Jeremy Corbyn’s big pharma policy is not ‘radical’ – it’s part of a new consensus to tackle a rogue industry

A commitment to public ownership could allow future governments to take on parts of the manufacturing process to supply affordable medicines to the NHS

Nick Dearden
Wednesday 25 September 2019 14:41 BST
Jeremy Corbyn is addressing Labour party conference before MPs head back to parliament tomorrow

For too long big pharmaceutical corporations have held patients to ransom by charging extortionate prices for life-saving medicines. And at least one former Conservative minister should applaud Jeremy Corbyn’s conference announcement yesterday, aimed at constraining this powerful sector.

Former commercial secretary to the Treasury, and one-time Goldman Sachs economist, Jim O’Neill, is not your traditional radical, but earlier this year he compared the socially destructive practices of big pharma to the way the banks gambled with our livelihoods in the financial crisis. He warned that nationalised industry might be the only way to solve the coming catastrophe of antibiotic resistance.

Corbyn’s speech tapped into that sentiment, and the Labour leader used his speech in Brighton to highlight the plight of one of the system’s victims, Luis Walker.

Nine-year-old Luis has cystic fibrosis. A drug called Orkambi could not only alleviate the symptoms of his condition, but could slow the progression of the disease, potentially adding years to his life. But the drug is not available on the NHS in England because it is too expensive. In spite of three years of negotiations, manufacturer Vertex is still refusing to lower its hefty price tag of £105,000 per patient.

The reasons for this are simple: over the last three decades, big pharma, like so much of big business has used lobbying muscle to secure market monopolies which vastly increase the power it holds over governments. Today, these corporations enjoy massive and growing monopoly protection for new medicines they manufacture which allows them to charge any price the market will endure.

While they say that these sky high prices are needed to recoup costs, the same corporations spend more money on marketing and financial shenanigans to keep the price of their stock high than they do developing new drugs.

Rather than discovering vital new drugs, scientists are employed making old medicines look like new medicines so they can renew patents and keep the profits rolling in.

It’s not just O’Neill. Dozens of economists now believe the pharmaceutical industry is not fit for purpose. While some life-saving drugs, like a new wave of antibiotics, are regarded as too unprofitable to research, others, like new cancer medications, are so unaffordable that even the NHS is creaking under the spiralling costs.

Medicines cost the NHS £18bn last year, a 4.6 per cent increase on the year before. In recent years the increase alone in the cost of medicines has dwarfed the NHS’s deficit.

So action is vital. And, as O’Neill has suggested, it’s perfectly possible. Yesterday, Corbyn committed Labour to reform.

First up, he promised to use something called “compulsory licensing” to override big pharma’s patents and manufacture generically where necessary. This is perfectly legal, although big pharma would like to convince us otherwise. It was used to procure medicines in the UK in the 1960s and 1970s, and has also been used effectively in over 100 countries since 2001 including the US.

Corbyn is saying that he is willing to use the legal mechanisms at his disposal to stop big pharma from putting profiteering before need. And he’s promising to help developing countries, who face phenomenal bullying from industry, to do the same.

But it doesn’t end there. In the last two years, the NHS spent £2bn on drugs where public money had funded their research and development. This means taxpayers are paying twice – first for the research, then for inflated prices the NHS is charged for the medicines. Take prostate cancer drug abiraterone, which was funded partly by the public purse but cost the NHS £172m from 2014 to 2016, and despite a generic version being available in India for a price 85 per cent lower.

Corbyn has pledged that conditions should be attached to public funding that require drugs based on publicly-funded research to be affordable and accessible.

Finally, Corbyn has promised public drug development and manufacturing capabilities, exactly what O’Neill said might now be necessary.

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This commitment to public ownership could enable future governments to fulfil their obligations to ensure the right to health by taking on parts of the manufacturing process to supply affordable medicines to the NHS. Potentially it could also save development funds, allowing technology and skills to be shared directly with developing countries, rather than using aid to line the pockets of big pharma.

Left to its own devices, no amount of voluntary codes have convinced big pharma to change its ways. In fact, the big players are currently kept in business by buying up smaller, more innovative players, and lobbying for ever higher levels of monopoly privilege in trade deals. The only solution is a mixture of strong regulation, and the removal of aspects of the industry from the market altogether, to bring it into common ownership. That’s what Labour has pledged.

This should be a starting point. The same combination of constraining capital and creating publicly owned alternatives needs to be applied across the global economy. The inequality, poverty and suffering which deregulation and privatisation have caused is completely unsustainable. It’s time to take control across the board. Labour has made a brave start. Other parties should follow suit.

Nick Dearden is director of Global Justice Now

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