Is Novartis profiteering from the NHS?

An interesting ID popped-up yesterday with a comment that needs some reflection and debate:

Re: Novartis, Scum! said…

“How do you guys feel about Novartis taking legal action against four NHS trusts for using a cheaper drug to treat macular degeneration? Isn’t this further proof of big pharmas’ greed? Us MSers are a cash cow, as are all ill people. The money is not to cure people, merely to treat them with expensive drugs. If we don’t pay, we don’t get. Is this not why Fampridine is out of most of ours’ reach?

“May be and may be not! Pharma is a business its major incentive is  to make money. Most Pharma companies are listed and therefore have shareholders; the major pharma shareholders are pension funds. Therefore, possibly your pension and some of mine depends on them doing well. In addition, pharma pay a large amount of money in tax. Our government does very well out of pharma; the pharma industry is ~6% of the UK’s GDP. The development costs of novel drugs is so large and risky that Pharma is the only workable model for developing drugs. Usually the pay-back for risk is big profits. If we don’t reward risk we don’t get any risk-takers. The pharma industry is no exception.

Who created the beast? We did – do we have a right  to complain?

So if you take a macro-economic view of pharma it is in everybody’s interest that Pharma does well. The issue here is getting the balance right between reasonable and unreasonable profits and reasonable and unreasonable behaviour. I am not sure what the correct answer is. If we erode the incentives for developing new drugs we reduce the chances of getting new drugs for MSers. What we need is some give and take! There is no easy solution.

I wish Pharma didn’t have such a bad reputation; it makes it difficult for them.” 

“What do you think?”

12 thoughts on “Is Novartis profiteering from the NHS?”

  1. The Novartis decision to sue several NHS trusts for using Avastin rather than the much more expensive (but no more effective, as recently shown) Lucentis for wet macular degeneration is in my view a HUGE mistake that will rebound on them. Heard their representative on the Today programme and he was very unconvincing. Nobody, well nobody reasonable, would deny the opportunity for pharma to make a profit but the question is how much and can it be justified in an area where drugs are charged at what the market will stand, rather than any true competition to drive down price as envisaged by Adam Smith in the Wealth of Nations.

  2. This is slightly related, I learmt recently that companies have a legal obligation to maximise profits. A listed company here in India has been sued by a British pension fund that's a shareholder for certain decisions that led to lower profits. (It used to be a public sector company and the Indian government is still a big shareholder – these unprofitable decisions were made because the govt wanted them) So pharma companies have to make big profits, but drugs nobody can afford are not much use. Perhaps governments that pay for healthcare should pay for drug development too

  3. In response to MD2. I agree that the market doesn't work for medical care nor prescription-only drugs. The problem is finding a way to drive down costs. NICE is one way of doing this! I suggest we wait for all the trial results to come in and for NICE to pontificate! What is interesting is that Ranibizumab (Lucentis), the eye product, and Bevacizumab(Avastin), the cancer product, were both made and developed by Genentech, yet Novartis is marketing the product outside the US. Do you think Genentech/Roche had a premonition about the fall-out from marketing these two drugs in parallel in Europe? Please note that Avastin is marketed in Europe by Roche, who owns Genentech. Why have Genetech/Roche split the marketing of these two similar products? What risks did Novartis take to develop Ranibizumab? Do these risks justify the windfall?

  4. Anon SaidDue to concerns about the cardiovascular effects of fingolimod (Gilenya), the drug is now contraindicated in patients with certain heart conditions. The FDA is also recommending that the time of cardiovascular monitoring be extended for patients at high-risk for bradycardia.This alert is brought to you by DELETED, a service from DELETED to highlight breaking news our medical editors identify as being of major importance to our readers.Monday, May 14, 2012 7:49:00 PMDelete

  5. No offence Prof G, but you seem to be sat on the fence on this issue. Novartis are doing something that is inexcusable. How dare they sue the NHS for doing what is best of the patient and the State.The original comment raised the issue of Fampradine being too expensive at the pharma's behest. Seems you've ignored that.

  6. Dear MariaThanks for that, no doubt G will post once he has digested it.Dear Anon 9:21With regard Fampradine….now that is Biogen-Idec..different company same type of virutes :-)We will say the same about them all.G may think that be is sat on the fence but you have to remember where the fencepost may end up:-).Likewise sitting on the fence is not the same as putting anotherside to the story, as both sides need to be heard. Otherwise it is just a pharma bashing exercise. Pharma need to improve their PR and better educate us to the reasons behind these behind these high-priced drugs. As to the high price of fampradine, you can be sure that it will wake other companies up to the oppertunities that can be had from symptom control drugs…these should not take years to filter through. Therefore there could be positive aspects to come from such drugs.Our opinunions no matter what they are are likely to influence the cost of MS drugs.

  7. I think you also need to consider what drugs the big pharmas have. Biogen has avonex, tysabri and BG12- a happy position to be in, as even if the market drops out of injectables, they will still have a big share of the market. Merck Serono only has rebif as far as I'm aware, so unless they drop the price hugely, the 'gold standard' that it's been until now will disappear. Maybe that's why they are trying to get it available for CIS- although how you get people to inject themselves 3x a week and all the side effects on the basis that thye would only probably get full blown MS if they didn't is debatable. A lot is going to depend on the cost of BG12 and it's criteria for use.

  8. Re: "No offence Prof G, but you seem to be sat on the fence on this issue."That is correct! There needs to be some compromise between pricing and value-for-money and the need for Pharma to make profits. May be NICE have got it right by focusing on cost per QALY (quality adjusted life year). The downside is that this has created a imbalance in trade. At the moment the US is subsidizing drugs that are being used in the UK and Europe; the cost 40-50% more in the US. This is unsustainable; why should America provide most of the profits for Pharma? On the other side of the coin we need Pharma. All new innovative drugs need Pharma to develop them. I am unaware of any new drug coming to market in the last 15-20 years independent of Pharma. The only ones that do are generic equivalent drugs. In addition, when it comes to developing drugs for neglected diseases it is Pharma's social responsibility programmes that stepping up to the plate; academia and government don't have the know-how or infrastructure to develop drugs.Pharma has an image problem that is getting worse. They need to look in the mirror and ask themselves what needs to be done to improve this image and to get the public on their side. If they want advice I would be prepared to help them.

  9. "Pharma has an image problem that is getting worse. They need to look in the mirror and ask themselves what needs to be done to improve this image and to get the public on their side."An image problem ? Yes they do but it goes beyond rebranding or a surface level image change. Unlikely this will ever happen – little changes perhaps, as long as it will not affect the bottom line (or have a positive affect on the bottom line) of making as much profit as possible for shareholders. While I acknowledge the system is unlikely to change, healthcare should not be subject to it like it currently is. Capitalism sucks!

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