Price controls or control through prices? Regulating the cost and consumption of prescription pharmaceuticals in the UK, 1948-67

Business History

Volumn 47, Issue 3, 2005, Pages 352-366

  Slinn, Judy ^a  

^a OXFORD BROOKES UNIVERSITY   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

INDUSTRIAL HISTORY; PHARMACEUTICAL INDUSTRY; PRICE DYNAMICS; TWENTIETH CENTURY;

EASTERN HEMISPHERE; EURASIA; EUROPE; UNITED KINGDOM; WESTERN EUROPE; WORLD;

EID: 19044388745     PISSN: 00076791     EISSN: 17437938     Source Type: Journal    
DOI: 10.1080/00076790500055970     Document Type: Article

References (94)

1. R. Ballance, J. Pogany and H. Forstner, The World's Pharmaceutical Industries (Aldershot, 1992).
2. J. Braithwaite and P. Drahos, Global Business Regulation (Cambridge, 2000), pp.370-73.
3. Included in many countries' price regulatory schemes are mechanisms to limit the amounts that pharmaceutical corporations spend on marketing and promotion. These have not been dealt with separately in this article.
4. M. Corstens, Marketing Strategy in the Pharmaceutical Industry (London, 1991), chapter 7.
5. L. Hancher, Regulating for Competition (Oxford, 1990), p.51.
6. For France see Hancher, Regulating;
7. for Japan see J. Howells and I. Neary, Intervention and Technological Innovation (London, 1995), especially chapter 4.
8. See also M.L. Burstall, 'How Do They Do It Elsewhere in Europe?, in D.G. Green (ed.), Should Pharmaceutical Prices be Regulated? (London, 1997), p.89.
9. For Japan see Howells and Neary, Intervention, chapter 4.
10. There is a more recent discussion in L.G. Thomas III, The Japanese Pharmaceutical Industry (Aldershot, 2001).
11. See C. Webster, The National Health Service (Oxford, 1998), p.37.
12. Webster, The NHS, p.46.
13. Ibid., p.46.
14. The Cost of the National Health Service in England and Wales (London, 1956).
15. Final Report of the Committee on the Cost of Prescribing (London, 1959).
16. Report of the Committee of Enquiry into the Relationship of the Pharmaceutical Industry with the National Health Service, Cmnd 3410 (London, 1967).
17. A. Digby and N. Bosanquet, 'Doctors and Patients in an Era of National Health Insurance and Private Practice, 1913-38', Economic History Review, Vol.41 No.1 (1988), pp.74-94.
18. See, for example, Webster, The NHS,
19. and J. Goodman, 'Pharmaceutical Industry', in R. Cooter and J. Pickstone (eds), Medicine in the Twentieth Century (Harwood, 2000), chapter 10.
20. J. Lewis, 'Providers, Consumers, the State and the Delivery of Health-Care Services in Twentieth Century Britain', in A. Wear (ed.), Medicine in Society (Cambridge, 1992), p.319.
21. The therapeutic revolution is the name generally used for the period starting in or around 1938 and lasting until about 1960 when the pace of introduction of new drugs slowed down; see, for example, G. Owen, From Empire to Europe (London, 1999), chapter 13, pp.366-72.
22. 'Vitamins, hormones, insulin and the sulfa drugs were the great therapeutic successes of the interwar period.' Goodman, 'Pharmaceutical Industry', p.145.
23. J. Le Fanu, The Rise and Fall of Modern Medicine (Boston, MA, 1999), p.xv.
24. See J. Slinn, A History of May & Baker, Hobsons Ltd (Cambridge, 1984), p.124.
25. Goodman, 'Pharmaceutical Industry', p.147.
26. See R. Davenport-Hines and J. Slinn, Glaxo: A History to 1962 (Cambridge, 1992), pp.161-2.
27. R. Landau, B. Achilladelis and A. Scriabine (eds), Pharmaceutical Innovation (Philadelphia, 1999), p.74.
28. See Ballance et al., The World's Pharmaceutical Industries, chapters 1 and 5.
29. In a speech to the PLP in the autumn of 1949, quoted in P. Hollis, Jennie Lee - A Life (Oxford, 1998), p.164.
30. Public Records Office (PRO), Ministry of Health (MH) 137/152, Pharmaceutical Services Brief for accounting officer, 1949-55. Figures have been rounded up or down to the nearest million.
31. W.D. Reekie, The Economics of the Pharmaceutical Industry (London, 1975), p. 16. NHS expenditure from the Annual Abstract of Statistics.
32. PRO, MH137/156, Pharmaceutical Services Brief for accounting officer, 1958-59.
33. PRO, MH 168/2, Cost investigation Drug Prices Control Negotiations on revised scheme 1960, draft memorandum for Home Affairs Committee, Dec. 1960.
34. PRO, MH101/37, Diary of events and note of circulars issued 1939-46: PRO, FD2/26 Medical Research Council (MRC), Annual Reports and Publications, 1939-45.
35. Other countries, for example France and Japan, used their wartime lists to form the basis of post-war approved lists from which doctors were allowed to prescribe: for France see Hancher, Regulating and for Japan, Howells and Neary, Intervention.
36. PRO, Treasury (T) 227/734, National Health Service Prescribing, prescription charges, memo, 11 Oct. 1949.
37. Reekie, The Economics, p.104.
38. PRO, MH137/152, Briefs for the accounting officer, 1949-55.
39. C. Webster, The National Health Service (Oxford, 1998), pp.20-21.
40. PRO, MH137/152, Briefs for accounting officer, 1949-55.
41. PRO, MH 137/153, Briefs for the accounting officer, 1955-56, 1956-57.
42. PRO, T227/339, National Health Service Price Control, memo, 26 Nov. 1953.
43. PRO, T 227/333, Committee of Enquiry into the existing and prospective cost of the National Health Service, memo, 17 Feb. 1953.
44. PRO, MH137/227, Guillebaud Committee, working papers, minutes of meetings and evidence submitted 1953-54.
45. Howells and Neary, Intervention, p.106.
46. PRO, MH137/153.
47. PRO, T227/424, Guillebaud Committee of Enquiry into costs: action arising from report 1955-57.
48. PRO, MH 137/236, Guillebaud Committee papers, correspondence.
49. PRO, MH 137/229, Guillebaud Committee Minutes of meetings, 1955.
50. G.E. Yates, 'Drugs: Healthy Confidence', FBI Review (Oct. 1963).
51. I b i d.
52. E. Mossialos, 'An Evaluation of the PPRS: Is there a Need for Reform?', in D.G. Green (ed.), Should Pharmaceutical Prices Be Regulated? (London, 1997).
53. PRO, MH137/154, Briefs for the accounting officer, 1956-57.
54. Hinchcliffe Report, 1959, para.212.
55. Ibid., p.27.
56. The Times, 3 Feb. 1961, quoted in Reekie, The Economics, pp.100-101.
57. I. Loudon, J. Horder and C. Webster (eds.), General Practice under the National Health Service, 1948-1997 (Oxford, 1998), p.302.
58. E.B. Chain, 'Academic and Industrial Contributions to Drug Research', The Trueman Wood Lecture to the Royal Society of Arts, 19 June 1963.
59. Loudon et al., General Practice, p.302. The proportion remained at less than 11 per cent until 1995.
60. PRO, MH149/241 Excessive prescribing by general medical practitioners: action to reduce prescription costs, 1963-65.
61. Letter from the BMA, 1 Jan. 1964, PRO, MH149/241.
62. PRO, MH149/241.
63. PRO, MH 149/453, Economy in prescribing options, 1963-65.
64. Ministry of Health Report 1962, quoted in Yates, 'Drugs: Healthy Confidence'.
65. Loudon et al., General Practice, pp.6-7.
66. PRO, MH 149/455.
67. Report of the Committee of Enquiry into the Relationship of the Pharmaceutical Industry with the National Health Service, Cmnd 3410, p.21.
68. Howells and Neary, Intervention.
69. M.H. Cooper, Prices and Profits in the Pharmaceutical Industry (Oxford, 1966), p.39.
70. Ibid., p.47.
71. Cooper, Prices and Profits, p.147.
72. Sainsbury Report, p.10.
73. In 1961 when the NHS and Pfizer could not agree on the price of tetracycline the UK government imposed lower prices. Pfizer went to court but failed to stop the import of cheaper tetracyclines from Italy and Poland. They were, however, found to be of poor quality. See also discussion on Roche's pricing of Librium and Valium: Reekie, The Economics, p.122.
74. WHO, International Classification of Diseases (London, 1992); for detailed discussion of this, particularly in relation to the current dispute on antidepressants, see the writings of Charles Medawar of Social Audit, www.socialaudit.org.uk.
75. T. Stone and G. Darlington, Pills, Potions and Poisons (Oxford, 2000), p.379.
76. See PRO, MH 154/468, Health education - drug dependence advisory committee; and MH 154/462, Health education in connection with drug-taking by young people.
77. Professor Paton, FRS, of the department of Pharmacology, University of Oxford, 'Drug dependence - A socio-pharmacological assessment': PRO, MH 154/468, Health Education - drug dependence advisory committee: correspondence; minutes.
78. A. Chetley, A Healthy Business (Zed Books, 1990), pp.10-11.
79. See D. Lupton, 'Foucault and the Medicalisation Critique', in A. Petersen and R. Bunton (eds), Foucault, Health and Medicine (London, 1997), chapter 5.
80. C. Lawrence, Medicine in the Making of Modern Britain, 1700-1920 (London, 1994), pp.82-3.
81. Loudon et al., General Practice, p.225.
82. There is an extensive oral archive, quoted in Loudon et al., General Practice, which might throw more light on this complex subject which merits further investigation, as does the whole subject of prescribing patterns.
83. Quoted in Loudon et al., General Practice, pp.92-3.
84. Ibid., pp.230-31.
85. J. Pickstone, 'Production, Community and Consumption: The Political Economy of Twentieth Century Medicine', in Cooter and Pickstone (eds), Medicine, p.15.
86. D. Weatherall, Science and the Quiet Art (Oxford 1997), p.18.
87. D.C. Mowery and N. Rosenberg, Paths of Innovation (Cambridge, 1998), p.97.
88. This does, it may be noted, raise the issue of regulatory capture, not otherwise dealt with in this article for reasons of scope and direct relevance. The Sainsbury Committee did suggest that the Ministry was 'overprotective' of the industry sometimes - see, for example, PRO, MH 104/45, Committee on the Pharmaceutical Industry - proceedings. For a discussion of regulatory capture in this context, see J. Abraham, Science, Politics and the Pharmaceutical Industry (London, 1995), chapter 1,
89. and M. Bishop, J. Kay and C. Mayer, The Regulatory Challenge (Oxford, 1995).
90. A. Maynard, 'Reforming the NHS', in Bishop et al. (eds), Regulatory Challenge, p.67.
91. For this and other measure see W.D. Reekie, Prescribing the Price of Pharmaceuticals (London, 1995).
92. In both France and Japan, where there are approved lists, it has been argued that such a system has contributed to the relatively poor innovation record of the industry in those countries. See Hancher, Regulating, for France
93. and, for Japan, L.G. Thomas, The Japanese Pharmaceutical Industry (Aldershot, 2001).
94. See Green (ed.), Should Pharmaceutical Prices.