Gene Editing: Agriculture and Medicine

Debate between Baroness Wheeler and Lord O'Shaughnessy

Monday 27th March 2017 Lords Chamber

[Lord O’Shaughnessy]

My noble friend is right to highlight the potential of gene editing by referring to that life-saving treatment of a girl with leukaemia. We have a world-leading regulatory climate and there are strict rules governing research in this area: for example, research involving the use of embryos is allowed up until 14 days but not beyond. We should certainly carry on with that research—indeed, we have a more permissive regulatory environment than in much of the world. As my noble friend rightly points out, we need to do that with the purpose of respecting life and of course reducing harm, driven by the desire to do so.

[Baroness Wheeler (Lab)]

My Lords, HIV has been mentioned. The Minister will know that the results from the gene-editing clinical trial for people who are HIV positive have shown promise, particularly regarding the use of zinc fingers, which can find specific sites in DNA that can then be edited. Research is in its very early stages but has shown the potential to increase resistance to the virus, with the ultimate goal of weaning some people off antiretroviral drugs. What are the Government doing to support and take forward this important research?

[Lord O’Shaughnessy]

As we have discussed, there is huge potential regarding illnesses such as HIV. Clinical trials of gene therapies involving gene editing are still at an early stage, and are receiving support from the National Institute for Health Research. Any applications that go beyond the experimental and research stage would inevitably have to go through the Medicines and Healthcare products Regulatory Agency regarding safety and clinical potential. So the right system exists, investment is taking place at the early stage of research and before anything is done to any scale, it must be subject to the proper discussion and scrutiny.

Social Care in England: Older People

Debate between Baroness Wheeler and Lord O'Shaughnessy

Monday 20th March 2017 Lords Chamber

[Baroness Wheeler]

To ask Her Majesty’s Government what is their response to Age UK’s report on the state of social care in England The Health and Care of Older People in England 2017.

[The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)]

My Lords, social care is a priority for this Government. That is why the Chancellor announced that local authorities in England will receive an extra £2 billion for social care in the next three years. This funding will allow councils to support more people, sustain a diverse market and ease pressures on the NHS.

[Baroness Wheeler (Lab)]

My Lords, before I respond, on behalf of the whole House I congratulate Dame Vera Lynn on her 100th birthday. I was not born during the war but as a post-war child I remember how people spoke and felt about her, and I send her our warm thanks.

Back to business. The Age UK report gives a very sobering picture of the scale of the unmet demand and likely future demand for social care, and the Minister knows that the extra £2 billion he spoke of spread over the next three years is the shortest of short-term solutions. I want to focus on the report’s assessment that the number of older people with unmet social care needs—defined as whether someone can carry out everyday activities such as washing, dressing, eating and using the toilet—has now grown to 1.2 million. This is an 18% increase since last year and nearly a 50% increase since 2010. It means that one in eight older people is living with some level of unmet need regarding vital everyday tasks. Can the Minister confirm that the Government’s Green Paper will acknowledge this level of demand and need, and that their long-term funding solutions will have to address this issue, as well as the provision of long-term care?

[Lord O'Shaughnessy]

The noble Baroness is quite right that there is a growing need for care for older people because of our ageing and growing population. I am sure she welcomes the additional funding announced in the Budget. It brings to over £9 billion the additional funding announced since 2015 for social care for the next three years, and that will make a big difference to meeting the kinds of care needs that she is talking about. She talked about the difference between the short term and the long term. That is why the other crucial part of the Budget announcement concerned the Green Paper. This will be ambitious in scope, with the intention of creating a fairer and more sustainable system of the kind I am sure she wants to see.

NHS: Sustainability and Transformation Plans

Debate between Baroness Wheeler and Lord O'Shaughnessy

Monday 20th March 2017 Lords Chamber

[Lord O’Shaughnessy]

My noble friend is quite right to bring the attention of the House to the effect of standards. The Care Act 2014 introduced for the first time national standards as well as much greater transparency in the provision of care. What the announcement in the Budget of additional funding for social care allows for is particularly a focus on the interface between the NHS and social care, which is where the issue of delayed transfers can arise. I can provide my noble friend with a reassurance that the Green Paper will be looking at this issue in the round, carrying on from the work done in the Budget to try to address the interface between the social care and health systems.

[Baroness Wheeler (Lab)]

My Lords, what is the Minister’s response to the key questions asked in the recent King’s Fund progress assessment on how STPs are to be funded and how integrated care is to be delivered in the context of having, in its words, a,

“‘workaround’ … of the complex and fragmented organisational arrangements that are the legacy of the Health and Social Care Act 2012‘”,

and when the NHS is under huge pressure to make £22 billion of efficiency savings and to improve performance? Does this not show that the thinking and modelling behind STPs are deeply flawed?

[Lord O’Shaughnessy]

I am sorry to hear the noble Baroness say that about the STPs, which have received support from the King’s Fund and NHS clinical commissioners. I hope that she is also aware that in the Budget the Chancellor announced £325 million of capital spending to support the strongest STPs, those which are capable of providing the kind of integration she has talked about and are delivering the highest levels of performance.

Adult Social Care: Funding

Debate between Baroness Wheeler and Lord O'Shaughnessy

Thursday 16th March 2017 Lords Chamber

[Lord O'Shaughnessy]

The issue of children’s palliative care came up in the debate the other evening on palliative care. A review is taking place with the charitable sector of the distribution of funding, particularly for children’s hospices, over the next year. In terms of children’s social care—this may come as a surprise to some noble Lords; it certainly did to me—the fastest-growing part of the adult social care budget is for adults with learning disabilities. Of course, that often comes in at the point at which people leave the children’s social care system and the school system and move into the adult social care sector, so there is an important point about continuity from one to the other.

[Baroness Wheeler (Lab)]

My Lords, does the noble Lord accept that the domiciliary care of people in their homes is in deep crisis, with 400 care home businesses declared insolvent since 2010? Large providers such as Mitie have recently been selling their home care health business—it sold it off for just £2, plus a £10 million pay-off to the new outsourcing firm for business trading losses and other costs. What impact do the Government assess that the £2 billion Budget cash spread over three years will have on halting home closures and reducing the risk of industry collapse? Will the future Green Paper look at finding a new, more sustainable model for providing and funding residential and domiciliary care?

[Lord O'Shaughnessy]

The noble Baroness brings up the issue of care homes closing. Inevitably, there is churn in the system. There has been a stable number of residential care home and nursing home beds, which is one metric. The other is the fact that there are many more home care agencies, with a lot more domiciliary care going on, and over 150,000 more social care jobs, so I do not think that the picture is quite as the noble Baroness described it. However, making sure that we have a sustainable system is at the heart of the Green Paper plans.

Hospital Beds: Availability

Debate between Baroness Wheeler and Lord O'Shaughnessy

Thursday 9th February 2017 Lords Chamber

[Lord O'Shaughnessy]

My noble friend is quite right that there has been an increasing prevalence of domiciliary care, which involves carers caring for patients in their own homes. Making sure that those patients can get home at a good time that works for them and those who support them is clearly a critical part of dealing with this delayed discharge issue.

[Baroness Wheeler (Lab)]

My Lords, the Minister was talking about care workers rather than carers. He has focused on social care but Nuffield Trust research shows that the proportion of discharge delays due to the unavailability of social care has grown by 84% in six years, but also that 57% of delays occurred because of problems in the NHS itself. This is because of a lack of local NHS community or rehabilitation services, and of the availability of home support therapies or access to diagnostic and other services. Are STPs going to be able to tackle this, given the scale of cuts that will need to be made? Is the Minister confident that last year’s NAO report, which warned that the Department of Health and NHS England rely “too easily” on differing local circumstances as a “catch-all excuse” for not improving NHS performance, is being addressed?

[Lord O'Shaughnessy]

The noble Baroness is quite right that there is increasing pressure on the health service. There have been 3.5 million more hospital admissions in the last 10 years and 2.4 million more A&E attendances in the last five years, so there is huge extra pressure. The number of acute beds has been dropping for a long time but at a slower rate in more recent years. Clearly, making sure that the right level of community care is available—step-down or interim care between hospital and home—will be incredibly important, particularly with a growing and ageing population.

Health Service Medical Supplies (Costs) Bill

Debate between Baroness Wheeler and Lord O'Shaughnessy

Report stage (Hansard): House of Lords
Tuesday 7th February 2017 Lords Chamber

[Baroness Wheeler (Lab)]

My Lords, I am the third person to congratulate the Minister. I add the support of these Benches for these amendments, which address unlicensed special medicines, and I congratulate the noble Baroness, Lady Finlay, on her tenacity in pursuing this issue and securing an important concession from the Government. I am sorry she cannot be here, but we can be pretty sure she will be reading Hansard to make sure we have got it right.

It has been hard to understand why the Government were refusing to recognise the need for urgent action on medicinal specials, particularly in view of the substantial price variation between hospital and community care, the many patients in community and primary care who are currently denied access to some specials, and the potential savings across the NHS that introducing a cheaper and more cost-effective whole-market procurement system will provide.

We are very pleased that the Minister has now recognised the need for the Bill to address this important issue in England and Wales. I welcome the legislative framework he has presented. As he pointed out, he has an extensive consultation exercise to conduct on all parts of the Bill, and this will certainly be included in that.

[Lord O'Shaughnessy]

I am truly touched to have been thanked personally by proxy by two noble Baronesses. I am grateful for that, and I am grateful for the support for these amendments, which are a testament to the tenacity of the noble Baroness, Lady Finlay.

I do not think it is quite fair to say that the Government did not recognise the need for action. The amendments tabled by the noble Baroness, Lady Finlay, disinterred a work programme that had been put on pause in order to deal with the Bill and discovered that lots of interesting work and thinking was going on, so we have been able to bring that to the fore, which is a fantastic thing, and the way legislation should work.

Residential Care

Debate between Baroness Wheeler and Lord O'Shaughnessy

Monday 6th February 2017 Lords Chamber

[Lord O'Shaughnessy]

The most important thing when providing care is that it is in a setting that people want and feel comfortable with. There is, of course, a trend towards more domiciliary and supported housing for precisely that reason.

[Baroness Wheeler (Lab)]

My Lords, what is the Minister’s view of Disability United’s recent FOI finding on NHS continuing care that a large number of CCGs are saying they will not support the care of chronically ill people in their homes if it is cheaper for them to be in residential care? How does this sit with the reality of the state of the residential care industry, with bed shortages in many areas so that patients cannot be transferred from hospital, and with the Government’s aim of giving chronically and terminally ill people choice about where they want to be cared for, particularly at the end of life?

[Lord O'Shaughnessy]

The noble Baroness makes a very good point. There is clearly a need for additional capacity, because there is a much greater population. The number of people aged over 85 has increased by about 25% in the last five years and that will increase at a similar rate over the next five years, so more capacity is needed both at hospital level, in residential and nursing homes, and at a domiciliary level too.

Health Service Medical Supplies (Costs) Bill

Debate between Baroness Wheeler and Lord O'Shaughnessy

Committee: 1st sitting (Hansard): House of Lords
Monday 23rd January 2017 Grand Committee

[Baroness Wheeler (Lab)]

My Lords, we tabled Amendment 7 to probe the Government on why, in their new draft regulations, with 25 pages just on the branded medicines proposals, they seek to alter the current arrangements for exempting low-cost presentations from the price-reduction requirements of the statutory scheme. As the Minister will know, the existing regulations specify as an exemption a low reimbursement price of either under £2 an item or low primary care sales to NHS England of less than £450,000 a year. The provision has been there to protect the commercial viability of low-revenue or very low-cost medicines. It therefore seems somewhat counterintuitive to remove this safeguard at a time of such significant uncertainty for the pharmaceutical industry, particularly in the face of what could be a highly disruptive withdrawal from the EU.

Under paragraph 11, the proposed revised regulations give the Secretary of State the power to exempt a manufacturer or supplier where he considers that an exemption is necessary to ensure adequate supplies of medicines for health services purposes. This changes the current arrangements to give the Secretary of State a discretionary power that he may use in certain circumstances, rather than the automatic exemption that currently operates for £2 per item or a £450,000 annual sum. The current provision is important in maintaining adequate supplies to the health service of the medicines in question.

We are concerned about the significant impact that the removal of the current arrangements will have on manufacturers producing the common, low-cost generic branded medicines in question, such as those for hypertension. Although it is not always the case, the producers of such low-cost medicines are often small businesses operating on small margins. If they are not exempted from paying a rebate on those medicines, many will struggle to maintain current low costs, resulting in a consequent rise in costs for those medicines.

It is also important that the regulations accompanying the Bill maintain a specific exemption from the statutory scheme in the case of supply shortages, as currently. Amendment 8 would therefore formally place this duty on the Secretary of State. This is particularly important given the concerns of GPs and other health professionals, who have voiced frustration about having to prescribe “second choice” medicines because their preferred drug is out of stock. Representative bodies have also expressed their concern about the removal of the current exemption.

The amendments do not call for anything new but for some of the current regulations to be maintained and—where the Secretary of State believes that there is a case for it—strengthened. I look forward to hearing from the Minister the Government’s reasons for seeking to change the current regulations. Has any work been undertaken to assess the potential impact on the future availability and cost of the medicines that will be affected, and on future supplies? Is this designed to save costs—and, if so, what is the expected level of savings to the NHS?

Noble Lords may feel that there is a case for debating the long-term place of such exemptions in the regulations, but now is clearly not the time to pull the rug from beneath the producers of low-cost medicines, or medicines at risk of supply shortages. Instead, it is important that the status quo is maintained until such time as the Government can be clear about the consequences and the benefits of any change. I beg to move.

[Lord O'Shaughnessy]

My Lords, I thank the noble Baroness, Lady Wheeler, for raising important issues through these amendments, both of which relate to the operation of the statutory scheme. I will turn to each separately.

Amendment 7 would set an exemption for low-cost presentations, defined in primary legislation as those presentations,

“of less than £2 per unit or with sales to NHS England totalling less than £450,000 per annum”.

This is similar to the exemption that exists in the current statutory scheme for presentations with a reimbursement price of less than £2.

Officials have continued to have constructive discussions with industry representatives and stakeholders throughout the consultation and since publishing the illustrative regulations. Through these discussions, my officials have been listening to views on the illustrative regulations and refining the policy approach for a future statutory scheme. I am sympathetic to the arguments that companies make in relation to these types of low-cost presentations, which could not only lead to direct savings to the NHS when compared to more expensive treatments but incentivise companies to lower prices further to meet the threshold. I reassure the noble Baroness, Lady Wheeler, that as a result of the discussions with industry, my officials are already considering a policy approach for low-price presentations.

However, the Government are not convinced that it is appropriate or desirable to have such an exemption set out in primary legislation. Setting out specific thresholds in primary legislation would be inflexible and would limit the Government’s ability to adjust them to account for the economic circumstances at the time. I can, however, commit that an exemption for low-price presentations will be included as part of the forthcoming consultation on the operation of the scheme, which will take place this year. I hope that this provides the noble Baroness and other noble Lords with the reassurance that the Government will fully consider this and take it forward.

Turning to the second amendment, Amendment 8 would place a legal duty on the Secretary of State to make provisions which “ensure adequate supplies” of those medicines in the statutory scheme. The production and supply of medicines is complex and highly regulated, involving materials and processes that must, rightly, meet rigorous safety and quality standards. These complex factors stretch far beyond those that relate specifically to medicine costs. Difficulties in ensuring supply can arise for a number of reasons including manufacturing problems, supply and demand imbalance and issues related to raw materials and regulatory action as a result of, for example, manufacturing site inspections. It is also important to remember the impact of a globalised pharmaceutical industry, which can mean that factors around the world can directly impact supplies of medicines to the UK.

However, I reassure the Committee that the Government recognise the vital importance of ensuring adequate supplies and actively manage and respond to supply issues on a daily basis. The Government have also carefully considered the supply issues in developing policy and regulation. We consider that in most cases, the ability to increase prices, as provided in the illustrative regulations, is the right way to address short or long-term supply problems, where these circumstances are dependent on UK pricing. We also recognise that there may be exceptions to this approach, which is why we included in the illustrative regulations a provision in Regulation 11 allowing the Secretary of State to exempt companies from price controls in the statutory scheme,

“where he considers that an exemption is necessary to ensure adequate supplies of that presentation for health service purposes”.

I understand and am sympathetic to the intention behind the amendment and concerns relating to the supply of medicines in the statutory scheme. However, given the complexities in the provision and supply of medicines, we believe that exemptions for supply issues are best dealt with by exemption, rather than a comprehensive and broad duty. In responding to both amendments, I hope that I have provided the Committee with the assurance that we recognise the concerns and will address them in both primary legislation and the illustrative regulations. I ask that the noble Baroness withdraw her amendment.

[Baroness Wheeler]

My Lords, I thank the Minister for his response and for the focus that he says that he will give in future to constructive consultation with the industry. There was a feeling that it was not being consulted on these issues, and his reassurances about that are welcome. Obviously, supply in the industry is complex and I will look at what the Minister said. We are concerned about the industry’s fears about the cost of deleting these provisions and we were certainly not advocating putting them into statutory requirements but making sure that the regulations dealt with this issue adequately. For the most part, I thank the Minister for the response, and I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Wheeler]

My Lords, we very much support the intention behind this amendment and commend the noble Baroness, Lady Finlay, for her determined and dogged campaigning in highlighting this issue and trying to persuade the Government to recognise the problem. In a Bill designed to close loopholes, this is a particularly important one to address. At the same time, it would obviously save the NHS a substantial amount of money. A BBC investigation six years ago estimated a potential saving of £70 million a year just for England, so it is hard to see why the Government should not want to take urgent action now.

We have heard from the noble Baroness, and from the excellent work undertaken on this issue by the British Association of Dermatologists and other organisations, of the overall costs and substantial savings that could be made on unlicensed medicines. Addressing this issue would be to the benefit of the NHS and the many patients in community and primary care who are denied access to special order medicines because of the way in which the current procurement system operates. The anomaly is that if they were in hospital, they would have stood a good chance of being given the drug.

We have also heard how the current system can result in some suppliers charging hyperinflated costs for specials, particularly when chemists do not buy direct from a specials manufacturer but via a wholesaler which adds its costs to the price. This results in the NHS having to pay the chemist the wholesalers’ rather than the manufacturers’ price, because there is no price tariff on the unlicensed specials. Moreover, prices for specials in the primary care sector are set by reference to the Association of Pharmaceutical Specials Manufacturers, which covers private companies that generally manufacture only smaller and therefore much more expensive quantities of drugs. The whole system, which has one much cheaper and cost-effective system for hospitals and another for community and primary care, surely needs to be urgently addressed.

I ask the Minister whether consideration can be given to the Competition and Markets Authority being asked to investigate suppliers. Why have the Government not looked at and learned from the Scottish system, which takes a whole-market approach in the way that the noble Baroness proposes should operate here? We understand that the Government have proposed a six-month review of the existing and proposed arrangements, but we do not feel that this adequately recognises the urgency and scale of the problem. In the Commons, the Minister, Philip Dunne, acknowledged that the Government have existing powers to address the issue, so why is it not being addressed?

The amendment contains the important provision to require NHS England, as part of its tariff-setting processes, to seek prices from the NHS as well as private manufacturers—the whole market—and we fully support this. If the Minister would at last take the important step of recognising and acknowledging the problem, then work could commence on the procurement process required to bring the new system into effect.

[Lord O'Shaughnessy]

My Lords, I thank the noble Baroness, Lady Finlay, for the work that she has put into investigating this issue, for her amendment and, indeed, the intent behind it, which is to save the NHS money and provide a better bang for our buck. That is something that everyone would support.

I say first that it is the Government’s priority to make sure that we get the best possible results for all NHS patients with the resources we have. That is what the Bill, in its entirety, aims to do. This amendment seeks to save the NHS money on specials by requiring CCGs, hospital trusts and community pharmacies to seek no less than three quotes for non-tariff items, at least one of which should be from an NHS manufacturer and, where possible, to select the cheapest quote. It also requires NHS England to take into account prices of NHS manufacturers when setting reimbursement prices. A special is a medicine manufactured or imported to meet the specific needs of a specific patient. By nature they are bespoke, and therefore they do not have the same economies of scale during manufacture and distribution as licensed medicines. Due to the bespoke nature of specials, the costs associated with manufacturing and distribution will never be as low as the often relatively cheap components that make up the special. I say that by way of background for those who are perhaps not as familiar with the subject as the noble Baroness is.

I turn now to the idea of setting tariff reimbursement prices and including data from NHS manufacturers. In England, reimbursement prices for the most commonly prescribed specials are listed in the drug tariff. Those prices are based on sales and volume data, which the department currently obtains from specials manufacturers under a voluntary arrangement. The new provisions in the Bill would make reimbursement data more widely available and more accurate—which would clearly be a benefit in making sure we get value for money with specials. By setting a reimbursement price, we encourage pharmacy contractors to source products as cheaply as possibly because it allows them to earn a margin, which in turn creates competition in the market and, as a result, lowers reimbursement prices. Since these reimbursement arrangements were introduced in 2011, we have observed that, in England, the average cost for specials listed in the drug tariff decreased by 39% between 2011 and 2016.

In setting that out, I do not disagree with the idea that there are instances of wild variation. Indeed, I ask the noble Baronesses, Lady Finlay and Lady Wheeler, for any examples and evidence that they have. I would be keen to see them, to better understand instances where it has happened.

Basing reimbursement prices on selling prices from more manufacturers than we do now, which the Bill would allow us to do, would make our reimbursement system more robust. For specials, we currently rely on information from those manufacturers that have signed up to our voluntary arrangement. There have been talks with NHS manufacturers to provide information on a voluntary basis. However, we have not been successful so far in securing data from NHS manufacturers that we are able to use. The Bill would enable us to get information from all manufacturers, including NHS manufacturers, for the purpose of reimbursing community pharmacies—that being, of course, one of the main aims of the Bill. Once we receive data from NHS manufacturers, we will be able to assess whether it is appropriate to include it in calculating reimbursement prices. We are actively looking to see whether we can include data as part of our reimbursement price setting, and the Bill will help us to get it. Consequently, we do not need the amendment.

--- Later in debate ---

[Lord O'Shaughnessy]

My Lords, I thank noble Lords for their many amendments in this group. They cover two very important aspects of the Bill and I am grateful for the opportunity to provide further clarification.

I will look first at the issue of small and medium-sized enterprises. As noble Lords will understand, the medicines sector is very diverse, with companies ranging from the largest global enterprises with multiple interests to very small companies that manufacture specials on a bespoke basis. The Government have no intention to put unnecessary burdens on companies, and especially not on SMEs. The information that we would require them to keep, record and provide would not be more than companies are currently required to keep for tax purposes. For routine collections, we know that they are not an excessive burden on companies. We heard the director-general of the British Generic Manufacturers Association say at the evidence session for the Bill in the Commons that:

“Providing those data is not a big issue for the majority of our members because it is run from their invoicing system”.—[Official Report, Commons, Health Service Medical Supplies (Costs) Bill Committee, 8/11/16; col. 7.]


For non-routine collections, the illustrative regulations specifically make provision for SMEs, defined here as companies with a UK turnover of less than £5 million, which can provide information in the form of pre-existing information such as invoices. This is the method by which we currently collect information from pharmacies, and we know that the process places barely any burden on them. We will consult the industry on the definition of an SME and will look also at the different definitions—I am aware that multiple definitions are being used across government. We would rely on the information provisions in the Bill to be able to obtain information to operate any price and cost control schemes. This definition of an SME would make it impossible to obtain information from certain companies and, therefore, it would be much harder effectively to operate our voluntary and statutory schemes. The amendment has the effect, therefore, of limiting applications of pricing controls set out in this Bill to large companies only.

We have considered carefully the application of the statutory scheme to small companies. Our consultation last year proposed that the exemption threshold for the new statutory scheme should be set at £5 million of branded health service medicines sales. This maintains the current statutory scheme arrangement and aligns, as we are trying to do throughout the Bill, with the current PPRS. Most industry responses agreed with this proposal, and the illustrative regulations published to aid discussion of the Bill show how it would be incorporated into the operation of the scheme.

It is also important to note that this bespoke definition is focused on the level of sales rather than company turnover, ensuring that only those businesses that make branded health services medicines sales of more than £5 million a year to the NHS will be included in the schemes. On that basis, any company, including those which fall within the EU definition of an SME, will be included in the scheme only if their sales reach this threshold. Not only does this align with the current PPRS and the Government’s broader aims to support SMEs but this bespoke definition ensures that the focus is kept on sales of branded medicines to the NHS. More details are set out in the illustrative regulations for the statutory scheme that have been published alongside the Bill.

There would, however, as a result of this amendment, be additional impacts to the reimbursement of community pharmacies and GP practices, which is one of the core purposes of the Bill, and to the collection of information. Community pharmacies purchase the medicines they supply against NHS prescriptions. The drug tariff sets out a reimbursement price that they will be paid for the majority of medicines. The Government have voluntary agreements in place with manufacturers and wholesalers of unbranded generic medicines and specials. They provide us with information on their prices and volumes, which informs our reimbursement prices. As a consequence of these arrangements, the Government have been able to reimburse community pharmacies more robustly for the products covered by the arrangement.

If SMEs, whether defined as set out in the amendment or under any other definition, were excluded from the requirement to provide information, then not all manufacturers and wholesalers would be included. Reimbursement would be based on large company data alone, with the risk that the prices being paid by small and medium-sized enterprises would not be reflected in the reimbursement prices, to their disbenefit.

In order for the reimbursement system to work effectively, appropriate data are needed from all parts of the supply chain, both large and small companies. If the prices charged by larger companies were generally lower, and these would be the only prices used to inform reimbursement prices, we would be systematically underfunding community pharmacies. This in turn could drive them to purchase products from the large companies only. The effect of this could be that small companies go out of business leading to less competition.

The third purpose for collection of information is for the Government to be assured that adequate supplies of healthcare products are available and on terms which represent value for money. We recognise that this non-routine provision of information is somewhat different from that associated with reimbursement and running our price and cost control schemes, and this is exactly why we have made provisions for SMEs.

I hope that I have assured noble Lords that the burden on SMEs has been considered carefully. We have provided bespoke definitions for both the price control schemes and the information provisions, in order that requirements are placed only on relevant companies for essential information. Broader definitions would risk both the price control schemes and critically the reimbursement mechanisms failing to work as well as they do now, let alone how they could work in the future.

I turn now to the other effect of the amendment, which is to limit application of the information-gathering powers to medicines and remove medical supplies or other related products from the scope of the clause. In response to the noble Lord, Lord Warner, I will look at the use of language and definitions subsequent to our debate today and provide reassurance that that is being done in the appropriate way and not to create confusion.

The 2006 Act gives the Government powers to control the price of medical supplies, as we have discussed at length, to collect information on medical supplies and to take enforcement action in the event of non-compliance. The Bill changes the 2006 Act in relation to medical supplies by reducing the enforcement penalties from criminal to civil, and aligns medical supplies provisions with those for medicines.

Clause 6 of the Bill brings together in one place all of the information requirements underpinning the provisions within this Bill. Without that information the provisions cannot apply to those companies. Removing medical supplies and other related products from this clause would therefore mean that we would not have the necessary information to put in place and operate a price control scheme if we wanted to and take specific action against instances of unwarranted price rises that come to our attention, although I appreciate that noble Lords have concerns that those two things will never happen in reality. Finally, it would impede our ability to put in place more robust reimbursement arrangements for medical supplies provided by community pharmacies for all the reasons that I touched on in the context of small and medium-sized enterprises. That is very important information to have to ensure that reimbursement happens properly.

It is right and proper for the Government to have effective powers to gather information regarding medical supplies and other related products in order to improve our understanding of the costs across the supply chain and ensure that those are providing value for money and that we are properly reimbursing community pharmacies. The medical supplies industry is made up largely of SMEs, and my comments earlier reflect my very real concern to ensure that we ask only for essential information that does not provide an additional burden on such companies. On that basis, I ask the noble Baroness to withdraw the amendment.

[Baroness Wheeler]

My Lords, I thank the Minister for his response. Quite honestly, at this late stage, I will not go into the debates that we have already had on the issue of inclusion of non-medicines in the scope of the Bill or of the burden on SMEs. But it is hard to see from the Minister’s response how the Government can say that they are open to ideas and suggestions on how they will reduce the regulatory burden on the medical supplies industry and particularly on SMEs. The Minister knows that we remain to be convinced on this whole area. I hope that we can have ongoing discussions on this matter before Report. We will certainly return to this issue, but meanwhile, I beg leave to withdraw the amendment.