Life Sciences Industrial Strategy (Science and Technology Committee Report)

Lord Hunt of Kings Heath Excerpts

Tuesday 23rd October 2018 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I very much welcome this debate and congratulate the noble Lord, Lord Patel, and his committee on the excellence of their report. I declare an interest as president of the Health Care Supply Association and of GS1 UK, the bar-coding association. As the noble Lord, Lord Patel, said, we all agree that the UK’s life sciences sector makes a hugely significant contribution to our country. Clearly it is the flagship of the Government’s industrial strategy, but the committee asked some pretty searching questions, particularly in relation to the National Health Service, which is what I want to focus on.

We have an enormous paradox. As Sir John Bell has said, the NHS is potentially an enormous asset for those seeking to develop and discover new innovative products and to be able to test them in a living healthcare system. The irony is that the NHS is absolutely useless at adopting generally proven new innovations. I am sorry to say that the strategy is going to do nothing whatever to improve that. All the innovations are worthy but minimal, and we know that they will not succeed. Unless something drastic happens the NHS will continue to refuse to take innovation seriously, and I find that a very depressing situation.

The committee has commented on the complicated arrangements for implementation and the clear lack of accountability. It has also referred to the NHS’s own commitment as being incoherent, unco-ordinated and ineffective. The reality is that the only thing that counts in the NHS at the moment is cost control. We know that when it comes to asking the NHS to invest in the kind of innovative products and medicines that would give the UK a lead in global development, it refuses to do so. I have talked to a number of innovative companies that are desperately trying to sell into the NHS, and the situation is really depressing. The Association of British Healthcare Industries has basically said that the adoption and spread of proven technology is a major problem. The NHS spends on discovery and development but it will not spend on adoption and spread. That is so different from the commercial sector. When I hear that NHS Improvement is not interested but it is interested in productivity, it makes me despair. Surely its investment in innovation is the one way in which we can actually enhance the productivity of our health service.

I am president of the procurement association in the NHS, and I confess that there is a problem with procurement in the health service. It is basically concerned only with the cost of individual items. When pressed, Ministers, NHS England and so on will say that they are concerned about overall value, but the reality is that they are not. They are concerned only about the actual cost of individual products. The ABHI also comments that SMEs might be forgiven for thinking that the strategy was designed mainly to support large companies. SMEs are having a real problem getting leverage and support from the Government in this crucial sector.

I shall give an example of an innovative company and the problems that it is having. In summary, over 200 NHS patients have been treated to date with Natrox oxygen therapy, an innovative treatment indicated for chronic non-healing diabetic foot ulcers and other chronic wounds. The NHS has not paid for any of the patients to be treated; the company has. It is a small start-up business, and it can no longer afford to fund free treatment for the NHS because the NHS now wants the company to dedicate itself to providing products to paying healthcare customers in other countries.

The NHS has pushed this company from pillar to post with all the so-called innovations that it has developed. Almost two years ago, the company went down the road of the “innovation scorecard”. My noble friend, who is in despair about this innovation scorecard that so many of us have heard about, may talk about it later. So the company spent a lot of energy on the scorecard and was preparing a tender submission but then the NHS abandoned the process. That was later restarted but the company was told it had to start again from scratch. It did so, but then it heard that the innovation scorecard process was being abandoned and it now had to utilise Innovation Connect. It registered on Innovation Connect in March but has had zero feedback from that route—not even an acknowledgment. There is no clear or obvious path to contracting for new products on the Innovation Connect website. The company has followed this up with emails and met the people concerned but has had absolutely no response.

So here we have the potential of NHS-assisted innovation, with some research funded by the National Institute for Health Research, not being available to NHS patients. Members of the company’s board, comprising UK and international investors, are pushing to relocate to the US on the basis that more interest and commitment has been shown by US healthcare providers. If that happens, NHS patients will lose out, the country will lose out and yet another UK innovation will have been lost overseas. I am afraid this is not an isolated incident; it is happening day after day. Hugely innovative companies simply cannot get inside the NHS.

It is the same story with medicines. Obviously pharma companies do not enjoy much sympathy in the world, but we are coming to the end of the current five-year PPRS agreement, which essentially rebated to the Government any cost of branded drugs, over a certain allowance for inflation, and instead of that money being used to invest in new medicines it has just gone back into the coffers of the Treasury. Patients in this country simply do not have access to the kinds of medicines that are available in France and Germany. It seems to me that NHS England has no interest, or policy to do so, in saying that it is in the UK’s interest to invest in new medicines, many of which have been developed in this country but will not be developed here in future. We are absolutely at the tipping point of losing a lot of the pharma industry, as the chief executive of AstraZeneca has made clear in his recent remarks.

We come to the Government’s response. Frankly, it is pathetic. The accelerated access review and academic health science networks are worthy but very marginal, as they can deal with only a few products and medicines. Then we are told that we can have a life sciences council. Wonderful. What on earth is a life sciences council going to do to get the NHS involved in investing in innovation and in the future of our country?

I am afraid I have reached the gloomy conclusion that for all the bold talk, exciting strategies and ministerial visions, the NHS is incapable of responding. Patients are losing out, innovative UK companies are getting a raw deal and, frankly, the life sciences strategy is doomed to fail.