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Drug prices may rise for NHS after Brexit

Experts warn new trade deals could harm NHS

Adrian O'Dowd

Friday, 13 July 2018

The NHS could face having to pay more for drugs as a result of leaving the European Union (EU), according to experts writing a viewpoint piece* published today in The Lancet.

One consequence of Brexit – the UK having to agree a trade deal itself with the US – could risk increasing drug prices in the UK, possibly reducing affordability for the NHS, said the authors from the School of Public Health, University of Michigan, USA, London School of Hygiene & Tropical Medicine, and University of Sheffield.

Currently, all of the UK’s international trade deals are negotiated through the EU, but the UK government will need to negotiate new deals to replace existing agreements post-Brexit.

The USA is one of the UK’s most important trading partners after the rest of the EU and a US-UK bilateral trade deal is likely to be a key post-Brexit priority.

The viewpoint piece explains that American drug prices are some of the highest in the world and the US government does not negotiate drug prices, and Medicare (the federal government’s health insurance programme for people aged 65 years and older) is prohibited by law from doing so.

In addition, the US Food and Drug Administration and the secretary of Health and Human Services are prevented from basing drug approval decisions on cost-effectiveness.

By contrast, similar drugs are often significantly cheaper in the UK, where the government negotiates prices with drug companies via the Pharmaceutical Price Regulation Scheme, and the NHS makes purchases based on clinical and cost-effectiveness assessments from NICE.

The authors said they had concerns that the USA could pressure the UK to change the way it regulates pharmaceuticals in trade deals and force the price of drugs to go up.

In May of this year, the US Department of Health and Human Services introduced the American Patients First blueprint, outlining measures to reduce US drug prices which include putting pressure on other countries to allow drug prices to rise in their jurisdictions.

The blueprint criticised single-payer healthcare systems which imposed drug price controls, and accused foreign governments of not paying their fair share of research and development costs to bring innovative drugs to market – proposing that other nations were “free-riding” off of American investment in drug development.

The article authors argued that this interpretation overlooked the high cost of drugs for patients, and that drugs should be priced in line with how much benefit they gave.

Lead author, Dr Holly Jarman from the University of Michigan, said: “American Patients First is an attempt by the Trump Administration to make the USA’s drug pricing problem everybody else’s problem.

“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.”

Fellow author, Professor Tamara Hervey from the University of Sheffield, said: “While deals have to be ratified by parliament, parliament cannot amend the agreement that the government negotiates, or be directly involved as the negotiation takes place.

“In addition, health groups are rarely consulted on trade deals, and parliament and other health-focused stakeholders have limited opportunities to hold the government to account in its trade negotiations.”

The authors said that the UK was unlikely to get a better deal with the USA than it had as part of the EU, as the UK market was much smaller than the whole of the EU, meaning the UK has less bargaining power in negotiations.

*Jarman H, McKee M, Hervey T K. Viewpoint: Health, transatlantic trade, and President Trump's populism: what American Patients First has to do with Brexit and the NHS. The Lancet, 12 July 2018. DOI: 10.1016/S0140-6736(18)31492-2

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