All 6 Debates between Lord Lansley and Baroness Finlay of Llandaff

Fri 4th Feb 2022
Thu 20th Jan 2022
Wed 11th Nov 2020
Medicines and Medical Devices Bill
Grand Committee

Committee stage:Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Thu 8th Oct 2020
Trade Bill
Grand Committee

Committee stage:Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Mon 23rd Jan 2017
Health Service Medical Supplies (Costs) Bill
Grand Committee

Committee: 1st sitting (Hansard): House of Lords

Health and Care Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Lord Lansley Portrait Lord Lansley (Con)
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My Lords, I am pleased to follow my noble friend Lord Grade. The point he made relates to my own experience in that, when the nutrient profiles in question were introduced in January 2011, I was Secretary of State. They were very much in the context of precisely the programme that I think he is looking for. It was about the reformulation of foods in the manner that had been done in relation to salt and to do the same for sugar and fats and the voluntary removal of transfats, which I think has essentially been accomplished. I have to say to my noble friend and the Committee that we have to be very careful because a lot of progress was made, but much more could have been made on a voluntary basis with the industry.

The nature of the attack made upon the Government and the industry was that, I paraphrase, “You’re working with the industry and, therefore, your activity is undermined by that fact.” It was rejected by many of the organisations that were seeking to achieve a public health objective. That was misplaced, and I am very disappointed that it happened like that. It would be a justifiable approach only if less healthy foods—HFSS foods or, for that matter, alcohol—were in the same position as tobacco. We do not deal with the tobacco industry because there is no safe level of tobacco consumption; we deal with the food and drink industry because there are safe levels of food and drink consumption.

My noble friends are nodding merrily, but I have to warn them that I actually agree with the Government’s proposals, partly because I think they are capable of being implemented in some respects in ways that meet some of the objectives that my noble friends are setting out. They can put practical timetables in place. They can give clear guidance about identifiable products, as distinct from brand sponsorship and the like. I do not like sunset clauses if we do not have to have them—if we have too many of them, as my noble friend Lord Moylan suggested, we would be clogged up with re-legislating all the time—but the Government can, by regulations, significantly change this.

I support the Government partly because they are clearly being attacked for doing too little and attacked for doing too much, so they are probably doing about the right thing. I think they are doing the right thing because we all know—the noble Baroness, Lady Boycott, said it—that obesity, and perhaps especially childhood obesity, is a multifactorial problem, so we must have multifactorial solutions. The one thing I would not accept is the proposition that I have sometimes heard from Governments of all persuasions: something must be done; this is something; therefore, it must be done. We need to implement many responses to this major public health issue—the noble Lord, Lord Stevens, is quite right—and we must tackle it as if it really matters. It is one of those missions that a mission-led Government should be seeking to achieve. It will need a wide range of different responses, of which this is one. All of them should be examined carefully to see whether they are evidence-based and effective.

I have to say that it is very difficult to say what is effective in this context because, for example, although we know that children who consume relatively more less healthy foods have a less healthy diet and are more likely to be obese, if we look at all the correlations, there are quite a lot of children who have a poor diet but it is not necessarily particularly heavy in less healthy foods. There are a lot of children whose poor diet is directly the consequence of their poverty, as my noble friend Lord Bethell said. The idea that we will see direct cause and effect is difficult to accomplish, but that does not mean we should not try. So, for public health reasons, I support what the Government are setting out to do.

I shall make one final point. The lead amendment in this group was tabled by the noble Baroness, Lady Finlay, and we have a later group on alcohol labelling. I have to say to her that I think that, in this context, her amendment is misplaced, first, because I think it derives from the idea that alcohol is like tobacco. For only a small minority of people is it necessary not to drink at all; most people who have a low or moderate alcohol consumption are at low risk. Secondly, she dismissed with a wave of the hand the codes and what has been achieved. I do not think that is fair. I think the alcohol marketing code has made a difference in relation to alcohol. I wish there was an HFSS marketing code that had been similarly effective because, where alcohol is concerned, the Health Survey for England 2019 said that, in 2003, 45% of eight to 15 year-olds had consumed an alcoholic drink and that, by 2019, that had dropped to 15%. These things can move in the right direction. We just need to make them do so. It does not automatically follow—

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB)
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Will the noble Lord clarify some of his statement about young people? We know that there are specific cultural groups among young people who do not drink at all, which has brought the average down, just as we know that there is a spectrum in poverty and obesity. Does the noble Lord feel that the current guidelines or whatever are working, given that there were 7,000 deaths from alcohol liver disease in 2020 and that there has been a 400% increase in the number of deaths from alcohol liver disease since 1972? If this had been working really well, we would not be seeing these increases. At the moment, we have a catastrophically large number of people dying from alcohol liver disease, which has got much worse during lockdown.

Lord Lansley Portrait Lord Lansley (Con)
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The noble Baroness is drawing me into what is a very important debate, but I do not think it is this one in this group. We will come on to it perhaps on Amendment 259 at a later stage. I do not disagree that we have not succeeded where alcohol consumption is concerned, but the nature of the problem has manifested itself more recently, especially in smaller numbers of people consuming alcohol, some not at all, but those who do very often doing so through binge drinking, which is exactly what is giving rise to what we are all most concerned about, which is the significant harm that is resulting for those people. We need to think behaviourally about the nature of the problem in order to find behaviourally what is the nature of the solution.

I need to stop, but I shall raise just one point with my noble friend on the Front Bench. I started with nutrient profiling. Nutrient profiling is terribly important. The noble Lord, Lord Clement-Jones, made the point that we do not get to look at that, but what it says is terribly important. As I understand it, we are due for a revision, but we have not yet seen it. There was a 2013 study that looked at our nutrient profiling and compared it to that of the WHO and five European countries. It concluded that, in relation to a large number of processed and packaged foods, under our system 47% would be able to be advertised to children, while under the WHO system it was 32%. There is a significant difference in what one puts into the nutrient profiling. It is not an objective truth, and putting alcohol in it completely misses the point, since it is not constructed around that proposition. I ask my noble friend to tell us a bit more about the nutrient profiling process, the timetable, the evidence and how we are going to put it together to meet the objectives under the Bill.

Health and Care Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Lord Lansley Portrait Lord Lansley (Con)
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Given NICE’s remit, it might be the Welsh Government as well, but the noble Lord may well be correct. We are all surmising, but I think we are probably not too far off the mark. It gave us an opportunity to respond to that.

So far as the amendments are concerned, the proposition that approved treatments should be adopted by the NHS is a proper one. What, of course, has not been brought into the debate is that the world has moved on, even in recent years. NHS England has taken what I think is an appropriately substantial interest in the approval of treatments, the uptake of treatments and their adoption by the NHS. When it started out, people said, “Oh dear, NICE is going to approve a treatment and then NHS England is going to tell people not to use it because it is going to cost them a lot of money.” In fact, we all agreed in the debates on the Medicines and Medical Devices Bill that there was everything to be said for NHS England, NICE and the pharmaceutical industry working together early, proactively, for the planned introduction of new medicines, including taking account of their cost. That is an NHS England role, not a NICE role. NICE does gold standard appraisals, but it does not take responsibility for the fiscal consequences of those appraisals, so all these things need to be put together. The pricing decision should not be something that comes out at the end.

One of the things I have been going on about for a decade or more—actually, 15 years—is that we should not end up in a position where there is an effective medicine that is properly approved by the MHRA and authorised for use; clinicians can use it and they know it is the right thing for their patient; but, because of the absence of an appropriate pricing decision, the answer to the patient is “no”. We should not arrive at that position. With NHS England and NICE working together with the pharmaceutical industry, we stand a better chance of the answer not being “no” in those circumstances as long as the resources are, indeed, available.

I do not think, on the face of it, that we should be legislating to change the medicines mandate from where it is now. My noble friend Lady McIntosh, in introducing her Amendment 54, referred to devices. The amendment does not refer to devices, but it should refer to devices. My further question to my noble friend the Minister is: when are we going to get a proper funding mandate on devices, which I think I was promised during our deliberations on the Medicines and Medical Devices Bill but we have not yet formally had it? Some good work has been done on some devices each year, but I am hoping that we will get a proper funding mandate on devices.

On formularies, my noble friend did not actually refer to the British National Formulary. Of course, NICE has had responsibility for the BNF for about seven or eight years, and even if it is not a legislative method, there is everything to be said for the NHS and clinicians looking to the BNF and NICE’s role in the BNF.

My noble friend and the noble Baroness, Lady Finlay of Llandaff, were quite right about the adoption of NICE guidance and standards on the use of them in clinical circumstances. However, via the regulator—the CQC—we already have a process by which the CQC looks at quality standards produced by NICE and incorporates what NICE itself isolates as the essential aspects of the standards that, in order to provide safe and effective care, must be reflected in the practice of a health provider.

My question to the noble Baroness, Lady Finlay of Llandaff, is: if she thinks that is not sufficient, how much further should the CQC actually go in adopting quality standards? At the moment, it has compromised and said, “We will take the essential steps, because those are a few, generally about five, specific things that we can look at to see whether they are being done, in which case, okay; or are they not being done, in which case it clearly needs improvement, or may not be meeting the standard.”

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB)
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The noble Lord asked me a question to which I feel obliged to try to respond, but I really want to answer the question with a question: does the CQC have enough powers to benchmark as it would want to do, and to publish those benchmarks? I hear the concerns of my noble friend Lord Stevens in relation to fear of litigation and how that is an objection to the amendments, but I am also quite worried that that is potentially a way of avoiding adopting the guidelines themselves, thereby inhibiting a change in practice and a move to best practice.

While there are sources of information that those who are very health-literate, IT-literate, and so on, can access to establish their own benchmarks about what is happening, many people, particularly those in the most deprived areas of the UK, do not have any knowledge of even where to begin looking for these things. That was the motivation behind the amendment: to try to make sure that in the poorest and most deprived areas, people would still be able to access this. That would drive up standards gently but would not create a mandated requirement that a NICE guideline is adopted, for the reasons I outlined previously.

Lord Lansley Portrait Lord Lansley (Con)
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I can see that my noble friend is eager to come in but I will conclude by answering the noble Baroness. I am not an expert, but I think the CQC has the powers—since it presently does it—to take account of the NICE quality standards and to incorporate specific indicators from those quality standards as part of its regulatory review. If the CQC was to attempt to introduce large-scale application of the guidance as a question in a regulatory review, I do not think the issue would be whether it had the power to do it, but whether it would make the headline conclusions it reaches in relation to healthcare providers increasingly difficult to interpret. At the moment, they are relatively straightforward to interpret. There is a small number of specific indicators in relation to services provided and they are either doing them or they are not. With guidance, it becomes much more complicated and many more value judgments have to be applied about the circumstances in which they are or are not complying. So, there is a real difficulty in going far beyond where we are now.

I will listen with great care when my noble friend the Minister responds to the questions I have asked.

Medicines and Medical Devices Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Wednesday 11th November 2020

(4 years ago)

Grand Committee
Read Full debate Medicines and Medical Devices Act 2021 View all Medicines and Medical Devices Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 116-V Fifth marshalled list for Grand Committee - (6 Nov 2020)
Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB) [V]
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My Lords, I am most grateful for the kindness of all your Lordships. Lacking having all those wonderful papers in front of me really showed. It is the first time that I have missed walking into the Chamber with a large stack of papers.

Amendment 91A builds on the concept that we had in the previous debates of an innovative medicines fund, which had been carefully thought through, including how it was to be financed. It struck me then that we have fantastic potential in medical engineering in this country to develop new and innovative medical devices. I should declare an interest because my son is involved in developing devices for use in cardiology, for oblation procedures and so on.

The real issue, as the Minister pointed out in the previous debate, is about developing a piece of equipment which is a custom-made device, for one reason or another. When that happens it can turn out to be, serendipitously, something that solves a problem for clinicians in undertaking a procedure of some sort. However, when that happens, if it is a small clinical team in a district general hospital, it will not be linked into a commercial enterprise and funding its ongoing development is extremely difficult.

In previous debates, I referred to the investment that went on in Ireland—in Galway—to create an innovation hub and ensure that there is investment in innovation. This amendment would allow the Government to explore having a medical devices fund similar to an innovative medicines fund, and would allow that fund to be used to develop a device and test and trial it within the NHS, with it being available to NHS patients and clinicians much more rapidly than the current procedures require. It does not in any way suggest that the usual ethical approval processes and all the checks that go with it should be curtailed; it would simply be a way of making sure that, where a custom-made device that solves a major problem could be rolled out widely, it can be used for the benefit of UK plc, if you like to call it that. It would make sure that we have that investment, and that the clinicians do not have to give it away for the whole thing to be developed commercially elsewhere and then sold back to the NHS at huge cost. I again express my gratitude to the Committee and I beg to move.

Lord Lansley Portrait Lord Lansley (Con)
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My Lords, I am grateful to the noble Baroness, Lady Finlay of Llandaff, for tabling and moving this amendment for a number of reasons, the first of which is that it allows me to express my appreciation to the noble Lord, Lord Patel, for moving Amendment 28, in his name and mine, last week on the innovative medicines fund and to say how much I welcomed the debate on it, which I have read, and the Minister’s response.

I am also grateful to my noble friend the Minister for his subsequent letter about the innovative medicines fund. There is of course a direct parallel in that Amendment 91A would look for the innovative medical devices fund to be funded in a similar way. I just gently dispute one proposition with my noble friend: he said that the use of the rebate on the voluntary pharmaceuticals access scheme would not be appropriate for the innovative medicines fund because the amounts could vary sharply from one year to the next. This would be a problem only if there were a direct hypothecation for the amount, and that is not necessarily implied. The amount of the innovative medicines fund could be established as a fixed amount that would then be funded by the rebate or, in the absence of a rebate, by the Exchequer or though NHS England’s total budget. It would not necessarily rise or fall with the rebate. The same would of course be true for the innovative medical devices fund.

There is a central proposition that supports both an innovative medicines fund and a medical devices fund; it is not that we in the United Kingdom lack innovation, it is that we lack the adoption of innovation in the National Health Service. That was the starting point for the Cancer Drugs Fund, on which this proposition is based. The Cancer Drugs Fund arose, in policy terms, from an analysis by Professor Mike Richards, who was then the cancer tsar under the last Labour Government, that there was a significant lack of availability of the latest cancer medicines for cancer patients, compared with other, principally European, countries. At the time that was not true for some other disease groups and medicine available for other diseases. It was a problem particular to cancer.

Why does this happen? It is not simply about funding; there is a systematic issue here, separate from the amount of resource, which is that the United Kingdom has a single-payer system. A single-payer system necessarily makes decisions about the availability of medicines on the basis of the whole system moving together. I suspect the same is true for devices. Pretty much all of the other European systems are not single-payer systems, but insurance-based systems, where, essentially, clinicians advise, patients choose and insurers pay. That brings innovations into use much more rapidly. There is potentially a problem with the diffusion of innovation in the NHS, which we have seen before and we have to continually guard against.

I put this question to the Minister for when he responds to this debate: are patients in the NHS getting access to new, effective medical devices as quickly as patients in other countries? I do not know the answer to that. I am absolutely clear that there was a good case for the Cancer Drugs Fund. I am clear that there is a continuing need for the innovative medicines fund, because there is sometimes a continuing gap between the availability of the most effective new medicines here and in other countries. I do not know about devices.

To this extent I offer an apology to the noble Baroness, Lady Finlay of Llandaff, because a medical devices fund might be premature, in the sense that we do not know to what extent there is a gap in the adoption or diffusion of innovation where medical devices are concerned. We identified real potential in the previous debate on Amendment 85 about the funding mandate for medical devices. If that is rolled out, as I think is the intention, and extended to a faster and larger pipeline of medical devices going through the NICE evaluation process, then we may find there is not too much of a problem. There may well be a case for understanding to what extent medical devices are being adopted by the NHS, relative to other health economies. I hope the Minister will agree that is worth looking at.

Trade Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 8th October 2020

(4 years, 1 month ago)

Grand Committee
Read Full debate Trade Bill 2019-21 View all Trade Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 128-V Fifth marshalled list for Grand Committee - (8 Oct 2020)
Lord Lansley Portrait Lord Lansley (Con)
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I have been leader of the House.

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB)
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My Lords, I realise that I should have declared at the outset that I am on the committee advising the Welsh Government, at their request, as we proceed through Brexit. I asked to come in after the Minister to correct the assertion made by the noble Baroness, Lady Noakes. I want to point out that supporting this group—and particularly Amendment 57—is not a last-ditch anti-Brexit move: it is because we have devolved competencies that are deeply affected. Sadly, the Government have not seemed to be adequately discussing with, consulting or bringing into confidence the Welsh Government. Wales voted for Brexit and is unionist. It feels as if the Government have been short-sighted to see the Government in Wales as somehow a cloaked enemy who cannot be trusted to keep confidentiality. The Welsh Government know only too well that the future of Wales depends on these trade agreements and that compromises will need to be made for the future welfare overall, and they respect the vote cast by the people of Wales.

The noble Lord, Lord Stevenson of Balmacara, and the noble Baroness, Lady Fairhead, highlighted many strong points within the amendments, and we must find a way forward. There is a need to bring the devolved Administrations into the inner circle in negotiating if the good of the whole UK is to be achieved. I ask the Minister to please consider that.

Health Service Medical Supplies (Costs) Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Wednesday 5th April 2017

(7 years, 7 months ago)

Lords Chamber
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Lord Lansley Portrait Lord Lansley
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I am perfectly happy if the Minister wants to reply but, from my point of view, I do not regard the PPRS as state aid. If R&D tax credits are available, they should be made available. When the Office of Fair Trading reviewed the PPRS back in 2008-09, I think, it concluded that it was neither a state aid nor a spur to innovation but was actually all about managing the drugs budget. That is what this legislation is all about: managing the drugs budget.

It is, however, important to recognise that the statutory duties in Lords Amendment 3 do not include the one which the Secretary of State should have specific regard to: affordability. It is deficient in not providing for that. Noble Lords will recall that, at an earlier stage, I tabled an amendment the purpose of which was to insert a more complete set of statutory duties for the Secretary of State to have regard to. Affordability must form part of that, but it is not present in this amendment. I am therefore against the amendment.

In the course of this legislation we have discussed other important issues which are still coming to a head. It is absolutely right, as my noble friend said, that the Government are setting out to promote innovation and the life sciences sector, and there are many ways of doing that. The Conservative Party manifesto of 2015 stated:

“We will increase the use of cost-effective new medicines and technologies”.


It also stated:

“We will speed up your access to new medicines”.


It is important that we do that as it is in the interests of patients, our life sciences industry and ourselves as a world leader in science in this area. However, we have on the stocks the accelerated access review—which, ironically, took too long to be produced, was delayed in its publication and has not yet been replied to. We also have a life sciences strategy. The many positives in that run the risk of being negated by the way in which NHS England and NICE have gone about the consultation.

As I said at an earlier stage, it is possible to see how NICE and NHS England can work together in ways that would give industry greater confidence as it would mean that it could get early engagement with NHS England about the managed entry of new medicines into the NHS, including, as my noble friend said, on issues of importance to industry, such as the volume of purchasing of new medicines in the early stages of access. However, the budget impact test, at £20 million, is probably not one-fifth of all new medicines; it is one-fifth of all new medicines regarded as cost effective by NICE. Therefore, this is not a case of any old medicine that might be very expensive; it just happens to be medicines which are cost effective but have relatively high volumes, which is exactly the point to which the noble Baroness, Lady Walmsley, referred.

However, the issue for NHS England should not be the cost of introducing new medicines that are cost effective and in the voluntary PPRS, as the purpose of the pharmaceutical price regulation scheme, as currently designed, is—through the clawback—to give government assurance about the overall increase in the drugs budget. As a consequence, that money is made available as part of the overall funding provided to NHS England. Therefore, NHS England should in theory have in its budget the money that is necessary to meet the drugs bill, including new medicines as they come on stream, because there is clawback for that.

We have this Bill in front of us partly, but not entirely, because the drugs budget was rising much faster than anticipated, and much of that growth was outside the voluntary PPRS. This Bill plugs that gap and sorts that out. However, in doing so—and here we are at the beginning of April—once this Bill is on the stocks and secures Royal Assent and the Secretary of State is able to align the statutory PPRS with the voluntary PPRS, there is no reason why NICE and NHS England should continue to apply an overall budgetary impact test. I say to my noble friend that I think the Government should step in at that point and say, “Where this product has come through a PPRS where a clawback is applied and we have a budgetary mechanism in place—redress—for any extra cost to the drugs bill in the course of this PPRS through to the end of 2018, NHS England should not interpose any extra delay, or seek any extra delay, through NICE in introducing that medicine to the NHS”. I am afraid that if it continues to do so in the way that it is at the moment, that will have a severe negative impact on the view held by the boards of major corporations in relation to the take-up of new medicines by the NHS.

I am sorry to say to the noble Lord, Lord Warner, and other noble Lords that the remedy is not contained in this amendment. The remedy is in the Government’s hands if they choose to make that point very clearly to NHS England in relation to what this legislation enables us to achieve in controlling the drugs budget.

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff (CB)
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My Lords, I thank the Minister for the way in which he has conducted all the previous stages of the Bill, the amount of discussion and negotiation that he has had with all of us, and for accepting many of the amendments. It might be helpful to the House, if, when he sums up, he could clarify how much of the 7% increase is due to new NICE-approved drugs coming through into the system.

It would also be helpful to know whether NICE has the ability to refuse to go along with the budget impact test on this estimated one-fifth of medication that it deems to be cost effective if it feels that a new medicine coming on line is extremely cost effective and that its cost efficacy will have a major impact on those with life-limiting or life-altering conditions. I am talking about people with a disease that will progress at quite a rate, meaning that over a 90-day period they will be likely to experience a significant decline without the intervention of whatever the new medication might be.

It would also be helpful if the Minister could tell us how the independence of NICE will be assured with this budget impact test. In many parts of the world NICE has been viewed as exemplary in deciding how a medication is approved to come on line, but there are problems with it. If it were viewed as having its independence eroded, that would seriously undermine public confidence in the whole process, particularly among those who have serious and life-limiting or life-altering illnesses.

Health Service Medical Supplies (Costs) Bill

Debate between Lord Lansley and Baroness Finlay of Llandaff
Lord Lansley Portrait Lord Lansley
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The short answer is yes. We should aim for what is a price paid by the NHS to the industry for the medicines that it uses that is reflective of value and is designed to promote innovative medicines—that is, as we will discuss in a later amendment, those that meet unmet need or add substantially to therapeutic benefit and are not the “me-too” drugs that are very similar to existing medicines but have a slightly different method of operation or delivery. Paying for what innovation gives by way of therapeutic benefit is where we want to be.

However, the amendment is right in the sense that one has to do that alongside supporting the life sciences sector. That is where freedom of pricing at introduction is important. I have accepted the principle of a PPRS which delivers a budget to the NHS and delivers freedom of pricing to the industry. We are not legislating precisely for the structure of the PPRS, but let us assume that those are continuing features. However, through the operation of the rebate or some other means, it seems perfectly possible to incorporate some of the criteria that will be the subject of our discussions on a number of amendments, as is reflected in the second limb of the amendment.

Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff
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The noble Lord referred to me-too drugs. I hope that he agrees that it is important to recognise that such drugs have often been developed in parallel. They do not take a molecule and just copy it; they develop a new molecule or delivery system, often to minimise side-effects and to maximise efficacy. But they also have a production cost behind them. They are not just copies of something previously produced and marketed differently; they have innovation behind them as well.

Lord Lansley Portrait Lord Lansley
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I understand that. There is a perfectly good argument for the benefits that are derived from incremental innovation. Not every innovation is a step change compared to what has gone before, so that is a perfectly valid point. One objective that we should arrive at, as I hope my own Amendment 10 will later reflect, is that the structure of value has to understand what those benefits might look like. New medicines will come through that are similar but are significantly better, for example in terms of compliance for patient populations, because they are administered differently. One might say, “Well, it’s a very similar drug”, but one has to look at what the overall benefit might be, which is part of the value.

--- Later in debate ---
Baroness Finlay of Llandaff Portrait Baroness Finlay of Llandaff
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In light of the noble Lord’s remarks, I wonder how he sees there being flexibility. The problem with establishing a value-based price, however one works it out, is that we do not have a crystal ball. A product may be used for a whole lot of different indications. One example is Rituximab, which was developed for lymphoma but is now widely used for at least seven other indications. Some of those are chronic conditions, so there is long-term use.

Obviously, the company produced a product and a price was fixed estimated on a certain amount of use, but then its sales went up hugely. That represents an enormous profit. In the system that the noble Lord envisages, how much flexibility would be built in to allow for volume sales and a dramatic lowering of the production costs? That has happened with a lot of things that were initially expensive to produce, but where production costs dropped dramatically over time. We must not inadvertently get locked into pricings that over time become inappropriate.

Lord Lansley Portrait Lord Lansley
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There is a risk of making this debate too extended, but the amendment is not about the whole structure of pricing but about what criteria should be taken into account. In the context of a PPRS scheme such as the present one, the point I made previously was that it would be possible, for example—and this is only an example—to modulate the rebate by reference to any gap between the price charged to the NHS by a company and the value as disclosed by a comparative assessment.

Of course, if there are a number of different indications, the value may vary according to those indications, but that is no problem in itself because all you are doing is trying to understand to what extent a company would be required to contribute a lot to the rebate because there was a big gap between the price charged and its relative value. Some companies may contribute virtually nothing to the rebate because there is no disclosed gap between the price charged to the NHS for a product and its relative value. That is merely an example of how a scheme could be adapted using this sort of value assessment. I beg leave to withdraw the amendment.