The National Health Service is under attack as never before. In this feature, a GP from north-west England looks at the effect of a huge government push for privatisation while nurse Claire Job looks at the predatory actions of the pharmaceutical industry.

TUC demo in Manchester: 50,000 march against Tories demanding action on NHS, photo Paul Mattsson

TUC demo in Manchester: 50,000 march against Tories demanding action on NHS, photo Paul Mattsson   (Click to enlarge: opens in new window)

Privatisation threatens health

A north west GP

As soon as the NHS was formed, it started to be undermined as a universal, comprehensive health system, free at the point of use.

But the process accelerated rapidly in recent years. The Coalition government’s health and social care act (HSCA) which started being implemented last April, enshrines the complete denationalisation of our NHS.

During New Labour governments, the private sector began making more and more profit from healthcare, particularly through increased use of the Private Finance Initiative (PFI).

Private money has almost completely replaced Treasury or state funding of new hospitals.

There are now over 100 PFI hospitals which, combined, were built for £11 billion but will cost over £65 billion to pay off, due to interest paid to the private sector owners.

Not surprisingly, 22 PFI hospital trusts are in debt due to these schemes and making cuts to frontline services to finance the crisis they face.

Even the Commons Public Accounts Committee warned that PFI is unsustainable but the current government has signed off on over 40 new contracts with more under negotiation.

Public anger over the problems caused by PFI has increased as up and down the country trusts cut budgets and centralised services to try to make ends meet.

Campaigns have been fought to save A&E, maternity services, paediatric units and more.

But privatisation of health care runs much deeper than PFI and is accelerating at a pace. Services sold off over the past few years include medical supplies and the blood plasma service among many others.

Since the NHS was set up GPs traditionally had ‘independent status’ ie they were largely self-employed but with a contract with the NHS to provide medical services.

However most GPs see themselves as part of the NHS and don’t generally undertake regular private work, although there are exceptions. The public too see them as part of the NHS.


However, growing numbers of groups of GPs have come together to operate as ‘businesses’. In some cases, contracts to run ‘GP-led’ health centres have been won by large private organisations like Care UK and Assura.

In others, ‘GP-led companies’ have come together perhaps seeing ‘safety in numbers’ in an unstable financial environment for healthcare.

They may have started with good intentions, aiming to bid more effectively for NHS contracts against the big private companies.

But the trend is towards these small companies expanding and winning contracts to run services across the country.

They then become more and more like the big corporations they compete for contracts with. They have commercial structures and are profit-making businesses, something not always obvious to patients.

This is an inevitable consequence of greater marketisation in the NHS, the pressure to compete and the fear of being taken over by giant health corporations.

The problem for these companies is that it’s not that easy to make large profits from primary care.

One way to cut costs and increase profits is to cut the most expensive outlays – GPs themselves. Many centres did just that, cutting GP numbers and using nurses instead to run clinics or relying on newly qualified, cheaper ‘salaried’ GPs rather than GP partners.

The other risk of this kind of privatisation is that companies, realising the slim pickings on offer, can pull out or sell up to other organisations if they wish (as happened when Assura sold to Virgin).

This puts employees in an unstable position and patients having no real say about who provides their healthcare.

Other primary care services were transferred from the NHS into private hands. District nursing, care for people with learning disabilities and other community services have been transferred to be run by social enterprises or private companies.

Short term contracts

Often they have short-term contracts, again introducing instability into the system. Staff may have an initial agreement to protect pay and conditions but once this runs out, cuts will invariably be made.

In some cases, wages are slashed to almost half the levels under the NHS and private companies cut costs by bringing in more and more unqualified staff to do jobs previously done by trained nurses for example.

The budget for buying clinical services has now also been handed over to Clinical Commissioning Groups (CCGs) run largely by groups of GPs.

In most areas contracts for various services are up for renewal and CCGs are putting these out to tender to ‘Any Qualified Provider’.

The NHS Support Federation found that between April and December 2013 70% of these contracts were awarded to private organisations.

If this trend continues, large swathes of our services will soon no longer be run by the NHS.

PFI has shown that privatisation doesn’t save money and can lead to financial crisis and destabilise services. Each tendering process costs money and what happens when the contract ends?

But this destabilisation is exactly what the government intends. They aim to undermine the NHS and start to develop a privately run health system based on the model of the USA, where publicly funded treatment on the NHS will be basic and people will need private health insurance to fund anything ‘extra’.

This is an ideological attack on the idea of the NHS. Cameron, Clegg and Co are more interested in protecting private companies’ interests than in providing a decent health care system for the majority.

We must fight this process, which is spiralling towards the end of the NHS. The health unions must come together in coordinated action to defend this treasured service.

Profit rules

Osborne and the Tories’ policies represent the drive by British capitalism to use the economic crisis to dramatically lower the share taken by the working class, including the social wage – if they can, down to pre-war levels.

At the same time they hope to partially overcome the long-term problem of capitalism in this epoch: the lack of profitable fields to invest their huge profits.

They hope that the privatisation of public services, particularly the NHS and education, will provide new investment opportunities.

Big Pharma’s deadly grip

Socialist Party campaigning in Doncaster against cuts to the NHS , photo Iain Dalton

Socialist Party campaigning in Doncaster against cuts to the NHS , photo Iain Dalton   (Click to enlarge: opens in new window)

Claire Job

Capitalism, a short term, money-making system, prioritises the quick quid over people’s needs. For the pharmaceutical industry giants, known as Big Pharma, this means putting profit before sick and even dying people.

They hunt for profits while government health budgets are slashed worldwide and poverty hits people’s lives even in the developed world.

One in three children in Britain lives in poverty yet, despite deprivation and ill-health being clearly linked, our NHS is short of staff and resources. But the drug companies focus solely on their vast profits.

The NHS’s annual drugs bill is currently around £10 billion. Last July, it was discovered that large drug companies were milking the NHS of millions of pounds, using a legal loophole in the government’s ‘price regulatory scheme’, by selling marketing rights to smaller companies.

These smaller companies, not governed by the scheme, can then set a new price, free of regulation.

The cost of one medicine went up 2,400% literally overnight. The extra cost to the NHS will be millions of pounds.

Big Pharma’s profits are growing; global spending on prescriptions has more than doubled since 2002. In 2011 it reached $954 billion.

The US market makes up about half of world spending on medicines. US workers pay massively inflated costs of medicines compared to Britain and Europe.


The big pharmaceutical companies are in competition to find the next ‘blockbuster’ medicine ie one they can patent for 20 years.

They claim property rights over the medicine, supposedly to reclaim money spent on its research and development.

In reality, this patent lets them charge massively inflated prices for a medicine that brings in huge profits.

The current blockbuster, Humira, used to treat arthritis, is from a group of drugs called Anti-TNFs. Humira, made by Abbott, rakes in $9.3 billion a year – estimated to rise to $11.2 billion by 2016.

Big Pharma talk of the 1980s and 1990s as a ‘golden-age’ of blockbuster medicines. Many came to the end of patent in the late 2000s.

The industry has been unable to replace them in the same number, mainly because of a lack of innovation in developing medicines over the last decade.

In times of economic uncertainty Big Pharma is reluctant to risk cash on developing new medicines. Many medicines new to market treat the same condition, in the same way, as an already existing drug.

These ‘me too’ medicines are less risky. For example I can prescribe an analgesia called ‘fentanyl’ from one company as a patch, from another as a tablet and from a third as a nasal spray!

Drug companies see research and development (R&D) of new medicines as ‘high risk’. Before investing in medicines, they want guaranteed big profits back.

If the financial risks are too great then R&D will not happen. In fact, a significant proportion of R&D is carried out by universities or funded by charities.

Drug companies’ practices in clinical trials of medicines are notorious. In 2007 legislation was introduced to ensure ‘mandatory reporting’ of clinical trial data.

But a BMJ article in 2012 found this law was ignored by four out of five clinical trials. Such withholding of negative trial data exposes people to harm and prevents health professionals and patients making an informed decision about treatments.

Safety compromised

In the USA GlaxoSmithKline (GSK) had to pay $3 billion in a 2012 settlement on charges of failure to report safety data and illegal promotion of prescription drugs.

Last year, a British GSK executive was reportedly banned from leaving China as the authorities investigated bribery charges – millions of pounds were allegedly funnelled through travel agencies to bribe doctors and health officials.

Blockbuster medicines for sale in the US and Europe ensure that diseases in the undeveloped world receive little attention.

Illnesses causing misery to millions are ignored in the chase for profit. Big Pharma’s global greed puts profits before public health needs and condemns large parts of the world to illness and even death from preventable, treatable diseases.

Big Pharma threatened to withhold medicines from Greece in 2013 when the government was not paying its bills, leaving workers worrying not only about their jobs, homes and food but access to life-sustaining medicines.

Nationalising the drug companies would remove a huge parasitic drain on public health resources and would be a huge step towards letting health services be planned for need rather than profit.

Health before profits

Medicine has achieved great scientific advances but much more might be achieved if scientists were freed from the narrow parameters imposed on them by those safeguarding the profits of Big Pharma’s shareholders.

Imagine what could be achieved if scientists could concentrate on the world’s most pressing health problems and share results in genuine cooperation instead of jealously guarding every advance with secrecy and patents.

Tackling the development and production of medicines based on people’s needs is only half the battle.

Poverty and ill health go hand in hand so we need to consider not just how we treat disease; but what should be done to prevent it.

Capitalist society will ensure that the health gap between the wealthy and the poor grows. Society needs to be run differently, planned democratically, with power in the hands of the many not the few.

People’s needs should come before profit in education, jobs, homes and a healthy environment. We need the socialist transformation of society.

PFI wrecks hospitals

Andrew Walton

University Hospitals Leicester Trust has to apply for government financial support after it was forecast to go £40 million in the red this year.

It plans to cut £45 million in 2014 in a “cost improvement plan”, which would sack more staff.

Portering and estates staff have already been replaced. Private company Interserve aims to cut staff costs – cutting jobs or not replacing people who leave, creating a poorer service.

So-called “backroom” staff are important in keeping hospitals clean, safe and infection-free.

Many hospitals face similar problems. Hit by exorbitant PFI deals, many involving 30-year contracts with private companies, much of the NHS is struggling financially.

The HSCA makes managers concentrate on keeping commissioners, the people who buy our service, happy. NHS staff fear their service may be taken over.

The Con-Dem government wants hospitals to become Foundation Trusts, which can be sold off to ‘any willing provider’.

Private companies can cherry-pick profitable parts of the service, while the public sector deals with more complex cases.

Foundation Trusts were created under New Labour who will need to be pressurised by mass action into even repealing the Tory HSCA.

When British Rail was privatised, Labour promised to renationalise it, but went back on its word when elected.

Invest in the NHS and kick greedy fat cats out of our hospitals!

Fightback must start here!

TUC demo in Manchester: 50,000 march against Tories demanding action on NHS, photo Paul Mattsson

TUC demo in Manchester: 50,000 march against Tories demanding action on NHS, photo Paul Mattsson   (Click to enlarge: opens in new window)

The Socialist Party says:

  • No to all cuts in jobs, services and staff pay and conditions
  • Abolish the Health and Social Care Act which allows the further selling off of our NHS to private companies
  • Kick the private vultures out of the NHS. End big business profiteering: ditch the Private Finance Initiative which is bleeding the NHS dry
  • Nationalise the pharmaceutical industry with compensation only on the basis of proven need
  • A fully publicly funded NHS, free for all at the point of use
  • United action to defend every part of the NHS. The TUC must name the day for a 24-hour general strike against austerity, cuts and closures
  • Fight for a socialist planned society that can maintain and exceed the original aims of the NHS

Defend the NHS!

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