The Association of the British Pharmaceutical
Industry (ABPI)
A Corporate Profile
By Corporate Watch UK
Completed September 2003
The Association of the British Pharmaceutical
Industry (ABPI)
The ABPI is the UK pharmaceutical industry's main industry
body and lobby group. Members include seventy five companies in the
UK producing prescription medicines, supplying more than 90 per cent
of the medicines prescribed through the National Health Service (NHS).
Membership of the ABPI is open to companies in the UK which supply
prescription medicines for human use. A complete list of member companies
and affiliates can be found on the ABPI's web site.
The ABPI justifiably claims to be the leading body in representing
the industry's views to government and decision makers in the UK.
Influencing legislation affecting the industry, and creating a beneficial
business environment, stand amongst the ABPI's principal objectives.
It is certainly one of the most powerful of all cross industry groups
in the UK, enjoying a very favourable relationship with the government.
As Secretary of State for Health, Stephen Dorrell, explained in 1996,
"Our policy needs to provide firm support for the pharmaceutical
industry... The industry knows that there will be no surprises, because
our partnership is based upon constant, constructive dialogue... In
order to guarantee that the benefits of this are enjoyed by the UK
economy the Government is committed to ensuring that regulation of
the sector is flexible and supportive."1
The ABPI also lobbies the EU in Brussels.
The ABPI operates out of two offices. The Whitehall office has a staff
of 60 and is shared with the ABPI-created group, the Prescription
Medicines Code of Practice Authority. ABPI Scotland, based in Edinburgh,
was set up in 1999 in order to lobby the new Scottish Parliament.
12 Whitehall, London SW1A 2DY
Telephone: +44 (0) 20 7930 3477
Fax: +44 (0) 20 7747 1414
ABPI homepage: http://www.abpi.org.uk/
ABPI Scotland
The Royal College of Physicians
9 Queen Street, Edinburgh, EH2 1JQ
Telephone: +44 0131 247 3688
Fax: +44 (0) 131 225 4865
The ABPI has also formed a 'Wales Industry Group' in
response to the perception that “despite the limited powers
of the National Assembly for Wales, devolution was leading to the
development of a distinctive health policy agenda in Wales”2.
The ABPI is controlled by a board of management whose members are
elected by the member companies and by directors appointed by the
ABPI itself. Board members work voluntarily for the ABPI and maintain
their jobs with their companies. Inevitably the larger pharmaceutical
corporations are better represented on the board of management.
In February 2003 the hired PR company, Hill & Knowlton to handle
its public affairs (lobbying) account in support of the ABPI's parliamentary
affairs head, Alison Bartlett (formerly of PR giant, Ketchum). The
brief covers media monitoring and strategic advice in addition to
the public affairs support. Hill & Knowlton are working with think
tanks and forming stakeholder partnerships on behalf of the ABPI.
This role had previously been covered by Ketchum UK.3
The ABPI's European work on access to medicines in developing countries
is performed by WS Adamson, the Brussels-based subsidiary of Weber
Shandwick.
A Fat Cat Industry
Whilst the UK's manufacturing industry has declined since the 70s,
the pharmaceutical industry has rarely veered from an upward path.
In 2000 UK pharmaceutical exports and investment levels reached record
highs. Exports rose 17% year-on-year to over £7bn, taking the
trade surplus to £2.3bn, while R&D expenditure rose 7% to
almost £3bn – or £8m/day – making pharmaceuticals
responsible for 23% of total expenditure on manufacturing industry
R&D in the UK4
. As the the UK's biggest export earner, after North Sea
oil, the industry has tremendous economic power. One of the ABPI's
favourite bargaining tactics (like so many other companies and industries)
is the overt or covert threat of companies leaving the UK.
The drugs market is divided into two sectors: prescription-only medicines
(POMs) and over-the-counter (OTC) medicines. POMs are obtained only
with a prescription from a qualified medical professional and dispensed
only by a registered pharmacist in a licensed pharmacy outlet. The
vast majority of prescribed pharmaceuticals in the UK are prescribed
through the National Health Service (NHS). The market for OTC pharmaceuticals
is consumer orientated. The pharmaceutical industry aims at expansion
of the latter category drugs which have a higher profit margin, and
for which advertising rules are relatively loose.
INFLUENCE AND AMBITIONS
Government backing
The pharmaceutical industry blossoms in the UK because of the existence
of a highly favourable business climate, created by the Government
at the request of the industry. The industry prospered under the Conservative
government and can now count on the support of Prime Minister Tony
Blair who describes the pharmaceutical industry as 'a prime example
of what is needed in a successful knowledge economy' and praises the
industry because of 'its very substantial contribution to our economy
and the welfare of our citizens'. Blair adds: 'We must work together
to ensure that the future of the UK pharmaceutical industry is even
brighter'.5
This must sound as music to the industry's ears.
As will be demonstrated below the ABPI maintains cosy relations with
the government and relevant areas of the public sector through links
to regulatory bodies and a number of specially created fora.
Backing biotech
As it represents the pharmaceutical industry which has considerable
biotechnology investments, the ABPI has consistently lobbied for government
backing of biotechnology at the UK and European level. The ABPI seems
to have particularly concentrated on getting the UK government to
back the 1997 European Biotechnology Patents Directive, claiming that
it was essential to maintain the UK's leading position in pharmaceuticals
research and development. The Directive was passed by the European
Parliament in 1997.6
Pushing for advertising rules to be relaxed
The ABPI has long been lobbying for relaxation of the regulations
governing promotion and advertising of prescription medicine. After
the US Food and Drug Administration changed its rules to allow direct-to-consumer
(DTC) marketing in 1997 the ABPI began its campaign for DTC marketing
in Britain and Europe.
The new rules in the USA have led to a plethora of advertising and
PR campaigns promoting prescription drugs. By 2000 american drugs
companies were spending $2bn on DTC marketing of branded medicines.
Recent PR campaigns have included the spectacle of american celebrities
extolling the virtues of particular drugs during chat show appearances.
The Consumers Association objects that marketing will inevitably present
a biased viewpoint of drugs, highlighting benefits and not the risks
and ignoring non-drug treatments. Patients demanding particular brands
will lead to increased costs to the NHS. The CA also points out a
lack of any evidence of overall health benefits in the USA as a result
of DTC advertising.
The ABPI's campaign orchestrates both lobbying and public relations
in its overall strategy. At a briefing to the Pharmaceuticals Marketing
Society in 2000, the ABPI described its “battle plan”
thus: “to deploy ground troops in the form of patient support
groups, symapthetic medical opinion and healthcare professionals...
which will lead the debate on the informed patient issue. This will
have the effect of weakening political, ideological and professional
defences... Then the ABPI will follow through with high-level precision
strikes on specific regulatory enclaves in both Whitehall and Brussels...”7
Aiming to create more informed patients, in January 2000, the ABPI
launched its Electronic Medicines Compendium. The eMC, launched under
the slogan “if you can eMC it you can believe it,” is
a web site giving detailed information on thousands of prescription
drugs. A spokesman added, “we intend to work closely with patient
interest groups.”8
Proposals for relaxing DTC regulations at the European Union have
twice been rejected by the Euopean Parliament and may be thrown out
completely later this year. For more information see the Consumers
Association web site.
Protecting Corporate Secrecy
At the same time as espousing DTC marketing as the best way to keep
patients informed, the ABPI has been strongly opposing another European
proposal that would force pharmaceutical companies to disclose far
more research data than they currently do. The information required
would be of tremendous benefit to academic researchers and patient
interest groups and would undoubtedly be more objective than that
released through corporate advertising or PR. However the ABPI continues
to oppose the proposal which was the result of pressure from consumer
groups and politicians over drug safety.9
Denying Conflicts of Interest
The ABPI routinely defends the pharmaceuticals regulatory framework
from accusations of conflicts of interest. In 2000 the ABPI responded
to a government review of the extensive financial links between pharmaceutical
companies and their regulators saying, “this must be the silly
season because this story comes round every 18 months”.10
Although 27 of the 36 members of the Committee on Safety of Medicines
(CSM) have declared interests in the pharmaceutical industry11,
the ABPI can apparently not even see why anyone might be suspicious
of this situation.
The CSM is a department of the Medical and Healthcare products Regulatory
Agency (formerly the Medicines Control Agency and the Medical Devices
Agency) which licenses medicines for use in the UK.
Parallel Imports
Whilst the ABPI is strongly in favour of 'free market' conditions
where it favours its member companies, it takes a dim view of free
trade where it does not. One recurring 'problem' with the European
single market has been the phenomenon of 'parallel imports'.
Parallel importing occurs due to the different prices set for branded
medicines in different countries within the EU. This leads to imports
of the same medicines from countries with lower prices to countries
with higher prices. The ABPI has consistently complained that this
undermines innovation in the UK pharmaceuticals sector and damages
its members profits.
Since the adoption of the Pharmaceutical Price Regulation Scheme in
1999 parallel imports have declined. The British Association of European
Pharmaceutical Distributors, which represents parallel importers,
alleges that provisions with the scheme allow companies to selectively
drive importers out of business. The ABPI has denied this.12
Opposition to lowering drug prices
The ABPI is at the forefront of creating an ever-friendlier business
environment in the UK and making the industry's demands clear to the
UK government. The ABPI has successfully opposed efforts by the Government
to lower drugs prices and increase transparency in pricing policies.
When in 1998 the Government announced its plans to reform the pharmaceutical
price regulation scheme (PPRS) -the scheme allowing drug companies
to set their own prices for drugs as long as they do not pass certain
profit limits- ABPI launched a counter-offensive, threatening that
'any attempt to cut profits could drive manufacturers away and damage
a business.'13
The ABPI opposed the NHS Modernisation Bill that contained powers
to ensure that pharmaceutical companies would comply with an agreement
negotiated with the government on how much profit they could make
from the NHS.14
In July 1999, after months of negotiations, the government struck
a deal with the pharmaceutical industry. The ABPI agreed to cut the
price of branded prescription medicines by 4.5%. In return, drug companies
won concessions and allowances aimed at rewarding and encouraging
research and development of new products. Critics, however, still
believe drug companies are overcharging consumers.15
Pharmaceutical Industry Competitiveness Task Force
(PICTF)
Capitalising on its cosy relationship with the government, the ABPI
in 2000 “achieved the setting up of a joint industry/government
Pharmaceutical Industry Competitiveness Task Force, reporting to the
Prime Minister”16
The PICTF, which was announced at the April 2000 annual dinner of
the ABPI by Health Minister, Alan Milburn, embodies a far-reaching
partnership between government and industry. The idea was to bring
together industry leaders in the UK with Government policy makers
to identify and report to the Prime Minister on the steps that need
to be taken to retain and strengthen the profitability of the UK pharmaceutical
industry. There is no reference in the PICTF's stated mission to identifying
ways in which the industry can assist the NHS or the wider society,
its value is simply presupposed.17
Areas where agreement has been reached through the PICTF
include certain aspects of intellectual property. In spite of recent
controversies over pharmaceutical companies refusing to allow developing
countries to manufacture copies of unaffordable medicines to combat
epidemics (of AIDS for instance), the government has agreed that “intellectual
property protection is not per se a barrier to access to medicines”
and that protection of patents must remain a “key plank”18
of its policy on access to medicines in the developing world.
Another key area for the pharmaceuticals industry has
been in creating closer ties between the relevant authorities and
the industry for research. The PICTF has achieved a streamlining of
the procedure for clinical trials approval, reducing the approval
process to about sixty days.
Three of the PICTF's ten members are senior members
of the ABPI: Bill Fullagar of Pfizer and ABPI President; Ken Moran
of Pfizer and ABPI Vice-President; and Trevor Jones, ABPI Director
General.
Public funds for research
The substantial amount of money spent on R&D is brought forward
by the industry as the main argument justifying the pharmaceutical
industry's enormous profits. However, the industry increasingly seeks
public funds to finance research. A recently announced partnership
between the private sector and the NHS allows co-funding of clinical
trials and faster development of new drugs. A spokeswoman for the
ABPI told BBC News Online that previous collaborations with the NHS
had been very ad-hoc in nature. She said: "A lot more can be
achieved by working together and pooling resources."19
One long term consequence of ever closer ties between
the pharmaceutical industry and the NHS may be concentration on drug
therapies at the expense of non-drug treatments.
National Institute for Clinical Excellence (NICE)
The National Institute for Clinical Excellence was set up as a Special
Health Authority for England and Wales in 1999. A part of the National
Health Service (NHS), its role is to provide patients, health professionals
and the public with authoritative guidance on current “best
practice”, concerning both individual health technologies (including
medicines, medical devices, diagnostic techniques, and procedures)
and the clinical management of specific conditions. As such its work
has the potential to impact significantly on sales of the ABPI's member
companies' products, and the ABPI naturally devotes considerable energy
to lobbying the Department of Health concerning its operations.
After a couple of years of discussions the ABPI seems to have largely
got its way: “
Links with Universities and Schools
ABPI sends free booklets to schools. Every secondary school and sixth
form college has been sent two free booklets from ABPI about pharmaceutical
manufacture. ABPI also offers an online course about medicines and
drugs. See: http://www.abpischools.org.uk/
Animal rights
ABPI supports using animals in research. However, ABPI is concerned
about the growing opposition against experiments with animals, mainly
coming from animal rights activists, claiming that the industry is
increasingly violently harassed. Tony Blair shares the industry's
concerns.20
And the industry works hard to get the media on her side. Banks and
financial institutions have recently been threatened by the industry,
saying they will close accounts if they cave in to threats from animal
rights protesters. The move follows a number of high profile financial
institutions severing links with the drugs-testing firm Huntingdon
Life Sciences (HLS) after it was targeted by animal rights activists.
"If they are not prepared to support a member of our industry
[HLS], we must ask if they are the people we should rely on for advice
and to invest our cash," said Trevor Jones, director-general
of the ABPI.21
The ABPI claims to have won significant concessions
in the 2001 Police and Criminal Justice Act. Indeed akll of its main
requests were added to the Act, including provisions to “deal
with protests outside people's homes, malicious communications, the
organisation of harassment campaigns anbd the availability of company
directors' and secretaries' home addresses. In addition, a National
Crime Squad has been established, along with a high level ministerial
committee, to deal specifically with this type of criminal activity.”22
Putting Profits before the Poor
Outside the UK, the ABPI shamelessly supported the big pharmaceutical
companies' fight against the South African government that tried to
provide its citizens with affordable AIDS medicines. The pharmaceutical
industry -afraid of losing profits- sued the South African government
for breaking international patent law. See also: sector overview
pharmaceutical industry.
When Development Cooperation Minister Clare Short
criticized the drugs industry for its lack of interest in Third World
diseases, ABPI spokesman Richard Ley said the industry welcomed her
comments. He added: "We would be happy to work with governments
and other agencies to discuss ways in which we can justify investment
in these areas to our shareholders."23
