Why are our medicines so expensive? Spoiler: Not for the reasons you are being told….

European Journal of General Practice 2024, VOL. 30, NO. 1, 2308006 https://doi.org/10.1080/13814788.2024.2308006 OPINION PAPER Why are our medicines so expensive? Spoiler: Not for the reasons you are being told… Els Torreele Institute for Innovation and Public Purpose, University College London, London, UK ABSTRACT Often described as a natural economic trend, the prices that pharmaceutical companies charge for new medicines have skyrocketed in recent years. Companies claim these prices are justified because of the ‘value’ new treatments represent or that they reflect the high costs and risks associated with the research and development process. They also claim that the revenues generated through these high prices are required to pay for continued innovation. This paper argues that high prices are not inevitable but the result of a societal and political choice to rely on a for-profit business model for medical innovation, selling medicines at the highest price possible. Instead of focusing on therapeutic advances, it prioritises profit maximisation to benefit shareholders and investors over improving people’s health outcomes or equitable access. As a result, people and health systems worldwide struggle to pay for the increasingly expensive health products, with growing inequities in access to even life-saving medicines while the biopharmaceutical industry and its financiers are the most lucrative business sectors. As the extreme COVID-19 vaccine inequities once again highlighted, we urgently need to reform the social contract between governments, the biopharmaceutical industry, and the public and restore its original health purpose. Policymakers must redesign policies and financing of the pharmaceutical research and development ecosystem such that public and private sectors work together towards the shared objective of responding to public health and patients’ needs, rather than maximising financial return because medicines should not be a luxury. Introduction In 2014, Gilead’s price of US$ 84,000 for a 3-month hepatitis C treatment (€77,628 at the current exchange rate), or US$ 1000 per pill (€924 at the current exchange rate), was considered unprecedented and excessive [1]. Today, we are no longer surprised when a new cancer or rare disease treatment is launched at €0.5 million to over 2 million [2], hailed as much by the financial press and investors as patient groups. But why are new medicines so expensive? Drug companies go to great lengths to convince the public and policymakers that these high prices are justified because of the medical ‘value’ new treatments represent, or else that they reflect the high costs and risks associated with the research and development (R&D) process. They also argue that the revenues generated through these high prices are required to pay for continued innovation. CONTACT Els Torreele ARTICLE HISTORY Received 12 September 2023 Accepted 15 January 2024 This paper will present evidence that high prices are instead artificial constructs that mainly serve to maximise revenues for investors and shareholders and reflect the growing financialisation of the pharmaceutical sector – prioritising financial return over improving people’s health. Current medicine pricing levels represent a sea-change compared to just two decades ago, without a concomitant increase in therapeutic advances. Predictably, people and health systems worldwide increasingly struggle to pay for the high prices being charged, with growing inequities in access to even life-saving medicines while the biopharmaceutical industry and its financiers have become among the most lucrative business sectors. This results from decades of policymaking to create a conducive business environment for global biopharmaceutical companies to thrive, with too little attention for ensuring it promotes health and equity. Institute for Innovation and Public Purpose, London, UK © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial License (http://creativecommons.org/licenses/by-nc/4.0/), which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. 2 E. TORREELE Lessons not learnt - history repeating itself For many years, unaffordable medicines and inequitable access were considered issues that primarily affected developing countries, whose highly indebted governments and poor citizens did not have the purchasing power to pay for medicines, especially expensive ones. This inequity sprung into the international spotlight in the late 1990s, when a breakthrough antiretroviral combination therapy transformed HIV/ AIDS from a burgeoning deadly epidemic into a chronic manageable disease but only in wealthy countries [3]. The price companies charged for this lifesaving combination treatment was €10–15,000 per person per year (roughly double in today’s prices) – way beyond the financial means of developing countries, where the AIDS epidemic was ravaging communities [4]. The reason why drug companies charged the high prices was not because it was costly to produce those medicines. In fact, it soon turned out that the production cost was just a few hundred dollars or 50 times less than the sales price, and that they were sold at hefty profit margins [5]. The root cause was that the companies producing these drugs held patent monopolies (see Box 1), even if they were largely based on US government research [6]. For-profit companies thus controlled the production, availability and price of these life-saving medicines, and adopted marketing strategies that prioritised profit maximisation over people’s health: selling primarily to wealthy countries that were willing and able to pay a high price (with public health systems and/or health insurance schemes covering much of the costs) [3]. As many low-resource countries’ governments did not have the fiscal space to pay for such medicines, people in those countries who often pay medicines out-of-pocket were deprived access to these critical drugs [4]. As a result, in much of the developing world particularly sub-Saharan Africa, there was an explosion of people in the primes of their lives falling ill and dying of untreated HIV/AIDS and continued spread of the epidemic well into the 2000s [7]. It required a major mobilisation of human rights and health activists all over the world to challenge the primacy of business interests over people’s lives, put HIV/AIDS patient rights before patent rights, and pave the way towards widespread availability of low-cost generic AIDS medicines [4,8]. It allowed to scale up access to HIV/AIDS treatment globally and made it possible for nearly 30 mil (...truncated)