25th November 2020

The Effects of UK and US Politics on Life Sciences

How could the past political affairs of the UK and US potentially affect the life science industry? It has been over 4 years and since the result of the UK referendum on the 23rd June 2016, there has been continuous speculation surrounding the stability of various economies and relations.

It has been over 4 years and since the result of the UK referendum on the 23rd June 2016, there has been continuous speculation surrounding the stability of various economies and relations. Some sectors have been backed to thrive under potential changes and others headlined to crumble. A relationship recently under the spotlight is that of the United Kingdom and the United States. The two countries are looking to maintain their ‘special relationship’ through the mist of Brexit and they have begun trade talks as a hope to achieve this.

Compared to Brexit, a trade deal has a whole new set of complications and potential dilemmas. As the Life science industry is now a daily focus of mine, it makes me question, how could it be affected in this mix?

Drug pricing has been a difficulty between the two countries for some time and is not a challenge which is due to disappear any time soon. Vast differences between the UK’s NHS and standardized prescription prices, compared to the US with its private insurance policy, has caused Pharma companies to approach each market differently.

A negative to the UK’s healthcare system is the financial restrictions when choosing treatments. An example of this would be a drug called Orkambi. This tablet has proven successful in treating Cystic Fibrosis (CF) patients with the gene mutation F508del, which is said to affect approximately 47% of patients with CF. Vertex pharmaceutical, the producers of Orkambi, have currently offered the drug to the NHS at a cost of £105,000 per patient, per year. As this cost is too high for the NHS, they have chosen not to take up the treatment, meaning it is only available in the UK under strict criteria through Vertex.

In the US, Orkambi costs equivalent to £207,000 per patient per year. It is said that this treatment is still unaffordable, even on good health insurance. Although this treatment is exceptionally expensive in both countries, it does outline the trend that prices tend to be increased when pharma companies supply to the American market.

Donalds Trump’s theory is that if more countries agreed to take up the treatment, then it would spread the cost and allow the prices to be reduced. In an ideal system this would be the case, but who can guarantee that the big Pharma companies will strategies in the same way. Especially considering the vast investment towards drug development, yet high risk in failure. According to a study by John Hopkins Bloomberg school of public health, clinical trials that the FDA approve, cost an average of $19 million. With the overall cost of developing the drug racking up to around $2-3 billion (£1.6-2.5 million).

With high costs for both treatment application and treatment development, the party benefiting is difficult to know unless compared. Over the average lifespan of a CF patient, the total cost of using Orkambi as a treatment would cost £8-12 million per patient. Taking the average cost for drug development, compared to the cost of treatment over a lifespan, it takes only 208 patients for the company to break even. The US has around 30,000 CF patients, the UK 10,500 and around 70,000 worldwide. It does make you think, why can’t they spread the cost and make it more accessible.

This is only the breakdown of one treatment, but if it’s a trend then a trade deal will unlikely affect the life science industry, as the pharma companies should have the control of the market anyway. If sales numbers increased due to trade deals, then the producers may still choose to keep the prices high to gain back their initial investment and fund new trials. It’s then difficult to decide which is best, making current treatments more affordable by improving GMP or pressing for more innovative treatments by funding further trials.

There may also be further regulation changes if the two countries increase interaction within the industry. Currently the FDA, MHRA and EMA all have different procedures and structures but do aim to achieve the same outcome. This is to ensure the safety and efficiency of medical drugs or devices is completed to a high standard and in the quickest and cheapest method.

The US currently depend on one centralized method which oversees the entire industry, this is the FDA. Although the MHRA oversees the UK, it is part of the EMA, which is built of a network of other departments within each EU country. While the approval process can be quite similar between the US and EU, the concept to market timeline can be significantly different. A common thought is that the FDA can take longer to conduct reviews, but a recent study showed that the drug review times are significantly shorter for the FDA.

 

For initial reviews it took…

303 days compared to 366 days in the EMA and their regulatory bodies.

 

And for full reviews…

322 days for the FDA compared to 366 days for EMA and their regulatory bodies.

 

This means for treatments that have been brought to market by both parties, 63.7% were available in the US first, an average of 90 days sooner than the EU. Going forward there may be a requirement to alter the regulations to ensure the release to market is quicker. Alternatively, it could mean the checks are more in-depth and last longer to meet stricter guidelines.

It has been mentioned that the US aims to increase the supply of life science products to the UK market. Moving forward, this could mean the UK will require changes to the US regulations to ensure they meet their standards. Depending on the changes suggested, this could mean increased overheads for the US pharma companies. We are yet to know if these changes would ever be required.

A trade deal normally takes 7-10 years to complete. In which time, who knows what new drugs will have been developed, or what new companies will be challenging for the top spot in the market. It’s clear to me that both the companies and employees within the life science industry are very versatile. They tend to show great support to each other on a global scale. Whatever happens towards a countries economy, it’s difficult to see it affecting the impressive developments the industry makes each year.

 

By Lewis Nutley   linkedin graphic

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