How the profit motive helps cystic fibrosis sufferers

Very little violates our sense of fairness more than patients suffering from genetic disorders being denied treatment on the grounds of price. Last Monday, the Scottish Medicines Consortium announced that Orkambi and Smedyko, two groundbreaking drugs which treat cystic fibrosis, were currently too expensive to be purchased by the NHS north of the border. NICE, which evaluates drugs for England, came to the same conclusion in 2016. Since then, NICE has been in a protracted fight with Vertex, the company that manufactures the drugs in question, over the question of price.

I myself suffer from cystic fibrosis, and this kind of financial battle is painful to watch for all affected by this wretched disease. Anger at the drug company in question is all too natural. Putting a financial price on human lives is the stuff of dead-eyed economists, not normally functioning humans. Nevertheless, one should always be wary of unintended consequences. Excessive interference with the operation of pharmaceutical markets could in fact have serious, negative consequences for patients. 

Up until 2012, treatments for CF invariably focused on the management of symptoms, not the underlying genetic causes of the condition. A breakthrough in gene therapy techniques allowed Vertex to create Kalydeco/Ivacaftor, a drug targeted at specific mutations responsible for about 4-5% of CF cases. Vertex have subsequently followed up with other gene therapies, including Orkambi and Smedyko, that target different mutations responsible for a larger percentage of CF cases. It is hard to overstate just how innovative these creations are, or what a breakthrough they represent in the treatment of CF, a crippling disease that severely affects quality of life and has a life expectancy of around 38 years.

As much as we might wish them to be, drug companies do not exist for altruistic reasons, and investors buy their shares in the hope of profits. Although the profits from one drug can be extremely large, the vast majority of drug-creation attempts fail, swallowing up hundreds of millions of pounds of wasted expenditure. The development process for new drugs as a whole is therefore incredibly expensive, and the few products that emerge successfully from the process inevitably come with very large price tags. This is especially true when the drugs in question treat a fairly rare condition, such as cystic fibrosis.

Yet rewarding innovation not only pays the innovator back for their discovery, but provides good incentives for other pharma companies to capitalize on their work. Vertex’s profits have encouraged new marketplace participants to enter the arena and create new drugs that target yet more of the different mutations that give rise to CF. The Vertex drugs currently work for about half of all CF patients, but other companies are working on drug trials for more gene therapies, not out of charity, but out of a desire to make money. The interests of patients seeking treatment and these endeavours seeking profit align nicely. 

Lastly it should be remembered that the price NICE are offering to buy the drugs at, £104,000, is massively lower than the price Vertex sells them for in other markets. The NHS using its monopoly power in this way infuriates American drug companies and will no doubt be an issue in future US trade talks after Brexit, but for now at least it enables the British healthcare system to leech off the R&D of more innovative nations. And while the NHS in Scotland could not realistically buy the drugs while they remain unavailable in England, lest this provide an overwhelming incentive for CF patients to move north, we can reasonably expect that once NHS England and Vertex eventually strike a deal, the NHS in Scotland will follow suit.

In our commendable desire for fairness and desperate need for a cure, we should be careful not to kill the geese that lay the golden eggs. Market mechanisms incentivise companies to produce ground-breaking drugs that massively benefit people with CF, and while the NHS is absolutely entitled to drive as hard a bargain as it can, anger at the drug companies for seeking to protect their margins is arguably misplaced. Without those profits, few of us would have much realistic hope for a better future.

Jonathon Kitson is an MA Political Economy Student at KCL, interested in forecasting, geopolitics and psychology. He was diagnosed at birth with Cystic Fibrosis.