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NICE one, Michael Rawlings

August 2008

Dying for cash


Traduced, abused and misrepresented, Sir Michael Rawlings strikes back. The accepted canard is that NICE are cruelly depriving the dying of weeks of life because of penny-pinching meanness.

Sir Michael is chairman of the National Institute for Clinical Excellence (NICE), which was recently hammered for failing to approve kidney cancer drugs.

He said, “Drugs are expensive because of "perverse incentives" in the pharmaceutical industry. Pharmaceutical companies have enjoyed double-digit growth year on year and they are out to sustain that, not least because their senior management's earnings are related to the share price.”

I had a meeting with Sir Michael at his invitation about five years ago on this issue. We agreed on everything. All I can fault him on in his claim today that ‘nobody’ has drawn attention to Big Pharma greed.

Earlier this month, I wrote,

“NICE cannot adopt a money no-object policy. That’s make-believe land not reality. But why are the drugs that cost pennies to manufacture priced at £30,000? The Big Pharmas blame the cost of research. At best that’s a half-truth. Even though the miraculous quality of the research is acknowledged.

All Big-Pharmas spend twice as much on marketing as they invest in research. Not marketing life saving drugs, but mass consumed medicines for trivial complaints. Their main investment is made to keep their profits buoyant. “


Sir Michael confirmed what I think is a deadly accusation, "Marketing costs generally are about twice the spend on research and development." Those are avoidable marketing costs. If the drugs work, they will sell themselves. Marketing is about multiplying profits.

Will this break through the permafrost of tabloid prejudice and ignorance that treats all new drugs as ‘miracle’ cures to be bought at any price? Big Pharma cynically exploit the suffering of the dying and their families to screw more money out the NHS budget.

Sir Michael said,” Kidney cancer drugs could be produced for about a tenth of their current cost, Rawlins said. While developing such medicines from scratch added to these costs, as did some 'unnecessary' bureaucracy around clinical trials, which should be scrapped, he said that was not the whole story. 'Part of the problem is that the pharmaceutical industry is looking at a very bad period in the future.

Share prices were driven by profits, he said. 'Pharmaceutical companies have enjoyed double-digit growth year on year and they are out to sustain that, not least because their senior management's earnings are related to the share price. It's not in their interests to take less profit, personally as well as from the point of view of the business. All these perverse incentives drive the price up.

The Big Guns of Big Pharma will now blast away at Sir Michael and NICE. It’s what they called ‘marketing’. Their PR riposte will be paid for eventually in the ballooning drugs budget of the NHS.