How Big Pharma Drug Pricing Costs Us Our Health

This article originally appeared on VICE UK.

Imagine this: You’re a man who has sex with other men. You know it puts you at high risk of contracting HIV, so you do some research and learn about a drug that will stop you contracting the virus. You go to your doctor and ask for it. “Yes, it exists,” says your doctor, “but you can’t have it.”

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Or this: You’ve been diagnosed with hepatitis C, and you’ve heard that it can lead to liver cirrhosis. There’s a “miracle” cure on the market, you’re told, but it’s not available to you in the UK.

Or imagine that your mom tells you she has late-stage breast cancer, and there’s a one-of-a-kind drug that could extend her life. “Sorry, it was too expensive,” the specialist at the hospital tells you. “It was struck off the National Health Service.”

I am sitting in a small room with people who don’t have to imagine this, because they have all had experiences like these. This is a meeting for AIDS activism and advocacy group ACT UP, in a support center in east London. The room is all gray plasterboard, with a round table in the middle, and a miserable-looking kettle in the corner. People arrive in dribs and drabs. A handsome gay man named Ashley is disseminating snacks while Paolo, an older guy, Italian, sits next to me and makes polite conversation. Sami, a trainee nurse, is last through the door, having come straight from a junior doctors protest.

We’re here to discuss a global shake-up of the way big pharma operates. Some people in this room have had their lives directly affected by illness: Paolo, for example, later told me he survived acute and hemorrhagic pancreatitis. Some want to campaign for access to drugs like the new, highly effective hep C treatments Sovaldi and Harvoni, which are currently unavailable on the NHS. Others, like me, are here to learn.

A lot of people here want the HIV-prevention drug PrEP to be made available in the UK, as it is in France, America, Canada, Israel, and Kenya. The drug, which could be offered to groups at high risk of contracting HIV, such as sex workers and gay men, has been found during clinical trials to prevent the rate of HIV infection by as much as 86 percent. At a cost of thousands per person for the pills, however, reports last week announced that, after much dispute, the NHS has decided against wide scale distribution. Instead, they intend to test PrEP on just 500 gay men over the next two years. In the same amount of time, around 5,000 will get a HIV diagnosis.

What people want to achieve at this meeting might vary, but ACT UP is united by a frustration at the way big drug companies inflate the price of drugs. It wants prices to drop to improve access to pharmaceuticals, and to save the government and the taxpayer some of the millions of pounds that are spent on drugs in this country each year. Everyone’s circumstances are different, but what’s radical about this group is the shared belief that the way big pharma operates needs a total, systemic overhaul, and they are all prepared to do something about it.

This is not a new conversation, but the debate over who decides the price of drugs has reached in an apex in recent months. Toward the end of last year, CEO of US drug company Turing Pharmaceuticals, Martin Shkreli, made international headlines for hiking the price of a HIV medication by a staggering 5,556 percent. When asked why the company had raised price, Shkreli said, “This isn’t the greedy drug company trying to gouge patients; it is us trying to stay in business.” In February, the MD of pharmaceutical giant Pfizer, Erik Nordkamp, criticized the British government’s proposal to alter the way cancer drug funds currently operate. “I would not want to be a cancer patient in England,” he told the Telegraph. As the NHS is currently being squeezed more than ever—even more so after the last budget—this is now a critical time to talk about the relationship between the taxpayer, the NHS, and drug companies.

“These companies are wildly overcharging for drugs that could save lives, at prices that can’t be afforded by the NHS,” said Dan Glass, who is facilitating the ACT UP meeting today. “We need to send them the message that business as usual is not acceptable.” Pens and paper are handed out, and we break into groups to decide how best to get this message across.

The group is spurred on by anger, but the members are not a collective of victims. Throughout the whole meeting, no one questions why I’m here. Ashley later told me that, since joining ACT UP four months ago, not one person has asked him whether he is HIV positive or not. It’s “just not relevant,” he said, because this isn’t about one hep C sufferer who needs a drug, or a person at risk of HIV needing PrEP; it’s about bringing marginalized groups of people together to challenge the way big pharma sells drugs to the NHS.

ACT UP has been around since 1987, when it formed in New York in response to the global AIDS pandemic. Since the 1990s and 2000s, the group has been largely dormant in the UK, until Glass decided to call for a regroup in October 2014. “I was living in Glasgow and noticing the cuts to services, doctors, and social support that I was getting for my HIV,” he told me. “I suppose I was being more cognizant to the general rise in stigma—especially as UKIP was saying things like migrants with HIV should be the last migrants we let into the UK.”

Treatment and support for people with HIV has not been prioritized by governments since the beginning of the outbreak in 1981. Ronald Reagan, the US President at the time, was notably silent on the subject, failing to utter the word “AIDS” for the next five years, while in the UK, Margaret Thatcher actively tried to block public health warnings about the illness. This behavior lead to ACT UP’s motto “Silence = Death.”

Today, 36 years after AIDS first started killing people (and AIDS has killed 39 million people to date), effective antiretroviral treatment drugs have been discovered and gradually distributed globally, curtailing the destruction caused by the HIV virus. Popular thinking is that we are on the way to eradicating both the stigma of living with HIV and that the number of diagnoses has fallen. But members of ACT UP believe we are living in what they describe as a “second silence.” HIV rates are rising in the UK, particularly among men who have sex with men, of whom now one in 20 are now thought to be positive. This isn’t the only demographic affected—of the 7,000 new HIV diagnoses in the UK each year, 45 percent are thought to be groups other than men who have sex with men. In America, rates of HIV aren’t going down, particularly within black and Latino communities.

And yet, the misconception pervades that AIDS is an issue that’s been dealt with. Global terror threats, the migration crisis, and new pandemics like Ebola have long since eclipsed concerns over HIV in international news coverage. Because treatment for HIV and AIDS exists, or because “high risk HIV groups” are slightly better off socioeconomically, AIDS is a problem that no longer destroys lives. Africa got their drugs, and with it, their higher life expectancies. People can keep their positivity a secret, because—thanks to certain treatments—most people living with HIV no longer have to walk around with lesions.

To buy into the myth that HIV is no longer an issue is both negligent and dangerous. Anyone can contract AIDS, beyond the “high risk” groups outlined above. Those in these groups—often marginalized in other ways, namely through sexism, racism, and homophobia—are still forced into situations where they are at higher risk of contracting the virus. And it might not be killing people in vast number as it did in the 1980s, but there are specific new problems facing people living with HIV today—such as the virus’s continuing stigma.

Silvia Petretti has been an AIDS activist for 15 years, providing peer support for women living with HIV through the group Positively UK. At our next ACT UP meeting, I watch her almost break down into tears because a woman with HIV that she has been working with had killed herself that morning. Another woman I spoke to from Silvia’s organization, who understandably did not want to be named, told me that she suffered from clinical depression because of the shame attached to HIV, and felt she could not tell her family she was positive. After her diagnosis, her mental health deteriorated rapidly. Perhaps, if PrEP was made widely available, future generations may not have to go through this.

It is no secret that hiking the prices of lifesaving medication for those who have HIV, hep C, cancer, or other diseases has prevented drugs from getting to the people who need them. This is how it normally goes down: Research for a drug is either conducted by a publicly funded research body, like Cancer Research UK or Medical Research Council, or else a privately owned biotech firm. Sometimes, the former discover a compound and sell it to the latter, who will take that chemical to the next stage in becoming a drug. Often, pharma companies swoop in and buy up a whole biotech firm in the late stages of a drug’s development. This is so that when the drug is finished, they own the copyright for it. Once the pharma company owns the copyright, they can slam a patent on the drug that lasts for anything up to 20 years, preventing anyone from legally duplicating the drug on the basis of intellectual copyright law.

This patent allows the company to charge a higher price for the medication, since they now have a monopoly over the market, and health services like the NHS more of less have their hands tied when it comes to paying these inordinately high costs—at least until the patent expires. In England and Wales, it is a government executive agency called the MHRA that tests the medicines and decides that are safe, and the National Institute for Health and Care and Excellence (NICE) decides what constitutes a financially viable drug to be used on the NHS. If a drug has been set as too expensive to outweigh the good it will do to your quality of life and lifespan, they will not pass it for distribution. This can lead to further negotiations—like the drug company dropping the price after patient appeals, or it can mean the drug never makes it to market.

The pharmaceutical industry— worth approximately $300 billion a year—tries to get off the hook for price-hiking by saying that it need its profit to reflect research and development costs, which are, granted, usually very steep. These costs are exacerbated because it’s difficult to get a drug approved, and, secondly, because the research for all failed drugs is factored into the sale price.

However, prices are also known to factor in marketing costs. According to an article published last February in the Washington Post, nine out of ten big pharmaceutical companies put more money into marketing than research. “Drug companies spent more than $3 billion a year marketing to consumers in the US in 2012, but an estimated $24 billion marketing directly to health care professionals,” it notes. And in the UK, many drug manufacturers have been found to spend almost double the money on annual marketing than they have research and development. So the situation is more complex than high prices paying for the research.

Interested to hear how someone from a drug company reconciled himself with all of this, I met John*, who leads access for one of the world’s biggest pharmaceutical companies. He explained how, particularly in the case of very expensive medicines for rare cancers or rare diseases, where say only 50 people in the country might have the condition, pharma companies “have to charge a lot in order to make the money back on their investment.” That doesn’t really apply to outbreaks like HIV or hep C, I contest, to which he responds by pointing to the government as the culprits: “For me, the big problem is the government demanding innovation and not rewarding it—most of the time, we’re not producing medicines that are helpful—they’re tiny advances, but when a medicine can actually change things, they turn around and say they are unwilling to pay for it.”

John said pharma companies aren’t all bad. Some have been known to charge more for drugs in Europe for example, so they can sell them under cost price in Africa. However, a pharmaceutical company “is a business,” he said, “and we have to please our shareholders.” If a drug company charges too much for a drug, it can lead to an outcry from the public, who will lobby politicians for a reform over the price. This can seriously affect a company’s stocks. When Hillary Clinton once tweeted that “price gouging” over a drug called Daraprim was “outrageous,” the stocks of the company producing it immediately fell by 5 percent. This demonstrates that any threat to profit margins will ultimately displease shareholders.

Jamie Love sits on the other side of the fence to John. A lawyer and the man who was largely instrumental in getting HIV drugs distributed to the developing world, he has dedicated much of his life to fighting big pharma companies’ prices. He currently runs an organization called KEI—Knowledge Ecology International—which is an association “concerned with fairness and access to knowledge resources”—knowledge resources like medicines. Love believes that the rich and the poor can achieve better equality with regard to knowledge goods over other types of more material goods, and has put this into practice by lobbying for patents on lifesaving medications to be overridden in countries like India, where they can then be replicated at cheaper cost and sold to places like Africa.

I called Love at his home in Virginia. “If left to their own devices, I feel like these companies will try to get out of you all the money you have,” he said, voice steady. “There are no boundaries. They do it because they can.” Love illustrates this belief with a story about a time he appealed to a pharmaceutical company to donate a lifesaving drug to a patient who could not afford it. The representative at the pharma company immediately asked whether the patient had any savings. “He told me, ‘If people are putting money away for a rainy day, then cancer is that rainy day.’”

In 2010, that rainy day landed on Love’s doorstep, when his wife was diagnosed with stage-four breast cancer. He told me that she now takes a drug called TDM1, made by Swiss pharma company Roche, and widely known as Kadcyla. “We talk about how many years she has left,” he said, “and I think several years ahead now because of this drug—but that drug is not available in Scotland, Northern Ireland, Wales, or most developing countries, primarily because of the cost. In England, it was £90,000 [$129,000] per patient for this drug treatment.” It has since been deemed too expensive by the NHS.

He sighed: “If you look at the price of cancer drugs right now, there’s not much bending. Everyone has individual ways of dealing with these things—some people accept this and move onto the next stage of grief or acceptance, and start writing their wills. My attitude is: That’s fucked up, we need to fix it. That’s why some of our work is directed toward governments; we don’t want to sit around and wait for the drug companies to have some come to Jesus moment, because that’s just not going to happen.”

The fact that effective cancer drugs are making headlines for being unaffordable, can—unjustly or otherwise—act as a catalyst for change. Research and campaigning that helps cancer suffers tends to be well-funded, whereas, historically, people with HIV have had struggled to receive help from drug companies and governments, in part because groups that are likely to be affected—sex workers, gay men, or racial minorities—have been politically disadvantaged. The meeting of these causes, members of ACT UP hope, could bring about a wider change in the way drugs are priced.

Gilead Sciences, the US company that owns the right to manufacture PrEP, as well as the hep C drugs Sovaldi and Harvoni, have placed the price so high that the NHS is currently figuring out how the hell they can justify distributing it, and people are angry. Even John said, “Gilead is really dragging all of our [pharma companies] names through the mud,” before calling the company “pricks” for its inflation rates. According to the New York Times, Gilead made $23 billion on the two hep C drugs in the United States alone over 2014 and 2015, putting it in the top 10 biggest pharma companies in the world.

The Hep C Trust, an independent UK charity, reports that “the price offered by Gilead in the UK is almost £35,000 [$50,000] for a 12-week course,” but “many patients will need a 24-week course, costing £70,000 [$100,000].”

The actual cost price of making this is thought to be as little as £70 [$100] for a 12-week course or £140 [$200] for a 24-week course. Gilead justify the cost like so:

“The price of Gilead’s hepatitis C treatments [and the statement is near identical for Truvada] reflects the significant clinical, economic, and public health value of these drugs, and is comparable to, or in many cases less than, the cost of older, less effective regimens. In the US and around the world, Gilead is working to increase access to its medicines for all people who can benefit from them, regardless of where they live or their ability to pay.”

In an article published by Medicines San Frontieres last month, it was estimated that 40 percent of the world’s population of people living with hep C still cannot access Gilead’s treatment drug.

The PrEP situation is more complex, in part because it is a preventative, not a treatment. Men admit to doctor-shopping for PrEP in the UK—that is, going to different doctors’ clinics and getting it prescribed as a post–exposure phrophylaxis (PEP), which is a treatment you can have after you’ve had unprotected sex that might put you at risk of contracting HIV—a bit like the morning after pill. Other than that, you can currently buy PrEP privately in the UK, from certain London clinics at its staggering net cost of £355.73 [$511.10] per person, per month. Or, you can get it from abroad, from companies in India and unregulated sources on the internet.

How effective is the drug? Well, trials indicate that, if PrEP was made widely available, it would stop 15 out of every 20 HIV infections that would have happened without it, and therefore, according to the National AIDS Trust, it would be likely to save the NHS money in reduced HIV diagnoses and treatments. This angers Glass.

“Gilead, the key provider of PrEP, has been approached to provide the medication for free,” he said, “but I couldn’t expect it to, as pharmaceutical companies are notoriously greedy. My problem is with the British government and department of health, who say, ‘One of our goals is to prevent the spread of HIV.’ If that’s their goal, why have they just announced they won’t provide the prevention? The government should be doing a lot more.”

John and Glass seem to agree on this point, that it’s not just big pharma’s fault, but that the government and NHS is also to blame. “The NHS is a bureaucratic institution,” said John. “It has to deal with yearly budgets set by the government. The person who deals with those budgets probably finds that treating and keeping someone with HIV alive is cheaper in one year than to invest in protecting public health from a long-term perspective.”

The Hep C Trust make a strong case that if Sovaldi or Harvoni could be haggled down with Gilead, the drugs would make the government savings in the long run. They note the fact that one in five people infected with hepatitis C develop liver cirrhosis, and a liver transplant costs more than £50,000 [$70,000] for the NHS. Similarly, commentators and experts believe PrEP’s money-saving capabilities could be exponential. Glass shares this viewpoint: “Medical advancements like PrEP that can stop people getting HIV are not only morally good but more economically viable, because PrEP is currently cheaper than ART treatment in the long run.” Studies by Canadian Journal of Infectious Diseases have found that in their health system, the adoption of PrEP would save money in the long term.

When I bring up this issue with Silvia from Positively UK, she becomes understandably irate. “People know that all drug companies make an immense profit, not just on HIV, but all kinds of illnesses. What we need to remember is that, very often, that money comes out of public money—taxpayer’s money. I don’t understand why this money should be robbed. There’s not another word for it—for me, it is thievery. The margin of profit is unethical and immoral. We need to lobby the government to intervene and stop this.”

Part of the reason Silvia is so concerned with this point, she told me, is that she believes the money saved could be valuably spent elsewhere. “The NHS spends so much budget on drugs, while other services like sexual health or domestic violence services—services that could help battle HIV diagnoses rates in the first place—are facing cuts.” She explains that, from her work with Positively UK, she has seen firsthand how the money put into the pocket of pharmaceutical companies could be better spent on services for women who are living with HIV, many of whom have children.

So what’s the answer to this global problem? Jamie Love is a practical man. During our call, he instructed me to use Google Hangout instead of Skype because it’s cheaper and more effective. Likewise, he wants to find a cheaper and more effective global system for regulating pharmaceutical company profiteering: “Drugs are intellectual property goods, meaning the cost is based on making the first one,” he explained. “If you give someone a house, you can’t give someone else the same house to live in. Each new house you make is going to be really expensive. With drugs, however, it’s not the cost of making the copy with a drug, because a drug may cost less than a penny to produce—it’s just about paying for the research and development.”

The answer, according to Love, is finding a way to change the overarching system of patenting. That way, he said, you could make the price cheaper for everyone on the planet. “I’m not gonna sit around with seven billion people getting ill and emailing me individually about it,” he said down the line. “We need a new way of funding research and development through a means that doesn’t rely on profits driven by the grant of a monopoly.” That’s the task Love is involved in right now. Working with the World Health Organization, he has been reexamining the link between the price of drugs and the incentive to make new drugs. He wants to see a new way of funding research and development that doesn’t rely on recouping costs via sales based upon high prices. Instead, he wants to introduce a system that focuses on expanding direct research grants and subsidies for development, and offering robust cash rewards for successful development of new products, so that drug companies have more incentive to create more helpful products rather than corner the market with existing ones.

Meanwhile, ACT UP is trying to make as much noise as possible about the ongoing situation surrounding PrEP and hep C meds, in order to put pressure on the government and NHS and drive Gilead’s price down. On Tuesday this week, it held a noise demo outside NHS England’s head offices in London. The turnout at the demo was good, Dan Glass told me afterward, but he would like to see more people engaging in with the battle for PrEP access. I suggested that most people don’t engage with the politics surrounding healthcare and pharmaceuticals unless they absolutely have to, that is, the point at which their own health relies on it. Until then, as Love put it, “People look at the inaccessibility of drugs like a natural disaster, like: ‘That’s harsh but that’s the way it is.’ They accept it, they think of it as an inevitability.”

When you really think about it, this makes no sense. We all have a body, and by virtue of having a body, we are all prone to illness. When our bodies get ill, we rely on pharmaceuticals to save us, be those cancer drugs, HIV drugs, or something else entirely. No one is exempt from this. But, as we’ve seen, some people are exempt from getting the drugs they need. “It’s a fundamental inequality,” said Ashley at our next ACT UP meeting. “There’s this quote that says, ‘The most potent weapon of the oppressor is the mind of the oppressed,’ and I think that’s true of this… If people actually start doing something about pharmaceuticals—standing up to these big corporations—then maybe things will start to change.”

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