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Big pharma offers a bitter pill to those who need the most help

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Jeremy Corbyn says he wants to change how drugs companies work. Sadie Robinson looks at how pharmaceutical fat cats pile up profits while ordinary people are denied care they need
Issue 2674
Corybn wants to overturn patents on new drugs (Pic: NIH-NCATS/Flickr)

Labour leader Jeremy Corbyn plans to transform the pharmaceutical industry to give cheaper drugs to patients.

Bosses claim the plan would stifle the development of new products by undermining competition.

In fact our health is being destroyed by private firms that have a monopoly on medicine. The NHS pays extortionate prices for patented drugs that cost a fraction of their ­price to produce.

Some people don’t get the medicines they need because they are so expensive that they are rationed, or not provided on the NHS at all.

But it’s a great money spinner for the fat cats.

A treatment for Hepatitis C, Sofosbuvir, costs 67 times more than a gram of gold, according to the Missing Medicines coalition.

The annual turnover of pharmaceutical goods to wholesalers in Britain was over £42 billion in 2017. NHS England spent a record £18.2 billion on medicines in 2017-18.


Firms claim they are simply reaping the rewards for their investment. Yet in 2017-18 companies grabbed £458 million from the NHS for cancer drugs that were developed with public money.

Three of the five most expensive cancer drugs came from ­publicly funded research, according to a Missing Medicines report.

The NHS paid Swiss multinational Roche £163 million for breast cancer drug Trastuzumab.

Meanwhile Merck grabbed £142 million to supply a drug that tackles lung and skin cancers.

The drugs were developed by British biochemist Sir Greg Winter, who did much of the research at a government-owned laboratory in Cambridge.

Saoirse Fitzpatrick from Stopaids, part of the Missing Medicines Coalition, said, “The public are ­footing the bill for the riskiest part of drug development where breakthroughs happen.

“Then the big pharmaceutical companies swoop in, patent a medicine and use the monopoly to charge an extortionate price.” Prostate cancer drug, Abiraterone, was developed by the Institute of Cancer Research, which is mainly publicly funded.

A subsidiary of Johnson & Johnson bought it up. It now costs the NHS £98 per day per patient.

And it isn’t only cancer drugs.Infliximab, a drug to treat arthritis, was initially developed by US and British universities.

It was then bought by Janssen Biotech and in 2014-15 cost the NHS £159 million—its fourth ­highest expenditure on a single medicine. The next year, NHS spending on the drug rose to £178 million

Meanwhile, the Missing Medicines report found a “huge drop in ­innovation and productivity”.

Professor Mariana Mazzucato said the system is “expensive and unproductive and requires a complete transformation”.

Corbyn’s plans don’t go far enough to solve the crisis

Jeremy Corbyn announced he would overturn patents on new drugs, allowing other firms to produce them at cheaper prices.

And Labour would force firms to make their medicines “affordable” in order to gain access to public research funding.

Richard Torbett from the Association of the British Pharmaceutical Industry denounced Corbyn’s plan as the “seizure of new research”.

Orkambi maker Vertex said it amounted to “providing third parties with access to a company’s intellectual property”.

The idea that private firms can “own” medicines and the research behind them, reflects what’s wrong with capitalism.

It’s good that Labour wants to take these measures—but we need to go further.

Preventing researchers and scientists from working together blocks the sharing of knowledge that could develop new medicines and save lives.

Many firms stop producing generic products because it’s more profitable for them to manufacture patented brands.

Firms also stockpile drugs to artificially develop shortages and drive up prices.

Conditions that aren’t profitable to treat are sidelined.

And firms charge huge sums for “new” treatments that are similar to existing drugs.

It’s not enough to have a state-run firm competing with private companies.

We have to get private firms out of health care and medicine altogether.

How tax breaks aid the bosses

The government hands big pharma huge levels of support.

The level of corporation tax in Britain is currently 19 percent. Yet pharmaceutical firms can pay much less due to research and development credits, and tax schemes.

The “Patent Box” scheme allows firms to pay corporation tax rates of just 10 percent.

Government figures show that 1,025 firms claimed £942.5 million in tax relief through Patent Box in 2016-17.

The firm Vertex Pharmaceuticals is based in London and Oxford, yet it has paid virtually no corporation tax.

It had a turnover of £5.3 billion in the five years to the end of 2017.

But the company declared a loss after paying its US parent company to manufacture the drugs.

And it raked in a staggering £7 million in tax credits from the government for research and development investment.

The company has made its money largely from sales of cystic fibrosis drugs Orkambi and Kalydeco.

Jeremy Corbyn referenced Orkambi in his speech.

He met cystic fibrosis sufferer Luis Walker, who is being denied the drug as it isn’t available on the NHS in England.

The medicine would cost the NHS £104,000 a year per patient. It would help an estimated 4,500 people in England.

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