Make medicines affordable — without going to court

Earlier this year, the Dutch Pharmaceutical Accountability Foundation filed a lawsuit against big pharma company AbbVie. According to the foundation, AbbVie made excessive profits on a medicine, and by doing so put a strain on the health care system by generating unnecessary costs.

Now, AbbVie is being held to account — but this case is also a clear message to governments around the world that, ultimately, it’s their responsibility to ensure access to affordable health care and medicines.

Governments can and must take control to prevent extreme drug prices.

The lawsuit against AbbVie focuses on the sale of the drug Humira, which is approved for the treatment of rheumatoid arthritis and other inflammatory diseases. From 2004 to 2018, the Dutch public health care system spent approximately €2.3 billion on this drug. This means that after subtracting research and development (R&D) costs, as well as a “reasonable” profit margin of 25 percent, the company made an estimated additional profit of €1.2 billion — that’s a lot of money that could have been spent on other care.

The global figures are even more staggering: AbbVie had a worldwide turnover of $208 billion, which translates to $110 billion of excess profit.

There’s been a lot of commotion recently over the high profits of food companies like Cargill and oil companies like Shell — but even they’d be jealous of such profit margins. And sure, there are essential differences between the products offered — a medicine isn’t a jar of peanut butter or a can of engine oil. But access to good health care and medicines is a fundamental need and human right.

What’s more, companies like Cargill and Shell don’t have a monopoly on their products, so their prices are partly determined by competition. Yet, in the period mentioned, AbbVie did have a monopoly on the Humira drug, which means the company was “free” to set the price as high as it could. There’s nothing wrong with making a profit, of course — but not when it comes at the expense of human rights.

In essence, pharmaceutical companies must adhere to human rights, and governments must monitor them and take action to prevent violations.

However, the balance of power between governments and pharmaceutical companies has long been lopsided. When governments negotiate the price of a drug, they often don’t know why the pharmaceutical company charges the price it does. And under pressure to make important medicines available to citizens, they often still pay exorbitant amounts — even after negotiations.

This imbalanced power relationship, and the dire consequences of it, is no news to governments. And along these lines, in 2019, all 194 members of the World Health Organization (WHO) unanimously adopted a resolution, committing them to enhancing the transparency of drug prices and the process of how these prices are determined. The resolution recognized the serious concerns surrounding high drug prices leading to “inequitable access” and “financial hardships” — as well as the fact that through greater transparency, governments can be better informed when procuring health products, and thus negotiate better, affordable prices.

Despite the resolution, governments have largely remained passive when it comes to shifting the power balance. There’s been no substantial global progress toward improving transparency when it comes to drug pricing. And to date, no national or international legislation enforcing pricing transparency has been implemented in high-income countries.

However, WHO member countries are currently negotiating once more — this time for an accord on how to prevent and respond to future pandemics, and access to pharmaceutical products is an important issue in these negotiations.

And these discussions present an opportunity.

Governments could easily decide to include text in this accord that make it mandatory for pharmaceutical companies to be transparent regarding the costs and net prices of medicines. Additionally, they could agree to attach conditions to the public R&D funding of pharmaceutical products, which could then act as a stepping stone for the implementation of similar policies outside pandemic events.

The lawsuit brought against AbbVie is a strong reminder that governments don’t have the luxury of leaving this issue on the shelf, as profit motives of pharmaceutical companies put intense pressure on health care systems. It also shows that our health systems need decisive government action to guarantee access to affordable health care and medicines.

Governments must finally implement the WHO resolution on transparency and include provisions in the pandemic accord guaranteeing the fair pricing of medicines. Then, there would be no need for further lawsuits in the future.