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US lobbies UK for free market

The US government suggests the UK should adopt an American-style Medicare system to increase competition and drive down drug costs

The US government is reportedly applying pressure to ministers in England to allow big American pharma companies unlimited access to supply drugs to the UK's national health service as part of free market reforms for the NHS, which many firms believe is being jeopardised by the recommendations of the National Institute for Health and Clinical Excellence (NICE).

Backing given to big pharma companies by the US government was given a boost yesterday according to a report in the Guardian when Alex Azar, deputy Secretary of Health and Human Services in the US, said that attempts to use rationing mechanisms, such as NICE, to quell rising drug costs would damage innovation.

NICE regularly comes under fire from pharma companies and patient groups for its reviews and recommendations; most recently it was lambasted for its decision not to recommend anti-cholinesterase drugs Aricept, Exelon and Reminyl for use in patients newly diagnosed with Alzheimer's disease and to deny NHS funding for advanced Alzheimer's treatment, Ebixa.

Azar believes that the process is currently obstructive and maintains that if all new drugs were recommended for use on the NHS, market forces, spurred by pharma industry competitiveness, would drive down treatment costs.

He even went as far as to suggest that the UK give serious consideration to adopting an American-style system, similar to the private insurance packages offered to people on Medicare, so patients could opt for access to basic healthcare or top it up if they wanted to pay for more than the state would afford.

While the idea of co-payment has been mooted on a product basis in some therapy areas in the UK, including cancer and chronic diseases, a mechanism similar to that of Medicare would require an overhaul of the UK tax system, not to mention a significant change in British culture.

The current healthcare debate raging in the US over Medicare will do little to promote its benefits across the Atlantic, whether or not a major upheaval is needed here.

Gains by the Democrats in the US mid-term elections are likely to signal strong-arm tactics to resolve a number of issues they feel have been neglected by President Bush: Medicare and the apparent influence wielded by the pharma industry are topping their list.

Senior US Democrats, from Nancy Pelosi to Rahn Emanuel, have said that priorities following their respective victories include railing against pharma to reduce drug costs. Pricing is a bone of contention for them not least because of the impact it has had on Medicare. Democrats want to see more government intervention to slash prices. Currently, the federal government is forbidden to get involved in negotiating drug prices directly.

Under Medicare Part D, drug benefits managers in the private sector negotiate product prices for the system in the hope that free market competition will be more effective than bureaucracy at reducing healthcare costs.

Democrats want this changed to enable federal government to agree lower prices. If they succeed, it could have a significant impact on global drug pricing. However, as Bush is extremely proud of Medicare Part D, he could stop Democrats in their tracks with a veto.

30th September 2008


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