Health Service Medical Supplies (Costs) Bill
Wednesday 15th March 2017
(7 years, 8 months ago)
Commons ChamberHealth Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 15 March 2017 - (15 Mar 2017)
17:06 - The House divided: - Ayes: 288 / Noes: 241 - Question accordingly agreed to.
Madam Deputy Speaker (Natascha Engel)
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 1, 2, 18, 19 and 21. If the House agrees them, I will cause an appropriate entry to be made in the Journal.
Before Clause 1
Duty to have regard to the life sciences sector and access to new medicines and treatments
The Minister of State, Department of Health (Mr Philip Dunne)
I beg to move, That this House disagrees with Lords amendment 3.
Madam Deputy Speaker
With this it will be convenient to discuss Lords amendments 1, 2 and 4 to 24.
Mr Dunne
I remind the House of the importance of this Bill. NHS spending on medicines is second only to staffing costs. The NHS in England spent more than £15 billion on medicines during 2015-16, a rise of nearly 20% since 2010-11. With advances in science and our ageing population, the costs will only continue to grow.
The UK has a lot to be proud of: we have a world-class science base and an excellent reputation for the quality and rigour of our clinical trials and the data they produce. The UK has one of the strongest life sciences industries in the world, generating turnover of more than £60 billion each year. Indeed, it is our most productive industry. The Government are deeply committed to supporting it to flourish and, in doing so, to provide jobs and transform the health of the nation.
In the 2016 autumn statement, an additional £4 billion of investment in research and development was announced, specifically targeted at industry-academia collaboration. We expect the life sciences industry to be a substantial beneficiary. That comes on top of measures such as the patent box and the R and D tax credits that the Government have introduced to encourage investment from innovative businesses.
That determined action is reaping rewards. The UK ranks top among the major European economies for foreign direct investment projects in life sciences. Last month, the Danish drugs company Novo Nordisk announced a new £115 million investment in a science research centre in Oxford. That comes on top of an additional investment of £275 million announced by GSK last June and AstraZeneca reaffirming its commitment to a £390 million investment to establish headquarters and a research centre in Cambridge—it is good to see the hon. Member for Cambridge (Daniel Zeichner) in his place. Looking ahead, Professor Sir John Bell, the regius professor of medicine at Oxford, has agreed to lead the development of a new life sciences strategy for the long-term success of UK.
At the same time, it is important that we secure better value for money for the NHS from its growing spend on medicines and other medical supplies. I remind the House that, overall, the Bill will do three things. First, it will enable us broadly to align our statutory scheme for the control of prices of branded medicines with our voluntary scheme, by introducing the possibility of a payment percentage for the statutory scheme. That could deliver £90 million of savings annually for the NHS. Secondly, the Bill will give us stronger powers to set the prices of unbranded generic medicines if companies charge unwarranted prices in the absence of competition.
Thirdly, the Bill will give us stronger powers to require companies in the supply chain for medicines, medical supplies and other related products to provide us with information. We will use that information to operate our pricing schemes, to reimburse community pharmacies for the products they dispense and to assure ourselves that the supply chain of specific products provides value for money for the NHS and the taxpayer.
During the Bill’s passage through the other place, the Government tabled 23 amendments, following debate and discussion in this House and with peers. I firmly believe that those amendments make it a better Bill. However, I will start with Lords amendment 3 and set out the reasons why it does not improve the Bill.
Lords amendment 3 would introduce a duty on the Government, in exercising their functions to control costs, to have “full regard” to the need to
“promote and support a growing life sciences sector”
and the need to ensure that patients have access to new medicines. The amendment would undermine one of the core purposes of the Bill by hindering the ability of the Government to put effective cost controls in place. Controlling the prices of medicines cannot, in itself, promote the interests of the life sciences sector and deliver growth. Having such a requirement in legislation could encourage companies to bring legal challenges where the cost controls have not, in themselves, promoted growth in the life sciences industry. That could significantly hinder the Government’s ability to exercise their powers to control costs effectively.
For example, if the Government were to take action to control the price of an unbranded generic medicine, because it was clear that the company was exploiting the NHS—several examples of that have been raised throughout the Bill’s passage through this House—it could be argued that that action did not promote the life sciences sector, because every generic drugs manufacturer could argue that it is a life sciences company. Nevertheless, that would, of course, be the right thing to do for the NHS, for patients and for taxpayers. Lords amendment 3 would enable companies to challenge any action by the Government to control costs by arguing that proper regard had not been paid to supporting a growing life sciences industry. The amendment would therefore make it more difficult to control costs, including where companies seek to exploit the NHS over and above the interests of patients, clinicians and taxpayers.
I say gently to those on the Labour Benches that it is ironic that they talk tough on the pharma companies, which they claim in other forums routinely seek to exploit the NHS, when today they are arguing the cause of the industry by supporting an amendment that would provide it with a legal stick with which to challenge the NHS when it seeks to control the costs of drugs, some of which, as they acknowledge, are exorbitantly priced. I therefore have to ask the hon. Member for Ellesmere Port and Neston (Justin Madders): whose side is Labour on?
The Government are seriously concerned that Lords amendment 3 has the potential to impact negatively on our ability to control costs. I do not expect that that was the aim of well-intentioned Members in the other place. I hope both Houses agree that it would be damaging to the NHS if, on every occasion that the Government deem it necessary to use their powers to control costs, the Government could be challenged for failing to give full regard to promoting the interests of life sciences companies.
The second part of Lords amendment 3 requires the Secretary of State to have full regard to the need for NHS patients to benefit from swift access to innovative medicines that have been recommended by the National Institute for Health and Care Excellence through its technology appraisals. However, NHS commissioners are already legally required to fund drugs and other treatments recommended in NICE technology appraisal guidance, normally within three months of final guidance. The Secretary of State’s power to control costs is a completely separate process. Therefore, this part of the amendment would not achieve anything.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Minister is of course absolutely right on the primacy of NICE in this matter, but today the NICE board will be imposing a budget threshold of £20 million a year, which would have the effect of at least delaying or possibly preventing the roll-out of new medicines. Does he share my concerns, particularly in relation to cancer drugs?
Mr Dunne
My hon. Friend is right to point out that NICE is considering today in its board meeting thresholds for the introduction of new medicines. What I would not do, however, is share his concern that it will necessarily lead to delay in their take-up. In essence, it will provide NHS England with greater commercial flexibility to negotiate with drugs companies that propose to introduce a drug that may cost more than £20 million in a full year. It will give NHS England more time to negotiate a lower price with the pharma company. That should not, in and of itself, lead to either delay or less take-up.
I am aware of the concerns, expressed by my hon. Friend, other Members and some charities in a national newspaper today, about the joint NICE and NHS England consultation on the proposed changes to the appraisal and adoption of new technologies. There have been suggestions by Opposition Members that this is rationing of NICE-approved medicines. I assure the House that that is not the case. Patients will continue to have the right to NICE-recommended drugs, as enshrined in the NHS constitution. The proposals are intended to ensure that patients benefit from even faster access to the most cost-effective treatments, while addressing issues of affordability as well as effectiveness.
Let me be very clear: Lords amendment 3 would not impact on the proposals; the NHS will continue to fund a product approved by NICE, in line with NICE recommendations. I also remind Members that NICE and NHS England are making the changes to address concerns about the affordability of high-cost new drugs and other technologies that were raised by the Public Accounts Committee, which is chaired by the hon. Member for Hackney South and Shoreditch (Meg Hillier).
I have read the suggestion by the Opposition that the NICE and NHS England proposals would be contrary to our intent to increase the uptake of new medicines. As I said to my hon. Friend the Member for South West Wiltshire (Dr Murrison), that is false. In reality, last year saw spend on medicines grow more quickly than in any of the past 10 years, as we seek to secure rapid access to new medicines for patients.
Access to medicines is primarily dependent on clinicians’ choices about what is best for their patients. Clinicians need to be aware of new medicines and persuaded that they may be a better option for their individual patients, taking into account other conditions each patient may have and other medicines they are taking. We need to change the culture and behaviour of those clinicians who may be reluctant to use innovative medicines, and legislation is not the right way to effect behaviour change in the NHS.
Bob Stewart (Beckenham) (Con)
I want to ask a layman’s question: if NICE approves a drug, is the NHS necessarily required to buy it?
Mr Dunne
The short answer is yes, it is. That is set out in the NHS constitution. The measures considered by the NICE board today provide some additional flexibility for NHS England in its handling of negotiations with the drugs companies over the introduction of new technology.
Let me conclude on amendment 3 by saying that the Government strongly believe that it would have a negative impact on the Government’s ability to operate price controls, so I ask Members to disagree with it.
I will deal briefly with the other amendments. Lords amendments 1 and 2 and amendments 4 to 24 were made in the other place. They are all amendments that the Government brought forward, having worked constructively with parliamentarians on improving the Bill.
Amendments 1 and 2 relate to the remuneration for persons providing pharmaceutical services in England and Wales respectively. The amendments provide for new regulation-making powers in respect of special medicinal products. These are unlicensed medicines that can be manufactured or imported to meet a patient’s individual needs when no licensed product is available.
The unique nature of specials—the hon. Member for Central Ayrshire (Dr Whitford) mentioned them during our consideration in this place—and their manufacturing arrangements mean that we need to do more to ensure that the prices paid by the NHS represent value for money for all these products. These amendments would enable England and Wales to develop options that will secure improved value for money—for example, by using a quotes system that has been trialled in Scotland, but there are also other options. We will consult the community pharmacy representative body on how best to take this forward.
Amendments 4 to 7 introduce a consultation requirement on the Government with regards to medical supplies. Again, the hon. Member for Central Ayrshire helpfully pointed out that such a requirement was in place for medicines, but not for medical supplies. I thank her for engaging with me and my officials, which has helped to improve the Bill.
The Government have listened to concerns in the House of Lords and in this House about the Government’s power to control the prices of medical supplies. These amendments would ensure that the first order to control the price of any medical supply would be subject to the affirmative procedure, giving both Houses an opportunity to discuss that order.
Amendments 8 and 9 and 15 to 17 are amendments to the information powers in the Bill. Responding to concerns from industry about the potential burdens of the proposed information power, they introduce an additional hurdle for the Government to obtain information by requiring them to issue an information notice whenever they require companies to provide cost information related to individual products, which can be appealed by the company concerned.
John Redwood (Wokingham) (Con)
One problem in coming to a fair price for a new drug—we want to reward the company for its innovation, but without being ripped off—is knowing what kind of production run or demand there might be for it. Is there any way that the NHS could get better at forecasting what its volume might be, as that might drive the price down?
Mr Dunne
As ever, my right hon. Friend, who is a champion of market solutions to some of these tricky problems, lights on an important point. We need to be better at trying to predict the take-up of medicines. Of course, until a new medicine has been introduced, it is very difficult to assess that, because it requires clinicians to get behind the product and to choose to prescribe it. He is absolutely right that we need to look at the way in which we model in order to have a negotiation with the pharmaceutical company that ensures that we build in as good a volume as we are expecting to maximise our prospects of getting the best price.
Let me return to Lords amendments 8, 9 and 15 to 17. When the Government ask a company to provide straightforward information about prices and other transaction costs or overall costs, there is no need for an information notice. The rationale is that there could be a significant burden on companies to provide product-level cost information. Any such request should be made only in exceptional circumstances—for example, in order to set the price of an unbranded generic medicine, when the Government would need insight into the costs and profits associated with the specific product.
Justin Madders (Ellesmere Port and Neston) (Lab)
I support the Lords amendments. I believe that they will improve the Bill significantly, and that they draw on many of the points that Opposition Members made during its earlier stages.
When I was asked to lead the debate for the Opposition—it was the first time that I had done so on a Government Bill—I was assured by my colleagues that this Bill was relatively short, but by comparison with the legislation that we passed on Monday, it strikes me as something of an epic. I only hope that we have more success today than we did on Monday with the amendments that were passed in the other place. As with that other Bill, however, the length of this Bill should not in any way detract from its importance. The exploitation of loopholes by a small number of unscrupulous companies left the Government with no option but to act, and we agree with the thrust of the Bill. We welcome the Lords amendments, both those that the Government are supporting today and the amendment relating to a duty to have regard to the life sciences sector and access to new medical treatments.
Let me first deal with the matters on which there is agreement. Lords amendments 1 and 2 relate to special medicinal products. They will do much to improve the reimbursement for specials, given that the current arrangements are in many cases failing to secure value for money for the taxpayer. As the Minister will know, there is a significant price variation between hospital and community care, with the result that many patients are currently denied access to some specials. The amendments could lead to significant savings throughout the NHS by introducing a more cost-effective whole- market procurement system, as well as having the potential to improve access to treatments. I am pleased that there now appears to be cross-party consensus that action is needed. However, I would welcome confirmation from the Minister that any savings made as a result of the amendment will be used to improve access to specials and other new treatments, rather than simply being returned to general budgets.
We also support Lords amendments 4 to 7, which relate to medical supplies. They add a much needed duty to consult before introducing secondary legislation to control the prices of medical supplies. That goes some way to addressing widespread concerns throughout the sector about the failure to engage before measures relating to medical supplies were introduced in the Bill. Lords amendment 7 would subject the first order to control the prices of medical supplies to the affirmative procedure. That means that if the Government wanted to introduce a new pricing scheme, they would have to convince Parliament that there was a case for doing so.
When we last debated these issues, concerns were expressed that the Government were asking us to give them powers in respect of medical supplies, but were not in a position to tell us how they might be used. The amendment does much to allay those concerns by giving a further opportunity for challenge should Ministers wish to exercise those powers. We are pleased that the Government have given some ground in that regard.
We also welcome Lords amendments 8 to 10, which introduce a trigger mechanism for information-gathering powers. These amendments make it clear that the Government would be required to issue an information notice before they could collect certain types of information. Amendment 9 sets out in detail what information would need to be provided, as well as the related form, manner and timings. Importantly, it would also introduce a right of appeal for those served with an information notice. This again goes some way towards resolving the concerns that we set out in this place about the potentially onerous effect of the new information-gathering powers.
Lords amendments 11 to 14 relate to the provision of information to Welsh Ministers and stem from the recommendations of the Delegated Powers and Regulatory Reform Committee in the other place. We welcome these measures, which I understand also have the support of the Welsh Assembly. We also support the remaining amendments, which are consequential.
That leaves us with amendment 3, which would introduce a duty on the Government when implementing the legislation to have regard to the life sciences sector and access to new medicines and treatments. This measure received cross-party support in the other place and I am disappointed that the Government intend to oppose it today.
We strongly support the core of the Bill, which seeks to close loopholes and to secure better value for money for the NHS from its negotiations with the pharmaceutical sector. However, if amendment 3 does not form part of the final legislation, the Bill will be looked upon as a missed opportunity.
The likely departure of the European Medicines Agency raises extremely worrying questions about the future of the life sciences and the pharmaceutical industry in this country. It is reported that up to 20 other countries are now queuing up to host it after it leaves these shores. That shows just what an attractive proposition it is for those looking to say to the sector, “This is a place to invest in.”
We have the strategic disaster of the EMA going against a backdrop of the sector’s investment in R and D already falling in recent years. Between 2003 and 2011 there was significant growth in spending in this area, eventually reaching a peak of £5 billion. However, by 2014 that had fallen to £4 billion, a reduction of 20% in just three years. We are extremely concerned that the potential loss of the EMA could see this figure fall back even further.
Over the last six years, we have ended up with the worst of all worlds: falling investment in R and D by the pharmaceutical industry and appalling rationing of treatments, leaving patients unable to access a range of medicines and treatments unless they have the means to pay for them privately. Members on both sides are beginning to find it ever more frustrating that when increasingly crude and arbitrary rationing is raised, the response from the Minister is often to agree with the concern, but simply to say that it is a matter for the individual clinical commissioning group in question. How many more times will Ministers sit and listen to huge concerns from every area of the country about treatment being denied to people in desperate situations before they finally accept that the unprecedented levels of rationing are not the consequence of a series of decisions that are unconnected and remote from Government, but a direct result of the systematic underfunding of the health service for the past seven years?
Daniel Zeichner (Cambridge) (Lab)
Does my hon. Friend agree that some of the debates in Westminster Hall and the concerns expressed by Members across the House have been prompted by the fact that the resources for new treatments have not become available in the way that was expected because, as the Secretary of State admitted, although the large amount of rebate from the pharmaceutical sector goes to the NHS, it is not being used specifically for new treatments?
Justin Madders
My hon. Friend is right to express that concern. We do not really know where this rebate has ended up, but all Members know from their personal experiences and our debates that across the board rationing is reaching unprecedented levels, particularly for new and innovative treatments. This is not just a manifestation of the financial straitjacket the health service currently operates in, nor is it just a disaster for individual patients, nor is it just an abrogation of the Minister’s responsibility to uphold the fundamental principles of the NHS; it is also a direct threat to the future prosperity of our life sciences industry. In answer to the Minister’s question about whether we are on the side of patients, I say we absolutely are. Proposed new clause 3(b) makes it very clear that we are on the side of patients, and in particular their ability to access new and innovative treatments.
It is impossible to look at the health of the pharmaceutical sector in this country without considering the central issue of access to treatments. The UK is home to about 4,800 life sciences companies and it continues to have the largest pipeline of new discoveries anywhere in Europe. We are all rightly proud of that. However, the fruits of this innovation are increasingly being enjoyed by patients in other parts of the world before NHS patients can benefit. For every 100 European patients who can access new medicines in the first year they are available, just 15 UK patients have the same access. How can anyone look at that and not say that something is going badly wrong?
As I set out in previous debates on the Bill, a recent report by Breast Cancer Now and Prostate Cancer UK showed that NHS cancer patients are missing out on innovative treatments that are available in any other comparable country to the UK. That should surely shame us all, and it looks as though the situation will get worse. A number of cancer charities estimate that the proposals by NICE to introduce a budget impact threshold could affect one in five new treatments. With one of the options available being a longer period for a phased introduction, the worry is that more patients will be denied access to those critical treatments. I thought that this Bill was meant to be the mechanism by which the cost of drugs would be controlled. Can the Minister explain the flaws in the proposed new pharmaceutical price regulation scheme that make this extra method of cost control necessary?
A debate in this place a few weeks ago drew attention to a number of breast cancer drugs, including Kadcyla, Palbociclib and Perjeta, that might no longer be funded due to changes to the cancer drugs fund. Those are but three examples. Media analysis by the King’s Fund found that there were 225 stories relating to rationing of services in 2016, compared with 144 in 2015 and 86 in 2011. There is clearly a trend developing and we need to reverse it.
We do not have much time today, so I shall draw my remarks to a close by reminding the House that this debate touches on many important issues that are all interlinked—three of them in particular. The first involves securing better value for the NHS; the second involves ensuring full and rapid access to treatments for NHS patients; and the third involves the need to support and promote our life sciences sector. The Government will not achieve any of those aims unless they adopt the right approach to all three. The Bill aims to put in place a system that will deal with the first of those aims, which we support. The amendment that we support today seeks to send a clear message to patients and to industry that the Government consider the other two elements equally important. That is why we are so disappointed that they are not prepared to listen to the overwhelming view expressed in the other place and support that amendment. I urge the Minister to reconsider.
Dr Murrison
I shall speak briefly to Lords amendment 3, but first I chastise the hon. Member for Ellesmere Port and Neston (Justin Madders), if I may, for his remarks about money. He is right to say that this is all about money, but I seem to remember that less than two years ago, he stood for election on a manifesto that would have had the effect of opposing the money that is currently going into the national health service, so we should not take any lessons from the Labour party on financing the NHS.
The Government are absolutely right to oppose this amendment. It looks a bit like a probing amendment, to be honest, and I am a bit surprised that it has got this far. It would subject this very good Bill to a whole shedload of judicial review. It would be a lawyers’ beanfeast. It bewilders me that people in this House who argue that the NHS needs more money, which it most certainly does, should support such a proposal when all the money would be going into the pockets of lawyers.
NHS England must fund any new drug found to be cost-effective by NICE within 90 days of that approval. This afternoon, the NICE board will approve this new measure, which will establish a budget impact threshold of £20 million. The hon. Member for Ellesmere Port and Neston is right to say that about one in five drugs will probably be within scope of the measure, and that is a cause for concern. Patients in the UK do not enjoy the full range of advanced medicines that are reckoned to be more or less routinely available in countries with which we can reasonably be compared—or if they do, they usually find that they are subject to unwarranted delays before they are treated. That is of course critical in the case of conditions such as cancer, and could well mean the difference between life and death; it will certainly mean a whole load of difference in quality of life. It is vital that we do nothing that would extend that process.
In response to my earlier intervention, the Minister gave me sufficient reassurance that the delay that the measure would introduce would be small, and that this would be an opportunity for NHS England to negotiate a lower price for these very expensive medicines. Indeed, that is the intention. Given that, I am more than happy to support the Government on this. However, any delay at all will send a signal to those in the life sciences sector; it is important that we make it clear that this will not introduce unwarranted delays in the introduction of new medicines, because frankly that would put them off. A lot of worthy work has been done recently, which has involved spending a lot of money, to support a vital part of our economy, and it would be a great pity if anything in the Bill reduced our life sciences sector’s ability to prosper in the years ahead.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I, too, welcome the principle of the Bill. We have discussed it in a lot of detail as it has gone through Parliament, and the legislative consent motion was passed by the Scottish Parliament last month. I welcome the fact that the Minister listened to our previous discussions, and I therefore welcome Lords amendment 1, which deals with specials—individually produced medicines, usually within dermatology. While the numbers involved may be small, the costs are often eye-watering. In Scotland, that process is controlled through a procurement method, but it was certainly clear that NHS England was simply being ripped off, and I am glad to see that that is being addressed.
I also welcome Lords amendment 6, which will bring in, as I suggested, a consultation on how to maintain the quality of products. We discussed surgical gloves as a perfect example. People talk about quality marks, but they are often simply manufacturing quality marks, not necessarily a mark of suitability for the task. The Medicines and Healthcare Products Regulatory Agency could be involved, or there could be some other process, but it is important that we do not drive down quality by trying to drive down price.
The main thing that we are discussing is the Government’s plan to disagree with Lords amendment 3, which would insert a new clause. The NICE board is today discussing this extra layer behind NICE. We are talking about drugs that NICE has already decided are cost-effective, and giving NHS England the ability to delay them further without negotiation. The amount of antivirals such as sofosbuvir for hepatitis C that hepatologists can prescribe is rationed, even though we know that the most important group to treat are those who are well—not those who are almost bed-bound or near the end of life with cirrhosis—because they are the ones out in society spreading hepatitis C to other people.
It is important to consider the delay, which has two aspects. The first relates to very expensive drugs, which are usually for rare diseases. Looking back, almost none of the drugs that have got through in recent years would pass the new limit. Secondly, the total of £20 million means that regardless of how effective a drug is, perhaps for a common disease, it would not get through. If someone comes up with a wonder drug for type 2 diabetes, it would hit the slowing mechanism if it cost more than £20 million because of the sheer number of people that we would be dealing with.
The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned the impact of our withdrawal from the European Medicines Agency, but while he focused on the impact on the pharmaceutical industry, the impact on the patient is much bigger. Drugs are launched in America and Europe due to the sheer scale of the market, and countries such as Canada and Australia wait longer. The UK will also wait a little longer because we will no longer be part of a market of 500 million people.
The UK may also be seen as a hostile market, because it takes three to five years for cancer drugs to get into the NHS. As other doctors in this place will know, our patients face a delay in accessing new drugs, and anyone who thinks otherwise is fooling themselves. Pharmaceutical companies will simply think, “Well, we’re not going to get into the NHS for five years, so let’s go and do Australia and Canada. We’ll come back and deal with the UK later.” That delay to licensing in the UK would be a real problem, and it would extend to Scotland, too, because at the moment licensing is a UK-wide process. The drugs would therefore not be available to us outside the European Medicines Agency.
This issue is also important to UK research. If we fall so far behind that we do not use what is considered standard treatment, we will not be able to take part in trials of standard plus new. There is an absolute need to control the cost of drugs, but perhaps we need different discussions with pharmaceutical companies about how drugs come on. We need something more radical than this to find the sweet spot between the companies getting a return on their money, the NHS controlling the cost and patients getting access.
We also need to think about realistic medicine. Not every patient even wants access to the newest chemotherapy, and perhaps we need some hard discussions, and to be much more open with patients about what a drug will and will not do.
Question put, That this House disagrees with Lords amendment 3.