The election campaign has only just started and already the consequences of Brexit for the NHS are dominating the news. Jeremy Corbyn’s speech at the launch of Labour’s campaign was greeted by chants of “not for sale”, a reference to the threat that any future trade deal with the USA would open the NHS up to American corporations. On cue, Donald Trump called into a phone-in hosted by Nigel Farage to say that “I don’t even know where [it] started with respect to us taking over your healthcare system. I mean it’s so ridiculous. I think Corbyn put that out there, but to even think, it was never even mentioned, I never even heard it until I went over to visit with the Queen.”
It was during his state visit, in June 2019, that he did say that “everything is on the table [in any future trade deal]. So the NHS or anything else”, although some accounts suggested that his comments may not have been fully thought through as Theresa May had to explain what the NHS actually was. This view was reinforced by the US Ambassador, Woody Johnson, a scion of the Johnson & Johnson family, currently embroiled in the opiate scandal in the USA. He said that “I think the entire economy, in a trade deal, all things that are traded would be on the table.” When he was asked if that included healthcare, he replied “I would think so.” When it became clear just how toxic this message would be in the UK Trump rolled back, saying “I don’t see [the NHS] being on the table … That’s not trade”.
So what is happening? The secrecy that surrounds the UK approach to Brexit means that, other than when its confidential documents are helpfully leaked, it is very difficult to know what policies are being pursued. The problem is accentuated by how the Withdrawal Agreement continues to consume vast amounts of energy within Whitehall, leaving little space for any work on future trading arrangements with anyone. Indeed, until the Withdrawal Agreement and Transition Period are in place, it will be impossible to have any idea what will happen. It is, however, possible, to identify several things that are very unlikely to happen.
We can start with the question of whether the NHS is “for sale”. As with so much about Brexit, the debate has proceeded on the basis of soundbites, perhaps because so few of those commenting understand the details, which are remarkably complicated. In this case, there has been a striking reluctance to explain what is meant by “the NHS”.
Would American health insurers seek to take over NHS funding, perhaps charging premiums based on age or previous illness, and maybe even excluding pre-existing conditions? One could envisage a situation post-Brexit in which a much poorer UK, as predicted by all serious economic forecasts, would allow the NHS to slowly wither, driving those who could afford it to purchase private insurance. Or maybe American corporations could take over the delivery of services, buying hospitals and clinics, perhaps using the power generated by creating local monopolies to drive up prices?
There are, however, several problems. First, the complexities of negotiating a deal for trade in services are enormous and, even within the EU, the single market is not complete. A helpful briefing by the House of Commons library sets out the issues clearly, highlighting the challenges ahead. But perhaps more importantly, the UK spends far less money on healthcare than the USA. In 2017, the USA spent US$10,224 per head compared to US$4,246 in the UK. It would be extremely difficult for those corporations to achieve anything like the same level of profits they get at home. There is, however, another way. That is to seek to carve out profitable niches, as has already been done in the UK by private providers in areas like specialist adolescent mental health. This can be problematic, as the sums involved leave little for those who are dependent on services that remain with NHS providers. Overall, however, the threat is probably limited.
What is a concern is pharmaceutical pricing. This has shot onto the political agenda following a Channel 4 Dispatches programme which revealed that UK officials had engaged in discussions on pharmaceutical pricing with US counterparts. The US government has made clear that it sees the existing system of NHS drug procurement, which makes most pharmaceuticals far cheaper in the UK, as a barrier to trade. The UK government denied that this was being discussed but insiders were quoted that this was a semantic distinction as the talks were being packaged as being about “innovation”.
But would any government ever agree to something that could lead to a massive increase in NHS costs while delivering no improvement in healthcare? It seems completely implausible. But that is only if you have missed what happened in Australia in the early 2000s. US trade officials negotiating the first US-Australia trade deal saw the Australian Pharmaceutical Benefits Scheme (PBS) as a barrier to trade. US legislation required them to eliminate any measure that would “deny full market access for United States products”. The PBS, created in the 1940s, rewarded companies for innovating while controlling prices. It remains extremely popular.
The Australian Liberal government denied that the PBS was up for negotiation. But it was, albeit in an Annex, with provisions for the situation to evolve. Subsequent discussions by the Medicines Working Group set up under the agreement facilitated this process. As with the current discussions between the USA and UK, the focus was on rewarding innovation. Eventually a solution was found by separating drugs covered by the PBS into two groups, F1, covering drugs available as a single brand, and F2, covering the rest. Those in F1 were protected from pricing comparisons with similar products in the F2 category, with important implications for the cost to the PBS. This process was shrouded in secrecy, only being revealed by Freedom of Innovation requests, although responses were often heavily redacted. Australia is not alone. The US-Korea trade deal includes provisions that seek to counter any attempt to establish a mechanism similar to the PBS. The Australian example seems to offer some compelling similarities with what is happening with the UK now.
But will any of this ever happen? In his call to Nigel Farage, Trump also expressed the view that a future UK-EU trade deal would prevent the signing of a UK-US deal. Here, Conservative and Labour politicians are united in opposition, with the former portraying such a deal as an opportunity and the latter as a threat. US trade negotiators have a long list of demands, not only on drugs but also on food standards and much else. But most of what they want would be incompatible with the level playing field that will be necessary for more than the most basic deal with the EU. When you add the complexities created by the Irish border, and especially the Good Friday Agreement, whose protection is a clear red line for the US Congress, it is very difficult to envisage any meaningful any deal with the US in at least a decade, if not more.
Donald Trump’s intervention on the NHS dominated the British media the following day. Yet, as is surely obvious, what he says one day will often be contradicted soon after, sometimes with a denial that the original statement was ever made. Someday it will be necessary to move the Brexit debate beyond the soundbites to get stuck into the detail. And when this happens, the sound of reality smashing into walls will echo loudly around Whitehall and beyond.
Martin McKee is professor of European public health at the London School of Hygiene and Tropical Medicine.