The Real Mythbuster: Why Saying “No” to Higher Drug Prices Won’t Fix The NHS/Pharma Relationship
I’ve just read a very interesting article in the Health Service Journal entitled: The mythbuster: Just say ‘no’ to demands for higher drug prices (registration required to read full piece).
Author Steve Black opens with a comparison between pharmaceutical patents and copyright extensions in the entertainment industry, arguing that both primarily enrich large corporations rather than driving creativity.
It’s an appealing parallel, but the problem is it doesn’t hold.
We’re talking about drugs, not The Empire Strikes Back
Drug discovery is nothing like songwriting or film production. Developing a medicine can cost £1 to 2billion and take more than a decade, with nine out of ten compounds failing before they ever reach a patient.
Unlike film studios or music labels, pharmaceutical companies don’t control demand or pricing; regulators, prescribers and NICE decide what is used, for whom and at what cost.
The patent system exists not to make companies rich but to make innovation possible. If there’s no realistic chance of recovering risk capital, investors simply won’t back the next antibiotic, dementia therapy or gene editing technology.
“Innovation” isn’t a weasel word, it’s a misunderstood one
Black is right that the system produces too many “me too” drugs, minor variations with little added clinical benefit. Every industry has its low value outputs, and pharma is no exception. But dismissing innovation itself misses the point.
The NHS doesn’t pay for innovation; it pays for value. The challenge lies in how that value is defined and measured. If “value” continues to mean cost per QALY in isolation, the system will under reward treatments that prevent hospital admissions, reduce multimorbidity or allow people to remain economically active.
If, instead, the NHS incentivised innovation that saves the system money downstream, reduces staff workload or improves access to care, it would reshape industry R&D priorities almost overnight. The solution isn’t to say “no”, it’s to define “yes” more intelligently.
The antibiotic argument misses the real problem
Perhaps the weakest part of Black’s argument is his treatment of antibiotics. He points to the abundance of niche oncology drugs and the lack of new antibiotics as proof that the industry chases profit over need. But the economics here are inverted.
Antibiotics are designed to be used sparingly, held in reserve to preserve effectiveness and prevent antimicrobial resistance (AMR). That means low sales volumes, short treatment durations and minimal opportunity for return on investment.
With a standard ten year patent window, most companies would lose money even if they successfully developed a new antibiotic.
The problem isn’t greed; it’s the structure of incentives. That’s why the UK is testing subscription style payment models for antibiotics and why others have proposed extended patent terms or transferable exclusivity vouchers to stimulate investment.
If we want new antibiotics, we need longer, stronger incentives, not weaker ones. In this case, Black’s logic works precisely in reverse.
Marketing vs R&D is a false comparison
Black also argues companies spend more on marketing than on research and development. While this may be true at headline level, it ignores what those “marketing” budgets actually fund; medical education, safety monitoring, patient support and infrastructure for appropriate use.
Pharma isn’t selling chocolate bars, it’s supporting prescribers and patients in using complex products safely and effectively. And while some firms have overstepped ethical boundaries, most have evolved dramatically under ABPI scrutiny, focusing on education, data and partnership rather than persuasion.
The real question isn’t how much is spent on marketing versus R&D, it’s whether spending across the system aligns with patient outcomes and value creation.
The NICE threshold debate; time for an honest update
Black criticises proposals to raise NICE’s cost-effectiveness threshold from £30,000 to £50,000 per QALY, calling it an unnecessary expense. But this ignores two important realities:
- The £30k threshold hasn’t been updated in more than 20 years. Adjusted for inflation alone, it should now sit closer to £55 to 60k.
- A higher threshold would allow faster access to truly transformative therapies, particularly for rare diseases, mental health and advanced therapies where long term benefits aren’t captured in short term models.
Raising the threshold isn’t about paying more for no reason. It’s about reflecting the real cost of achieving better outcomes in a system dealing with complexity, chronic illness and workforce constraints.
It’s time to reform incentives, not retreat from them
Black’s call to “resist vacuous industry arguments” has rhetorical power but lacks a practical pathway. Simply refusing to pay higher prices won’t reform the system, it will just move the innovation pipeline elsewhere.
What’s needed is a new model of shared accountability, where NHS priorities and industry incentives align. That means:
- Outcome based pricing tied to real world data and measurable system value.
- Adaptive, long term partnerships between companies, ICBs and Provider Collaboratives.
- Differentiated exclusivity, shortening patents for low value iterations but extending them for true breakthroughs.
- Pull incentives for neglected disease areas like AMR, and neurodegeneration.
- Rewarding NHS aligned innovation; treatments that free up capacity, prevent hospital admissions or support earlier diagnosis.
When we get that alignment right, higher prices aren’t a burden, they’re an investment in long term sustainability.
The big myth here is that innovation comes cheaply
The biggest myth in all of this isn’t that pharma overcharges. It’s the idea that the NHS can get innovation on the cheap.
We need drugs, devices and diagnostics that help tackle the system’s most pressing challenges, e.g., multimorbidity, prevention, staff shortages and health inequalities. To get them, we must design an incentive framework that pays for what matters.
That means moving past ideology and toward partnership. The NHS can, and should, be tough on poor value offers but it also needs to be smart enough to recognise and reward the ones that could transform care.
Because in the end, saying “no” doesn’t fix the problem. But building a better “yes” does.
At www.scottmckenzieconsultancy.com, we work directly inside the NHS, supporting provider organisations, commissioners and systemleaders to implement real change. We then help pharma, medtech and device companies interpret what’s happening, so they can engage the right stakeholders, align with NHS priorities and get their innovations embedded into care pathways.
With more than 20 years working within the NHS and Pharma, medtech and devices companies, Scott brings a unique dual perspective, now captured in his book, Embedded: How Pharma, MedTech, and Device Companies Can Get Their Products into NHS Pathways and Stay There, which distils everything he’s learned into a practical playbook. Whether you’re launching a new product or trying to unlock stalled adoption, Embedded shows you how to reframe your offer, align with NHS priorities and make change stick.