national health service 1948 Edward G Malindine/Getty Images

Putting the Public Back in Public Health

As pharmaceutical companies continue to ratchet up drug prices, the burden on public health agencies like the UK's National Health Service is becoming unsustainable. Rather than looking on as public investments are channeled into private profits, governments need to step in to guide innovation toward collective goals.

LONDON – The United Kingdom’s National Health Service marked its 70th birthday this year, so this is a good time to reflect on the NHS’s past and consider its future. The NHS has long been a source of inspiration in health-care debates around the world. But if it is not put on a more sustainable footing, it could become a cautionary tale.

When the NHS was founded in 1948, its mission, to provide universal high-quality health care, was daringly radical. In time, though, it came to represent a fundamental pillar of the modern welfare state, alongside education and public provision for old age.

Today, however, the NHS faces mounting challenges, owing to the years of “austerity” after the 2008 financial crisis, as well as to larger changes in the pharmaceutical industry’s business model. With corporate governance increasingly oriented around narrow financial indicators such as quarterly earnings, drug companies have hiked up medicine prices, and the NHS is bearing the costs. Making matters worse, many drugs would not even exist if not for public investment. Last year, the NHS in England spent £1 billion ($1.28 billion) purchasing medicines that have received investments from the UK Medical Research Council and other public bodies. In the United States, the National Institutes of Health (NIH) spends more than $37 billion on biomedical research every year, particularly in areas that are too risky for the private sector. And, worldwide, the public pays for an estimated two-thirds of all upfront costs for pharmaceutical research and development.

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