Drug prices, and the length of patent protection that keeps the price of branded drugs high, have been at the centre of a series of meetings between British and US trade delegations as Theresa May’s government began preparations for a US trade deal after Brexit.
451 pages of official British government notes revealing this and other aspects of the discussions were leaked to the Labour Party last week, and led to reinforced accusations by Jeremy Corbyn and other Labour leaders that (as Donald Trump had said on his visit to Britain in the summer), the NHS was “on the table” in trade talks. Corbyn has argued that ministers had been discussing “selling it off” to the Americans.
The Daily Mirror took a similar view, describing “a bombshell press conference” in which “Mr Corbyn first showed heavily-redacted government documents, obtained by campaigners, relating to months of trade talks between the US and the UK. But he then dramatically held up a second bundle – the uncensored versions.”
The Guardian reported Labour’s argument that “We have now got evidence that under Boris Johnson the NHS is on the table and will be up for sale. He tried to cover it up in a secret agenda and today it has been exposed.”
The current government may have tried to suppress the embarrassing content, but attempts to question whether the documents were genuine were derailed when former minister Liam Fox, who was present at the early meetings, confirmed they were.
The documents span a period before Johnson took office, and the Financial Times among others was keen to play down their significance. Their correspondent Jim Pickard argued that out of the 451 pages there only seemed to be a few relevant paragraphs:
“On page 41 it says that the US is not keen on warning labels on food.
“On page 43 it repeats the US desire to improve the “media narrative” on chlorine-washed chicken.
“On page 119 there are some words hinting at the US desire for longer drug patents.
“That’s pretty much it….quite thin material when you boil it down to the essentials.”
So what are we to make of the evidence, now we can now comb through it online?
It’s clear the FT missed a lot of interesting content. In the first meeting (page 24) there is a discussion of the movement of professionals across borders and recognition of their qualifications – and this includes nursing:
“Nursing was the other profession that the US was interested in. Nursing in the US was very closely coordinated with Canada and Ireland. The relationship with Canada was particularly close and Canada had adopted the US exam. A compact between 25-30 states meant that nurses were able to move between those states. The US were interested to know if it would be really problematic for the UK to act in this area – they were sensitive to the particular sensitivities with the health sector in the UK.”
In the second meeting the US ambition to lengthen the life of patents that protect the higher prices of branded drugs was discussed:
“The US said there is a lot of conversation on drug prices and looking at what other countries pay and this is causing angst. There are worries that the US is not getting a good deal in pharmaceutical industries.” (pp48-49)
In the third meeting the discussion moved on to a discussion of State Owned Enterprises (SOEs), in which the US trade delegation “probed UK position on our ‘health insurance’ system” (p49).
While it’s clear the main US concerns in this regard are with the many large SOEs in China, the discussion clearly shows a determination to restrict the freedom of governments to protect or subsidise these enterprises:
“The US tends to be more aggressive in trying to discipline other nations’ subsidy programmes. The US business community became interested in SOEs a few years ago, which drove this position further. The US stated that SOEs are particularly positioned to potentially disrupt trade flows, and so are keen to have tougher rules for SOEs than for private business.” (p50)
It’s interesting that in this discussion the US asked if the UK had concerns about their “health insurance system.” The British did not point out that the NHS is not an insurance system, but a health service funded from taxation. Nor did they insist it had to be off the table. Instead they replied that more discussion should take place ‘further down the line’:
“the UK has an advanced competition law regime and strong corporate governance rules, and we believe we are compliant with international best practice. Wouldn’t want to discuss particular health care entities at this time, you’ll be aware of certain statements saying we need to protect our needs; this would be something to discuss further down the line when we come to consider what entities would count as ‘enterprises’. (p52)
The Lead Negotiator comments on this query, noting that:
“The query about ‘health insurance’ was likely a fishing expedition to check the tone of our response. We do not currently believe the US has a major offensive interest in this space – not through the SOE chapter at least. Our response dealt with this for now, but we will need to be able to go into more detail about the functioning of the NHS and our views on whether or not it is engaged in commercial activities …” (p53)
The Fourth meeting included a lengthy discussion of patent issues. The document flags up as “Key Points to Note” the connection with the NHS:
“This session provided the UK with an opportunity to provide a comprehensive overview of our approach to patent policy and highlight how this is intricately linked to the UK health system.” (p119)
An introduction from the UK delegation argues:
“The pharmaceutical sector has an annual turnover of £48.2 billion, it employs over 100,000 people from 2,000 businesses, and it is closely integrated with the UK’s national health system.” (p121)
The discussion on how the two systems work concluded with an upbeat suggestion that agreement is getting close:
“We have reached a point (for Patents in Pharmaceuticals/Health) where beyond specific policy details in niche areas, we are awaiting the clearance to negotiate and exchange text to really take significant further steps. There is however significant scope to discuss patents in other areas at future sessions, in particular: Technology and Agriculture/Chemicals.” (p132)
As the Times has pointed out, the leaked documents, most especially from the fourth meeting in July 2018, also revealed that a “top priority” of US negotiators was establishing a “free flow” of data (p22), and emphasising US opposition to any requirement for American companies to disclose encryption methods or algorithms underlying their systems.
Alan Winters, director of the Trade Policy Observatory at Sussex University, told The Times that clauses on data sharing and algorithms that US negotiators want inserted into a deal could be used to capture data from Britain’s 55 million NHS patient records, which city accountants EY have estimated could be worth £10 billion a year.
According to the Times report:
“The arrangements could see UK data swept back to servers in America and mined by algorithms written in Silicon Valley to develop new diagnostic tools and medical devices that would then be sold back to the NHS.”
The UK NHS could wind up “unable to analyse its health data without paying a royalty to Silicon Valley to use an algorithm,” and “Once the algorithm has been written and copyrighted by an American company, if the NHS tried to do the same in the UK it could be sued.”
What is striking throughout the leaked papers is the eagerness of the British delegation to fit in with the ambitions of the Americans, knowing that especially after an acrimonious no-deal Brexit a US trade deal might be the nearest to a substantial deal on offer.
Despite the subsequent protestations of ministers after the un-redacted documents were publicised, at no point in these meetings does anybody from the British delegation insist that the NHS would not be “on the table”.
However it’s also clear that the US delegation’s interest in the NHS is almost entirely focused on drug patents (and protecting higher prices) and on free flow of data.
And while Boris Johnson’s ministers are no doubt quite willing to “sell off” the NHS to American corporations, and the “ratchet” clauses in free trade agreements would potentially restrict options to bring privatised services back in-house, there is no evidence so far that there are any potential American buyers lining up to take over a deficit-ridden, under-funded and under-invested service.
Campaigners want to keep it that way: and there is no doubt – despite the denials all round – a Johnson government would be the most amenable to striking a deal with the US which would impact on the NHS with potentially disastrous consequences.
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