Drugs Bust – Opportunistic companies take advantage of a hole in the regulations.

On the surface this looks like a typical South African legal loophole arbitrage opportunity taken by a smart businessman and the manipulated are the British public whose administrators left a loophole in the law. the loophole has been there for years, only recently abused, and has not been closed as yet.
A deeper analysis might suggest that Glaxo was complicit in this immoral action, and that they took advantage by owning a share of the new company. Politicians need to get their act together and block this in future.

Image result for big pharma cartoon

Bill Kember in The Times 14th April reports: Drug giant’s secret plan to destroy cancer medicine – Company staff discussed dumping life-saving stock unless 4,000% price rise agreed

Staff at one of the world’s leading drug companies discussed destroying supplies of life-saving cancer medicines in a battle to impose massive price rises across Europe, The Times can reveal.

The proposal was raised at Aspen Pharmacare during a dispute with the Spanish health service in 2014 over attempts to increase the price of the medicines by up to 4,000 per cent.

The company, which runs its European operations from Dublin, began a continent-wide effort to drive up the price of five cancer medicines after buying the rights from the British company GlaxoSmithKline (GSK).

The price rises meant that the cost of busulfan, used by leukaemia patients, rose from £5.20 to £65.22 a pack in England and Wales during 2013, an increase of more than 1,100 per cent. The price of chlorambucil, also used to treat blood cancer, rose from £8.36 to £40.51 a pack in the same year.

Aspen, a South African pharmaceutical company……

Drugs Bust – Times leader 14th April 2017

Let’s celebrate!” This sign-off to an internal email at Aspen Pharmacare followed the conclusion of a deal, but not the sort of deal any business should be proud of. The South African company had agreed increases of up to 1,500 per cent in the cost of life-saving cancer drugs aimed mainly at children and the elderly after months of threats to withhold them or destroy supplies.

This agreement was struck with the Italian health service but the company was emboldened by its earlier experience with the NHS: Aspen had raised the prices of these drugs in England and Wales by up to 1,200 per cent. This is the latest in a series of scandalous abuses of a drug pricing loophole brought to the attention of the public not by regulators, the health service, police or civil servants, but by The Times.

As a direct result of this newspaper’s public interest reporting, which is under sustained threat from both the government and the courts, a bill is now before parliament that will close the loophole in question and save the NHS and taxpayers hundreds of millions of pounds a year.

There are more practical steps that can be taken to halt the extortionate practices of companies that exploit the marketing rights to out-of-patent drugs. There is also a question to be answered by both the maverick firms that buy up these rights and the giants that sell them. How can any business be a party to withholding or forcing up the prices of cutting-edge medicines, knowing that desperately ill children need them? That the question even arises is a moral outrage.

Aspen is controlled by Stephen Saad, one of Africa’s richest men. In 2009 he oversaw the acquisition from GlaxoSmithKline (GSK) of a portfolio of cancer drugs known as Cosmos, which until then had been sold at a modest profit. As branded drugs their pricing was strictly regulated. Being out of patent, under rules then in force, these prices could be reset at whatever level the market would bear provided they were renamed and recategorised as “unbranded generics”.

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This entry was posted in A Personal View, Commissioning, Political Representatives and activists, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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