Pricing and access

Research and development of life-saving and -improving treatments can be a costly business, and so sometimes high drug prices are inevitable. However, it is frequently the case that prices are set with little reference to these costs but rather are set at the maximum the market will bear. Acquiring smaller companies and then increasing the prices of the drugs they sell is also not uncommon. Partially as a result, 34 million Americans have lost a family member or a friend in the last five years, not because the treatment didn’t exist, but because they couldn’t afford it.

A subset of this issue is how healthcare companies interact with the patent system. Patents exist so that companies can enjoy exclusive rights to the profit of an invention for a period after its launch - in most cases 20 years. This has contributed to highly unequal access to COVID-19 vaccines between rich and poor countries. Companies also often file multiple patents (sometimes over 100 per drug) and make minor adjustments to their product to extend the life of the patent, resulting in prices that are unaffordable for many over an ever longer period of time.

Different countries around the world have particular needs for certain drugs and differing abilities to afford them; this is why equitable pricing strategies for drugs is crucial. Yet even in the US -which, as a wealthy country, should be expected to pay higher drug prices than other countries - pays a multiple of the price in comparable countries. Americans spent $535 billion on prescription drugs in 2018, an increase of 50% since 2010. The price of long-established drugs such as insulin has risen at a rate far greater than inflation, while the amount spent on medical marketing has also increased substantially.

The patent system has been abused by pharmaceutical companies for a long time. Reform is desperately needed, in regulation but also in companies’ practices. Priti Krishtel of I-MAK gives a TED talk on the topic here; for a deeper dive, check out this report.

The highly unequal rollout of COVID-19 vaccines has demonstrated the unjust consequences of current rules around access to emergency medicines, and pharmaceutical companies’ role in it. As of May 2022, over 75% of rich country residents have been vaccinated, compared with just over 17% of those in low-income countries. Vaccine producers Johnson & Johnson, Moderna, Oxford/AstraZeneca, and Pfizer/BioNTech have fallen short of their commitments to improve poorer countries access to COVID vaccines.

Access to Medicine produces a ranking of how 20 of the biggest pharmaceutical companies perform on providing access to their drugs and treatments.

  • Has your company significantly increased the price of life-saving or necessary drugs over the past five years?
  • Does your company publish the formulae or criteria which determine how its drugs are priced?
  • Does your company use equitable pricing to enable access to its drugs in less wealthy countries?
  • Has your company engaged in ‘evergreening’, extending the patent life of its drugs?
  • Does your organisation (and the trade groups which it is a member of) support the five R.A.I.S.E. priorities for reform of the patent system?a

Antimicrobial Resistance

Antimicrobial resistance (AMR) refers to the evolution of bacteria and other microorganisms to become resistant to antimicrobial drugs, leading to the rise of drug-resistant infections (sometimes called superbugs). It has been ranked as one of the top 10 global public health threats facing humanity, and already kills an estimated 700,000 people per year; this could grow to 10 million per year by 2050 if adequate action isn’t taken.

Companies operating in this space have a mix of challenges to respond to: restraining the over-prescription and -use of antibiotic drugs, increasing the research and development of new antimicrobial drugs, and expanding access to antibiotics in low-income countries.

The WHO has put together an overview of AMR, the current state-of-play and efforts to address the issue. A particular problem is the lower revenues generated by antibiotics compared with other drugs, reducing drug companies’ incentives to invest in solutions. Aside from its implications for human health, the release of antimicrobials and drug-resistant organisms into the environment can also have devastating effects on our environment and food systems.

The Access to Medicine Foundation produces a ranking of various pharmaceutical companies across various aspects of their approach to AMR.

  • What resources is your company contributing to the research and development of new antimicrobial drugs?

  • Does your company appropriately treat and manage discharge from its manufacturing sites, or require this from its suppliers?