Pharmaceutical companies are routinely among the most valuable companies in the world. Though with a net market value of over $300 billion, this isn’t too much of a surprise. While this in and of itself isn’t too concerning, after all their products are literally prolonging peoples’ lives, many of their actions are. Just recently one person died, and five more were hospitalised during participation in a phase 1 trial (when the drug is given to humans for the first time). Unfortunately there are many more cases of events like these, and some others that are less direct, but much further reaching.
Data from the Association of British Pharmaceutical Industries, Total Medicines Expenditure for the year 2013
Drug development is a very long and expensive process, it can often take around of 10 years and £1.2 billion to bring a completely new drug to market. The company’s reward for such a long and arduous process is a patent, or exclusivity. This means that the company has exclusive rights to sell and market that drug for around 20 years with some extensions given out as rewards by governments for drugs in specific areas. This period is given out as an incentive for companies to conduct research, and to allow them to recoup losses for such an expensive process. They can and do charge very large sums for their new inventions, for example NICE (the regulator for approving drugs for the NHS) have recently approved Eculizumab, which can cost around £330,000 per patient, per year.
Now for a new breakthrough that lengthens peoples’ lives like nothing else, this might be an acceptable price to pay. However, it gets thornier when looking at the differences between similar generic and branded products. The Open Data Institute found out back in 2012 that the NHS could save hundreds of millions by switching to prescribe generics over the branded, with similar outcomes. Thankfully the data for GPs’ prescribing is fully open and available for anyone to peruse (Open Prescribing or straight from the HSCIC) so we can see if there’s been any headway since then.
One area of interest are lipid-regulating drugs (BNF section 2.12), as most of these have been shown to have roughly similar effects, even the brand spanking new ones. So in an ideal world we would only prescribe the generics. Now this won’t quite be the case, as some people react differently to others and so might need more specialist medication, but it’s an aspiration to shoot for.
Data from Open Prescribing, section 2.12 in the BNF, from 2010 to the present.
This is a clear example of the effect coming off patent can have. The drug Lipitor (AKA Atorvastatin), was introduced in 1996 and sold more than $125 billion between its introduction and its coming off patent. The price of the generic Atorvastatin was 93% that of the branded Lipitor. Reportedly the NHS went from spending over £310 million in 2011, to just over £42 million in 2013, all while usage of the drug went up by 40%. In fact the existence of the generic pharmaceutical industry saved the NHS over £12 billion in 2013 alone.
Now there are fairly innocuous reasons why a branded medication might be prescribed over the generic. The patient may have had a bad reaction to one, or some well established research may have shown that it is better in this particular case. However the elephant in the room is that it could also be due to marketing or payments from pharmaceutical companies. Although some companies like GlaxoSmithKline have said they’re no longer going to pay doctors to promote their products they still paid over £1.1 million to UK-based healthcare professionals in 2014 alone, and this is just their reported figure.
The laughable or depressing thing about this however, is that when surveyed, most doctors agreed that money received from these companies could influence prescription practices, they just didn’t think it would happen to them. This is an example of illusory superiority or the Lake Wobegone Effect, when people overestimate their own capabilities, in this case to resist influence.
What we must constantly keep in mind however is that these decisions can cost lives. The more these drugs cost, the fewer people can benefit from them in a system like the NHS, the more people go without. I don’t mean to demonize the industry too much, but this is the fact.
This was originally going to look at generic prescription trends in England, however I’m still waiting on the data, so it will have to be for another time.