Access to medicines issues
Pharmaceutical companies are failing a duty of care. Governments offer pharmaceutical companies exclusivity rights to incentivise the development of medicines, because medical innovation is in the public interest. Pharmaceutical companies, in return, have a duty of care to protect this public interest, and not to abuse market exclusivities by setting prices that put medicines out of reach, or that displace other health care services.
Missing medicines and high prices
Pharmaceutical companies are taking advantage of laws that are meant to incentivise the creation of new, needed medicines to instead ratchet up prices to unsustainable levels. Often this is done without any new innovation at all. Companies can obtain added market protections for old drugs with new indications, or monopolise supply chains to prevent patients accessing lower cost versions of the same medicine. The Pharmaceutical Accountability Foundation considers this type of action a betrayal of the public trust. When pharmaceutical companies accept the incentives offered by national governments to serve public health, they have a duty to serve public health – not only line their pockets. Worse, the focus on high prices over health needs often leads to a variety of sub-optimal public health outcomes, including: failing to incentivise the creation of needed medicines in the first place and charging expensive prices for patients and health systems. Critical issues are listed below, divided loosely into three broad categories.
Click here for an overview of all issues.
Medicines development is currently incentivised by profit. Because of this incentive structure, products that are important for public health but unlikely to be profitable are often not developed. This means that some places of acute need are underserved, if the market they provide is not sufficiently profitable to motivate companies to develop medicines. Such products can include those that treat diseases that largely affect poor and vulnerable populations and those that treat rare diseases with very small patient populations. They can also include treatments for anti-microbial resistant infections that must be kept in reserve after registration, or products to treat illnesses with pandemic potential (before an outbreak has occurred). The ‘financialisation’ of pharmaceutical development leads to market failures, as the profit motive is insufficient to meet public need, including the need for novel disease preparedness. Click here for an overview of all related issues.
Even where products are available, they are often not accessible or affordable for those that need them. There are many reasons for access problems. They might be due to monopolies that limit competition and raise prices, or to high prices unrelated to monopolies (for example because a medicine is difficult to manufacture or contains expensive ingredients). They can also be caused by barriers such as weak health infrastructure or regulatory barriers. Patents are a way of rewarding innovation. The idea is to incentivise research and development into needed new medical products by providing companies that do this research with a temporary monopoly – generally, 20 years – during which no one else can make or sell the product without their permission. This allows the patent holder to recoup the cost of researching and developing the product, and to make a profit. During the term of patent protection, the sole supplier of a medicine can charge whatever they wish for a course of treatment. Rising medicines prices over the last several years have been the cause of concern and even rationing of high priced health products in wealthy and developing countries alike. Companies are incentivised to hold on to patent protection as long as possible to maximise their profits. This has resulted in a patent system that is deeply out of balance, with its benefits increasingly serving the pharmaceutical industry’s bottom line at the cost of diminishing returns for public-health. Click here for an overview of all related issues.
Poor Enabling Environment
The legal and policy environments in which companies operate in can have a profound influence on their behaviour, but are all too often designed in ways that serve industry rather than the public interest. Poorly applied competition law, lack of political will to stand up to industry demands, and other issues can create an environment that does not optimally enable innovation and access to medicines. There can also be cases where legislation needs to be improved. For example: countries with inadequate or poorly designed reimbursement systems (such as insurance) can cause patients to avoid needed treatment due to the cost of receiving care. The way that insurance schemes are organised can also drive up prices on medicinal products by adding layers of non-transparency where rent-seeking behaviour can occur. In many countries, laws are poorly applied and sub-optimal legislation continues to exist because there is a lack of political will to stand up to the pharmaceutical industry and an overinfluence of lobby groups for pharmaceutical companies in public spaces. Corruption can come in many forms, and create public health challenges. Corruption can include influencing medical professionals to prescribe a drug more often, for example through direct payments, speaking engagements and other incentives; it can also include direct-to-patient advertising. It can include undue industry influence on technical guidelines, and pushing for off-label use of existing medicines without good technical guidelines. Corruption is facilitated by wider issues of poor enabling environments. Click here for an overview of all related issues.