NHS 'Faces Medicines Price Hike' in a UK-US Trade Deal

Peter Russell

July 13, 2018

The nature of the UK's future trading arrangements remains unclear but experts have warned that the NHS could struggle to afford medicines after Brexit if the UK relies on a trade deal with the US.

In a Viewpoint opinion piece in The Lancet, three researchers argued that the UK could come under pressure from the US during negotiations to compromise on the way it regulates medicines, potentially forcing up the price of drugs and reducing their availability after the UK leaves the EU.

"The US regulatory model is very poor at controlling drug prices", lead author Holly Jarman, an assistant professor at the University of Michigan in the US, told Medscape News UK. "US regulators do not take cost-effectiveness into account when allowing new drugs on the market, and the largest publicly-funded health insurance program in the US, Medicare, does not negotiate drug prices with pharmaceutical companies. The UK's current regulatory model does both of these things, with the result that the NHS pays less for drugs than health systems and patients in the United States do."

American Patients First

Earlier this year the US administration introduced American Patients First, President Trump's blueprint to lower drug prices for US citizens, and which blames, in part, "foreign governments free-riding off of American investment in innovation". Launching the programme, Trump said: "When foreign governments extort unreasonably low prices from US pharmaceutical companies, Americans have to pay more to subsidise the enormous cost of research and development."

"American Patients First is an attempt by the Trump Administration to make the USA's drug pricing problem everybody else's problem,” according to the Viewpoint piece. "By shifting the economic, political, and social costs of policies made in the USA onto America's trading partners, the Trump Administration is attempting to show voters that they are doing something about high drug prices while providing benefits to pharmaceutical companies and sympathetic campaign donors."

UK Medicines Regulation 'Under Threat'

Tamara Hervey, a professor of European Union law at The University of Sheffield, and a co-author of the Viewpoint article, said: "The point we are making is that Trump's policy frames pharmaceutical prices in European countries as a 'cause' of high prices in the USA. He is saying that because European countries negotiate lower prices and also have many other aspects of our regulatory regimes that are designed to balance interests in a different way than in the USA, the USA is 'carrying' those cheaper prices."

The authors contend that this view is wrong. They argue that medicines should be priced in line with the benefit for patients rather than by the US system, which ignores cost per quality-adjusted life-year calculations in making decisions.

They urge the UK to be clear with the US that the UK's drug pricing and evaluation regime would not be negotiable in any future UK-US trade talks.

Holly Jarman said that if the UK leaves the EU's large single market and diverges from its regulatory regime, "pharmaceutical companies will have to make a choice – should they take on board the additional costs and complexity of introducing their drugs to the EU market and the UK's separate regime?"

She added: "Some drug companies are likely to answer 'no'; other firms will say 'yes', but make the UK's smaller market a much lower priority. The result would be that drugs would arrive in the UK market later than in the EU, and may cost more."

The authors wrote: "It is naive to think that the UK could get a deal with the USA on better terms than EU member states bargaining collectively can."

HJ reports personal fees from the Searle Foundation, outside the submitted work. TKH reports grants from the Economic and Social Research Council and the European Commission Jean Monnet Network during the conduct of the study; TH is also a Specialist Adviser for the House of Commons Health and Social Care Committee for its ongoing
Inquiry into Brexit and Health and Social Care. MM declares no competing interests.

Lancet. Health, transatlantic trade, and President Trump's populism: what American Patients First has to do with Brexit and the NHS, Holly Jarman, Martin McKee, Tamara K Hervey, Published Online July 12, 2018. Article

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