UK Gov't Disowns ‘Secret’ Meetings With US On Post-Brexit Drug Pricing
Brexit And NHS Will Dominate General Election Campaign
Executive Summary
Brexit and the NHS are likely to be key issues as political parties in the UK prepare to campaign ahead of the general election in December.
As political parties in the UK prepare their campaigns for the December general election, the health secretary, Matt Hancock, has again insisted that neither the National Health Service nor higher UK drug prices will be on the agenda of negotiations on a post-Brexit free trade deal with the US.
A television program aired on Channel 4 on 28 October claimed that senior UK civil servants had covered the possibility of higher NHS drug prices at six separate meetings with US pharmaceutical firms, as part of preparations for negotiations on a UK-US FTA after the UK leaves the EU. The latest deadline for Brexit is now 31 January 2020.
The Dispatches program claimed that officials involved in the meetings had been warned not to mention “drug pricing” in emails, and to use the term “valuing innovation” instead.
“We have been absolutely clear that there will not be drug pricing on the table in these talks" – Health secretary Matt Hancock
Claiming he had no knowledge of any such meetings, Hancock said: “We have been absolutely clear that there will not be drug pricing on the table in these talks. The full talks haven’t started yet, we haven’t yet signed off the mandate for how these trade talks happen, and in that mandate it will be absolutely clear that the NHS is off the table and that pharmaceutical pricing is off the table.”
Hancock made his statement on October 30 as the country braced itself for the second general election since 2015, to be held on Thursday 12 December. While Thursday is the traditional day for an election, this is the first time that one has been held in December since 1923.
Prime Minister Boris Johnson decided to call the election rather than pursue approval of his Brexit Withdrawal Agreement Bill, which would allow the UK to leave the EU with a transition period to the end of 2020. The bill passed its second reading in the House of Commons on 22 October, but MPs refused to approve Johnson’s tight timetable for debating the legislation.
A short bill allowing the general election to take place was approved by the Commons on 29 October by 438 votes to 20, and was expected to be signed off by the House of Lords following a debate on 29-30 October. Once the bill has received royal assent, parliament will be dissolved on 6 November and the election campaign will begin in earnest.
What The Winners Might Do
Johnson says an election will break the current political deadlock and “get Brexit done.” If the ruling Conservative Party wins a majority of seats in parliament he will find it easier to get the withdrawal deal approved by the new Brexit deadline - the end of January 2020, which was agreed by the EU a few days ago. (Also see "UK Industry ‘Exasperated’ As Third Brexit Extension Prolongs Uncertainty" - Pink Sheet, 28 Oct, 2019.)
If the opposition Labour Party should win, it is likely that its leader, Jeremy Corbyn, would seek a “softer” Brexit, possibly with some form of customs partnership and a closer relationship with the EU single market. Corbyn has also said that he would "immediately legislate" to hold a second referendum.
Jo Swinson, leader of the Liberal Democrat Party, which is in favour of revoking the Article 50 notification that began the Brexit process, said the election was “our best chance to stop Brexit.”
Nicola Sturgeon, Scotland’s First Minister and leader of the Scottish National Party, which also stands on a remain platform, said an election was a chance for Scotland to hold another referendum on whether the country should become independent of the UK: "A win for the SNP will be an unequivocal and irresistible demand for Scotland's right to choose our own future,” she declared.
Brexit and The NHS
Brexit will be the overriding issue in the parties’ campaigns. Major policy issues like the NHS will also figure prominently, given the growing concern over the pressures on the service due to factors such as higher demand overall for healthcare, the ageing population, the high cost of some medicines, drug shortages in the event of a no-deal, the loss of health workers from EU countries after Brexit.
Opposition parties will likely make capital out of the possibility that the sustainability of the NHS could be under threat if a future UK Conservative government should seek to smooth the way to a post-Brexit trade deal with the US by making concessions on drug pricing and access to the NHS by US healthcare companies. Corbyn has already expressed suspicion over any UK-US trade deal, saying it would “open our NHS to takeover by US private corporations.”
It is no secret that the US negotiators have the NHS and UK drug pricing and reimbursement in their sights. In its final negotiating objectives released earlier this year, the US Trade Representative said it planned to “seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for US products.”
In its submission to the USTR, the US pharmaceutical industry body PhRMA criticized UK market access policies, saying they were characterized by “rigid health technology assessments, government price controls, insufficient health care budgets, and increasingly punitive and proactive national procurement initiatives and local barriers to uptake.” It said the UK system “significantly undervalues innovative medicines and restricts patient access to those medicines” and that drugs should be priced “either through a market-based system… or some type of equivalent system.” (Also see "UK Drug Pricing & IP Targeted As US Gears Up For Post-Brexit Trade Deal Talks " - Pink Sheet, 4 Mar, 2019.)
Other government figures including Boris Johnson have also previously insisted that the NHS would not figure in any post-Brexit trade deal with the US. However, Stephen Vaughn, former general counsel for the Office of the USTR, told the Dispatches program he did not understand what Mr Johnson meant when he said the NHS was not on the table. “I don't know what they thought they meant when they said that,” he declared.
He added: “I would expect US negotiators to see what we could do in terms of getting increased access to the British market. That's what we do… I think it's going to be likely to come up because the US mentioned pharmaceuticals in its negotiating objectives.”