Health: Neurological Services

Lord O'Shaughnessy Excerpts

Tuesday 31st January 2017 Lords Chamber

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

My Lords, first, I thank the noble Baroness, Lady Gale, for securing a debate on this important issue. I am new to the brief but I know enough to know that she is a forceful campaigner on these issues and I very much respect her knowledge and opinion. Indeed, I thank all Peers who have spoken for their very informed and expert contributions. I will do my best in the time available to answer as many questions as possible. To answer the noble Baroness’s request, I would be extremely happy to meet her and others in order to discuss these issues following on from the debate.

As many noble Lords have said, neurological disorders can have a serious impact on people’s quality of life, cause disability and affect family members and carers. It is estimated that there are around 4.7 million neurological cases in England, with the UK prevalence of specific conditions including: 400,000 people with epilepsy; 100,000 people with multiple sclerosis; 5,000 people with motor neurone disease; 120,000 people with Parkinson’s disease; and 60,000 with neuromuscular disorders. It is probably fair to say that there is scarcely a family in England that has not been touched in some way by neurological illnesses and disorders. The NHS spends around £3.5 billion a year on neurological care—excluding stroke care, which is on top of that.

Since NHS England assumed its responsibilities as national commissioner and leader for the NHS in 2013, there have been a number of important initiatives aimed at improving neurological care, including the development of a national specialised service for neurological conditions to ensure that people with complex problems can access high-quality neurological care. The Government have established a national children’s epilepsy service that offers the chance of symptom improvement and even cure for children whose epilepsy cannot be well managed by routine treatment.

There is now a national augmentative and alternative communication service to provide support to patients with complex and progressive conditions such as motor neurone disease who cannot speak. The National Institute for Health and Care Excellence has provided a range of expert guidance to manage neurological conditions, including a motor neurone disease guideline in 2016 that was described by one of the leading charities as “hugely significant”. So, although I recognise the comments of noble Lords about what can still be done, good progress has been made.

The Public Accounts Committee report was mentioned in many speeches tonight. As noble Lords are aware, the committee published its progress report on neurological services on 26 February 2016. In their response on 28 April 2016, the Government agreed with three of the committee’s recommendations, around supporting CCGs with neurological commissioning, reporting back to the PAC on reductions in variation and providing greater clarity on who commissions what in the system. Less than a year on, we have been implementing those recommendations. Furthermore, progress has been made in a number of areas relevant to the PAC recommendations that were not accepted by the Government, as I will set out.

The noble Baronesses, Lady Finlay and Lady Walmsley, both talked about reducing variations in neurological care, as did other noble Lords. I think it is fair to say that this is not a problem that is unique to neurological services. Nevertheless, the Government recognise that there is work to be done.

We agreed with the PAC recommendations about reducing variation in neurological care in services and access to specialists. Reducing unwarranted variation is crucial to improving services and patient care, and to efficiencies. The overall programme to reduce variation across the NHS is delivered through the RightCare programme to all clinical commissioning groups. Of the 65 CCGs in wave 1 of the programme in 2016, 40% prioritised neurology because it offered a substantial opportunity to reduce variation in services and outcomes compared to other pathways. A similar proportion of the 144 CCGs in wave 2 are expected to prioritise neurology to the same degree in 2017.

RightCare is already delivering results. For example, the Southampton CCG discovered in 2014-15 that it had spent £1.5 million more on neurology emergency admissions than similar CCGs, particularly for headaches and epilepsy. In response, the CCG is providing education and support to GPs on managing headache and migraine patients and is working with local hospital consultants to develop a protocol for migraine management in A&E to provide quick access to diagnostics, avoiding emergency admission wherever possible. On epilepsy, the CCG is considering whether additional clinical expertise, such as specialist nurses, is needed in community services.

More information was clearly needed on the prevalence and outcomes of diseases, and that led to the creation of the Neurology Intelligence Network, which several noble Lords talked about. This sits within Public Health England, collates and interprets data on neurological conditions and works with the RightCare programme to develop neurology-related metrics that will offer further insights into neurological services and outcomes. The network will also run a best-practice and knowledge-sharing session for CCGs in March 2017, prioritising neurology. I can confirm that the Neurology Intelligence Network continues to be supported financially, and that local areas will continue to have their own neurology networks.

The issue of national clinical leadership has featured heavily in the debate. The Government did not agree with the PAC’s recommendation to retain the national clinical director for neurology. We recognise that NHS England’s decision to remove the post came as a disappointment to stakeholders. However, decisions about clinical priorities, including those regarding clinical advisory structures, are a matter for NHS England, as is consistent with the overall vision of service delivery that is clinically led. I am, however, more than ready to speak to NHS England about its general attitude to national clinical directors, and specifically on neurology.

The creation of the new neurology advisory group has been welcomed by noble Lords tonight. It brings together key system partners, professional bodies and stakeholders to align work to improve neurological care. This is the right point at which to express my gratitude to NGOs, charities and voluntary groups involved in supporting neurological care in the UK. The group is led by Professor Adrian Williams; it met first in October 2016 and is currently working with stakeholders and developing its plan.

The Government also disagreed with the PAC recommendations about how it held the NHS to account for delivering care plans. This was mainly because the objective no longer featured in the mandate and the previous metric used was unreliable. However, two important developments have recently taken place. First, in July 2016 NHS England announced a deal to grant 1.8 million people with long-term conditions access to the patient activation measure as part of its self-care support programme. This is a tool which captures the extent to which people feel engaged and confident in managing their care and helps professionals tailor support accordingly. It is an important part of ensuring that services are accountable to patients.

Secondly, and also in 2016, the final report of NHS England’s Realising the Value of Self-care programme was published. This provided a range of tools and resources, including an economic model to help the local NHS understand the costs and benefits of self-care approaches, such as peer support and health coaching. Evidence from the programme demonstrated that access to self-care can be effectively provided by systematically putting in place personalised care planning.

The noble Baroness, Lady Gale, asked about the clarity of commissioning responsibilities. This was an area where the Government were able to accept the PAC recommendation to better define responsibilities. The updated services manual was published in May 2016 and describes the responsibilities of NHS England and CCGs in terms of neurology outpatients. Specifically, it sets out that NHS England is responsible for only those services where the patient has been referred by a consultant to that service.

Going further, the neurosciences service specification, which sets out the design of specialised neurological care, is also being revised and NHS England is developing plans for consultation during the financial year 2017-18. I am keen to hear from noble Lords about any examples of patients falling into the gaps between CCGs and NHS England’s specialised commissioning, and I will ensure that when the new neurosciences service specification has been published there is a proper promotional plan to spread best practice throughout the healthcare system.

I will touch briefly on two further issues: personal health budgets and research. There is an extension of personal health budgets throughout NHS England at the moment, and anyone with a neurological condition who is eligible for NHS continuing healthcare has the right to a personal health budget. Beyond this, CCGs have flexibility around their introduction and are developing local plans which would include services used by people with neurological conditions, such as rehabilitation or wheelchair provision.

In the first six months of this financial year, almost 11,000 people had a personal health budget—an increase of 130% on the same period last year. By March 2021 between 50,000 and 100,000 people will benefit from a personal health budget.

Finally on research, there is clearly a need for more research, and spending on research through the National Institute for Health Research on neurological conditions has almost doubled since 2010.

I will now pick up a few points made by noble Lords in the debate, specifically ones I have not yet addressed. On the question of the workforce, in September 2016 there were 1,325 neurologists, compared to 1,019 in May 2010: that is an overall increase and includes 200 more consultants and 100 more doctors in training.

I very much take on board the point about distributional issues: whether areas of the country are not getting the right kind of support. I shall certainly look at that to find out what is happening and write to Peers. At this stage, I would not be too concerned about whether they are featuring properly in sustainability transformation plans—they are not attempting to be comprehensive about all conditions at this point—but it is important to watch them to ensure that neurological conditions get the attention that they deserve.

Several noble Lords mentioned waiting times. Clearly, we have referral targets, which should be met for neurological conditions, as with others. We are working with NHS England to ensure that that is done and that the staff are in place. Early diagnosis is also important, and NICE will be producing new guidance in January 2018 on that. I hope that that provides some reassurance to the noble Baroness, Lady Finlay.

The noble Baronesses, Lady Masham and Lady Walmsley, and the noble Lord, Lord Hunt, asked about the impact of Brexit on the workforce. Clearly, the health and care system is reliant on foreign workers. We will take that into account in negotiations and other opportunities, and are increasing domestic recruitment. I will not touch on the national stroke strategy here; that is for another time.

Finally, in response to the noble Baroness, Lady Masham, who praised me for my youth and energy, I say: long may that continue, and I will certainly do what I can to bring them to bear for the benefit of those patients who are suffering from these illnesses. I again thank the noble Baroness, Lady Gale, for tabling the debate, and all noble Lords for a useful, interesting and informative discussion.

Abortion (Disability Equality) Bill [HL]

Lord O'Shaughnessy Excerpts

Committee: 1st sitting (Hansard): House of Lords
Friday 27th January 2017 Lords Chamber

[Baroness Gale (Lab)]

My Lords, I thank my noble friend Lady Massey for moving this amendment. It has been welcomed across the House, which is a good sign that we can have a really good debate on this. It is a sensible amendment as it asks the Secretary of State to,

“undertake a review of the impact of this Act on disabled children, their families and carers, and the provision of support services”,

with,

“a report of the review to be laid before each House”.

As other noble Lords have said, Acts of Parliament are seldom, if ever, reviewed, so no one knows whether or not they are working. This amendment will ensure that Parliament can at least understand how the Act is working.

My noble friend Lady Hayter said at Second Reading:

“Despite the contribution that disabled people make to national life and their human right to equality of treatment, there are, sadly, still huge hurdles in the way of many of them being able to pursue a full, and indeed fulfilled, life”.


She went on to comment on the lack of adequate resources to meet the additional needs of people with disabilities and made this very important point:

“Of course, all this is not helped by the Government’s welfare reforms”.—[Official Report, 21/10/16; col. 2558.]


There are approximately 12 million people living with disabilities, impairment or limiting long-term illnesses in the UK today. Of these, 5.7 million are of working age, 5.2 million are over 65 and 0.8 million are children. It is recognised that raising a child with disabilities costs up to three times as much as raising a child without disabilities. Twenty-one per cent of children in families with at least one disabled member are in poverty, a significantly higher proportion than the 16% of children in families with no disabled member.

The Government revealed in the Autumn Statement that they had set aside £360 million over six years to ensure that families with a disabled child will receive child disability tax credits in future. However, the payments will be backdated only to April, meaning that individual families may have lost out on entitlements totalling up to £20,000 over the past five years. This is a big loss. The recent UN committee investigation into the rights of disabled people in the UK said that a range of measures introduced since 2010, including the bedroom tax and cuts to disability benefits and social care budgets, had disproportionately and adversely affected disabled children. These are big cuts for people suffering from disabilities. Cuts to the employment support allowance work-related activity group will take more than £1,500 a year away from 500,000 disabled people—this from a fund that was designed to help people stay in or find work. These cuts will reduce support for disabled people by £650 million a year.

An analysis from the TUC found that the Government are years behind schedule on their manifesto commitments to halve the disability employment gap. At their rate of progress, it will take until 2030. The research forecast that by 2020 just over half of disabled people will be in work, which is 11% less than the Government promised. There is no doubt that disabled people are suffering, and will suffer, from the cuts made by government so there is much more to do in this field.

That is why the Labour Party is calling for a complete overhaul of the current system. We are undertaking an intensive consultation exercise, with disabled people at the heart of shaping our approach, through our disability equality roadshow. It is why I am grateful to my noble friend Lady Massey for bringing this important amendment before us, which allows us to highlight the difficulties that people with disabilities have to face now and in the future. Can the Minister take note of the needs of disabled people, which are much greater than those of non-disabled people, to find ways of giving a lot more assistance than they receive at present?

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

My Lords, I congratulate noble Lords on the quality of debate on this amendment and recognise the broad welcome that it has received from all the speakers. I also join noble Lords in paying tribute to my noble friend Lord Shinkwin for bringing forward the Bill and raising the issue of disability rights and their effect on abortion, and in commending the noble Baroness, Lady Massey, on the clarity and conviction with which she made her case today.

Like all issues of conscience, the issue of abortion is one that divides opinions in ways that transcend the usual political boundaries because of the very personal reasons that parliamentarians have for their beliefs. It is for that reason that Governments remain neutral on such issues. The role of government in issues of conscience is to implement the law as decided by Parliament. On that basis, were this amendment to be carried and the Bill passed, the Government would of course carry out the proposed review in order to monitor the impact of the legislation, and we would indeed report to Parliament in due course.

The amendment proposed fits well with the overall determination of successive Governments to improve the lives of disabled people and their families. That has been a cornerstone of the approach of this Government and the previous Conservative-led Government. The Children and Families Act 2014 introduced a new statutory framework for local authorities and clinical commissioning groups to work together to secure services for children and young people who have special educational needs and disabilities. The support available to families includes early intervention programmes that aim to help the child develop, as well as providing support to the family from health visitors, midwives and others.

I also recognise that this amendment would improve the evidence base available for policymakers. There is of course a general desire in this Government to have more evidence-based policy-making, which the amendment would clearly aid. But, in the end, this is an issue of conscience, so noble Lords are free to decide their views according to their ethical or religious beliefs.

[Baroness Masham of Ilton (CB)]

My Lords, before the Minister sits down, are the Government supportive of the Equality Act?

[Lord O'Shaughnessy]

We are of course supportive of the Equality Act.

[Lord Shinkwin (Con)]

My Lords, I thank all noble Lords who have spoken in support of my Bill, and I thank sincerely and in good faith the noble Baroness, Lady Massey of Darwen, for her amendment, which I not only accept but welcome as a logical extension to a logical Bill. It is a Bill that brings the law as it currently applies to disability before birth into line with how your Lordships’ House has already ensured that the law applies to disability after birth.

The amendment is about the impact of my Bill. But it is a simple, wonderful truth that I owe your Lordships’ House so much because of the impact of legislation that it has already passed. Without your Lordships’ House, a commitment to disability equality would never have been enshrined in law. Noble Lords will know that noble giants such as Jack Ashley and Alf Morris, with both of whom I had the privilege of working and whose spirits I invoke today, led the fight to outlaw disability discrimination. All my Bill does is to carry on their noble work, because it would allow us to outlaw disability discrimination where it begins—at source before birth. It is simply unfinished business. The amendment would help because it would measure the Bill’s impact on disabled children, their families and carers, and on the provision of support services.

When I think about the incredible role that strong women—women such as my own mother—play in the lives of their disabled children, anything that supports families and carers after birth and, crucially, on diagnosis before birth is welcome. Moreover, it stands to reason that such support services, be they provided by the state, charities, parents’ organisations or disabled people’s organisations, should be included in an impact review so that people can learn and disseminate best practice and, where necessary, ensure that improvements are made.

Sustainability and Transformation Plans

Lord O'Shaughnessy Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Greaves]

To ask Her Majesty’s Government what progress is being made with the Sustainability and Transformation Plans for England.

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

My Lords, proposals have been published for all 42 sustainability and transformation plans—also known as STPs—covering every part of England, with a goal of making the NHS five-year forward view a reality. NHS organisations have now submitted their operational plans for 2017-19. These are the next steps in turning STPs from proposals into practical action.

[Lord Greaves (LD)]

My Lords, with 42 areas, a huge number of meetings, a huge amount of report-writing and research and all kinds of things are taking place, diverting a large amount of time and resources. The Government see the operation as a way of slashing spending, but the professionals involved on the ground see it as a way of providing better services. Do the Government realise that they cannot carry out another huge wave of reorganisations in these 42 areas without extra resources, rather than less resources? Can they tell us how many staff are engaged on the STP process and at what cost, and how much is being spent on consultants and other outside support to carry out this operation? How much is it all costing?

[Lord O'Shaughnessy]

My Lords, the sustainability and transformation plans are operational plans for putting the NHS’s own five-year forward view into practice. They are about the community and clinically led redesign of services to do things such as make it easier to see a GP, improve cancer diagnosis and give faster mental health support. Noble Lords might be interested to know some of the big opportunities for service improvement identified by the Lancashire and South Cumbria STP, which is local to the noble Lord: 27% of people seeing their GP could have had their issue resolved another way; 25% to 50% of hospital beds were used by people who did not need to be there; and 30% of A&E attendances could have been avoided. It has said that about £176 million of efficiencies could be found in the acute providers within that STP area alone. There are huge opportunities for change. It is clear that any changes cannot be approved without public consultation or without delivering clinical improvements. The Government are backing these plans in two ways. First, with the £1.8 billion—

[Noble Lords]

Too long.

--- Later in debate ---

[Lord O'Shaughnessy]

The noble Lord asked about funding and I want to provide him with an answer. The plans are backed by a £1.8 billion sustainability and transformation fund and £19 billion of capital spending over four years to help make these changes.

[Lord Hunt of Kings Heath (Lab)]

My Lords, the Minister has talked about the public being involved. Why then have the public, local authorities and clinicians been excluded from the STP process so far, as shown by the King’s Fund? These plans depend on investment in primary care, community care and social care. Where on earth is the money going to come from to invest in those services, when the acute sector is under such pressure?

[Lord O'Shaughnessy]

Clinicians and local authorities are involved in these plans. The whole point of the plans is that they bring everybody together within an area to create changes that are driven from the bottom up, so as to provide a much more efficient service. The noble Lord knows full well that more money is going into both primary care and the service overall.

[Lord Patel (CB)]

My Lords, STPs are a major systems change in the way healthcare will be delivered. As the Minister said, there will be significant demand for the resources going into them. What are the governance arrangements for the STPs?

[Lord O'Shaughnessy]

I thank the noble Lord for that question. STPs are voluntary groupings of all the relevant people—whether that is at the acute level, in primary care or local authorities—coming together under leadership to create the changes. Those then turn into operational plans that are delivered by individual hospitals, primary care settings and so on.

[Baroness Walmsley (LD)]

My Lords, these plans were supposed to have got under way last October. Have any of them actually started transforming services in their area, or are they still too busy figuring out how to balance the books?

[Lord O'Shaughnessy]

All 44 sustainability and transformation plans have now been published and are being scrutinised by NHS England, which is helping to ensure that they are as successful as possible. Operational plans will then come forward from April 2017 onwards.

[Baroness Crawley (Lab)]

My Lords, the sustainability and transformation plans have been widely criticised for not yet allowing adequate public or parliamentary scrutiny. Does the Minister agree with me that any future rationing of cancer drug treatment, for example, should receive the public scrutiny it deserves? In particular, will he intervene with NICE and the pharmaceutical company Roche to demand a rethink on the proposal to stop from next week the effective secondary breast cancer drug, Kadcyla, being available to women on the NHS?

[Lord O'Shaughnessy]

On public scrutiny, all the sustainability and transformation plans have had public involvement. They were published and consulted on. I do not recognise the picture that the noble Baroness paints in relation to cancer drugs. This Government created the cancer drugs fund in order specifically to fund innovative cancer drugs and bring them to market more quickly. She will know that decisions on availability and funding of drugs are properly taken by NICE on a clinical basis.

[Baroness Finlay of Llandaff (CB)]

In July last year, the Government’s response to the national end-of-life choice offer was that end-of-life care would be part of all transformation programmes, yet 20 of the plans make fleeting or no reference whatever to end-of-life care and only six have clearly stated plans. That is despite approximately a quarter of a million patients dying each year in hospital. While some cases are acute, a large number of patients have a period where they need their care improved. What action are the Government taking?

[Lord O'Shaughnessy]

I thank the noble Baroness for making that point. The purpose of NHS England’s review of the STPs is to make sure that they account for all the priorities set out in the Five Year Forward View. Clearly, that involves end-of-life care, and NHS England will work hard to make sure that it is properly reflected.

[Baroness Tonge (Non-Afl)]

My Lords, a very interesting and good report has been published this week on pilot schemes in three London boroughs to treat the effects of female genital mutilation and prevent it occurring in future generations. We have already heard from one clinic in that pilot project that it will have to close at the end of March through lack of funding. Will Minister assure us that such projects, which are vital for many women in our communities, will continue in future?

[Lord O'Shaughnessy]

I thank the noble Baroness for raising that issue, which I was not aware of. I would be very happy to write to her on it.

Health Service Medical Supplies (Costs) Bill

Lord O'Shaughnessy Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 25th January 2017 Grand Committee

[Lord Hunt of Kings Heath (Lab)]

My Lords, I want to express some sympathy with the remarks of the noble Lord, Lord Lansley. I am not sure whether he has got the terms of his amendment right; my noble friend Lord Warner has an amendment in the next group which, in a sense, covers the same ground.

The noble Lord, Lord Lansley, knows that I am sceptical about whether these powers should be extended to non-medicines but the issue here is that they are very broad, as he says. As far as I can see, there are absolutely no safeguards regarding how these powers will be used. The safeguards are not in the Bill or the 2006 Act, and certainly not in the draft regulations as far as I can see. We are looking for the Minister to table amendments on Report to build in thresholds or safeguards to stop the department simply undertaking fishing expeditions. That would give us some sense of proportionality. I am not sure whether the noble Lords, Lord Lansley and Lord Warner, have got their amendments quite right but I am certain there will be a consensus for building in some safeguards over the use of these powers.

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

My Lords, it is nice to be back with you again today to finish the Bill’s Committee stage. I am grateful to my noble friend Lord Lansley for tabling his amendments, and for his support for the Bill’s ultimate purpose: more rigorous gathering of data to support voluntary and statutory schemes and pharmacy reimbursements. That support is very welcome. I have huge sympathy with his argument. It is because we agree with the need properly to set out the information powers that we have published two sets of illustrative regulations to help Parliament scrutinise the information powers in the Bill. Reflecting on those, I believe that I can reassure my noble friend about the concerns behind his amendment.

I start by addressing the general proposition that a UK producer should be provided with an information notice every time the Secretary of State seeks to require information from that producer. Many noble Lords have expressed concerns about the regulatory burden the Bill might impose, and the amendment could exacerbate those worries. Regarding routine information collection, the Government already collect information on prices and volumes every quarter to support the operation of the PPRS and statutory schemes, and to inform reimbursement prices for community pharmacies. The Bill would expand routine collections to inform reimbursement prices to enable us—as my noble friend pointed out—to use data from more companies, to make the reimbursement of community pharmacies fairer and more robust, and to set reimbursement prices for more products.

For the purposes of requiring information on a routine basis, the illustrative regulations clearly set out what information would need to be provided, the form in which it would need to be supplied, the period of time it would need to cover and the date by which it would need to be supplied. Where information is required on a non-routine basis, the illustrative regulations demonstrate that the Secretary of State would notify a UK producer of that request. The regulations set out the notice that the Secretary of State would give a UK producer, the form in which the notice would be given and the type of information that would be required. The regulations would also require the Secretary of State to inform UK producers of the time period the information would need to cover and the time within which the information would be required.

Turning to the purposes for which information can be required and the persons to whom confidential and commercially sensitive information can be disclosed, I reassure the Committee that the Government take these matters very seriously. We have sought clearly to set out in the Bill the limited purposes for which information can be required and the persons to whom confidential or commercially sensitive information can be disclosed in relation to those purposes. The Bill makes it clear that information can be required for only three purposes: first, to reimburse community pharmacies and GPs; secondly, to support the PPRS and the cost-control provision in the NHS Act 2006; and thirdly, to ensure that healthcare products provide value for money.

The information that we would collect under the first two purposes would generally involve routine collections, to operate the reimbursement system and our voluntary and statutory schemes. However, assuring ourselves that products or the supply chain provide value for money would be done through ad-hoc collections. This is where we get to the critical issue of thresholds. Those collections would be triggered by evidence from existing data that there may be an issue with pricing—for example, when the reimbursement price we set in primary care is increasing without obvious reasons—or patients, clinicians, commissioners or the industry raising concerns, for example about price rises without obvious reasons or access problems. I hope that that makes it clear that this is not intended for fishing expeditions, to use the expression of the noble Lord, Lord Hunt.

[Lord Hunt of Kings Heath]

Have I missed this? Are those qualifications for the use of the provisions set out in the Bill?

[Lord O'Shaughnessy]

They are not. I am using this opportunity to set out on the record the reasons why information would be sought.

The Bill is also clear about with whom confidential and commercially sensitive information can be shared. This is restricted to other Government departments, the devolved Administrations and specific NHS bodies and persons providing services to any of these bodies. The information can be disclosed to these bodies only for the purposes set out in the Bill—which I just reprised. The Bill also enables the Secretary of State to share information with trade bodies, and Regulation 11 of the illustrative regulations sets out the trade bodies with whom the Secretary of State might want to share information, and the type of information that he would want to share with them.

The illustrative regulations currently limit the information that we can share with trade bodies to aggregated data that cannot be led back to a specific company. Furthermore, the Bill enables the Government to prescribe in regulations any other person to whom the Secretary of State can disclose information. The flexibility provided by this regulation-making power allows the Secretary of State to disclose information to other persons who may become involved in payment or reimbursement for health service medicines, medical supplies or other related products, including, for example, in circumstances of regional devolution. Again, it would be possible to disclose confidential or commercially sensitive information to these persons only for the purposes set out in the Bill. We will have further opportunities to discuss these powers of disclosure when we discuss the amendments relating to the report of the DPRRC. In summary, we would not be able to disclose information to bodies not listed in the Bill or prescribed in regulations, so the legislation will restrict to whom we can disclose information.

--- Later in debate ---

[Lord Lansley]

I am grateful to the noble Lord, Lord Hunt, and my noble friend for their response to this amendment. I can see from the illustrative regulations that, as I said earlier, there would be a general scheme for the collection of information, and I am not looking for the amendment to replace a general scheme with a requirement to issue individual information notices. That would be excessive and burdensome. However, under the illustrative regulations there is, in addition to the general scheme, what is effectively the restatement of the power for the Secretary of State additionally to require specific information from companies that breach the requirements of the general scheme—frankly, for any other purpose that the Secretary of State is looking for. That is in draft Regulation 19(2), which really just restates what is already in the legislation: that there is this general ability to say “just give me this information”.

I entirely understand the point that my noble friend is making about the appeal against enforcement, but there is no appeal against such a specific information notice. I may not have got it absolutely right, but in the case outside the general scheme of information, when the Secretary of State asks a company to provide specific additional information, I was proposing not an appeal against enforcement of request, where the company resisted, but for the company to be able to appeal against the information notice on the basis that it is an excessive use of powers; that is, rather than a judicial review, an appeal against that specific information notice.

My noble friend referred to the Delegated Powers and Regulatory Reform Committee’s view, which relates specifically to the question of with whom the information may be shared. The illustrative regulations really do not add anything from that point of view; they do not tell us, beyond what the legislation already states, with whom they may be shared. From any company’s point of view, there is little reassurance in the restrictions that the Minister has just referred to. The information could end up in all sorts of places. Remember, we are talking about an NHS body and, of course, all NHS bodies always behave absolutely properly in the use of information under all circumstances—I am being ironic.

From the point of view of a company engaged in selling these products, we are talking about a monopoly purchaser—a single payer—and a set of organisations with tremendous financial leverage in relation to the products that are being sold. If we are simply handing all the information over to the Secretary of State in the expectation that he could—I am not saying that he would—hand this information on to NHS bodies which are themselves the purchasers of these products, it could significantly skew what would otherwise be a proper commercial relationship between seller and buyer.

Companies must have a point at which they can cry foul, but I am not sure that we have yet given them the ability to do so at the appropriate stage when the information is being asked for. In a way, my amendment does that. I was rather comforted by the DPPRC’s report, in that it seemed to me that my amendment at least sought to make clear how the DPPRC’s recommendation in relation to the Bill might be met. I am implying in what I say that I can see how the amendment is not right; we could go further.

[Lord O'Shaughnessy]

I thank my noble friend for that clarification. I think that we are talking about the same thing, but we should have the opportunity to explore it between Committee and Report. Certainly, we will talk about the DPPRC issues. It is understood that the powers as currently set out need to be looked at.

[Lord Lansley]

I am again grateful to my noble friend. On the basis of what I have explained, there is a conversation to be had and I hope that we may be able to resolve this satisfactorily before Report. I therefore beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hunt of Kings Heath]

My Lords, my noble friend is right because he goes to the heart of the argument about this Bill. I think we have all said that we support the core aim, which is to deal with branded products becoming generics and the issues that were identified. The question is whether the Bill is a proportionate response to that and what impact it will have on future investment in this country.

I have been wracking my brains to puzzle out why this was first legislated for in 1977. My noble friend will remember that that was the time of the prices and incomes policy. Lady Williams of Crosby and my esteemed noble friend Lord Hattersley were Secretaries of State for Prices and Consumer Protection. I would not be at all surprised if it had something to do with that. I have to say that it was not altogether successful as a policy, and I am not sure that it is a great precedent for the Minister to rely on now. Certainly, in 1979 the electorate did not think that it was a very successful policy, that is for sure.

The only point I want to put to the Minister is this: I think there is a consensus in the Committee that there needs to be some trigger mechanism. We have had elements of that. The noble Lord, Lord Lansley, proposed an amendment that included appeals. He suggested what would trigger action, which was very helpful. In his amendment, my noble friend suggested another approach. The Delegated Powers Committee is concerned about the general terms of this clause. It said:

“We consider the general power to be inappropriate unless the Minister is able to explain why it is not feasible to specify the further bodies to whom information may be disclosed on the face of the Bill, and why it is not feasible to limit the kinds of bodies to whom disclosure may be made”.


That picks up the point raised by the noble Lord, Lord Lansley, and I agree with him about NHS bodies,

The question is this. The only satisfactory safeguards will be in the Bill. This House has no influence on regulations. The Minister will know that only six or seven statutory instruments have ever been defeated, so regulations in themselves provide very little safeguard. This is our only opportunity to provide safeguards in the Bill. Essentially, the choice for us is to press on with amendments at Report or to come to some agreement with the Government about what is appropriate. That we need something in the Bill is not in doubt.

[Lord O'Shaughnessy]

I thank noble Lords for that very good debate, which has again got to the heart of why we are all here. While we are reflecting on the 1970s, we have an industrial strategy again, so who knows? The wheel turns.

I am grateful to the noble Lord, Lord Warner, for his amendment and understand that he seeks to minimise the burden on businesses; we agree with him on that aim. However, the amendment would have serious unintended consequences. I will set out why I believe that to be the case and in doing so, I hope to respond to other noble Lords’ questions.

The amendment would restrict the circumstances under which the Government could ask for information on revenues or profits accrued in connection with the manufacturing, distribution or supply of UK health service products. We have been clear throughout that the information that we seek for routine data collection does not go beyond that which would be required for tax purposes. That is the reassurance that we provide on the overall burden and how it would affect businesses. I appreciate that there is a separate question about non-routine data collection, which I will come to, but the overall intention is not to create any additional burden.

The amendment would restrict the information-gathering powers to where a specific health service product has significantly increased in price and where there are reasonable grounds to believe that the NHS is not receiving value for money. However, it would prevent us operating our cost and price control schemes. The reason for that is that the Government collect information on revenues from companies as part of the various cost and price control schemes to be able to determine the sales of those companies to the health service. This enables us to identify the savings achieved through price cuts and which, in our reformed statutory scheme, would be a prerequisite for calculating the payments due from individual companies.

The Government require this information at product level to satisfy ourselves that the terms of the scheme are being applied correctly. As noble Lords know, this model has been in operation through the PPRS for many years, and we have not heard concerns from industry about the burden that it places upon it. Indeed, it is precisely this mechanism which demonstrated to both the Government and the ABPI that the current PPRS was not operating as expected during 2016—something to which the noble Lord, Lord Hunt, referred during our previous sitting.

We had constructive discussions with the ABPI during 2016 about why the spend measured by the PPRS and used to calculate payments under the scheme had fallen, compared to the real growth in NHS spending on branded medicines, which continues to rise. Joint analysis of company data by the ABPI and the Department of Health shows that the NHS is spending more than ever on branded medicines, with spend growth in 2016 likely to be around 5.3% of the budget.

It became clear that the cap mechanism was not capturing significant areas of branded medicines spend—in particular, parallel imports. Also, some companies left to join the statutory scheme, or divested individual products from the voluntary to the statutory scheme, but this growth was not captured by the PPRS methodology. Without action, this would have led to a significant drop in income from the scheme while branded medicines spend continued to rise, which is obviously against the spirit of the agreement. After a short period of very constructive negotiation just before Christmas, we agreed a new deal with the ABPI to cover the last two years of the scheme, details of which I set out in a Written Ministerial Statement published last week, I think—it has been only three and a half weeks, but it feels longer. This shows how well industry and the Government can work together to develop and maintain voluntary arrangements, but we can do so only with the right information available.

We have provided illustrative versions of both the information regulations and the statutory scheme regulations. I emphasise that these regulations show that the Government have no intention of routinely collecting information on profits. They do, however, set out the circumstances in which the Government might want to collect information about profits.

First, the illustrative regulations set out that we would be able to ask for information related to products where a company asks for a price increase under the statutory scheme regulations. To agree such an increase, the Government require assurance that the product is no longer profitable at its current price. Information on profitability is therefore crucial to determine this.

--- Later in debate ---

[Lord O'Shaughnessy]

On that point, two separate issues are in play here. One is about the information required to be routinely collected for the purposes particularly of community reimbursement, but also for the operation of the schemes. It is welcome that that information will be put on a statutory basis and there is clarity about the kind of information that might be required. In doing so, it will provide for better information and better pricing. Then, there is the separate discussion that the noble Lords, Lord Hunt, Lord Warner, and other noble Lords have alighted on: the collection of non-routine data. Effectively, the question is, what are the circumstances under which that kind of non-routine collection would be justified? Assuming I have interpreted that correctly, I would be happy to talk to noble Lords about how we do that, as I committed to doing during the last sitting. My desire throughout is to make sure that, despite the fears of the noble Lord, Lord Hunt, the Bill is proportionate in its efforts to achieve our aims.

[Lord Warner]

Those interventions from the noble Lord, Lord Hunt, and the Minister were helpful. It certainly should not be difficult or beyond the wit of man for the department and the industry to have an agreed set of routine information collections. What goes on top is the issue, as the Minister rightly said. I would be very happy to participate—as far as I can, because I shall be away on holiday tomorrow, although I am sure my representatives on earth will be able to cover this very satisfactorily. If we can make progress on this issue, it would avoid our having to table amendments on Report. In the meantime, I beg leave to withdraw the amendment.

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[Lord Hunt of Kings Heath]

My Lords, I have a little list, which is a bit bigger than the Minister’s list.

[Lord O'Shaughnessy]

Have you seen it?

[Lord Hunt of Kings Heath]

Indeed so. In following the remarks of the noble Baroness, Lady Walmsley, this is really a probing question. Lists are generally avoided in primary legislation for the obvious reason that you need flexibility. I can see why a list of bodies has been put into paragraph (11) of the draft regulations. At this stage, I am just puzzled to know why those organisations which are in the list have been chosen and why others have not.

First, I see that the BMA is in the list. I assume that is because it represents dispensing pharmacists, but I would be grateful to have clarification. I think that may have been clarified. For instance, why is the British Healthcare Trades Association not in the list? Clearly, its membership, although sometimes the same, is rather different from the ABHI. There are other organisations that I have put down to probe how the department has come to that list. When we know that, we can then come back to the general principles that the noble Baroness has so rightly raised.

[Lord O'Shaughnessy]

I thank the noble Baroness, Lady Walmsley, and the noble Lord, Lord Hunt, for these amendments. As both have set out, it is clear that they have been tabled in response to the report of the Delegated Powers and Regulatory Reform Committee. I am very grateful to the committee for its consideration of the Bill and for providing its report. The committee has concluded that the general power in new Section 264B(1)(l) to describe in regulations any other persons to whom information may be supplied is too wide and not justified at present. I assure noble Lords that I am considering these comments very carefully, and the views expressed by the noble Baroness, Lady Walmsley, and the noble Lord, Lord Hunt, have been helpful in explaining the issues.

The amendment in the name of the noble Lord, Lord Hunt, would put in the Bill the industry representative bodies to which the Secretary of State can disclose information. The Government would prefer to prescribe these bodies in regulations and have done so in the illustrative regulations—albeit the current version includes only a limited number of such bodies and they are given purely as examples rather than as an attempt to be exhaustive. By prescribing a large number of representative bodies in primary legislation we would, as I think the noble Lord, Lord Hunt, admits, lose the flexibility to be able to add new representative bodies, if needed, in regulations.

In its report, the DPRRC was satisfied with the way the Bill was drafted in this area, and it considered the power to prescribe bodies that appear to the Secretary of State to represent manufacturers, distributers or suppliers to be a specific power. The committee thought, however, that the general power to prescribe any other person was too general and suggested that the Government limit the kinds of bodies to which disclosure may be made, as is done with the power to prescribe representative bodies. Like the DPRRC, I believe that the power to prescribe representative bodies is sufficiently specific, while still allowing some flexibility. However, we are giving serious consideration to the general power.

As noble Lords are aware, there is a balance to be struck between ensuring clarity in primary legislation and, at the same time, giving sufficient flexibility to enable arrangements to change in response to external changes to ensure that, in the future, we have flexibility to work with the right stakeholders without requiring primary legislation to do so. I once again reassure the Committee that I am considering these recommendations very carefully and will respond to the DPRRC shortly. I expect, subject to the appropriate procedures, to bring forward proposals on Report. On that basis, I ask the noble Baroness to withdraw her amendment.

[Baroness Walmsley]

My Lords, I am most grateful to the Minister, and I look forward to, I hope, being copied in to his reply to the committee. I certainly understand what he said about the representative bodies being in regulations and that it is just an illustrative list that we have before us. If the list is in regulations, it is much easier to add a new representative body. It is reasonable to assume that, some day, perhaps one or more new bodies may be set up. However, the general power is another animal altogether. I look forward to hearing from the Minister after he has considered the matter. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Walmsley]

My Lords, I will speak to Amendment 58 and to the other amendments in the group. This group also reflects concerns expressed by the DPRRC in relation to Clause 7, which deals with information to Welsh Ministers. The substantive amendments are 58, 61 and 66; the others in the group are consequential.

New Section 201A of the NHS Wales Act 2006 will enable Welsh Ministers to require information from producers of health service products to be used in Wales. Subsection (5) of the new section allows regulations to be made for the payment of a penalty if a person contravenes these regulations. Noble Lords may have noticed that there are no equivalent provisions in Clause 6, which inserts new sections into the NHS Act 2006. There is no need, because the original Act already enables regulations to provide for the payment of penalties. However, if we look back at these provisions in the NHS Act 2006, we notice that there are some differences between the penalty sections there and those in the Bill. Specifically, under the NHS Act 2006, there is a limit on the penalty that can be imposed—I think that that is what we have been given in the illustrative regulations. Secondly, any increase in the penalty must be done by affirmative order. In Wales, we have no limit and no affirmative order.

Amendment 58 puts limits on the penalties in this Bill in line with those in the NHS Act 2006, and Amendment 66 changes the relevant bit of the NHS (Wales) Act 2006 so that regulations under new subsection 5B in Amendment 58 would have to be made by the affirmative order procedure. This provides us with consistency, because the provisions in the two pieces of legislation would be similar. I am not wedded to the actual penalty limits that I have laid down, but they are the same as those specified in Section 265 of the NHS Act 2006, so they would be consistent. However, as in this case they would apply to a narrower range of people, it may be appropriate to have a different limit. The main point is that there should be a limit.

Amendment 61 deals with a different issue but reflects what I was trying to do in Clause 6 with my Amendment 49 in the last group. It relates to new Section 201B of the NHS (Wales) Act 2006 on disclosure of information. As with Clause 6, the bodies to whom information can be disclosed are not specified in the Bill. Instead, these can be prescribed by Welsh Ministers. Since there has been no information as to why it is not feasible to specify these further bodies to whom confidential, commercially sensitive information can be disclosed, can the Minister explain why not? Surely it should be possible at least to limit the kinds of bodies to whom disclosure may be made. It seems to me to be a flexibility too far and beyond what is really necessary to ensure the purposes of the Bill. The Delegated Powers Committee regards it as “inappropriate”. Can the Minister convince us of the need for this very broad power?

[Lord O'Shaughnessy]

My Lords, I am grateful to the noble Baroness, Lady Walmsley, for her sharp eyes and even sharper suggestions with regard to these amendments, which are again in response to the report of the Delegated Powers and Regulatory Reform Committee. The committee concluded that the power in Clause 7, which enables Welsh Ministers to make regulations that make provision for payment of a penalty if a provider of pharmaceutical or primary medical services contravenes regulations requiring them to record and provide information about health service products that are required for the health service in Wales, should be consistent with similar provisions in the 2006 Act.

In particular, the committee recommends that the maximum penalty that may be imposed under what would be Section 201 of the NHS (Wales) Act 2006 should be set out in the Bill and that there should be a power to increase this maximum by regulations made subject to the affirmative procedure, as the noble Baroness set out. I assure noble Lords that, as with the previous set of amendments, I am considering these comments very carefully; the views expressed by the noble Baroness have been very helpful in highlighting the issue, for which I am grateful.

Noble Lords will understand that these provisions relate to the powers of the Welsh Ministers, and it is therefore necessary for me to seek the views of Ministers in Wales on this matter. However, I acknowledge the concern that, as drafted, the Bill does not impose a limit on the penalty which may be imposed by Welsh Ministers. Noble Lords will appreciate that, in the case of penalties, the powers in relation to Wales are different from those in relation to the UK as a whole, in so far as Welsh Ministers will be able to impose penalties only on providers of pharmaceutical and primary medical services. In contrast, the 2006 Act allows for penalties to be imposed on manufacturers and distributers, and the size of any penalty should reflect this. It would therefore be disproportionate if the level of maximum fine allowed for in the 2006 Act were to be replicated in the NHS (Wales) Act. I accept, however, that the framework governing the maximum size of any penalty and increasing that maximum should be the same.

Turning to the amendment which would remove the provisions allowing Welsh Ministers to disclose information to persons prescribed in regulations, this is a matter which I understand Welsh Ministers are content to reconsider in light of the DPRRC’s recommendations. I reassure the Committee that I accept the recommendations of the DPRRC regarding limits being placed on the penalties that can be imposed by Welsh Ministers and the need to specify in the Bill the further bodies to which Welsh Ministers may disclose information. I will respond to the DPRRC in due course with proposals once I have discussed them with Ministers in Wales. I intend, subject to the appropriate procedures, to bring forward proposals on Report.

As these will be my final remarks in Committee, I thank all noble Lords for a constructive and informative debate. It has been important to be able to draw on the wisdom of so many former Ministers in making sure that the Bill is properly scrutinised and best equipped to carry out the purposes we have set for it. I have committed to consider many of the issues raised before Report on 7 February, not that far away, and I will be holding as many meetings as I can in the short time available to aid that process. My officials and I are available to noble Lords should they have any other questions or concerns about the Bill, and I look forward to bringing forward any necessary proposals on Report. To conclude on this group, I ask the noble Baroness to withdraw her amendment.

[Baroness Walmsley]

My Lords, I am most grateful to the Minister for his assurance that these matters will be considered before Report. I look forward to hearing the result of his considerations. I am very happy to beg leave to withdraw the amendment.

NHS: Debt

Lord O'Shaughnessy Excerpts

Monday 23rd January 2017 Lords Chamber

[Baroness McDonagh]

To ask Her Majesty’s Government why debt has increased in NHS trusts in 12 months from £894 million in 2014–15 to £2.45 billion in 2015–16.

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

The NHS is facing pressure from the ageing population, increasing demand and changing expectations. In addition, there are the costs of new drugs, treatments and safer staffing requirements. All these factors have an impact on NHS trust budgets. To address this, the NHS leadership bodies have developed their own plan to deliver financial sustainability for the NHS. The Government are supporting that plan by investing a further £10 billion a year in the NHS by 2020-21.

[Baroness McDonagh (Lab)]

I must start by apologising to the Minister, but I do not recognise reality in that Answer. The Government have cut £1.8 billion from social care during this period, which has led to the escalation of the £2.5 billion in NHS debt. I do not know whether it is a case of incompetence or ideology, but the Government have set about providing us with the most expensive and worst system of care for the elderly in the western world. Will the Minister use all his powers of persuasion to do what the Chancellor wanted to do last year and persuade the Prime Minister to put more money into local authorities for social care? It will save lives and money.

--- Later in debate ---

[Lord O'Shaughnessy]

The noble Baroness’s Question is about debt in NHS trusts. I think that referred to deficits, and the facts I have given her are absolutely right. It did increase, not least because of important increases in staffing in response to the Francis inquiry, following events at Mid Staffordshire. Regarding the social care budget, there are a million more over-65 year-olds than there were in 2010 and social care is of course under a lot of pressure. That is why the Autumn Statement outlined additional money for social care. There is £900 million extra over the next couple of years, the precept is rising faster than previously and we have the Better Care Fund, so money is going in, but I accept that there is pressure on the system. That is something we are all working to address.

[Lord Maude of Horsham (Con)]

My Lords, will my noble friend reflect on the contribution that could be made to addressing the problem of overspending by NHS trusts, which has contributed to the growing deficit to which the Question refers, by reviving the programme of health service mutuals? Under the coalition Government, some tens of thousands of health service workers put themselves into not-for-profit social enterprises—staff-led and staff-owned—which showed a dramatic improvement in productivity and quality, and cut costs. A revival of this process, which has been slightly stifled, I suspect, by the attitude of the NHS establishment, could make a major contribution to improving productivity in the health service.

[Lord O'Shaughnessy]

I thank my noble friend for that point. I know he was a passionate advocate of mutuals when he was in government, not just in the health service but elsewhere. They can make a huge difference to productivity. Improving productivity in the health service is obviously one way in which we will meet our ambitious targets, as well as reducing demand on the most expensive bits of the system. I shall certainly look at the ideas he has suggested. Through the sustainability and transformation plans, the NHS has a number of routes to drive extra efficiency in the system, and I am sure that mutuals can play a part. I would be delighted to meet him to discuss that.

[Baroness Boothroyd (CB)]

My Lords—

[Baroness Boothroyd]

Order. That is a very good way to begin the week. My question is brief and very much to the point, and concerns the transportation of patients to and from hospitals. We are all aware that many patients often have to go to major hospitals—travelling 20 or 30 miles—on a daily, weekly, fortnightly or thrice-weekly basis. The cost must be horrendous; is this part of it? Can the Minister give any indication of the cost of transporting patients to and from hospitals?

[Lord O'Shaughnessy]

I will write to the noble Baroness with specific details of cost. It is certainly true that if you have to go to or be taken to a distant hospital for care, that is more expensive both in transport and setting terms. Part of the transformation that the NHS needs to make is that more care should be delivered in primary settings and in the community, which by definition will be closer to home.

[Lord Reid of Cardowan]

My Lords, first, I apologise to the noble Baroness; I thought it was the Liberal Benches. Has not the noble Lord missed the point of the Question? In the first sentence of his first answer, he said his first challenge was an ageing population. Is it not now obvious to even the most obstinate that cuts in social care have a knock-on effect on the ageing population in putting pressure on the NHS? It is not just that the deficits have trebled; 27 hospitals have now declared that they cannot provide comprehensive care, and more than 50 hospitals are asking for outside assistance every day of the week. The situation is getting worse every week. Will he not take the advice of my noble friend and urge his colleagues to reverse the cuts to social care in the Budget, which are not only affecting care provision but having a disastrous effect on provision through the National Health Service?

[Lord O'Shaughnessy]

It is certainly the case that one part of the system impacts on the other parts, whether that is primary, secondary or social care. There is no denying that and I do not seek to do so. On the picture the noble Lord paints of worsening deficits, in fact, the picture in 2016-17 is considerably better than it was in 2015-16. It has been helped not least by the sustainability and transformation plans. We are putting £1.8 billion into trusts, 95% of which have accepted control totals to get a hold of that financial sustainability. Extra funding is going in. There is a big increase this year for the NHS budget, which will help, as will the extra money for social care; but of course the challenges are there.

[Baroness Walmsley (LD)]

My Lords, is the Minister aware that 96% of hospitals say that they employ fewer registered nurses than they themselves have planned for safe staffing of the wards, and some of them employ more healthcare assistants than they had planned for? What does the Minister say to those who suspect that hospitals, in an attempt to deal with their deficits, are employing too few registered nurses for safe staffing of the wards and/or putting less qualified people on the wards?

[Lord O'Shaughnessy]

Clearly, trusts have a responsibility to make sure that they have the staffing right. There are more nursing places available and more coming through training, as we talked about in the House the other day. There has been a general uplift in staffing numbers because of the safety requirements post Francis, especially as we seek to leave the European Union, which will mean that that source of nurses and staff in general will change. We have to train more of our own staff, which is why we are increasing the number of doctor and nurse training places.

Health Service Medical Supplies (Costs) Bill

Lord O'Shaughnessy Excerpts

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

Between 2003 and 2011, there was a significant growth in pharmaceutical industry spend on R&D in the UK. It went up to a peak of £5 billion, but by 2014 it had fallen to £4 billion. My question to the Minister is: how much further is it going to fall before the Government start to realise that what the NHS does on access to medicines is as important as the other measures contained in the industrial strategy?

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

My Lords, I thank the noble Lord, Lord Warner, for his amendment and for the opportunity it has provided to have this discussion. I had a feeling that this one might lead to a wide-ranging debate that would probably go well beyond the remit of the Bill. Indeed, I had that sense when I had meetings with him and other noble Lords. I am grateful to the welcome that has been extended to me and I have been looking forward—if that is the right phrase—to having this opportunity to discuss the Bill.

It is worth stepping back for a moment as we start. I do not know whether the noble Lord, Lord Warner, will agree with the characterisation of this amendment by my noble friend Lord Lansley that it is more of a statement of intent than a concrete desire to change legislation. But, given that that is a decent characterisation, it is worth reprising what the Bill is trying to achieve. There is widespread support for many elements of the Bill.

We need to ensure that we have the right level of information to provide for three things: first, an accurate reimbursement of community pharmacies; secondly, information for price control schemes—and there are a variety of them, as we discussed—and, thirdly, the ability to get value for money and to ensure that, in relation to those instances that end up in the CMA, we are able to do something about them beforehand, because it takes a long time to get to that point. While it is important that that sort of back-stop provision is there—the big stick at the end of the road—ultimately, we do not want to get to that point, as it is an admission that we do not have the system right and have not controlled prices earlier on.

If those are the shared aims of the Bill, it is also important that we will the means. We cannot just say that we do not like these things and then not do anything about them. The question in regard to willing the means—and that is the main question about the Bill, and was so at Second Reading, when I listened as a Back-Bencher—is whether the provisions of the Bill are proportionate. That is the right question; “proportionate” can mean all sorts of things in different contexts, but it can mean proportionate in terms of the burden on firms, proportionate in terms of what it delivers in savings to the NHS, and so on. That is what sits behind many of the amendments that have been tabled by noble Lords, and we will have lots of opportunities to discuss them.

I think it is worth pointing out that the Bill does not introduce any new information requirements to the medical supplies industry, but rather clarifies the requirements and offers reassurances that provisions will be enacted only through regulation, which is a consultative process. Section 260 of the NHS Act 2006 already provides the Secretary of State with the power to make the medical supplies industry keep and provide information —the conception is that this has been extended to that industry. This power has not been used but, as we will discuss later, the instances where unjustified price rises have come about have happened in unbranded generics. That is one reason we are now acting as we are—because we did not have the power in advance. Of course, one can never anticipate all circumstances and instances in which that might happen.

I mention that only by way of a mini Second Reading debate and to reprise the purposes of the Bill and give background. It will also, I hope, give noble Lords an understanding that I know what the pressure points are and understand the balance that we have to draw between the two. As several noble Lords have pointed out, and following historical precedent, my particular policy brief does hold both the responsibility for a flourishing life sciences sector and for medicine pricing and regulation. I am acutely aware that those are two sides of the same coin and can be in tension with one another. The goal is to have a win-win situation in which the NHS gets good prices, new drugs come through the system and the life sciences industry feels that the United Kingdom is a place where it wants to do business. Pricing is one part of that, but there are lots of other factors, such as the ability to carry out clinical trials, R&D, the environment and so on.

While the Government agree with the underlying principles behind the amendment and the two arms of the legal duty, we are not convinced that a legal duty is the right approach. We recognise the vital role that the life sciences sector has in our economy. Thanks to the research and development efforts of the life sciences industry, which contributes £56 billion and tens of thousands of jobs to the UK economy every year, our understanding of diseases and the best way to treat them has improved dramatically over the past 20 years.

As several noble Lords have referenced, the Government launched today a UK-wide industrial strategy, which is a critical part of the Prime Minister’s ambition to build an economy that works for everyone. It is not about picking winners but about making sure that we play to our strengths and build on the comparative advantages that we have. I am therefore grateful for the opportunity to talk about the commitment to the life sciences industry, which I know was one of the intentions of the noble Lord, Lord Warner, in tabling the amendment, and to re-emphasise the Government’s commitment.

The UK has one of the strongest and most productive life sciences industries in the world. Technology and commercial pressures are transforming the field of healthcare technology and the Government’s ambition, as set out in the life sciences strategy of 2011, is to anticipate and react to these changes while building on existing strengths. Innovation, funding for scientific research, aligned regulatory systems and access to the best people and talent all have a role in supporting a flourishing life sciences sector that goes beyond the prices paid for medicines and medical supplies.

In the context of the industrial strategy that was launched today, there will be a sector-specific life sciences industrial strategy to follow in due course. That will be an opportunity to make sure that we are able to address the concerns that exists in the life sciences industry, which are not peculiar to the Bill but are around, for example, the pricing environment and Brexit, which is a continuing concern. It may not always be popular to say so but it is the view of the Government that Brexit offers a number of opportunities as well as challenges. We will be seeking to make the most of those in our own regulatory system and in how we can provide exactly the kind of fertile ground that the life sciences industry needs to flourish in this country. There is a deep commitment to making that work.

I turn now to the second arm of the duty: making sure that the Secretary of State has regard to ensuring that patients have speedy access to NICE-approved medicines. We believe that this duty is also unnecessary. As noble Lords will know, NICE technology appraisals provides robust, evidence-based guidance for the NHS on whether drugs and other treatments represent a clinically effective and cost-effective use of NHS resources. NHS commissioners are legally required to fund treatments recommended in NICE guidance, usually within three months of the final guidance. This legal requirement is also reinforced in the NHS constitution as a right to NICE-recommended drugs and treatments.

We recognise that there is a remaining challenge in encouraging practitioners to use NICE-recommended treatments. The latest data from the innovation scorecard shows that the rate of uptake and utility of new medicines recommended by NICE are increasing. I acknowledge the picture indicating that we are lagging behind where we should be, so there is no complacency on that point. We are working to improve the scorecard to make it a more effective, accessible and useful tool to identify unjustifiable variation in the uptake of innovative new products.

The Government and their arm’s-length bodies are also taking forward a number of actions to improve access to, and uptake of, new medicines. The Medicines and Healthcare Products Regulatory Agency—the MHRA—has initiated an early access to medicines scheme, providing a platform to bring drugs that do not yet have a licence to patients at a much faster rate than before. The scheme is making a real difference, as 25 promising innovative medicine designations and 10 positive scientific opinions have been awarded by the MHRA since the launch of the scheme in 2014. We also have the NHS test beds programme, which is supporting the testing and uptake of innovations across the NHS, and the accelerated access review, which has been published and which the Government will respond to as part of their industrial strategy.

I would also like to take the opportunity to address a number of points raised by noble Lords during this very informative and useful discussion. We will no doubt come back to these things on other amendments. We have talked about CMA fines and what we might do further upstream. There was a question mark over changes to the statutory scheme and whether there had been proper consultation. There will be further consultation on the implementation of the statutory scheme later this year, in addition to the consultations that have taken place. I should also point out that I intend to meet all the relevant industry groups, which I have not had the opportunity to do yet, to make sure that I hear first-hand about their concerns. I am endeavouring to do that in between Committee and Report so that we have the opportunity to have that personal dialogue—one that will reflect on the decisions we make today and on Wednesday about what the right approach is.

As the noble Lord, Lord Young, said, there is a case for action here. The question is always whether what we are doing is proportionate, so I thank him for that support. I was not aware of the issue about clinical pharmacology and will certainly look into it. If he and the noble Lord, Lord Hunt, would like a meeting about this to help me understand that better, I would be delighted. It is clearly an important part of having the right approach.

The work on antimicrobial resistance is being taken forward with great gusto by my colleague the Chief Medical Officer, Dame Sally Davies. She generously gave me a copy of her own book to read about that the other day—which I dutifully did, quickly, so that I could answer questions on it. We are putting forward a candidate to run the World Health Organization, Dr David Nabarro, who is deeply committed to this. We obviously hope that his candidature will be successful. I reassure the Committee that that work very much goes on.

The noble Baroness, Lady Finlay, asked about the nature of the pricing and control scheme. I am grateful to her for sharing her knowledge in a personal meeting. There is a tension between getting the right deal and disincentivising investment in the life sciences. It is always a fraught point—as my noble friend Lord Lansley said, every time we have one of these negotiations the balance is slightly different—but I am aware that it is an important balance to strike throughout.

I am grateful to my noble friend Lady Redfern for her support for the Bill and for the importance of driving value. We will have an opportunity to discuss ring-fencing shortly. I do not want to get ahead of myself on that, but we will address it. I had the great pleasure of working for my noble friend Lord Lansley when the Conservative Party was in opposition and I know that he has been very committed for a long time to value-based pricing and getting a good deal. I am grateful for his knowledge on that. Again, we will have the opportunity to talk about those things in a group of his amendments, so I do not want to spend any more time on that.

The noble Baroness, Lady Masham, asked particularly about pricing differences in England and Scotland. I think that we will address that at a later point. There are differences in how drugs are priced according to packs versus units, the starting point and so on. The picture is quite good when you look at it in the round for particular products, but I would be delighted to discuss that with her further, if she wants.

Finally, on the questions raised by the noble Lord, Lord Hunt, I have tried to express again why we think that the Bill is necessary. The noble Lord talked about the open-ended nature of the Bill, which we will look at in amendments at the end of the process. Clearly, we do not want a declining UK sector or rationing. That involves, first, a proper life sciences industrial strategy, which we will have. I would like to think that that is not just the preserve of the governing party but something to which all parties would want to contribute. I look forward to working with noble Lords, who have tremendous experience in this area, to gain their ideas to help us with that.

We also need to drive access through the system. That is one part of an industrial strategy. It cannot be done just by diktat. We rightly put clinical decision-making at the centre of our system, but there are things that we can do beyond what we are currently doing to improve access, which I would be delighted to talk about and work on further with noble Lords as we draw out that life sciences strategy.

I apologise for the slightly long contribution, but I wanted to take the opportunity to respond to noble Lords and to set the scene. While we support the principles of the amendment on the duty, I do not believe that the aim is best achieved through having a legal duty. I ask the noble Lord to withdraw the amendment.

[Baroness Finlay of Llandaff]

Let me thank the Minister for that comprehensive reply and for his openness in discussing things with us all. He talks about having discussions with the industry. I hope that he is aware that there is a move by the industry to consolidate into three major hubs, or potentially four. The fourth would be the Oxford-Cambridge-London axis, the other three being those in Boston, in California and in Basle in Switzerland. We are at a critical time, because a lot of change is going on—hence the motivation for so many of us to support the amendment, as we are aware that things are potentially fragile.

[Lord O'Shaughnessy]

I thank the noble Baroness for that point, with which I completely concur. This is obviously a big moment in time, for several reasons. Our current price regulation systems for pharmaceuticals run until the end of 2018 and, in 2019, we will leave the European Union. These things are bundled together and co-dependent; making the right decisions on each of the factors will have a knock-on effect on the rest. I very much understand the point. As I said, my job has the tension of both responsibilities, including health, and the trick is to square the circle.

[Lord Warner]

My Lords, I am grateful to the Minister for his response but I was not convinced and I am not sure that the industry will be convinced. Over time, the industry is seeing the legal requirement to implement NICE being watered down by NHS England in effect introducing a cost-control system on top of the legal requirement. It is seeing the Government fixated with cost rather than innovation and patient interest. Companies are seeing their investment drop and their involvement in this country being called much more into question by their boards. That is the issue. It is not about whether the Minister can convince me or this Committee; it is whether he can convince the outside world in this sector. At the moment, I am inclined to pursue this on Report, but in the meantime I beg leave to withdraw the amendment.

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[Lord Lansley]

There is a risk of going on about this, but the structure of the amendment in the context of the PPRS as presently constructed is illogical, because the PPRS is constructed around budget control. The point, however—we will no doubt come back to this, not least on the next group—is that we should be thinking about how we can arrive at a negotiated price for the NHS to buy medicines which may well be marketed initially or globally at a given price, but the amount that the NHS should pay should reflect value. I have said it before and I will keep coming back to it.

I would not be as disparaging of the current consultation between NHS England and NICE at the noble Lord, Lord Hunt. It could have the effect that he describes: adding additional jeopardy because one has to meet not only all the normal criteria for an effective medicine but the NICE threshold, and NHS England might step in with hobnailed boots and say, “But we are not going to make it available and you must change the funding direction”. But it might recognise reality. The consultation, in my view, may have the effect of avoiding arbitrary post hoc rationing of medicines, because the NHS should be up front, negotiating price discounts on medicines, regardless of the rebate. That means engaging with the industry at an early point.

If the industry understands the consultation properly, it will understand that the budgetary impact for the NHS under current circumstances cannot be ignored. The best way to deal with that is not to go through all these processes and then find, at the end of the day, that the NHS cannot afford it, or that NICE has to say no through the application of the threshold. Rather, it is to use the pharmaco-economic evaluation and the health technology assessment properly alongside NHS England and say: “Here is something that is valuable and we want to be able to use it, but we must recognise the budgetary impacts”. There may well therefore be some risk-sharing processes or discounting processes to enable the product to be available to the NHS at an early stage and to give industry and the NHS all the information they need subsequently to be able to make sure that they have got the pricing right.

[Lord O'Shaughnessy]

I thank noble Lords for these amendments and for the discussion that has followed. I will come back to the issue of budgetary control raised by my noble friend Lord Lansley. I do not think it is enough simply to say that it should not be a factor. It is a factor and I will talk about how that interacts with the current system in my response.

Our concerns with these amendments are twofold—one is a matter of principle and the second is a matter of practice. In my short period in the office I have already had an opportunity to talk about ring-fencing on at least one occasion. Noble Lords understand that the Government’s policy is not to ring-fence with budgets set by politicians but rather to give money to the NHS and its constituent parts and to trust clinical judgment on commissioning health services in response to the regulatory regime that is set up to hold them accountable. I have not yet heard from anybody who disagrees with that fundamental principle.

Amendments 2 and 4 are unnecessary, therefore, because all the income and savings from the PPRS and the statutory scheme are already invested in NHS services. As the noble Lord, Lord Hunt, said, the anticipated income from the PPRS and the statutory scheme are put into the NHS baseline. That baseline is the figure above which we will be spending the additional £10 billion by 2020-21. That money is already in the baseline and it is there to be used with the discretion of clinicians within the system.

The Health and Social Care Act 2012 requires the Secretary of State to promote the autonomy of NHS England and clinical commissioning groups. This includes their decisions as commissioners about priorities for funding. That is because it is a fundamental principle of the NHS that funding should be allocated according to clinical priorities based on the judgment of clinical commissioners. That might include new treatments but it might include scaling up older, effective treatments or investing in staff. The proposed amendments would result in the income received from a voluntary or statutory scheme being used solely for the purposes of reimbursing the NHS for medicines and medical supplies. It is perhaps worth highlighting to noble Lords that the NHS spent over £15.2 billion on medicines in 2015-16—far in excess of the cumulative income received from both schemes.

I come to a couple of points raised by the noble Lord, Lord Hunt. The first, as I mentioned, is on budgetary control. The second is that if additional money were spent, it could be recycled back into funding for innovative drugs. I am not sure. I have not had the opportunity yet to consult with the boards of life sciences companies, but I am not sure that there is an open-ended commitment there either to continue spending money in the NHS. There is a need for budgetary control on both sides. I appreciate—and it is a strong theme in this debate and was in the previous debate—the need to do something about access. The ability to access drugs and to access them quickly is both good for patients—because clearly those drugs are being approved because they are an improvement largely on what has gone before—and also good for life sciences. If we are in the game, as it were, of trying to find a win-win out of the changes we make now or in future, clearly access will be a clear part of that.

My noble friend Lord Lansley touched on a practical objection. It is the potential unintended consequence of ring-fencing the income from schemes specifically for certain types or categories of medicines. The income from the PPRS and the statutory scheme can fluctuate, so allocating the income to a specific area, such as new medicines, brings risk. This could potentially disadvantage patients by making treatment dependent on income from medicines pricing schemes, thereby producing inequities. At the moment the Department of Health manages that risk. The proposed changes would move that risk on to the NHS—which, as we know, is already under a great deal of pressure.

I understand the intention behind the amendments, but I am not convinced that the Government predetermining clinical decisions and clinical priorities for spending on medicines and medical supplies is the right way to go. We believe that the current PPRS is designed to incentivise companies to bring new medicines to market. Companies with mainly new medicines in their portfolios pay less than companies with mainly old medicines, and as part of the PPRS, the Government have made a number of commitments around NICE decisions and the funding of NICE-approved products in order to support access to new medicines.

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[Lord O'Shaughnessy]

My Lords, I thank noble Lords for their amendments. The noble Lord, Lord Hunt, skipped over the first part of Amendment 3. For the sake of completeness, I shall dwell on it briefly. The amendment would circumvent an important part of the checks and balances around prescribing systems. It would basically do away with the NICE process by going straight from licence to availability with clinicians, which we do not think is the right approach.

The second part of Amendment 3 would link the payment mechanisms for the statutory and voluntary schemes, and Amendment 5 would require us to secure equivalent terms for both schemes. The Government’s intention is for the two schemes to deliver a broadly equivalent—I emphasise “broadly”—level of savings as a proportion of the total sales covered by each scheme. However, to require the terms of each scheme to be the same, which is what the amendments denote, would be inappropriate and would severely restrict the scope for the two schemes to operate in a complementary manner. The idea of equivalence is too strong and would involve there being similar processes, whereas the alignment approach outlined in the Bill would allow for similar outcomes, which is ultimately what we are driving at and would not undermine the complementarity of the two approaches.

The voluntary scheme is a matter for negotiation with industry. As such, there is scope to include a range of measures that reflect the priorities of both sides. To give an example, the current voluntary scheme, the PPRS, includes a range of provisions developed through negotiation with industry that sit alongside the payment mechanism. They include price modulation, which enables companies to put prices up and down as long as the overall effect across their portfolio is neutral. This has commercial value to companies, who may be willing to accept a higher payment percentage as a result.

To give another example, while new medicines in the PPRS are excluded from the PPRS payments, the PPRS payment percentage level is set to achieve the agreed level of savings across both old and new medicines. This means that each company’s share of the income due to the Government will vary depending on the balance of new and old products in their portfolio, with companies which have mainly new products paying less than companies with mainly old products—there is obviously value in that for encouraging innovation.

However, it would be very challenging to replicate this model in the statutory scheme, as many fewer companies are affected by the statutory scheme regulations than are members of the PPRS. As a result, there is a smaller pool of companies with older products. To achieve the same level of savings overall from the statutory scheme as from the PPRS while exempting new products would require an extremely high payment percentage—I think that my noble friend Lord Lansley conceded that point. This provides an example of where minor differences in terms may be required to deliver an equivalent level of savings across the two schemes overall. The detail of how a future statutory scheme would work will be subject to further consultation that will take place this year.

The freedom to be able to negotiate the voluntary scheme has been valued greatly by both industry and government. We would intend that any future voluntary scheme is established through negotiation in this way, but linking the payment mechanisms as described in the amendments would inevitably place a restriction on that freedom.

Amendment 6 would mean that the Secretary of State’s powers to operate a statutory scheme would be permitted only while a voluntary scheme was in operation—a point that has already been raised. It is clear that the noble Lord, Lord Warner, is keen to retain a voluntary scheme in future and we know that industry values the agreement, which began 60 years ago in 1957 and has been of benefit to both government and the life sciences sector over that time.

The current scheme, the 2014 PPRS, and its predecessors show how government and industry can work together to develop solutions on a voluntary basis for the benefit of patients. Like the noble Lord, I am keen to continue the collaborative and productive relationship that the Government currently have with the pharmaceutical and life sciences industries. With the life sciences industrial strategy coming up, and reflecting on the debates that we have had, it is clear that there is a lot more we can do to enhance that relationship.

However, the amendment would have the effect of giving industry no incentive to agree a voluntary scheme, as there would be no fallback to a statutory scheme in the event of failing to agree a voluntary scheme. Without a voluntary scheme in operation, there would be no scheme to control the cost of medicines—so it would in effect tie one hand behind our back in any negotiations.

The statutory scheme and the PPRS both include provisions for controlling the maximum price of medicines, and these prices are the starting point for negotiation of supply contracts between the NHS and suppliers of medicines. As I think all noble Lords would recognise, removal of both schemes would risk significant price rises.

I am sympathetic to the noble Lord’s intention in tabling this amendment and welcome the opportunity to reassure him and other noble Lords that the Government are committed to continuing a collaborative approach to future medicines pricing arrangements. We firmly believe that it is beneficial to collaborate with industry to develop the successor arrangements to the 2014 PPRS. This legislation should provide the widest possible range of options in order that the best arrangements, whether voluntary or statutory, can be put in place for the benefit of NHS patients.

However, the amendment would have the opposite effect by removing a key incentive for industry to collaborate, and would bring significant risks to the control of the cost of medicines. I ask noble Lords not to press their amendments.

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[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.

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[Lord Warner]

My Lords, I have added my name to Amendment 14, but I also support in principle Amendments 9 and 10A in this group. Each of these amendments does something slightly different and they need some consolidation. They are, however, a reflection of a deep sense of unease over where the Bill is taking us and a strong wish to monitor its consequences. The Government are imposing a lot of requirements on the industry for information. The quid-pro-quo is that we would like a lot more information from the Government on how this has worked in practice.

There seem to be three features that that kind of reporting back should cover. The first is the scale of payments made; the second is the use to which the money has been put; and the third is the impact of the Bill on the access to new medicines of NHS patients. It would not be right to try to draft this off the tops of our heads, but it would be helpful if the Government would accept that there should be some kind of monitoring of key issues around the Bill that are then reported back to Parliament and the public on a regular basis—let us say annually—and if we could get together with the Government to help draft something for Report in this kind of territory.

[Lord O'Shaughnessy]

My Lords, I am grateful to noble Lords for raising the issue of reporting requirements. We will address at the end the issue of access and my sympathy to reporting requirements, but I first want to deal with the amendments as they stand.

Under the current PPRS, the Government regularly publish information relating to the operation of the voluntary scheme. Of course, for a future statutory scheme I draw attention to the regulations that we have already discussed, in which there are annual reviews of the regulations and a requirement to publish a report on each review. The illustrative regulations require an annual review that will: set out the objectives of the scheme; assess the extent that our objectives have been achieved; and assess whether those objectives remain appropriate. These requirements will be tested through the consultation on the regulations and we will, of course, take account of those views. I totally accept that reporting is a critical principle, but believe that setting out the requirements in primary legislation is too restrictive because of the potential to change from year to year what the priorities are within a sector and within the NHS.

Turning to the specifics of Amendment 9, I reassure noble Lords that the content of annual reviews would not be restricted to reviewing objectives. They must also be able to address key issues arising during the year that might affect the operation of the scheme, so there is flexibility there. We also intend for the annual review to be published and put before Parliament, so there is the opportunity for that to be seen and discussed. On the details of what it is proposed to report—in particular, how the payments are used—to achieve the specific aims of the amendment, the department would need to ring-fence the funds and monitor where the payments are used. I do not want to rehash our discussion about ring-fencing. I take seriously the point that noble Lords make about driving access to innovative drugs but we do not think this is the right way of doing it.

Nor do I believe that, through these means, it is right to address matters relating to the NHS duty to promote innovation. This Bill is ultimately about controlling the cost of medicines and medical supplies. The NHS Act 2006 puts duties on the Secretary of State to take into account both the need for medicinal products to be available for the health service on reasonable terms and the costs of research and development, which is a big factor in innovation. By taking into account these factors, the Secretary of State is looking at the needs of the industry to support the R&D base as is necessary to support the development of innovative medicines and technologies.

The NHS duty to promote innovation is different. It is about promoting innovation in the provision of health services and there is an extremely broad agenda that goes well beyond medicines. We have already said that we all want to make the UK the best place in the world to design, develop and deploy life sciences products. We do not believe that the Bill will have a negative impact on our doing so. We have also talked about the accelerated access review, so I will not go over that.

Turning to the specifics of Amendment 10A, the supply of medicines is highly complex, and pricing is one part of it. Other issues of course include rigorous safety and quality standards. Difficulties faced in the take-up or availability of medicines can be influenced by a number of reasons which are nothing to do with pricing. There can be manufacturing problems, such as batch failures; changes in guidelines, such as antibiotic switches; and raw material problems, as well as regulatory changes.

For example, in 2015, there was worldwide withdrawal of a branded antipsychotic injection, Piportil, due to a global shortage of the active pharmaceutical ingredient. Sanofi was unable to find an alternative source of this ingredient and had to discontinue the product. I set that out to illustrate the point that it is not always easy to link changes in pricing to issues of availability or access: there are other things to take into account. That is why we do not believe that we should set out, either in primary legislation or beyond the commitments made in the illustrative regulations, specifically to assess the impact on availability, access and so on.

Leaving all that aside and returning to the recurring theme of the debate, I understand the desire for greater transparency, which is undoubtedly the right approach to access. We must think about how we can improve access to innovative medicines for NHS patients and, in doing so, improve the operating conditions, if you like, for the life sciences industry—the win-win situation to which we keep returning. I would be happy to meet noble Lords either individually or collectively to think about what more we could do, whether through the Bill or looking ahead to the life sciences strategy, to ensure that we deliver on this promise. I take very seriously the warnings that many noble Lords have issued; the Government absolutely want to address this. On that basis, I ask noble Lords not to press their amendments.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the Minister. On the two arguments he put forward against the amendments, he said, first, that primary legislation would be too restrictive and what one might need to report on one year, one would not in another. The three amendments cover payment, supply, R&D and innovation. I do not think that there would be any year in which it would not be appropriate to report on them. He also said that duties in existing legislation cover some of these areas, and that where they do, such as the duty on innovation—presumably in the 2012 Act—they go wider than the intent in the amendments. I fully accept that. None the less, there is a strong argument for progress being monitored and for Parliament to be involved in that. However, I am grateful to the Minister for agreeing to have further discussion about the core issue of access, and I hope that we may take this forward. In the meantime, I beg leave to withdraw the amendment.

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[Lord O'Shaughnessy]

My Lords, I am very grateful to my noble friend Lord Lansley for this amendment and I pay tribute to his considerable expertise in this area. We had the opportunity to discuss some of this when we met. I also recognise that the amendment’s purpose is to start thinking ahead to what comes next. It is not so much to define right here and now what is required but to do something which I think he has been trying to do for a long time: to broaden the discussion about how we price value into medicines and bring that broader discussion to bear. I recognise the intention. It clearly is important that we think of these things in the broadest possible sense for the benefit of the most people possible.

Amendment 10 would require the Secretary of State to have regard to factors such as therapeutic benefit to patients, meeting unmet need, wider societal benefits, the promotion of innovation in new therapies and NHS affordability. I would like to draw noble Lords’ attention to the legal duties that already exist, which the Government believe currently achieve the intention behind the amendment. Section 266(4) of the NHS Act 2006 already requires the Government to bear in mind,

“the need for medicinal products to be available to the health service on reasonable terms”,

and,

“the costs of research and development”,

when limiting the price of medicines—something we discussed in the last group. Section 233 of the Health and Social Care Act 2012 requires NICE to have regard to,

“the broad balance between the benefits and costs of provision … the degree of need … and … the desirability of promoting innovation”.

In reading out these sections, I am beginning to understand that these Acts are often very, very long. I am thankful for small mercies that our Bill is not, yet.

As part of the NICE clinical and cost-effectiveness assessments, NICE already considers factors such as therapeutic benefit to patients, unmet clinical need and the promotion of innovation, and has recently consulted on new affordability considerations. The point here is that some of the factors that my noble friend is concerned about are already taking place but within the NICE process as part of that assessment.

The Government’s priority is to make sure we get the best possible results for all NHS patients with the resources we have. We will continue to look at how to promote better access to effective medicines through NICE recommendations and guidance to the NHS. In developing that guidance, NICE takes account of all health-related costs and benefits, including the benefits to carers. As I am sure my noble friend will recall, in 2014, NICE considered changes to its methods to better capture the wider costs and benefits to society of new drugs and treatments, sometimes known as value-based pricing. It is only responsible to report that, during the consultation, some significant concerns were raised; for example, about the potential implications for products that offer limited life extension without associated gains in quality of life for those with terminal illnesses. The consultation highlighted a significant diversity of responses, demonstrating that this is a complex issue. The point here is to say that there may be a way through, but we do not yet know what the right way forward is. It is critical that stakeholders continue to have confidence in NICE’s work, and we agree with NICE that these issues require very careful consideration before making changes to the way that we assess medicines.

My final point is on freedom of pricing, an issue that has been raised and which this amendment would have an impact on. Noble Lords will be aware that the Government, when setting prices for new medicines, currently operate a system of freedom of pricing for medicines that are a new active substance. This means that the maximum NHS price approved and published by the Secretary of State is that proposed by companies. NICE will then assess the product and consider whether it is clinically and cost effective. The PPRS allows a company to propose a discount to the maximum price.

We know that this system of freedom of pricing for new active substances is of great value to the life sciences industry, providing commercial flexibility, which is important in a context where other countries may reference the maximum NHS price in their own pricing arrangements—something we know to be of huge value. It does not prevent the NHS securing substantial discounts, which indeed it does, and these form part of the overall assessment of value undertaken by NICE. The amendment could, however, have the effect of removing the principle of freedom of pricing, which has been an important pillar of medicines pricing agreements for years. It would require the introduction of assessments akin to clinical and cost effectiveness when determining price, as opposed to determining through NICE whether it should be used. Such an approach would largely replicate the factors that NICE considers as part of its clinical and cost-effectiveness assessments.

I want to make one final point on the current scheme and looking ahead. The PPRS commits the Government to maintaining the basic NICE threshold and take-up periods until the end of 2018. It is my belief that the right time to look at whether the sorts of factors that my noble friend has raised should be taken into account in medicines funding and pricing arrangements is as part of discussions on a new medicines pricing system, where it can then be looked at in the round. That opportunity will arise when considering what should happen when the current PPRS expires. I would be very happy to explore with him proposals on what any new scheme could look like. I look forward to productive dialogue and to benefiting from his wisdom in the months ahead. On that basis, we believe that the amendment is unnecessary, although we sympathise with its intention. I therefore ask my noble friend to withdraw it.

[Lord Lansley]

I am grateful to my noble friend for that thoughtful and helpful response. I will say three things. First, thank you for the opportunity to be consulted as the future PPRS structure is developed. I very much appreciate that.

Secondly, on freedom of pricing and introduction, it does not necessarily follow that putting into the legislation the criteria that Ministers should take into account in so far as they exercise their powers has a direct impact. That might be done, as I described, through the mechanism of modulating the rebate, which would not impact on the freedom of pricing and introduction.

My third point is that I did not invent value-based pricing. I may have advocated it for some considerable time—probably 10 years now—but it was advocated before I took it up by the OECD in a wide-ranging report on pharmaceutical pricing internationally and by the Office of Fair Trading in its review of the previous PPRS.

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Moved by

[Lord O'Shaughnessy]

11: Clause 5, page 3, line 25, at end insert—
“( ) Section 260 (control of maximum price of medical supplies other than health service medicines) is amended in accordance with subsections (2) and (2A).”

[Lord O'Shaughnessy]

My Lords, this group of government amendments would ensure that, as is the case with the power to control the cost of health service medicines in the NHS Act 2006, the Secretary of State would be required to consult representative bodies before making legislation to control prices of medical supplies.

The NHS Act 2006 contains provision for the Secretary of State to control the cost of both health service medicines and medical supplies. It also contains a requirement on the Secretary of State to consult with the industry body before any cost control scheme for health service medicines is made. There is, however, no requirement to consult before making price controls on medical supplies. The amendment would introduce this requirement.

An amendment was tabled in Committee and on Report in the House of Commons, with support from Labour and the SNP. It would have had a similar effect, but it was not consistent with the existing provisions for health service medicines in the NHS Act 2006. Representative bodies in the medical devices sector have expressed their support for the amendment. I believe that it would improve the Bill by ensuring that appropriate consultation takes place before the introduction of any scheme to control the price of medical supplies. Therefore, I hope noble Lords will be prepared to accept this amendment.

Amendment 11 agreed.

Moved by

[Lord O'Shaughnessy]

12: Clause 5, page 3, line 26, leave out from “In” to second “for” in line 27 and insert “subsection (1)”

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[Baroness Walmsley]

My Lords, I think you only want to modernise something when you are planning to use it. Therefore, I hope the Minister can understand the level of suspicion and worry that we have been hearing from the sector. I understand that the Government want to make the penalty for not complying with the information requirements more proportionate—that is fair enough. But if the Government are not planning to use those powers then why do they want to make that small but fairly significant change?

I am not aware of any competition law action against companies providing medical supplies to say they have abused the system or overcharged. I am aware that an awful lot of the companies producing medical supplies are fairly small and would fall below the £5 million level and therefore not be affected by this. However, some companies that provide a lot of equipment and supplies do come within the scope of what the Government are trying to do, but they are, in fact, very competitive. It is a very competitive market already and, as far as I know, the prices charged are affected by competition. Therefore, to my knowledge, the NHS is not being ripped off. I have asked the Minister whether he has any evidence to the contrary. I have not heard anything yet, but perhaps he will be able to give us something this evening.

[Lord O'Shaughnessy]

I thank noble Lords for the debate on Clause 5. I am also grateful for the tour d’horizon or history lesson on how this has all come about. It feels as though it has slipped through many nets, for which there are multiple responsibilities around the room.

I will first address the point about consultation. Noble Lords will appreciate it when I say that, personally, I have not had the chance of undertaking that consultation but it is something that I am committed to doing. Whatever has gone before, I can at least give the reassurance that I will meet the relevant bodies in the next few weeks and discuss their concerns ahead of Report. At least in a forward-looking way, I can provide that reassurance.

As everyone has stated, the critical point here is that the 2006 Act gives the Secretary of State the power to control the price of medical supplies and to collect information about medical supplies. What Clause 5 does is to ensure that the same enforcement and territorial extent to provisions apply to controlling the cost of medical supplies and health service medicines. It does not give the Secretary of State any new powers to control the price of medical supplies. There are currently inconsistencies in the enforcement and territorial extent provisions. For example, a contravention or a failure to comply with the current provisions in the 2006 Act for medical supplies can result in a criminal offence. By contrast, the equivalent penalty for medicines is a civil financial penalty. Clause 5, therefore, aligns the enforcement provisions for medical supplies with those for medicines and, in so doing, makes them more proportionate, as the noble Baroness, Lady Walmsley, has pointed out.

With respect to the territorial extent, the power to control the prices of medical supplies in the NHS Act 2006 currently extends only to England and Wales. Clause 5 would extend the power to control the prices of medical supplies to Scotland and Northern Ireland. That would be consistent with the territorial extent of the powers to control the costs of health service medicines. That is an important point.

A number of noble Lords asked why the Government need the powers to control the prices of medical supplies when they do not currently use them nor have ever used them. That is a perfectly reasonable question to raise and one that occurred to me, too. We do not have any immediate concerns about the pricing of medical supplies. It is true that the market for medical supplies is very different from the market for medicines. It is innovative and competitive, and new medical supplies are generally faced with competition much more quickly than is the case for new medicines. However, I remind noble Lords that until recently we did not think that we needed the powers to set the price of unbranded generic medicines. We thought that competition in the market was working well and keeping prices down. When we realised that the market was not functioning as well as we thought with respect to certain products, and we were faced with companies charging unreasonably high thresholds where they had no competitors, we realised that we did not have sufficient powers to intervene when needed. That is of course one of the reasons for the Bill.

A question was asked about thresholds and when such a provision could be triggered, which is a reasonable question. The two examples I can give are when we had evidence from existing data that there may be an issue with pricing—for example, the reimbursement price that we set in primary care is increasing without an obvious reason—or when there is effectively a bottom-up complaint where patients, clinicians, commissioners or industry raise concerns because it is not obvious what is driving a price rise. I want to minimise the need for future primary legislation on medical supplies pricing controls. The Government should have the ability to intervene, but only when the market is not working well. Whether it is for medicines or medical supplies, it is right that those powers exist but are used only when necessary and proportionately. On that basis, I ask the Committee to agree that Clause 5 stand part of the Bill.

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the Minister for his response. I also thank him for his consultation and willingness to meet bodies before Report, which I am sure will be very welcome. I understand the first argument, which is that there is a need to ensure consistency in relation to this Bill and the 2006 Act. I fully understand that. I also understand the change from criminal to civil penalties. But we then come to the issue of whether this provision should be in statute at all. The Minister himself has acknowledged that this is a different market, with competitive tendering. It is very competitive. We can see no evidence that this measure has been used for 40 years, and as far as I can see there is no evidence to suggest that it will be used any time soon.

The Minister said that it was not thought that the switch from branding to generics would arise in relation to medicines, and therefore that we should look into a completely different sector and say that because something might happen in the future we need to have this overarching provision in the Bill. But that is not the right approach. It has become clear that there are two courses of action. One is to take this out of the 2006 Act altogether, which at the moment I rather favour. We should not regulate for something that might happen in the mystical future.

I, too, was a better regulation Minister and it was drummed into me that if you do not need it, get rid of it—and if you do not need it, do not legislate in the first place. In his heart of hearts, surely the Minister realises that this is unnecessary. The alternative approach is to take the threshold he suggested and put it in the form of an amendment so that we have some reassurance on the face the Bill that it will not be used inappropriately. Those are two particular options.

In my tour d’horizon, as the noble Lord said, I came across the comments made by the noble Earl, Lord Howe, in 1999 when my noble friend Lady Hayman was taking one of the many health service Bills through your Lordships’ House. The discussion was not about devices but about the PPR scheme, because the then Government had taken powers in relation to prices. The noble Earl, Lord Howe, said that the Government had,

“arrogated to themselves sweeping powers to bring the current voluntary scheme to an end and to control the price of any drug at will. Lower medicine prices are appealing but too much of that will kill the golden goose”.—[Official Report, 9/2/99; col. 118.]

If the noble Earl, Lord Howe, were here arguing for this Bill, I think that he would have reflected that the case had not been made for non-health service medicines to be involved. We need to find a way forward between this stage and Report, otherwise the persuasive argument will be to remove the offending sections from the 2006 Act.

[Lord Warner]

Perhaps the Minister will consider the Bill’s definition of “medical supplies”. It states that it,

“includes surgical, dental and optical materials and equipment (and for this purpose ‘equipment’ includes any machinery, apparatus or appliance, whether fixed or not, and any vehicle)”.

That seems to take the Government into any bits of kit—not just ordinary devices as we normally understand them. It covers ambulances and all sorts of fixed equipment in the NHS. Is the Minister really saying that the Department of Health needs a power to cover that range of subjects—I presume that it includes scanners—where competitive tendering may be used, and that the Government reserve the right to intervene in that? That is what the Bill seems to say.

[Lord O'Shaughnessy]

On that specific point, there are number of things—for example, supplements, cosmetics and foods—that fall outwith the categories of health service medicines or health service medical supplies but are sometimes provided or prescribed by the NHS. The intention of the part of the Bill to which noble Lords draw attention is to capture such items when they are provided by the NHS for the benefit of patients—but not in general.

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[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.

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[Lord Lansley]

That is a helpful suggestion. It might not necessarily be defined in regulations, but one might contemplate that the Secretary of State would issue guidance as to what constituted such a process.

[Lord O'Shaughnessy]

I thank my noble friend for his amendment and am very happy to show sympathy with it, as other noble Lords have done. I will start by stating that the Government’s view is clearly that competition and market forces are the best way of delivering value. Wherever possible, we should ensure that competition is there, that it works and that it involves as many participants as possible. In many instances, that is the way to drive better value. That being the case, my first priority is to look at ways of improving how markets operate, before reaching for the lever of regulation. That principle is guiding our work on the pricing and cost control of medicines and medical supplies.

For that reason, I understand the sentiment behind the amendment. The underlying assumption here is that if the NHS tenders for a product in a competitive market, the tender should always secure the NHS the best possible deal, and that there should be no need for further government intervention. However, while that is the case sometimes, it is not always the case. I will give a couple of examples. The department or the NHS may conduct tenders for a number of reasons, including security of supply. Furthermore, EU procurement rules —of course, that may change in future—which have been implemented into domestic legislation pursuant to the Public Contracts Regulations 2015 mean that, for contracts for products over a certain value, the NHS has to tender such contract opportunities in accordance with the requirements specified in the procurement rules.

Where there is a sole supplier of a particular product, or other factors such as supply or specificity of products apply, a tender exercise in itself is unlikely to result in significantly lower prices. For example, the department has run competitive processes for von Willebrand factor. This is used to treat patients with a genetic deficiency in the quality or quantity of this protein, which causes problems with blood clotting. Although there are six or seven products that may meet our tender specification, they all have a different concentration of von Willebrand factor, so they are not easily interchangeable. This means that, in practice, the suppliers of such products do not compete on price, knowing that clinicians need access to all the products to select on clinical need and that the department will make awards on this basis.

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[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.

Mental Health: Children’s Services

Lord O'Shaughnessy Excerpts

Thursday 19th January 2017 Lords Chamber

[Lord Hunt of Kings Heath]

To ask Her Majesty’s Government what is their assessment of YoungMinds’ analysis published on 21 December 2016 that 64 per cent of Clinical Commissioning Groups are diverting new funding for children’s mental health services to other areas.

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

My Lords, the Government are working with partners in the NHS and elsewhere to deliver an ambitious programme that improves access to high-quality mental health care for children and young people. This is backed by significant additional investment. NHS England’s new five-year forward view for mental health dashboard shows each CCG’s spend and activity on children’s mental health, as part of the robust assurance processes we have put in place.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I thank the Minister for that. No one can doubt that Ministers have made all the right noises on developing mental health services for young people. The problem is in the execution. He mentioned extra money, but he will know that the promised £1 billion is simply not getting through to the front line. A recent survey by YoungMinds showed that about 50% of CCGs were simply not using the money that they had been given in their baseline budgets for mental health services for young people. With one in four young people not getting access to services and it being not until 2021 before we stop the appalling practice of young people having residential care hundreds of miles from their homes, there is grave doubt as to whether this will happen in practice. Will the Minister agree to consider ring-fencing this money to ensure that it is actually spent on young people?

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[Lord O’Shaughnessy]

I thank the noble Lord for raising this important issue. I have looked at the YoungMinds research, and who could not agree that the money needs to get through to the front line? Its suggestion of maximising transparency is something with which we wholeheartedly agree. We do not think that ring-fencing is the right approach. It is right that we have a health service in which clinical commissioners, who know their local needs best, take decisions. As he knows, we are trying to redress an historic imbalance in both spending and parity of esteem for services. The approach that NHS England is taking about transparency is improving and working. I think that the YoungMinds research shows an improving picture year on year, although there is a lot to do. Indeed, that is confirmed by data from CCGs themselves on mental health spending, which shows an 8.4% increase year-on-year on money getting through to the front line.

[Lord Laming (CB)]

My Lords, do the Government accept that this is a subject of immense importance? Unless we identify young children with learning difficulties and other problems to do with eating disorders and self-harm, especially in the early years in education, and act quickly and robustly to meet their needs, it will be the beginning of a downward spiral. Society will pay a high cost in terms of both what happens to the individual in the impairment of their development and the costs for society in meeting their needs in their later life.

[Lord O’Shaughnessy]

I could not agree more with the noble Lord. It is significant that the Prime Minister made the announcement on mental health and committed herself to a big improvement in both the amount of funding and the services offered. Part of that is making sure that schools and health work together, with every secondary school in the country being offered mental health and first-aid training, but clearly there is much more to do.

[Baroness Chisholm of Owlpen (Con)]

My Lords, clearly prevention is better than cure. What is being done by the Department for Education and the Department of Health to work together to educate teachers—in fact all those who come into contact with people in our schools and universities—to notice when a young person might be having a mental health episode?

[Lord O’Shaughnessy]

The sad fact is that the prevalence of mental illness among young people, whether it is self-harm or eating disorders, is growing and there is a real problem. Schools have to play a central role along with health services in addressing it. One of the Prime Minister’s announcements was a major thematic review of children and adolescent mental health services, which is being carried out by both the Care Quality Commission and Ofsted, so that is an important point about joint working. Indeed, the Green Paper that we are committed to producing will be put together by both the Department of Health and the Department for Education. That is a very important statement of intent. Clearly there is a lot of work to do to fill it with good content that will make a difference, but there is absolute determination from the PM downwards to make that happen.

[Baroness Tyler of Enfield (LD)]

My Lords, given the frankly shocking revelation that more than half of clinical commissioning groups are diverting the new money they receive to improve children’s mental health services to other priorities, will the Government commit not to sign off any sustainability and transformation plans that do not contain a clear commitment to spend every penny assigned to mental health for those purposes?

[Lord O’Shaughnessy]

The noble Baroness is a great campaigner on these issues, and I have huge respect for the work that she has done. The sustainability and transformation plans will obviously include these local transformation plans for mental health, and it is up to NHS England to ensure that it delivers on the many commitments we now have. Those commitments include the first ever access and waiting times for mental health, which is both access to talking therapies and access to help after psychotic incidents. We have new targets coming up for children and young people who seek help when eating disorders or other generic mental health problems are identified. There are robust targets and there is now a mental health improvement team in NHS England to make sure that those CCGs deliver what they should.

[The Lord Bishop of St Albans]

My Lords, this is a very serious and growing problem. Recent research has shown over the last five years that the number of hospital admissions associated with children’s self-harm has grown by 93% among girls and 45% among boys. It seems extraordinary that when money is announced for mental health services it is then not spent. First, how many years will we wait until we need to ring-fence that money, because this is a really important issue? Secondly, to pick up on the previous but one question, will the Government commit to producing guidelines for schools and colleges about preventing and responding to self-harm, so that we have some practical things put in place?

[Lord O'Shaughnessy]

I could not agree more with those points, in the sense that money must get through to the front line. However, we have an NHS that is set up so that clinical decisions are made by clinicians rather than politicians, and that must be right, because the needs vary from area to area and different areas have different priorities. They have different historic legacies in terms of delivering their services. As for the direction that we give to schools and colleges, clearly the thematic review that the CQC and Ofsted are carrying out will provide advice on what works. We are also introducing some randomised control trials to look at interventions that work, so we have a proper evidence-based system. The commitment is to get 70,000 more young people having evidence-based treatments by 2021.

[Lord Watts (Lab)]

My Lords, is it not clear that the present system of “hands off” is not working? People working in this service are desperate to make sure that the Government take action to ring-fence this funding so that vulnerable children are not put at risk.

--- Later in debate ---

[Lord O'Shaughnessy]

I do not think that anybody disagrees with the scale of the problem that we are dealing with, but I do not believe—and the Government do not believe—that having an NHS in which politicians can direct pots of money is the right approach. These are clinical decisions that need to be made locally. It is not true to say that there is no pressure going on—that is what NHS England is for, to make sure that CCGs are committing not just on mental health but on other health issues to spend the money and meet the targets that they are committed to meeting.

[Baroness Butler-Sloss (CB)]

Does the Minister accept that to start looking at mental health issues in secondary school is too late? There is no doubt a shortage in terms of looking at it at primary school level, but it is extremely important. The earlier that children are looked at for their problems, the better.

[Lord O'Shaughnessy]

The noble and learned Baroness may know that over the past five years I have been setting up primary free schools, with an explicit focus on developing character, well-being and resilience in young people, so I could not agree with her more—it has to start early. Indeed, it does not have to start in primary; it must start in early years and, of course, it must start with parenting and giving parents the skills that they need to teach resilience in their children.

[Lord Roberts of Llandudno (LD)]

Is the Minister aware that half the immigrant children in the Calais or Dunkirk camps were diagnosed with mental health problems? As we are supposed to accept 20,000 refugees in the next three years, is there sufficient funding and awareness of the need to add to our commitment?

[Lord O'Shaughnessy]

I was not aware of that fact, but it is clearly an important one and I shall write to the noble Lord with the information about what we are doing to support those children who come to this country.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, the Minister will be aware that there is an issue around identifying people in need of treatment, but there is also an issue about the sustainability of the workforce to deliver that treatment. What are the Government doing to encourage more trainee professionals, both doctors and other kinds of mental health professionals, to pursue a career in relation to mental health, which as I understand it is still fairly unpopular as a specialisation?

[Lord O'Shaughnessy]

That is an extremely good point. The people need to be there in order to deliver. There are two parts to the answer—first, that within the additional £1.4 billion going into children and adolescent mental health services over the course of this Parliament, about £130 million is for workforce development. Secondly, because of our reforms to workforce training, there are another 1,500 doctor training places. By removing the cap on nurse, midwife and allied health professional training, universities will be able to offer up to 10,000 more places a year for those positions.

[Lord Clark of Windermere (Lab)]

My Lords, might I press the Minister a little further on his very last sentence, when he referred to the increased availability of nursing? I know that he is aware that there is a projected 20% drop in nurse training at this stage but, for specialist nurse training, especially mental health nurse training, the drop is even larger than 20%.

[Lord O'Shaughnessy]

This is something that we had the opportunity to discuss yesterday. I am aware of the concerns on this issue. The reforms are designed to take the cap off the number of places, making more places available. In the last year, something like 37,000 applicants were turned away from nursing places, which is clearly not something that we want. When there is a change in regime, clearly there may be an impact on numbers in the first year—as there have been when tuition fees have been introduced in the past—but historically that has tended to rebound.

Health Workers: Training

Lord O'Shaughnessy Excerpts

Wednesday 18th January 2017 Lords Chamber

[Lord Crisp]

To ask Her Majesty’s Government what plans they have to increase the number of training places for doctors, nurses and other health workers.

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

My Lords, on 4 October the Health Secretary announced that from September 2018, the Government will fund up to 1,500 additional undergraduate medical places each year. Reforms to the funding of nursing, midwifery and allied health preregistration training will come into effect on 1 August 2017. The reforms will enable universities to offer up to 10,000 additional training places by the end of this Parliament.

[Lord Crisp (CB)]

I thank the Minister for his Answer and welcome him to what I think is his first parliamentary Question. I am sure that the Government recognise that there is a growing shortage of health workers globally that comes about as countries, particularly in Asia, expand their workforce enormously. There is a global market and global competition for health professionals. The UK was going to be affected by it regardless of Brexit, but the uncertainties of Brexit make it worse. First, what assessment have the Government made of the scale of the risks from those two factors? Secondly, what assessment have they made of the opportunities? The UK is a world leader in the education of health professionals. What are the Government doing to help universities and others take the opportunity to train more health workers both here and abroad to meet both the UK’s and the world’s demand for increased numbers?

[Lord O'Shaughnessy]

I thank the noble Lord for his welcome. The WHO has identified a global shortage of medical staff of more than 2 million, so clearly there is a big need and, as he says, it is being driven by the development of countries, particularly those with large populations, and the need to grow their own staff. At the moment, about 25% of NHS staff in the UK come from abroad and, like all NHS staff, they do a fantastic job for us. Clearly, given the problem that the noble Lord identified, we will need to become less reliant on overseas staff, which is one reason driving our desire to increase the number of training places for doctors, nurses, midwives and others.

In answer to the second part of his question, I think something like 10 of the world’s top universities are based in the UK. We are a world leader in education; that is a great strength of ours and something that we want to continue. Healthcare UK is the government body responsible for working with universities to unlock partnerships with other countries, and there have been a number of successful examples of where that has happened.

[Lord Hunt of Kings Heath (Lab)]

My Lords, if we are such a world leader in education, it is disappointing that the Government are doing everything they can to stop overseas students coming to our universities to study. On the NHS, the Minister will know that it is under the most extreme pressure. Cancer operations are being cancelled, people are dying on trolleys waiting for beds, and all the Government can do is attack general practitioners. Has the noble Lord seen the NAO report this month which shows that, since 2010, almost as many GPs have left the service as joined and that falling retention and increasing retirement rates put the target of 5,000 extra GPs at risk? The Minister says that the Government hold NHS staff in high esteem, so why do they not talk to and work with GPs to put this right rather than slagging them off?

[Lord O’Shaughnessy]

I do not recognise the description of “slagging off”. We know that GPs do a fantastic job and we are recruiting more of them—5,000, as the noble Lord said. More money is going into general practice as part of the five-year forward view. The Prime Minister in her statement paid tribute to the work that GPs do and said that there were obligations around extended hours and the provision of out-of-hours healthcare—and it is quite right, with the pressures we face, that every part of the healthcare system steps up to fulfil its responsibilities just as others are doing, in order to meet the pressure we are under.

[Baroness Gardner of Parkes (Con)]

My Lords, in the past I have raised the issue of the standard of training for nurses and the fact that they have to have five A-levels to get in. The answer from the Government is that they are about to introduce training that will not require five A-levels and therefore will produce many more nurses. Can the Minister tell us what is happening with that and whether there is any real progress?

[Lord O’Shaughnessy]

There are two routes into nursing. One is the university route, and because of the changes we are making, there will be the possibility for universities to recruit up to 10,000 more nurses. That is why we are removing the cap. We have also introduced an apprenticeship route, which does not involve going to university but follows the apprenticeship route practised in other fields. That will have 1,000 places in its first instance.

[Baroness Brinton (LD)]

Data in December showed that applications for midwifery and nursing degrees and other allied health university courses in England had fallen by more than 20% since the Government’s announcement of plans to scrap the NHS bursary in favour of loans for student midwives and nurses. Given that we are already extremely short of nurses and midwives, what will the Government do, first, to reverse the removal of the bursary given that most of the courses are on the wards, learning on the job, and, secondly, to encourage the recruitment of more nurses and midwives?

[Lord O’Shaughnessy]

I thank the noble Baroness for that question. We are recruiting and creating conditions for the recruitment of more nurses. Something like 37,000 applications were turned down for those wishing to take on nursing, midwifery and allied health professional degrees in 2014-15. That was one of the reasons for removing the cap and equalising the funding arrangement that goes to nurses on other courses within higher education. That will allow universities to provide more places for trainee nurses. We are still early in the cycle and are moving to a new system. I think the UCAS applications have just closed and it is certainly true that in the past when fees were introduced by whichever Government—Labour, coalition or whoever—there was sometimes a small dip in take-up in the first year. But following that, in all those cases across the system, there was a strong rebound in interest in higher education places.

[Baroness Hollins (CB)]

My Lords—

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[Baroness Hollins]

My Lords, my profession of psychiatry is the medical specialty which has recruited the most specialists from outside the United Kingdom, with 41% of trainees coming from overseas. It takes something like 14 years to train a consultant psychiatrist. Can the Minister confirm whether it is the intention of Her Majesty’s Government to allow doctors, nurses and other health and social care professionals to remain in the United Kingdom after Brexit?

[Lord O'Shaughnessy]

The Prime Minister has been incredibly clear on this point—and was again yesterday. It is our intention to do so, and to agree that early with our EU partners. But that is something that needs to be reciprocated.

[Lord Turnberg]

My Lords, we certainly need more doctors and nurses. The problem is that we are not retaining as many as we should, and there is no doubt that they feel denigrated and devalued. They really need to feel appreciated rather than kicked around all the time. Are the Government going to help them in any way whatever, or are they going to be constantly criticised?

[Lord O'Shaughnessy]

I do not believe that we are criticising. To take the noble Lord’s point, he is right that there is often negativity in the media about the performance of health professionals. But it is worth pointing out that in a recent poll earlier this week, those who believe that the NHS provides a high standard of care is now at 71%, up 13% since 2013. That is a huge testament to the amazing work that our NHS does.

Mental Health and NHS Performance Update

Lord O'Shaughnessy Excerpts

Monday 9th January 2017 Lords Chamber

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

My Lords, with permission, I will repeat a Statement made by my right honourable friend the Secretary of State in the other place. The Statement is as follows.

“This Government are committed to a shared society in which public services work to the highest standards for everyone. This includes plans announced by the Prime Minister this morning on mental health. I am proud that, under this Government, 1,400 more people are accessing mental health services every day compared to 2010 and we are investing more in mental health than ever before, with plans for 1 million more people with mental health conditions to access services by 2020. But we recognise that there is more to do, and will proceed with plans to further improve mental health provision, including: formally accepting the recommendations of the independent Mental Health Taskforce, which will see mental health spend increase by £1 billion a year by the end of the Parliament; a Green Paper on children and young people’s mental health to be published before the end of the year; enabling every secondary school to train someone in mental health first aid; a new partnership with employers to support mental health in the workplace; up to £15 million extra invested in places of safety for those in crisis following the highly successful start to this programme in the last Parliament; an ambitious expansion of digital mental health provision; and an updated and more comprehensive suicide prevention strategy. Further details of these plans are contained in the Written Ministerial Statement laid in the House this morning.

However, turning to winter, as our most precious public service, the NHS has been under sustained pressure for a number of years. In just six years, the number of people over 80 has risen by 340,000, and life expectancy has risen by 12 months. As a result, demand is unprecedented: the Tuesday after Christmas was the busiest day in the history of the NHS, and some hospitals are reporting that A&E attendances are up to 30% higher compared to last year. I therefore want to set out how we intend to protect the service through an extremely challenging period and sustain it for the future.

First, I would like to pay tribute to staff on the front line: 1.3 million NHS staff, alongside 1.4 million in the social care system, do an incredible job which is frankly humbling for all of us in this House. An estimated 150,000 medical staff, and many more non-medical staff, worked on Christmas Day and New Year’s Day. They have never worked harder to keep patients safe, and the whole country is in their debt.

With respect to this winter, the NHS has made more extensive preparations than ever before. We started the run-up to the winter period with over 1,600 more doctors and 3,000 more nurses than just a year ago, bringing the total increase since 2010 to 11,400 more doctors and 11,200 more hospital nurses. The NHS allocated £400 million to local health systems for winter preparedness; it nationally assured the winter plans of every trust; it launched the largest ever flu vaccination scheme, with over 13 million people already vaccinated; and it also bolstered support outside A&Es, with 12,000 additional GP sessions offered over the festive period.

The result has been that this winter has already seen days where A&E departments have treated a record number of people within four hours, and there have been fewer serious incidents declared than many expected. As Chris Hopson, head of NHS Providers, said, although there have been serious problems at some trusts, the system as a whole is doing slightly better than last year. However, there are indeed a number of trusts when the situation has been extremely fragile. All of last week’s A & E diverts happened at 19 trusts, of which four are in special measures. The most recent statistics showed that nearly three-quarters of trolley waits occurred in just two trusts. In Worcestershire in particular there has been a number of unacceptably long trolley waits and two deaths reported in the media while patients were in A&E. We are also aware of ongoing problems in the North Midlands, with extremely high numbers of 12-hour trolley waits.

Nationally, the NHS has taken urgent action to support these trusts, including working intensively with leadership and brokering conversations with social care partners to generate a joined-up approach across systems of concern. As of this weekend, there are some signs that pressure is easing both in the most distressed trusts and across the system. However, with further cold weather on the way this weekend, a spike in respiratory infections and a rise in flu, there will be further challenges ahead.

NHS England and NHS Improvement will also consider a series of further measures which may be taken in particularly distressed systems on a temporary basis at the discretion of the local clinical leaders. These may include: temporarily releasing time for GPs to support urgent care work; clinically triaging non-urgent calls to the ambulance service for residents of nursing and residential homes before they are taken to hospital; continuing to suspend elective care, including, where appropriate, suspension of non-urgent out-patient appointments; working with the CQC on rapid reinspection where this has the potential to reopen community health and social care bed capacity; and working with community trusts and community nursing teams to speed up discharge. Taken together, these actions will give the NHS the flexibility to take further measures as and when appropriate at local level.

However, looking to the future, it is clear we need to have an honest discussion with the public about the purpose of A&E departments. There is nowhere outside the UK that commits to all patients that it will sort out any urgent health need within four hours. Only four other countries—New Zealand, Sweden, Australia and Canada—have similar national standards, which are generally less stringent than ours. This Government are committed to maintaining and delivering that vital four-hour commitment to patients. But since it was announced in 2000, there have been nearly 9 million more people visiting our A&E departments, up to 30% of whom NHS England estimates do not need to be there, and the tide is continuing to rise.

If we are going to protect the four-hour standard, we need to be clear it is a promise to sort out all urgent health problems within four hours, but not all health problems, however minor. As Professor Keith Willett, NHS England’s medical director for acute care, has said, no country in the world has a four-hour standard for all health problems, however small, and if we are to protect services for the most vulnerable nor can we. So NHS England and NHS Improvement will continue to explore ways to ensure that at least some of the patients who do not need to be in A&E can be given good alternative options, building on progress under way with the streaming policy in the NHS England’s A&E plan. This way, we will be able to improve the patient experience for those with more minor conditions who are currently not seen within four hours as well as protect the four-hour promise for those who actually need it.

Taken together, what I have announced today are plans to support the NHS in a difficult period but also plans for a Government who are ambitious for our NHS, quite simply, to offer the safest, highest-quality care available anywhere for both mental and physical health. But they will take time to come to fruition, and in the meantime all of our thoughts are with NHS and social care staff who are working extremely hard over the winter, and throughout the year, both inside and outside our hospitals.

I commend this Statement to the House”.

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[Baroness Walmsley (LD)]

My Lords, I also welcome the Minister to his first appearance in his new role. I add thanks from these Benches to all the health and care staff who gave up their Christmas holidays to care for patients.

We welcome the Prime Minister’s attention being turned to mental health, and the emphasis on the roles of schools and the workplace. The NHS of course cannot do the job alone. However, many people are not getting mental health treatment, getting it late, not getting the right treatment or getting it many miles from home, which prevents their families and friends supporting them. As the noble Lord, Lord Hunt, said, the money is not getting through to front-line mental health services, despite the £1.4 billion secured from the previous Chancellor by my right honourable friend Norman Lamb when he was coalition Health Minister. Why is that?

Is it not true that if there were not a shortage of funding for other services, CCGs would not be tempted to raid the mental health budget? That is what they are doing. FOI requests by Young Minds, as has been mentioned, show that half of CCGs are using money allocated to children’s mental health to prop up physical health services, which are also in crisis. That is wrong. A recent survey of child and adolescent psychiatrists show that a whopping seven out of 10 of them thought that mental health services for children and young people were inadequate. By any calculation, that is a national disgrace.

Will the Minister ring-fence the money that has been promised to mental health and improve transparency with the publication of the mental health dashboards, which are meant to show how much is being spent on mental health services in every area and on what services? The £1 billion that has already been announced for adult mental health is back-loaded to the end of the Parliament. Will the Government bring it forward to deal with the current crisis? Will they at last acknowledge that there must be a cross-party discussion about how to raise the money needed for health and social care? Will they ensure that the lessons learned in Manchester about integration are spread to other areas? That could save money and provide better service. Will the Government provide more funding for social care? As the noble Lord, Lord Hunt of Kings Heath, has said, without that, nothing will improve.

To return to mental health, I acknowledge that funding is not the whole story. The main point of the report from the values-based CAMHS commission, chaired by my noble friend Lady Tyler of Enfield, was that there needs to be a shared set of values and a shared language across all those involved with children and young people’s mental health, thereby enabling the system to have widespread change and a far more joined-up response to mental health issues. Does the Minister agree with that? How could it be achieved?

[Lord O'Shaughnessy]

My Lords, I thank noble Lords for their kind welcome. First, on mental health, which is clearly the subject of the Prime Minister’s Statement today, I think this is a good news day for mental health services. We know that this part of the system has suffered from not being seen by some people as as important as physical health. We have now legislated for parity of esteem, but of course parity of esteem comes about through practice, not just through law, and part of that is about a series of changes to ensure that this is a high-quality system that is available not just for some but for all.

With regard to performance, there is a lot of strength within the system. My predecessor, my noble friend Lord Prior, whose abilities I pay warm tribute to, would always say that there is lots of innovation and quality in the health service. One of the challenges that we face is diffusion. Part of the purpose of the strategy today is about taking best practice and moving it around the system. There is good practice. We have fantastic dementia diagnosis rates, the IAPT system is being copied by other countries and we have a record number of psychiatrists.

As someone who has spent the best part of 15 years working in schools, I think we finally have recognition that something significant and serious is going on with our young people that needs a new approach. With the promise of a Green Paper on children and young people’s mental health, I am optimistic that we have an opportunity to deliver what the noble Baroness said—getting everyone who cares about this subject around the table and making sure that we deliver the kind of strategy that is going to do two things. The first is to help schools and young people to identify mental illness where it exists and to access treatment; the second and, arguably, more important, is to build resilience so that young people are better able to resist the various pressures that they are under and to stay in good mental health, because that is our ultimate goal.

There is £1 billion to implement the plan. It is reasonable to ask how it will get to the front line; clearly, this money should not be being diverted to other services. The noble Baroness said that transparency was critical here. CCGs need to report in a much more detailed, open and honest way about where that money is being spent, so that we can ensure that it is going to front-line mental health services.

There is a challenge every winter; that is not unique to this Government. The Statement pays tribute to the incredible work of the staff in the NHS and social care system, and I add my voice to that. They are working at an extraordinary level and under a lot of pressure. Clearly, unacceptable things are going on, such as trolley waits of more than 12 hours. The key is being prepared and, where there are problems, working out what to do about them. The NHS has been well prepared for this winter, with £400 million going into preparedness plans, which it has tested to ensure that they are robust. Although I have been in the department for only five days, judging by the interest, passion and application of Ministers and officials, I can say that a close eye is being kept on this not just in the department but in NHS England and NHSI. As we say in the Statement, we will continue to support trusts to deal with challenges, particularly in fragile areas—some of which, as the noble Lord, Lord Hunt, said, we have known about for some time. Help is going in.

On social care, there was more money in the Autumn Statement, which I am sure was welcome, and a change to front-load the precept, which will make a difference, and we have the better care fund, so funding is increasing. However, more people are accessing the service, and we know why: because of the demographic pressures. Since 2010 there are now some 1 million more over-65s, so the system needs the extra support the Government have provided. The noble Baroness was quite right when she talked about integration. One opportunity that we have in the five-year forward view through the sustainability and transformation plans is the creation of much better integrated systems which focus not simply on the number of beds, although that is important, but on delivering the best outcomes. As we know, lots of people in hospitals would be better cared for if they were in the community or at home. One challenge that we face is ensuring that those patients who would be better treated in that environment have the opportunity to move out, freeing up those beds for those who need them.

We are committed to the four-hour target, as my right honourable friend outlined in the Statement, and have delivered many more doctors and nurses to ensure that we can deliver a high-quality service. We are dealing with 9 million more visits to A&E every year than we were in 2000. We need to ensure that we are delivering a service which continues to provide the best quality care in whatever setting is most appropriate, and never lose sight of the fact that A&E is there for a specific purpose, particularly for the support of the most vulnerable. About a quarter of A&E admissions are from the over-65 age group, which is growing, so this will get more challenging.

On the specific issue in Worcestershire, it is of course a terrible tragedy. The trust and NHS Improvement are investigating, and I do not think it would be appropriate for me to comment at this time, other than to say that we will be watching very closely what happens as a consequence of those investigations. Plans are already in place to support the trust and ensure that it can improve, but it is not appropriate for me to comment on the specific deaths that occurred.

We know that additional resource is not just about money; it is about service configuration and how we deliver a better service. We are providing £10 billion more in real terms to the NHS over the course of this Parliament. That is what we were asked to deliver, and that is what we are delivering, in concert with NHS England. It is the responsibility of everyone within the system to ensure that we deliver the best possible service.

[Lord Ribeiro (Con)]

My Lords, from these Benches I welcome my noble friend to his new position on the Front Bench and pay credit, as he did, to the work that the noble Lord, Lord Prior, did before him.

The Statement suggests that, during this period of exceeding challenge to the hospital sector, with clinical leaders attempts will be made to,

“suspend elective care, including, where appropriate, suspension of non-urgent out-patient appointments”.

I was rather distressed to hear on the “Today” programme of a patient with oesophageal cancer having either his treatment or his admission delayed—it sounded like it was his admission. As a surgeon, I felt particularly uncomfortable about that. I hope that the Minister can give some reassurance that when it comes to treating patients with cancer, irrespective of the pressures a hospital is under, provision must be made to admit those patients, because any delay can have a long-term effect on them.

Although I accept that there have been 11,400 more doctors since 2010—and that is a very reassuring figure—we must also remember that the intake into medicine has changed significantly over the past 10 or 20 years. There is now probably a majority of female doctors coming into medical school, so the workforce is feminising and changing. Whether we like it or not, many of them will have children, will have family commitments and will wish to work part-time, or less than full-time. When we talk about numbers, it is important that we talk about whole-time equivalents rather than the ballpark figure. It looks like a lot of doctors coming into the system, but we must take into consideration that many of them will work less than full-time, so we may well need to increase the medical workforce, perhaps asking them to work in a different way than they do currently.

I would be grateful if the Minister would comment on that, but I welcome his comments about mental health. I hope that greater provision will be made to ensure that patients with mental health issues have as much support as possible, as he said.

[Lord O'Shaughnessy]

I am grateful to my noble friend for his kind words of welcome. On the specific issue raised on the “Today” programme, which I believe is the subject of a documentary, and how it relates to the Statement made by my right honourable friend, there is an important distinction, which is that it is at the discretion of local clinical leaders. It is not a blanket mandate to delay treatment where the ethical and clinical responsibilities of those treating a given patient require it to be done speedily.

On the issue of the workforce changing, I take my noble friend’s point about what in the education world we called FTEs—full-time equivalents—and will make sure that the workforce figures I use are always expressed in those terms.

[Lord Kakkar (CB)]

My Lords, I declare my interest as chairman of University College London Partners, and join others in welcoming the Minister to his new responsibilities. With regard to the current performance in accident and emergency departments, part of the explanation in the past has been the lack of access to and availability of primary care services. What thought have Her Majesty’s Government given to the potential for the provision of GP primary care services within accident and emergency departments? How is that work going forward and how might it be integrated with the broader provision of primary care services in the community?

[Lord O'Shaughnessy]

I thank the noble Lord for that question; he speaks with a great deal of knowledge and wisdom on the subject. Clearly, to ensure that we have the best possible services, the system needs to be as flexible as possible to local requirements. As is already happening in some areas, having GPs in A&Es as part of the triage, the streaming service, will provide that kind of efficiency and effectiveness, so that everyone is treated properly. I do not have the detail on where NHS England is on that process, but I will be happy to write to the noble Lord with more detail.

[Lord Scriven (LD)]

My Lords, I also welcome the Minister to his new post and declare my interest as a member of Sheffield City Council. As 80% of those who are in hospital for two weeks or more are aged 65 or over, many require social care rather than healthcare. What is the timescale for the Government to deal with the crisis in healthcare funding rather than the short-term sticking plaster of bringing forward the precepts?

[Lord O'Shaughnessy]

I thank the noble Lord for his question. There are many strategies, going forward. One is the reform of social care, which includes additional funding, with the precepts being front-loaded now. The second is making sure that, in hospitals, those people in beds who would be better served in a different care setting are able to leave through step-down services, or other such services. Of course, the other factor is to make sure that there is appropriate general practice, and not simply A&E departments, although these can be effective in some areas. We want to make sure that there are more GPs and that we spend more on general practice, as we will in the spending review period, for patients who would be better dealt with without going into A&E, if the kind of care that they are receiving would be more appropriate in a primary care setting. We have to remember that, for patients such as those with dementia, the prospect of going into A&E could in itself be frightening and worrying.

[Baroness Pitkeathley (Lab)]

My Lords, I cannot resist the opportunity to remind the new Minister, as I always used to remind his predecessor, about the importance of Britain’s 6 million family carers, when we look at both the issues that he has brought to our attention today. First, he talks about speeding up discharge. You cannot speed up discharge in the social care sector unless you also provide support to the family carers, many of whom are elderly themselves, who will provide that care, when somebody comes out of hospital who is still barely recovered and those carers are expected to perform nursing functions, such as changing catheters. As for mental health, carers are often expected to be full-time carers for young people with very challenging behaviour, and they are often deprived of any information that would help them, on the grounds of confidentiality. What is the Government’s position on helping those informal carers in both these situations?

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[Lord O'Shaughnessy]

I thank the noble Baroness for her question. She is absolutely right: millions of people across the country care for a relative who has some care need, be it a spouse, somebody at retirement age or a child with mental health problems. I do not have the specific details to answer her question; I shall write to her with those details—but through the social care reforms being delivered by local authorities and the reforms going forward through the five-year forward view in community health, there is more focus on that ground-level support, in a way that is much more difficult to do from Whitehall. So we are seeing through the early drafts of the STPs—one of the new bits of jargon that I have had to learn—ideas for how to provide family support that goes beyond the statutory support that is available through the benefits system or the community health system.

[Baroness Berridge (Con)]

My Lords, I welcome my noble friend to his new role and welcome particularly his comments on the parity in practice, as well as in law, of mental and physical health. I welcome the Government’s commitment of money and the Green Paper on young people’s mental health. Can my noble friend please comment on whether there will be a focus on the disparities of outcomes that persist for many in the black and minority ethnic community, who are often diagnosed late, are more likely to be detained for their condition and overall suffer poorer outcomes as a result in mental health? Could some focus be given to these issues of disparity?

[Lord O'Shaughnessy]

I thank my noble friend for her warm welcome. I take that point very seriously. Clearly, parity of esteem is no good unless it is applicable to everybody who is suffering from a particular illness. I am not fully aware of the details of the nature of the disparity with black and minority ethnic families but, if there is a problem, making sure that we fulfil this ambitious and I hope welcome strategy is going to make sure that we can lift performance of those services for people in minority ethnic groups.

[Lord Bradley (Lab)]

My Lords, I declare my health interests. Can the Minister explain why it will take at least four years to stop the appalling situation where children have to go out of their local area to receive their mental health treatment?

[Lord O'Shaughnessy]

I thank the noble Lord for his question. I was not aware that it would take four years for that to stop. What we are dealing with here is an historic challenge, which is that mental health services not just in this country but in countries all over the developed world have not been at the same level as services for physical health. The strategy that we have set out today and the further elements to come will be one way of making sure that those young people can be treated close to home. Clearly, there will always be cases and instances where they need to travel. On Friday, I had my first ever ministerial visit to Oxford mental health trust and was able to observe the fantastic work that it is doing across a wide area but with a specific residential school and, interestingly, linking up with the university psychology research department. There were young people who were coming to take advantage of that from all over the country. I realise that this is, if not unique, an unusual coagulation of good factors. As part of making sure that you can get treatment for mental illness or support to build mental health locally, we need to make sure that there are more centres of excellence that can be accessed by those who are in acute need.

[Lord Willis of Knaresborough (LD)]

My Lords, we welcome very much indeed any Statement that the Minister or indeed the Prime Minister makes about mental health. The issue of parity of esteem has gone through legislation, but in reality we have seen very little in terms of progress towards that parity of esteem.

I welcome the Minister to his place and wish him every success in this key role. One thing that is not mentioned in the Statement is how we train and educate the workforce to deliver the sorts of plans that we have. For instance, in training our nurses, unless they do a specialist mental health programme they might receive less than a morning’s training in a three-year graduate programme in terms of mental health. The same applies to children and people with disabilities. What efforts are going to be made to make sure that we have the workforce in place with the right skills and training to deliver the sorts of ambition that he and the rest of the House rightly share?

[Lord O'Shaughnessy]

I thank the noble Lord for his welcome. He is quite right, of course, that to deal with the problems of mental illness in every setting the staff need to be trained to spot them and do something about it. In the announcement today, a couple of things are relevant to his question. The first is on supporting schools and every secondary school having a mental first aid trained teacher, so they can spot the signs of mental illness and then refer them on if necessary, if they cannot deal with them themselves—although they will have the skills to deal with some instances. The other is the investment of £60 million—£30 million from government and £30 million from trusts—of digitally assisted mental health services, which will bring global digital exemplars for mental health. That will mean that we will be able to provide better information for both staff and patients about the quality of care and safety and effectiveness.

[Lord Warner (CB)]

I welcome the Minister to his new job and raise the issue of CAMHS and the security of funding for CAMHS. It is no good making fine words in this area. The raiding of budgets in this area has taken place in the NHS over a very long period of time. It is not just a question of ring-fencing for a short time; it is guaranteeing budgets over a longish period, so that staffing levels can be built up with people who are expert in this field. Will this issue be addressed in the Green Paper?

[Lord O'Shaughnessy]

I thank the noble Lord for his question. He speaks with great knowledge and experience, particularly from his work in the Department of Health. There are two separate issues here. First, there need to be more resources, and we are providing those. Secondly, we need to make sure that those resources are applied in the right setting, so that money designed to support mental health goes there. The primary way we deliver that is through transparency: making sure that CCGs—which are, of course, independent of government and making clinical commissioning decisions based on local need—are reporting on the money they are spending and the services they are commissioning in mental health and then making sure that we work with NHS England to look at any CCGs where that is not happening. It is clearly wrong that money which is intended to support mental health does not do so, but the way to deal with that is to work with the CCGs where it is not happening and to make them report on their own performance.

[Baroness McIntosh of Pickering (Con)]

My Lords, I welcome my noble friend to his position and declare an interest as an adviser to the board of the Dispensing Doctors’ Association, having been the daughter and sister of dispensing doctors in rural practice. Are my noble friend and his department aware of a chronic shortage of psychiatrists in rural areas, which has particular implications for children waiting to be statemented and treated? Is he also aware that there may be a spike in retirements of GPs over the next five or 10 years? The Government have addressed the issue of new doctors coming through; is there a second round, bearing in mind that it currently takes seven years to train a GP?

[Lord O'Shaughnessy]

I thank my noble friend for her welcome. The global number of psychiatrists across England is increasing: I was not aware of the particular shortage in rural areas. I will certainly investigate and write to my noble friend about it. I know, from my past work in education and the example of head teachers, that the shape of the public sector workforce is now such that senior positions are weighted towards the over 55s. Although I realise that separate pension arrangements are available in the health service, now that retirement and pension ages are increasing we have a reasonable expectation that people might work longer than they did in the past. Therefore the problem described by my noble friend may not be as acute—not just in health but in other sectors as well—as she says. However, there is clearly an issue about the demography of the service and we are backing up GP recruitment with quite a big increase in extra funding for primary care over the course of this spending review period. A large part of that will go on both recruiting new staff and paying those who are in the system now.

[Baroness Hussein-Ece (LD)]

Is the Minister aware of whether GP referrals to CAMHS are now improving? Last year a number of reports highlighted the fact that in some 15 trusts up to 60% of GP referrals were not being dealt with. Only the very urgent, critical cases—those children who were self-harming or attempting suicide—were being dealt with. Has this situation improved and is there now proper access? GPs are the gateway to these services and if their referrals are not being taken seriously, these problems will mount up and we will be failing the next generation. Can the Minister give that assurance?

--- Later in debate ---

[Lord O'Shaughnessy]

Mental health is an issue that spans education and health. I recognise the problems that the noble Baroness is describing. I do not know the specific details about the performance of referrals but I will write to her with that information. One of the purposes of the strategy, and the adoption of all the recommendations of this review, is to make sure that we make the system work better so that what the noble Baroness describes—which is not what we want to happen—happens less frequently.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I too welcome the noble Lord to his new appointment and wish him well. I place on record my gratitude to his predecessor, the noble Lord, Lord Prior, who was always open and honest in his dealings with us and straightforward in answering our questions. I hope we are going to have an open and honest discussion about the role of A&Es in the future and whether there is any likelihood that we are going to lose the four-hour limit. Over the holiday period, Sir Simon Stevens commented that A&E is not to be used as a “national hangover service”. Is there a possibility that we are to lose some of the terms we have had in the past because of the number of drunks who are being treated on Fridays, Saturdays and Sundays throughout the year—not just over bank holidays? This is creating immense problems within A&E, yet the Government refuse to do anything about the fundamental cause of that: to use Mr Cameron’s phrase, “cheap booze”. Back in 2012 he was advocating a change to try to stop this. Unless that is addressed, there will be a scandalised outcry about changes in the fundamental terms relating to A&E.

[Lord O'Shaughnessy]

I thank the noble Lord for his welcome. On A&E, the Statement is very clear that the Government are,

“committed to maintaining and delivering that vital four-hour commitment to patients”.

As the noble Lord described, there has been a change in the case load going into A&E. You only need to spend a bit of time in an A&E to know that alcohol is a factor. I do not know whether this is increasing, but I shall endeavour to find out. I absolutely agree that any proper strategy for relieving pressure on A&E must include cracking down on problem drinking.