The UK's Competition and Markets Authority (CMA) has found that the drug company, Concordia, has overcharged the NHS for its thyroid drug, Liothyronine. The CMA said that in 2016 the NHS spent £34 million on its drug, liothyronine, whilst in 2006 it was just £600,000. The amount the NHS paid per pack rose from about £4.46 in 2007 to £258.19 by July 2017, a staggering increase of almost 6,000%.
So what is the problem? Has demand for the drug risen? Are there lots more people suffering hypothyroidism? No, all kinds of sickness is rising, but not by 6000% in 10 years! Has there been a supply problem then, some difficulty making the drug, an increase in the cost of making it? No, the CMA said the price rise took place despite production costs being "broadly stable".
"We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that."
So this is yet another example of pharmaceutical industry profiteering. Nor is it an isolated incident of a drug company milking national governments, national health services, and patients. I blogged in October 2015 about the drug Daraprim and Turing Pharmaceuticals, which gained control over the drug and increased the price from $13.50 to $750, a rise of over 5,000%!
The strategy appears to be for smaller drug companies to gain control over a specific drug, and once in a monopoly position to exploit it for all it is worth.
The price change happened after the drug was de-branded in 2007, that is, the patent expired. Drugs are expensive under patent; but the government can cap the profits drug companies are allowed to make. Afterwards, drug prices usually fall. But not if the pharmaceutical industry takes action, and gives an individual company a monopoly in marketing the drug. This is what happened in this case, and the earlier one concerning Daraprim. Concordia was, until earlier this year, the only supplier of the drug, selling in in more than 100 countries. The CMA report commented:
"Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS - and the UK taxpayer - to pay over the odds for important medical treatments."
Yet as always the main unasked question is whether this drug is safe. Although the media produced patients who felt they had benefitted from it, the Drugs.com website outlines the side effects of the drug, some of them serious. It warns that any patient should get "emergency help immediately" if any of the following known side effects of the drug occurs:
* Arm, back or jaw pain
* changes in appetite
* changes in menstrual periods
* chest pain or discomfort
* chest tightness or heaviness
* cold clammy skin
* confusion
* decreased urine output
* diarrhoea
* dilated neck veins
* dizziness
* extreme fatigue
* fainting
* fast, slow, pounding, or irregular heartbeat or pulse
* fever
* hand tremors
* headache
* increased bowel movements
* irregular breathing
* irritability
* leg cramps
* lightheadedness
* menstrual changes
* nausea
* nervousness
* sensitivity to heat
* shortness of breath
* sweating
* swelling of face, fingers, feet, or lower legs
* troubled breathing
* trouble sleeping
* vomiting
* weak pulse
* weight gain
* weight loss
* wheezing
Monopoly is a major problem in the provision of health care services. A monopoly over the sale of a single drug can lead to cost of pharmaceutical drugs becoming exhorbitant. The monopoly of a single type of medicine within a national health service can lead to patients having to suffer the consequence of harmful and dangerous drugs, with patients believing that they are the only way to treat their illness.
"We allege that Concordia used its market dominance in the supply of liothyronine tablets to do exactly that."
The strategy appears to be for smaller drug companies to gain control over a specific drug, and once in a monopoly position to exploit it for all it is worth.
The price change happened after the drug was de-branded in 2007, that is, the patent expired. Drugs are expensive under patent; but the government can cap the profits drug companies are allowed to make. Afterwards, drug prices usually fall. But not if the pharmaceutical industry takes action, and gives an individual company a monopoly in marketing the drug. This is what happened in this case, and the earlier one concerning Daraprim. Concordia was, until earlier this year, the only supplier of the drug, selling in in more than 100 countries. The CMA report commented:
"Pharmaceutical companies which abuse their position and overcharge for drugs are forcing the NHS - and the UK taxpayer - to pay over the odds for important medical treatments."
And for some patients, in a country where conventional medicine is also a virtual monopoly, this has indeed become an important drug. The mainstream media produced several patients who have found the drug useful, and have been affected by the price hype. Owing to the cost, the NHS stopped doctors prescribing it, and these patients suffered as a result.
It is, of course, a good human interest news story, and most of the mainstream media reported it. What they did not report, or even suggest, was that this story demonstrates clearly that drug companies are essentially private business enterprises, interested mainly in maximising their profit. Producing drugs is not, for them, a philanthropic patient-centred exercise. Indeed, by hyping the price to this extent it is clear that the last people the company were thinking about were the patients!
Nor did the media ask what appears to be a natural question. How is it that within the pharmaceutical world one small drug company is allowed a monopoly over the manufacture and distribution of a drug? How is it that when an established drug comes off patent, and are 'debranded', its price can rocket? Apparently this is the CMA has challenged a number of drugs companies about. It is not an isolated example.
The company, Concordia, has stated that it did "not believe that competition law has been infringed", and that the pricing of liothyronine had been conducted "openly and transparently with the Department of Health in the UK over a period of 10 years". However, earlier in 2017, Concordia was accused of pushing up the price of another NHS drug, hydrocortisone, by striking a deal not to compete with another firm. Their innocence, and the innocence of the pharmaceutical industry generally, seems to be highly questionable.
Moreover, the liothyronine case is not the only one being investigated by the CMA. The drug giants Pfizer and Flynn Pharma have been intestigated for excessive and unfair prices being set for the anti-epilepsy treatment, phenytoin sodium capsules, and it has imposed fines of about £45 million on a number of other pharmaceutical companies in relation to the anti-depressant drug, paroxetine.
All this raises another unasked question. If this is so, how is it that a government department, and the NHS, has not picked up on the profiteering? Has there been collusion, at a time when the NHS is getting deeper into crisis and bankrupcy? As I have argued at length elsewhere, the pharmaceutical industry is important to government because it is an important part of the British economy.
* Arm, back or jaw pain
* changes in appetite
* changes in menstrual periods
* chest pain or discomfort
* chest tightness or heaviness
* cold clammy skin
* confusion
* decreased urine output
* diarrhoea
* dilated neck veins
* dizziness
* extreme fatigue
* fainting
* fast, slow, pounding, or irregular heartbeat or pulse
* fever
* hand tremors
* headache
* increased bowel movements
* irregular breathing
* irritability
* leg cramps
* lightheadedness
* menstrual changes
* nausea
* nervousness
* sensitivity to heat
* shortness of breath
* sweating
* swelling of face, fingers, feet, or lower legs
* troubled breathing
* trouble sleeping
* vomiting
* weak pulse
* weight gain
* weight loss
* wheezing
Monopoly is a major problem in the provision of health care services. A monopoly over the sale of a single drug can lead to cost of pharmaceutical drugs becoming exhorbitant. The monopoly of a single type of medicine within a national health service can lead to patients having to suffer the consequence of harmful and dangerous drugs, with patients believing that they are the only way to treat their illness.
