading the charge, having prepared a draft resolution for this year’s World Health Assembly which plans to improve the transparency of markets for drugs, vaccines and other health-related technologies. If passed, it will give governments a mandate to require pharmaceutical companies to disclose their annual research and development costs and declare how much public subsidies they received when registering a drug. This will put a stop to the current system where governments are negotiating blindfolded with pharmaceutical companies.

Access to a healthy life is a basic human right, and people’s ability to realize that right should not be dependent on how wealthy they are. We must change the system that perpetuates inequality by leaving only the richest able to access the treatments they need. To do this we urgently need fairer international patent regimes.

All members of the World Trade Organization are legally entitled to override patents that are causing pricing barriers to essential medicines. The UK government has not actively spoken out in support of countries using these tools since the last Labour government, in 2007, and although it has been mentioned, it is yet to implement these measures themselves to improve patient access to Orkambi.

Although there will be a UK representative attending this week’s forum in Johannesburg, the UK government needs to do more to address inflationary drug prices.

With nearly 2 billion patients still waiting to access essential medicines around the world, we cannot afford for the Forum to be just a talking-shop that leaves in place the status quo that is failing patients in the UK and around the world.

The power imbalance between the pharmaceutical industry and governments must be shifted so we can ensure people can get the medicines they need at prices we can all afford.