30 Nov 2008
Could the pharmaceutical companies be short selling the NHS so they can bankrupt it and then buy it up cheap?
Pharmaceutical companies make huge profits because of monopoly power. They patent new drugs meaning they cannot be copied. Demand is high for drugs which are said to prolong life...who would not pay £1,000s for say an anti-cancer drug that would extend life for a few months more.
Pharmaceutical drugs bills are rising for the NHS and pharmaceutical companies are adept at running PR campaigns to weaken NICE (the organisation that decides whether the NHS can buy new expensive drugs). Who has not seen the news on TV with dying cancer victims lobbying for the NHS to fund a drug for them? A depressing sight. No one ever makes the point that someone is profiting on a huge scale from misery, do BBC reporters ask hard questions about company profits?
The pharmaceutical companies are motivated by profit pure and simple. They argue that the profit motive is good, giving rise to new products. I don't know what Ayn Rand would say to this? If cheaper generic drugs appear, their profits fall.
Generic drugs are chemically the same, have the same health effect but are cheaper.
The non generic drugs bill is damaging the NHS, patients and healthcare in general.
Lets add in government debt. My guess is the current economic catastrophe will lead to unsustainable government borrowing (this is everyone's guess is it not). The £ will collapse (hasn't it collapsed already!) neither the balance of payments deficit or government borrowing will be sustainable.
So Brown and Darling or Cameron and Osbourne will be forced to call in the IMF...who will insist on interest rates moving up to 15% and wide spread privatisation.
The NHS will be 'unaffordable' and will be sold, big pharm can buy it up cheap and get into a new area of 'healthcare'.
May be with the high cost of drugs that generate monopoly profits the end of the NHS will be hastened.
May be I am being too conspiratorial or not conspiratorial enough, depending on your point of view. Perhaps big pharm likes the NHS, a buyer for their often over priced products and would not want to buy up the goose that lays the golden eggs.
The European Commission has at least produced a report on the dangers of big pharm blocking generic drugs.
"Market entry of generic companies and the development of new and more affordable medicines is sometimes blocked or delayed, at significant cost to healthcare systems, consumers and taxpayers," said Competition Commissioner Neelie Kroes.
"It is still early days but the Commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached," she added.
The Commission could impose large fines on drug companies if they have engaged in unfair practices.
Unfortunately while Mcain and Obama (who I usually give very little credit too) in the US have picked up on the issue, British politicians seem to be ignoring it compleatly.
Sounds like state control of pharmaceutical companies would work better than the present monopolistic market arrangements or what about open source research?
Posted by Derek Wall at 10:30 am