Draft Prevention of Trade Diversion (Key Medicines) (EU Exit) Regulations 2020
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
I beg to move,
That the Committee has considered the draft Prevention of Trade Diversion (Key Medicines) (EU Exit) Regulations 2020.
Mr Hollobone, it is a great pleasure to serve under your chairmanship. I hope the Committee will prove unanimous in its support for the draft regulations and their objective. The regulations perform a laudable function: they will ensure that pharmaceutical companies in Great Britain can continue to produce and sell certain medicines to developing countries at a low cost to help fight key diseases such as HIV and malaria, without the potential drawback of these medicines being reimported into Great Britain for sale at a price lower than the domestic market price.
Many of the poorest developing countries are in urgent need of access to affordable essential medicines for the treatment of communicable diseases and are heavily dependent on imports of medicines, as local manufacturing is limited. Price segmentation between developing and developed countries is necessary to ensure that the poorest developing countries have access to essential pharmaceutical products at heavily reduced prices, while ensuring that fair market prices in wealthier markets incentivise drug development and investment.
Gareth Thomas (Harrow West) (Lab/Co-op)
Will the Minister set out for us whether the list of drugs covered by the regulations will be exactly the same as under the current EU regulation?
Graham Stuart
I can so confirm. This is a technical statutory instrument and has no policy content as such.
Pharmaceutical manufacturers will produce large volumes of pharmaceutical products at reduced prices for the developing world only if they are assured that these products will not find a way into developed countries’ markets afterwards. The regulations will correct deficiencies in legislation to establish a procedure that identifies the products, countries and diseases covered and prevents the reimport of such products through seizing and disposing, in accordance with national legislation.
Gareth Thomas
One small but potentially significant difference between this SI and the EU regulation it supersedes is that, under the EU regulation, drugs sold only in developing countries have to be marked differently to those sold here. That is not in the current draft of the regulations. Why the change?
Graham Stuart
I am grateful to the hon. Gentleman for his question. I look forward to responding in due course, when suitably refreshed on that important technical point.
The regulations were laid before the House on 2 September and are made under powers in the European Union (Withdrawal) Act 2018. The Committee knows that, given the context, those powers are limited; all that they allow is the correction of technical deficiencies in existing EU law that, by the operation of the Act, were retained in UK law following withdrawal. The draft regulations correct such deficiencies by, for example, replacing references to the European Union, its institutions and legislation with the appropriate UK references. This statutory instrument follows the affirmative procedure because it transfers to the Secretary of State a power that currently sits with the European Commission.
Gareth Thomas
I am grateful to the Minister for his answer to the previous question. The reason it is important is that the markings on the drugs for sale to developing countries potentially make it easier for customs authorities to seize those drugs, recognising that they should not be being sold back into a developed country. However, the draft instrument also does not include the requirement for Ministers—as the previous EU regulation did for the European Commission—to publish a report on the export numbers of drugs. Again, why the change?
Graham Stuart
Obviously, the references to the EU Commission are no longer relevant, and there is therefore no requirement to notify the Commission as under the previous set-up.
Gareth Thomas
My apologies—perhaps I did not make the question clear. It is perfectly reasonable that there is no need to reference the EU Commission, but there is surely a need to report on the number of drugs affected in this way. There is no requirement in the draft instrument, as there is in the EU regulation that it supersedes, for such a report. I simply ask why there is no need, in the Minister’s view, for a report on the number of drugs exported under the draft regulations.
Graham Stuart
I thank the hon. Gentleman again. It is worth noting that no drugs have been added to the list under the regulation since 2004. The numbers we are talking about are relatively limited and, as I said, the Commission element is redundant. I am happy to follow up on any need to make sure that the numbers are there and that we remain as transparent in the future as we are today.
The statutory instrument follows the affirmative procedure because it transfers to the Secretary of State a power that currently sits with the European Commission—the power to amend the list of pharmaceutical products covered under the regulations and the criteria for products to remain on that list. The statutory instrument also replaces the requirement that pharmaceutical products, packaging and connected documents should be affixed with an EU logo, with a power for the Secretary of State to make regulations providing for marking, labelling or other identification requirements. I commend the regulations to the Committee.
Graham Stuart
I congratulate the hon. Member for Harrow West on his speech, which did two things. First, it thoroughly examined the SI and, secondly, having built that base and confidence with you, Mr Hollobone, it included issues that would adorn any general debate in the House of Commons on health, perhaps straying somewhat beyond the highly technical and specific elements of the regulations. I will respond only to the bits that have some relevance to the SI that we are discussing, notwithstanding the fact that it was an excellent speech and touched on important matters that should, as the hon. Gentleman rightly said, be debated elsewhere.
The hon. Gentleman raised the lack of specialists. We recognise that; he is entirely right. That is why we will work closely with the Medicines and Healthcare Products Regulatory Agency to assess any medicinal information provided by manufacturers or exporters, to ensure that all considerations are given appropriate weight. He will be aware that the Government not only are the first ever—if we are stretching beyond the immediate remit—to meet the 0.7% target for aid spending, but are generously and fully funding the WHO. We will consult as appropriate across the piece.
The hon. Gentleman mentioned roll-over agreements in Africa. I am not aware that there are any practical implications, but if there are any, on further consideration following this debate, I will write to not only the hon. Gentleman but all Committee members so that they are aware of them.
As the hon. Gentleman will be aware, the Secretary of State can make regulations under the SI. On the issue of labelling, the only thing that we are removing is the EU logo. Manufacturers will be able, as now, to work with the appropriate authorities to ensure that their product is suitably differentiated. They have every interest in doing so. Whatever mark they may find best to do so will continue to be supported. As I say, we will have the power to make regulations if further action were to be appropriate, but at the moment we do not think it will be.
Matt Western (Warwick and Leamington) (Lab)
How frequently will labelling be reviewed by the Secretary of State, and on what products?
Graham Stuart
I think I can suggest that it will never be reviewed, unless or until someone raises it as an issue, which is most likely to be the companies whose interests we are seeking to protect. We will keep an open mind. We have the power to do these things, and if any problem arises, we will swiftly seek to make changes to ensure that the regime continues to work as successfully as the hon. Member for Harrow West made clear it has to date.
I think “Fire in the Blood”, the Government’s broader role in procurement, tiered pricing and covid go way beyond this SI, which I hope, as has been made clear, everyone in the Committee is happy to support. I am grateful to all hon. Members for attending today and to the hon. Gentleman for, as I knew he would, giving the regulations a characteristically thorough examination.
Question put and agreed to.