Big pharma decries ‘cynical and exploitative’ pricing behaviour for out of patent medicines
June 8 2016
The body representing leading pharmaceutical companies has condemned the pricing policies imposed by some companies that have become sole manufacturers for out of patent medicines.
A report in The Times last week highlighted huge increases in the prices being charged to the NHS - in one case a price hike of 12,500% - for certain generic medicines. The investigation also found price increases of over 1,000% for 32 other drugs, which are mainly older, low volume drugs which other generics manufacturers do not see as commercially viable. Without competition, the sole supplier of the generic can command prices to reflect its monopoly.
The Times report claimed that a small group of entrepreneurs “has made vast sums after raising the cost of medicines by £262 million a year”. This is done by “taking advantage of a loophole that leaves them free to impose ‘extortionate’ price rises on drugs if they drop an existing brand name and sell it under its generic name instead.”
Responding to the report, the Association of the British Pharmaceutical Industry said such behaviour needs to be tackled, and has called for government intervention.
Dr Richard Torbett, Executive Director Commercial at the ABPI, said: “The sort of pricing behaviour described in the Times investigation today – over 12,000% price increase for an old, out of patent product - is cynical and exploitative. It does not reflect the values of our members who are focussed on researching and developing new medicines to meet the medical needs of NHS patients.
“Any inappropriate behaviour around the pricing of these old medicines should quite rightly be tackled. Thankfully, these examples are rare, and overall the UK has a highly competitive market where competition drives efficiency and low prices.
“The government can step in and question pricing decisions and through the Competition and Markets Authority has wide powers to regulate and deal with market abuses. The ABPI supports this and is in discussion with Government about how best to ensure appropriate pricing throughout the system. Any future policy decisions in this area should rightly take into account the needs of the NHS, and also provide the flexibility that companies need in order to continue to supply medicines.”
The ABPI has also published a response to a global survey report by Transparency International, titled ‘Corruption in the Pharmaceutical Sector’. This raised concerns that the pharmaceuticals and healthcare sector is regularly cited as a high-risk sector for corruption. In part this is due to “a clear knowledge gap between the providers and users of healthcare, leaving patients subject to the knowledge they are provided by healthcare providers, suppliers, and regulators.”
The report notes the positive steps being taken to address these concerns. The European Federation of Pharmaceutical Industries and Associations (EFPIA) is implementing a code of conduct requiring data disclosure beginning in June 2016, “while in the UK a ‘Sunshine rule’ will require NHS hospitals and doctor groups to keep registers of gifts and hospitality given to staff from pharmaceutical companies.”
Responding to the TI report, Dr Virginia Acha, ABPI Director of Research, Medical and Innovation, said: “Greater transparency and higher standards should be the goal for any industry, and particularly those responsible for delivering healthcare services to patients. This contribution from Transparency International maps out why this is so important, and we welcome that focus.
“However, this publication sets out the challenges very clearly, but fails to reflect what is already required by regulation and delivered by companies around the world in meeting these obligations. For the UK in particular, the arguments set out appear to be both out of sync and out of date with our track record for how we research, conduct clinical trials, market and provide our medicines to patients and engage with healthcare professionals.”
Dr Acha also pointed out that regulations such as the UK Bribery Act and the US Foreign Corrupt Practices Act (FCPA) have global application, and companies also face intense scrutiny by the MHRA and NICE.
“At the end of June this year, the ABPI will also deliver the UK’s first searchable database of payments between the pharmaceutical industry and healthcare professionals and organisations. Disclosure UK is another big step forward in increased transparency which will help the public to understand why pharmaceutical companies need to work with doctors, nurses and pharmacists in order to bring medicines into the NHS safely and responsibly,” said Dr Acha.