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Labour pledges to create state-owned generics manufacturers

The Labour party has announced plans to create state-owned generics manufacturers to sell medicines to the NHS at “affordable” prices.

If Labour won the election, it would set up these companies to save “our health service money and save lives”, leader Jeremy Corbyn claimed at his party’s conference in Brighton yesterday (September 24).

Expanding on the concept in its ‘Medicines for the many’ document – which it described as a “radical programme of reforms” – Labour suggested that these “democratically controlled” manufacturers could focus on producing generic medicines that are facing “price or supply issues”.

Any profits earned from these companies would be “reinvested into the existing network of publicly-funded research and development facilities” and used to offset the cost of medicines that are more expensive to produce, it added in the document.

It alluded to “successful examples of publicly owned pharmaceutical companies that produce both originator and generic medicines”.

“Improve access to medicines”

Labour pledged to keep medicine prices low by “actively using voluntary and compulsory licensing to secure affordable generic versions of patented medicines where the patented product cannot be accessed”.

It would also “make public funding for research conditional on the resultant drugs being priced affordably for all”, it said.

“The most sustainable way to keep drug prices down” is through competition, Labour explained. But if the supply of generic medicines does not meet demand, “prices can escalate as buyers try to access reduced stocks”.

“Pharmacies in England have struggled to source vital medicines and have been forced to pay higher-than-expected prices,” it added in the document, pointing to NHS England estimates that these price increases cost the health service around £362 million in 2017-18 alone.

Generics manufacturers’ view

Commenting on Labour’s radical promises, Warwick Smith, director general of the British Generic Manufacturers Association (BGMA), claimed that competition is “the bedrock of the current UK generic medicines system” and saves the NHS more than £13 billion a year.

“We note the reference made in the Labour leader’s speech to creating a publicly owned generic medicines manufacturing company and would welcome more detail on what he proposes,” Mr Smith told C+D.

At the conference, Labour also set out plans to scrap prescription fees in England.

What do you think of Labour's plans?

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