Health: Not So NICE Drug Companies

The Chief of the British health watchdog NICE (National Institute for Health and Clinical Excellence) has hit out at pharmaceutical companies in an interview with the Observer. He attacked drug companies, which include GSK (GlaxoSmithKline); Astra Zeneca; and Pfizer, for making huge profits on the back of high prices in order to meet 'perverse incentive' targets.

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.

NICE has come under fire recently for refusing access to kidney drugs on the NHS, despite their availability elsewhere in Europe. He did, however, agree that pharmaceutical companies do invest hugely in new drugs.

'Of course, pharmaceutical companies make a huge investment into public health when they develop a new medicine: it costs on average £550m, and takes more than 10 years, to bring each new treatment to patients,' she said. 'Naturally companies will look to recoup such costs through the final price.'

A recent report by the Office of Fair trading has called in to question whether drug companies price treatments correctly.

Full interview here.