In recent months, the media has reported numerous cases of patients campaigning to be given expensive anti-cancer drugs such as Herceptin by the NHS despite a lack of NICE approval. Difficult decisions must be made about how money should be spent and where economies can be made.
One way of reducing the drugs budget is by restricting the prescribing of costly new drugs. Some patients inevitably lose out. If the NHS is to continue providing the newest and most effective medicines to its patients, it must radically rethink the way in which it interacts with the pharmaceutical industry.
Research and development costs account for the high cost of new medicines. Pharmaceutical companies file patents as soon as soon as they discover a molecule with therapeutic potential. The patent lasts for 20 years, although it is typically 12 years before the product gets to market. During this time, an average of£400m will have been spent on the development of the drug. Generics are routinely released immediately after patent expiry of the innovator product. Thus, in the short time between gaining regulatory approval and patent expiry, sales of the innovator drug must pay for the research. This is reflected in the cost of new medicines.
Apart from a demonstration of bioequivelance with the innovator product, very little work is required in order to bring a generic to market. The cost of generic medicines represents only the manufacturing cost and presumably some degree of profit. Therefore these products can be sold at a lower price than the proprietary brand and are attractive to those involved in the buying of medicines.
Extended patents - a proposed alternative
The current strategy for the reduction of drug expenditure by purchasing generic medicines is flawed for a number of reasons. The price of new drugs is kept high as pharmaceutical companies rush to recoup research costs before patent expiry. The lack of investment in research and development may stifle the development of the drugs of the future. Additionally, patients are more likely to be taking old drugs than the newest agents on the market.
This could result in suboptimal treatment. Rosuvastatin (Crestor) has been demonstrated to achieve greater reduction in LDL-cholesterol than the older agent, simvastatin (according to a randomized, double-blind study in the Journal of Cardiovascular Risk, (8 (6) 383-390)). If these findings were to translate to a higher risk of cardiovascular events with older agents, it is not only patients who would pay the price. Prevention is better than cure, certainly in economic terms.
To improve patient access to new medicines, an overhaul of the way in which the NHS purchases its medicines is required. Instead of opting for the 'bottom-line' approach of purchasing the cheapest product available, the government and the NHS should use their power as a consumer to broker deals with pharmaceutical companies to ensure that new drugs are not prohibitively expensive. This could be achieved if the government offered extended patents to companies which agreed to sell their products at fixed prices to the NHS.
The price could be calculated to enable pharmaceutical companies to make a fair profit from their products, but over a longer period of time than they currently do. It would be expected that the agreed price would fall somewhere between the cost of a new innovator drug and a generic alternative. The price would be fixed over the course of the patent and hence the 'blip' whereby new medicines are very expensive at first and then cheaper on patent expiry could be ironed out.
This would mean that new drugs could be more readily obtained, without necessarily incurring any additional costs. The competitive nature of the pharmaceutical industry would work in the favour of the NHS as companies tried to undercut each other with competing products.
Such deals between governments and pharmaceutical companies are not unprecedented. In order to improve the quality of clinical data regarding the use of drugs in children, the Food and Drug Administration operates a system called Pediatric Exclusivity Provision, whereby extended patents are provided to companies who provide robust clinical data on the use of their product on children.
The NHS will always be cash-strapped, but with some creative thinking, we can make a little money go a lot further. The proposed model would simultaneously facilitate better availability of the newest drugs to patients and increase spending on research and development in healthcare.
Peter Penson is a postgraduate researcher in cardiovascular pharmacology at the Welsh School of Pharmacy, and a locum community pharmacist.