Despite its relatively small size in the global market for medicines, the UK retains a high profile because it serves as a
window on the industry's future. The Pharmaceutical Price Regulation Scheme (PPRS) is a benchmark for pricing in dozens of
other countries, while the National Health Service (NHS)—second only to the Chinese People's Liberation Army in the ranks
of the world's largest employers—exists as a laboratory for cutting edge experiments in the delivery of healthcare. In addition,
successive UK governments have created an international precedent by raising the status of the biopharma sector as a target
for sophisticated industrial policies designed to advance innovation as a business process.
Thus, it is worth looking at the May 6 parliamentary election to gauge the impact on the industry's business model and related
public policy agendas. Given the growing importance of government purchasing—even in the US—progress on policy is sure to
drive successful repositioning on the commercial side.
Consensus on NHS Funding
Healthcare has been tagged as a top issue for voters, and is being discussed within a larger, almost spiritual debate about
the relevance of major institutions in an era where the UK seems destined for global economic decline. This theme accounts
for much of the newfound appeal of the Liberal Democratic Party, perennial "also-ran" of the UK political system, and its
leadership candidate, Nick Clegg. Clegg's boost has come from his strong performance in three televised debate, a media event
that the US has been used to for 50 years, but which has been slow to infiltrate UK shores.
As a result, a solid electoral outcome that delivers a clear majority to the Conservative opposition against the ruling Labour
party is much less certain. Going forward, healthcare policy is likely to be more heavily politicized and subject to marginal
changes rather than decisive shifts.
All three parties are highlighting their commitment to the NHS as a free point-of-service healthcare provider. The enormous
national deficit is ignored where it comes to health; none of the three parties are advocating significant cuts in NHS outlays,
although Labour has already established a consensus that real growth—which over the past decade has pushed UK health spending
to a level above the OECD norm—cannot continue.
Another ripple in the election is the debate about rationing access to key services like cancer care. Just before the election
announcement, the Conservatives weighed in with plans to improve the availability of anti-cancer treatments not currently
approved by the National Institute for Health and Clinical Excellence (NICE) for use in the NHS. The Tories promised an extra
£1 billion in funding for new anti-cancer treatments if they gain power, money they would raise by cutting NHS employment.
However, John Appleby, chief economist of the right-leaning think tank The King's Fund, criticized the plan as "sleight of
hand," saying the money would have to come out of other budgets. Labour dismissed the plan as "selective" and "misleading,"
and not much more than an attempt to grab headlines. Interestingly, NICE, with a new emphasis on sophisticated public relations,
announced that it would not publish any new technology appraisal, in either draft or final form, during the general election
Labour, meanwhile, is promising a new set of initiatives to save money for the NHS through expanded preventive services focused
on primary care and diagnostics in the fight against chronic disease. The Conservatives have attacked the government's emphasis
on meeting complex performance targets, which have led to an explosion in spending on consultants, IT, and management experts.
A Tory government would actually commit to spending slightly more on the NHS in real terms than the other two parties, paid
for through higher taxes. Nevertheless, the Tories have been less specific than the other two parties in detailing their plans
for health, devoting only four of 76 pages in their election manifesto to the subject. Should they form the next government,
the Tories will likely revert to type and resume the initiative to open up at least some of the NHS to market forces. As an
April 14 Guardian editorial observed: "One detail that does not make it into the [election manifesto], but which is plainly set out on the
Conservative Web site, is a new economic regulator, with a remit to 'promote competition." This will include the health service.
The Liberal Democrats, in keeping with their message against waste and featherbedding, focus on trimming the NHS of costly
management ranks and simplifying the NHS structure through such initiatives as cutting the number of semi-independent health
agencies by a third.
The lack of campaign rancor over health (excepting cancer treatment) may be attributed to the fact that Labour's 13-year record
in improving the NHS isn't that bad. The King's Fund released a report in April stating that the NHS in England has improved
"significantly" since 1997, and pointed to major and sustained reductions in waiting times, better access to GPs and primary
care services, and a substantial fall in death rates from cancer and heart disease. However, it countered this with the observation
that the health gap between rich and poor was wider than ever, and that the UK's cancer survival rates, although improving,
still lag behind the rest of Europe.