NHS patients are being let down by a global health innovation system which fails to deliver the treatments they need at prices that government can afford, according to a new report led by Professor Mariana Mazzucato, Director of the UCL Institute for Innovation and Public Purpose (IIPP), in collaboration with STOPAIDS, Global Justice Now and Just Treatment.

The report, The People's Prescription: Re-imagining health innovation to deliver public value, warns that health innovation is being hampered by a drive for profit and calls for a major overhaul of the system to ensure that more drugs and treatments are developed for critical health needs. Crucially it addresses both the rate and the direction of innovation.

Although innovation in health is vital for the development of drugs used by the NHS and healthcare systems around the world, the report finds that the current system for developing drugs incentivises high prices and delivers short-term returns to shareholders, rather than focusing on riskier, longer-term research which leads to critically needed therapeutic advances.

The authors warn that the high prices of medicines are causing severe patient access problems worldwide with damaging consequences for health and wellbeing. The solution is not as simple as demanding lower prices but to understand how the characteristics of the system must be overhauled, from the dynamics of patents which are hurting transparency and collaboration to the ways in which corporate governance hurt innovation.

With the system 'fundamentally broken', the report maps out fault lines and recommends new concrete policy actions to deliver public value for the greatest health need.

Last year, NHS England spent £1bn on medicines that had received public investment, while spending on drugs is rising at five times the rate its budget is rising.

Key points include:

  • Research and development priorities are not determined by public health needs. The system ignores diseases - such as tuberculosis - that are most prevalent in developing countries. Meanwhile, more than half of approved medicines in recent years offered no additional health benefits.
  • The number of new drugs approved against research and development (R & D) spend has declined from around 40 drugs per $1bn of R & D in the 1950s to less than 0.65 drugs per $1bn spend this century, representing a huge drop in innovation and productivity.
  • Pharmaceutical companies are increasingly focused on maximising short-term financial returns to shareholders, rather than funding health advances in the public interest. The 19 pharmaceutical companies included in the S&P 500 Index in January 2017 (and listed 2006-15) spent $297bn on repurchasing their own shares between 2007-16--61% of their combined R&D expenditures in this period.

Professor Mariana Mazzucato said: "The diagnosis looks bleak for the health innovation system; it's expensive and unproductive and requires a complete transformation. We have a situation now where the NHS is a huge buyer of drugs and the UK government is a significant investor in the development of new treatments, yet big pharmaceutical companies are calling the shots.

"In the year of the 70th anniversary of the NHS, this is an ideal time to take stock and rethink the system with a move towards a model that prioritises long-term public value above short-term corporate profits."