Government initiatives to pool their citizens health data could shift the power balance against drug companies

The sharing of patient health records by national bodies represents a potentially game changing shift of power in the National Health spending paradigm.

Traditionally, pharmaceutical companies and private sector providers have held the upper hand over the Government and on occasions this has meant that drug companies have been able to charge extremely high prices for some drugs.

After a drug has been successfully launched the patent system generally protects the company that owns the drug from other companies launching similar drugs. Therefore a drug company with a patent protected drug can to an extent charge what it likes.

Successful research however depends upon access to patients. Not just live patients but patient samples, be they tissue, fluid or otherwise. Drug companies currently  follow a long and complicated process in order to bring drugs to market. At the heart of this process is having access to patients not only to take part in experiments involving the drug being developed but also to provide samples.

If Governments can successfully create long lasting initiatives that create pools of patient records, at the National level it represents an enormously attractive pool of data for drug companies to utilise in their drug development process. Rather than hire patients individually to provide samples, which is very costly, drug companies could utilise the Government's pool of samples and data. This could provide vast reductions in cost for the drug companies but they would be at the mercy of the Government since it would have to provide access to that resource.

Therefore the balance of power would shift. Any drug company that chose to charge too much for an important drug might find themselves out of the loop with regards to access to the Government's sample and data pool.

You may argue that drug companies will still try and go it alone. Why would they choose to be beholden to Governments? Simply put, the cost reductions available by utilising these enormous pools of resources could render the going it alone option unsustainable.

Upstart drug companies could enter the market with a business model based on working closely with Governments and their pools of samples and data, or indeed Governments could potentially run their own drug development programs. Thus all or most of the need for Governments to buy drugs from relatively high cost suppliers would be circumvented.

Having nationwide pools of data is still a long way off but significant efforts are under way. Not least efforts such as that by the NHS in the UK and in the US in the genetics space Clinvar .

The views in this article are my own and not a reflection of any views held by the company I work for. 

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