Adult Social Care

Debate between Lord O'Shaughnessy and Lord Warner

Wednesday 11th July 2018 Lords Chamber

[Lord Warner]

To ask Her Majesty’s Government when their Green Paper on the future funding of adult social care will be published; and whether the Green Paper will draw on the experience of other countries.

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O’Shaughnessy) (Con)]

My Lords, as recently announced by the previous Secretary of State for Health and Social Care, the Government will publish a Green Paper in autumn 2018 setting out proposals for social care reform alongside the NHS plan. In developing the Green Paper, the Government are drawing on best practice of what works abroad to create a sustainable social care system.

[Lord Warner (CB)]

I thank the Minister for his Answer. Is he aware, however, that according to a report in May by the Health Foundation and the King’s Fund, adult social care funding needs to increase by between £5 billion and £8 billion by 2020-21? Can he reassure those service providers who are leaving the publicly funded adult social care system in droves that the Government’s financial cavalry will arrive by Christmas?

[Lord O’Shaughnessy]

The noble Lord is quite right that there is a need for more money in the social care system. That is why, in addition to the funding set out in the spending review, the Government have put £9.4 billion over three years into the system in the short term. The point he makes, which is right, is about the long-term sustainability of the settlement. I would point him to the seven principles underpinning the Green Paper, which my right honourable friend set out. One of those is a sustainable funding model—a model which, as we have said, cannot put pressure on the NHS. That means that we need to find the money to ensure that it can subsist.

Long-term Plan for the NHS

Debate between Lord O'Shaughnessy and Lord Warner

Tuesday 19th June 2018 Lords Chamber

[Lord Warner (CB)]

My Lords, could the Minister say something about the economic literacy of this announcement? As I understand it, the Conservative chairman of the Health Select Committee, Dr Sarah Wollaston, has said that the Brexit dividend idea is “tosh”. If we write that one out of the script, can he say something about what economic assumptions the Government are making on the growth of GDP in each of the next five years?

[Lord O'Shaughnessy]

I know that the noble Lord no longer serves the Labour Party, but he might be interested to know that the Labour leader said in February that,

“we will use the funds returned from Brussels after Brexit to invest in our public services”.

Clearly, we are not alone in believing that, once we leave the European Union—and, as a party, we are committed to leaving the European Union—we will no longer be sending subscriptions to Brussels but using them for the NHS. For further detail on the funding settlement, the noble Lord will need to wait until the Budget, when the Chancellor will outline the plans.

Health and Social Care

Debate between Lord O'Shaughnessy and Lord Warner

Thursday 12th October 2017 Lords Chamber

[Lord O'Shaughnessy]

I reassure my noble friend that he is quite right to point out the benefits that attend to a cap. The intention is to consult on both the floor and the cap.

[Lord Warner (CB)]

My Lords, I declare my interest as a member of the Dilnot commission but I will not actually go down that territory. Are the Minister and his department aware that over the last three or four years there has been a considerable surge out of publicly funded social care by all providers, particularly nursing homes? What risk assessment has his department made of the implications of that, particularly for the NHS?

[Lord O'Shaughnessy]

The CQC report, which I am sure the noble Lord has looked at, talks about agencies and indeed nursing home providers deregistering. It also talks about the ones that are registering. There is a fairly consistent turnover in the number of those, so it is about balance. There is a similar number of providers within the market—again, with slightly fewer residential nursing and slightly more domiciliary to reflect the kind of balances of care that we have discussed.

Adult Social Care in England

Debate between Lord O'Shaughnessy and Lord Warner

Tuesday 10th October 2017 Lords Chamber

[Lord O’Shaughnessy]

The noble Baroness speaks from experience here. On the point about paying care staff, one of the greatest beneficiaries from the new national living wage are and will be care staff. That will increase over time and is one of the reasons why increased funding needs to go into the system. She also talks about the interface with local authorities. She will know that it is a very fluid market, with providers registering and deregistering all the time. We are trying to make sure that there is a proper review of the quality of the interface between local authorities and the National Health Service. Some do it very well, with very few delayed transfers, while others have huge problems. We get people in beds who should be in a care setting, either in a nursing home, in community care or at home. Those reviews are taking place and should highlight some practice that is not good enough. The challenge will be to work with those councils to make sure they do something about it.

[Lord Warner (CB)]

My Lords, is the Minister aware that the CQC has drawn attention to the loss of 4,000 nursing home beds in the last year? Does he accept that this is a loss that the NHS could do without? What action are the Government taking to increase the number of nursing home beds in this country?

[Lord O’Shaughnessy]

The noble Lord is quite right that the CQC report highlights that. It also highlights a broadly stable residential care home situation. What is changing the nature of care provision is the increase in the amount of domiciliary and community-based care that is being provided; we are seeing a shift there. The CQC report also shows big discrepancies across the country in terms of the proportion of beds per head of population. That is one thing we are trying to address, to make sure there is much more evenness of care.

Adult Social Care Services

Debate between Lord O'Shaughnessy and Lord Warner

Thursday 6th July 2017 Lords Chamber

[Lord O'Shaughnessy]

I reiterate the point I made to the noble Baroness, Lady Wheeler. I completely agree that safety is paramount: it is the beginning of any good care setting. As I said, the new regime highlights issues of safety where they exist so that operators and commissioners, whether that is local authorities or whoever, can demand turnaround in those services. As I said, the response to that has been demonstrated.

I mentioned that more staff are, of course, getting the national living wage, which will continue to attract people to the sector. The noble Baroness is quite right about skills, which is why we have the skills for care programme.

It is also worth pointing out that one thing the CQC report did show, as indeed you would hope it would, is that 79% of settings provided either good or outstanding care. There is no doubting the motivations of the people who work in this sector, and we all pay tribute to them. It is about making sure that there are enough of them and that they are properly skilled. That is precisely why we have put additional money into social funding, to enable real-term increases over the next three years to address the fact that we have an ageing and growing population.

[Lord Warner (CB)]

My Lords, I declare my interest as a member of the Dilnot commission. I am sure we all welcome the idea of a longer-term set of proposals for consideration later. However, does the Minister not realise that the money the Government have said they are putting in over the next three years, including the current year, merely puts back a lot of the money that was taken out before, and certainly does not meet the proposal for immediate funding made by your Lordships’ Select Committee on the sustainability of the NHS and by the King’s Fund? This year, the Government are about £1.5 billion to £2 billion short to meet the needs. Does the Minister understand that this is not just about quality but about quantity? People working in publically funded care are leaving in droves. Is this on the Department of Health’s risk register? What are the Government going to do if the tipping point is reached on providers not providing publically funded social care?

[Lord O'Shaughnessy]

First, I congratulate the noble Lord on the work he did on the Dilnot commission in setting out the challenges we face and the kinds of solutions that we need to put the sector on a long-term footing. I merely reiterate the point that extra funding is going in, at a time when we are still addressing the £150 billion deficit that the Government inherited in 2010. That is enabling real-terms increases. Of course we need to keep going with that, because there are more older people and their care is increasingly complex.

I want to come back to the changes we are making on delayed transfers of care. Making sure that the interface between the NHS and social care is as quick, smooth and suitable for patients as possible is critical. That is why there is renewed emphasis to make sure that the money going in is addressing one of the major problems that is preventing the quality of care that we want.

Health Service Medical Supplies (Costs) Bill

Debate between Lord O'Shaughnessy and Lord Warner

Ping Pong (Hansard): House of Lords
Wednesday 26th April 2017 Lords Chamber

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

My Lords, I beg to move Motion A. In doing so, I apologise to the House for the late change to the running order. Noble Lords who were expecting—or indeed hoping—that my noble friend Lord Nash would be taking the Bill through will have to make do with me.

We are here again to consider whether and how the Government can take into account the impact that exercising the powers in the Bill will have on the life sciences industry and on access to new medicines for patients who may benefit from them.

When we last debated these issues, I set out clearly the Government’s reasons for disagreeing with Amendment 3B. As I explained at the time, it would undermine one of the core purposes of the Bill by undermining the Government’s ability to put effective cost controls in place. This could encourage companies to bring legal challenges where cost controls have not in themselves promoted growth in the life sciences industry, seriously hindering the Government’s ability to exercise their powers effectively to control costs. This would have a detrimental effect if the Government were to take action to control the price of an unbranded generic medicine where it is clear that the company is exploiting the NHS, because the Government might be challenged on the basis that the action does not promote the life sciences sector. Nevertheless, as I am sure that all noble Lords agree, in such an instance it would of course be the right thing to do for the NHS, for patients and for taxpayers. The powers in the Bill that enable such action have received universal support in both Houses throughout the Bill’s passage.

Through our previous debates on this issue, we clarified that there was no intention to undermine the core purposes of the Bill; rather, the intention is to ensure that a mechanism is laid out in the Bill to ensure that the Government pause to reflect on the impact of any proposed statutory price control scheme on the life sciences industry, and on access to cost-effective medicines. With this clarity, the Government have now put forward their own amendment in lieu which will achieve just that, without undermining the Bill’s core purpose.

Consultation requirements are already set out in Section 263 of the NHS Act, prior to the implementation of any statutory price control scheme for medicines. Our amendment, which received support from all parties in the other place, would mean that the Bill would amend the NHS Act to include particular additional factors that must be consulted on. These are: first, the economic consequences for the life sciences industry in the United Kingdom; secondly, the consequences for the economy of the United Kingdom; and, thirdly, the consequences for patients to whom any health service medicines are to be supplied and for other health service patients.

The requirements are framed in this way in order not only to consider the economic consequences for the life sciences industry and for patients who may benefit from new medicines but to balance these factors against wider considerations. I am sure that we can all agree that, although a thriving life sciences industry and access to new medicines are highly desirable, it must not come at any cost and it is the Government’s responsibility to achieve the right balance and to be held to account for it. As with all consultations, the Government must give all responses due consideration before finalising policy. Setting these requirements out in the Bill does not limit the scope of any consultation on a statutory pricing scheme, offering both the Government and consultees the opportunity to give all relevant issues proper consideration.

The amendment is specific to Section 263 of the NHS Act—that is to say, the powers to put a statutory scheme in place for medicines. Where action is being taken against a specific instance of high prices, it would not be appropriate for it to be subject to such a wide-ranging consultation. In such cases, the NHS Act requires consultation with the appropriate industry body or bodies prior to the exercise of the powers.

With this amendment, the Government have therefore addressed the real intent behind Peers’ concerns, giving assurance of proper, balanced consideration of the effects of any statutory pricing scheme on the life sciences industry and patient access to medicine without undermining the Government’s ability to operate such a scheme. I hope that it will meet with the approval of the House.

Before closing, I thank the many noble Lords who have contributed not only to the development of the amendment but to the Bill as a whole. I thank the noble Lords, Lord Warner and Lord Hunt, and the noble Baroness, Lady Walmsley, as well as my noble friend Lord Lansley and the noble Baroness, Lady Finlay, for their contributions to improving the Bill. Finally, I also thank other noble Lords who have made important contributions to the debate, including the noble Lord, Lord Patel, and the noble Baronesses, Lady Masham and Lady Wheeler. I believe that we have worked in a constructive and open spirit and, as a result, the Bill is better and stronger than when we found it. I beg to move.

[Lord Warner (CB)]

My Lords, I am grateful to the Minister for the further thought that he has given to the amendment that your Lordships passed at an earlier stage. I am also grateful to him for his courtesy in showing me the amendments before he went forward with them; I very much appreciate that. I accept the Government’s arguments for the new approach that they have provided on the set of concerns that we had across the House about the adequacy of the provisions in the Bill on the life sciences industry and on speedy access to NICE-approved drugs. I accept their arguments that the original amendment was to some extent too restrictive on their freedom of manoeuvre when they need to act on unreasonable high prices. The Government have skilfully met the concerns of your Lordships’ House and I am very pleased to be able to support the amendment.

While I am on my feet, I will also thank the Minister for the courteous way in which he has listened to concerns throughout this Bill and taken the issues away, considered them with his officials and come back and tried to respond to many of the concerns. Across the Benches of this House, we are grateful for the way in which he has conducted the discussions during the passage of the Bill.

Health Service Medical Supplies (Costs) Bill

Debate between Lord O'Shaughnessy and Lord Warner

Wednesday 5th April 2017 Lords Chamber

[Lord O'Shaughnessy]

My Lords, I am grateful to all noble Lords for the points they have made in the discussion we have just had. I will try to deal with as many of them as I can in my response.

I am afraid that we do not agree with the first point of the noble Lord, Lord Warner, about the change of wording to make it more flexible. Such wording as exists in the current amendment would increase the risk of judicial review. As my noble friend Lord Lansley pointed out, it would impair our ability to crack down on those companies that are abusing the NHS by raising prices in a completely unwarranted way. I cannot believe that this is what noble Lords want.

The noble Lord, Lord Warner, referred to the Bill providing a pausing mechanism. It is important to point out and remind noble Lords that the Bill requires a consultation before the beginning of any new statutory scheme. One of the key amendments that we made—indeed, I accepted proposals from others in Committee and on Report—was to introduce an affirmative resolution on extending price controls into the devices realm. So those consultations and pauses already exist—and they do so in a way that is appropriate to the core purpose of this Bill, which is to control costs.

The noble Baroness, Lady Walmsley, referred to the balance that is being struck. She is quite right that there is a balance to be struck, but that does not mean that the balance needs to be struck in each and every item of government policy. As my noble friend Lord Lansley pointed out, this Bill is not the right vehicle to achieve support for the life sciences and industry and to improve patient access. These aims are achieved through other routes, as I have outlined, and the Government are doing a huge amount of work on them.

I wholeheartedly agree with all noble Lords on the importance of the life sciences sector and of improving patient access. The noble Lord, Lord Hunt, was right to point out that, post Brexit, it will be more important than ever. The noble Baroness, Lady Masham, said that this is not just a macroeconomic point; it is about the lives of humans, often in great suffering, who need to have access to medicines. I thank her for bringing that out. It is precisely why the Government are developing an ambitious strategy and a sector deal; and it is precisely why I have been keen to ensure that the NHS is seen as a partner and beneficiary of that deal. Rather than this being seen as something that is done to it, it has to be a counterparty, as it were. I disagree with the noble Lord, Lord Hunt, because we are seeing improvements in uptake for the reasons that I have outlined.

In the course of dealing with the Bill, while I have had complaints from the life sciences sector about certain things that we have done—I will touch on those in a moment—it is fair to say that I have not received any complaints from the industry that this Bill will affect it negatively. It understands that the Bill is about providing equality between the statutory and voluntary schemes, cracking down on those who seek to abuse the system and making sure that there is proper information to inform the price control schemes that we have.

Looking further ahead, from 2019 onwards we will need to look at the medicine and pricing regulation system in the round—and we will be doing so from a position of being outside the European Union. It is therefore absolutely essential that we have a world-leading price and regulatory environment. I am looking at all aspects of that now and talking to industry and others. As my noble friend Lord Lansley pointed out, it is only right to consider the changes introduced by NICE and NHS England as we look to a comprehensive solution from 2019 onwards.

While we are talking about the outcome of that consultation, I should point out that it was provided in response to the Public Accounts Committee and that there is no threat to the independence of those organisations. I completely agree with the noble Baroness, Lady Finlay, in applauding the reputation that NICE has around the world and the fact that the life sciences industry values getting NICE technology approvals.

The changes being made are consistent with the NHS constitution. I explained in my opening statement how this will work and I have addressed the misconceptions. This is not about delay or reducing uptake, it is about costs, and indeed the changes bring about a variety of positive and welcome benefits to commercial agreements and to a fast-track appraisal process.

The noble Baroness, Lady Finlay, asked what proportion of the growth in the drugs bill has been driven by branded drugs. She will know that that is quite difficult to define because of the issue of what are known as parallel imports. These are branded drugs that are outside the schemes which come in, but of course they make a contribution to the bill. As a country we are one of the best, if not the best, in the OECD in terms of the use of generic drugs, which of course is one way of holding down the bill and creating headroom for innovative drugs. There is a good story to be told about that.

The noble Baroness also mentioned orphan drugs and she is quite right to highlight them. There is the highly specialised technology route. I should also point out that there are routes and specialised commissioning within NHS England, including the commissioning through evaluation programme. These routes have been invented by NHS England to facilitate access to drugs, not to delay it.

To conclude, I want to return to the amendment itself. I should stress to noble Lords that this is not a cost-free amendment and it is not simply a declaratory piece of legislation. It would increase costs to the NHS for drugs for no benefit. No more drugs would be bought and no more people would take them up. Indeed, it would take money away from other care settings. The Government cannot agree with an amendment that would put the NHS at such a disadvantage. I do not believe that it would be in the interests of either patients or the health service. The House of Commons was right to reject the first version of the amendment and this version does not substantively change the intent. I hope and trust that noble Lords will take the same approach in rejecting it, but before that I would like to ask the noble Lord, Lord Warner, on the basis of the arguments that I have made in response to his key points, to withdraw it.

[Lord Warner]

My Lords, this has been an interesting debate and I thank noble Lords for their contributions. I do not interpret this amendment in the same way as the Minister and I am slightly surprised that he thinks there is a happy mood in the industry about all this because that certainly does not square with my contacts. I would also like to draw his attention to a comment made during a pink ribbon conference recently by the oncologist who heads chemotherapy commissioning for NHS England. He was talking about the budget impact test: “That is why we expect the £20 million figure to hit cancer drugs much more than other drugs”. I think that that is quite an interesting revelation which suggests that some of those who are closer to this than perhaps the Minister and me take a different view about how the budget impact test actually works in practice.

The Minister would have had plenty of time, if he had accepted the principle behind the amendment, to negotiate with us a form of wording that would deliver its intent. He has spent his time trying to get us to take it out of the Bill. He has more access to draftspeople than I do. If he had accepted the principle, we could have come up with wording that is more to his taste. Neither he nor his officials have co-operated with that kind of approach. I believe that this amendment as it stands would be of benefit to patients, to UK plc and to the industry. I wish to test the opinion of the House.

Adult Social Care: Funding

Debate between Lord O'Shaughnessy and Lord Warner

Thursday 16th March 2017 Lords Chamber

[Lord Warner]

To ask Her Majesty’s Government when they expect to produce their proposals for a longer-term solution to the funding of adult social care.

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

My Lords, in order to meet the demographic challenges facing this country, the Government are committed to establishing a fairer and more sustainable system for funding adult social care. We will bring forward proposals in a Green Paper later this year.

[Lord Warner (CB)]

I thank the Minister for that Answer, but can he confirm that the review which is ongoing will examine the lessons from Japan and Germany, where populations and politicians have recognised that, as we live longer, we have to prepare earlier for funding our long-term care? Can he also assure the House that, in securing a new funding system for social care, regard will be paid to the impact of that on the long-term sustainability of the NHS?

[Lord O'Shaughnessy]

The noble Lord has done much work on the sustainability of social care, including his work on the Dilnot commission. He is quite right to point out that there are lessons to be learned from other countries, and certainly we will be learning them from Japan, Germany and elsewhere. He will know that the measures announced in the Budget are specifically designed not only to help adult social care but also to help the interface between the NHS and social care to provide exactly the kind of sustainability he is talking about.

Health Service Medical Supplies (Costs) Bill

Debate between Lord O'Shaughnessy and Lord Warner

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

[Lord O'Shaughnessy]

My Lords, in Committee we debated the Government’s existing powers to control the prices of medical supplies. I have listened carefully to the concerns expressed by noble Lords and tabled this government amendment to address them. Before I go into more detail about the amendment, I would like to take the opportunity to address some concerns raised in Committee about the definitions used in the Bill, including that of medical supplies.

The Bill refers to health service products, which is the overarching term for medicines, medical supplies and other related products used in the health service. The term “medical supplies” is used in the NHS Act 2006 and the existing definition covers a broad range of medical supplies, from bandages to MRI scanners. It could include ambulances, to answer a question asked in Committee by the noble Lord, Lord Warner. “Other related products” are those which are not medicines or medical supplies but are prescribed in the NHS—for example, vitamins. The Government have powers to control the costs of health service medicines and the prices of medical supplies. If the Government were to introduce any controls on those prices then we would, of course, need to define which supplies the control would apply to. This would be done within the regulations. Similarly, in the information regulations we will specify which medical supplies and other related products will be covered. These regulations will, of course, be subject to consultation.

The illustrative regulations published alongside the Bill give examples of the categories of medical supplies and other related products on which we would expect information to be kept, recorded and provided. For example, one category includes those medical supplies and other related products listed in the drug tariffs. As noble Lords know, the illustrative regulations are not in their final form and have been provided to demonstrate how we would specify which products are covered by the regulations. We have already started discussions with representative bodies of the medical devices industry about how we could restrict the types of medical supplies and other related products that the regulations cover. It is not our current intention, for example, to include ambulances in the regulations. We will carry a formal consultation to consider the products that need to be covered.

While I am still on definitions—please bear with me—the Bill also refers to UK health service products and English health service products. This reflects that the Bill has some aspects that are reserved and others that are devolved. While medicine pricing is a reserved matter with respect to Scotland and Wales, reimbursement is a devolved matter. I acknowledge that the distinction between reserved and non-reserved matters adds complexities, not least for me, but I assure noble Lords that the definitions are consistent and in line with the existing provisions of the NHS Act 2006. I hope that this explanation helps noble Lords to understand those definitions.

Regarding Amendment 6, which I have tabled, I understand the views expressed by some Peers asking why the Government need the powers to control prices of medical supplies when they are not using those powers. In the words of the noble Lord, Lord Hunt, it is a question of proportionality. At this moment, the Government have no immediate concerns about the prices of medical supplies as it appears that the market is generally competitive. Nevertheless, noble Lords will be aware of the work of the noble Lord, Lord Carter, on efficiency and variation in the NHS—indeed, it has been referenced today—and the work being done to implement that report. He concluded that there is considerable variation between trusts on the value that they extract from the procurement of goods and services, so while the market may be competitive the NHS could be getting better value for money for the products it buys. This is one area where the information powers in the Bill, which will not be burdensome, could help the NHS to save money. Again, I know that we all share this goal.

We also know that markets can dysfunction for any number of reasons and that competition will not always operate to control prices. This is the unfortunate situation we have found ourselves in with unbranded generic medicines, which the powers in the Bill will help us to deal with. I continue to believe that the Government should have the ability to intervene but only when a market is not working. As noble Lords know, as part of the 2006 Act the Government already have the power to introduce price control schemes into the medical supplies sector but concern was expressed in Committee that these powers, and how they are developed in the Bill, are not proportionate. As I have set out, we have no concerns about the current operation of the medical supplies market, so noble Lords justifiably asked whether some additional threshold or hurdle should be required before the introduction of any price control scheme in this sector.

I have listened to their concerns, which have much merit, and so have tabled this government amendment so that the first order to control the prices of medical supplies would be subject to the affirmative procedure. The order would then require the formal approval of both Houses of Parliament before it becomes law and there would be debates on the proposals, in which the Government would have to justify their case for action. This means that if the Government want to introduce a pricing scheme, they would have to convince Parliament that there were sufficient grounds for doing so. I am very grateful to many noble Lords for their engagement on this issue and I trust this amendment meets the concerns raised. I hope that noble Lords across the House will be able to agree to it.

[Lord Warner]

My Lords, I am grateful to the Government for taking some modest steps in the direction we were asking them to take in Committee. My sympathies are entirely with the Minister, who had to bring forward this amendment and explain it in the way he did. It shows what a tangle the Government have got themselves into by taking some powers which they are not sure they will need but which the noble Lord, Lord Carter, may suggest they need. It represents a decision by the Government that, when they think the NHS cannot tender and run a proper competition, they will be willing to step in to control the price of a product when the NHS has failed to do proper purchasing.

This is a pretty big step because the noble Lord, Lord Carter, has shown that chunks of the NHS are not terribly good at tendering and purchasing. Are we now going into the kind of Soviet era that the noble Lord, Lord Hunt, painted a picture of on a previous amendment, in which the Government are going to step in whenever they have evidence that there is a pretty lousy trust down in Little Cullompton or wherever and start to control the price of a number of medical devices? I do not think I have exaggerated where the Government are using this legislation to take them. It seems pretty peculiar. Can the Minister reassure me about whether the Government have big plans to go about this and tell me what evidence they have that it is a serious problem?

[Lord O'Shaughnessy]

I thank the noble Lord, Lord Warner, for the lukewarm endorsement of an attempt to improve the Bill. We seem to have zipped from socialism to communism, which for a Conservative is a fairly terrifying idea. The noble Lord raises an important point. I am not in a position to comment on the provenance of the Bill as I was not around. He is right to focus on the issues of procurement and competition. It must be the policy intention to make sure that competition works the best it can. In the generics market, we found an instance of where that is not working. Through the much-referred-to Sir John Bell, the industrial strategy is looking at issues around the manufacture of generics, biosimilars and so on, which, as the noble Baroness, Lady Walmsley, said earlier, has the ability to reduce prices through competition.

Equally with procurement, there is the NHS supply chain. The feedback is that it could do a lot better. A lot of work is going on on the future operating model—another piece of jargon. It is a thorough piece of work that is getting a lot of scrutiny to make sure that it can deliver the kind of savings that the noble Lord talks about. I agree that there are other things that a Government must do to make markets work better. It is for that reason that I insisted that the amendments we have brought forward today should involve an affirmative resolution. When they introduce the first scheme, the Government are going to have to justify exactly what they have done to make competition work, why the procurement is not working and what is going on. Obviously, I cannot anticipate at this point what that might look like. Given the experience we have had with generics, I do not think it unreasonable for that power to be there. Indeed, the power is already in the 2006 Act. This Bill circumscribes that power and makes it more reasonable. I hope I have been able to persuade the noble Lord, Lord Warner, that we are not slipping into communism, that the Government are taking a reasonable approach that understands the importance of markets, and that this power would be used only in situations where it could be justified when interventions to improve competition and procurement have not worked.

--- Later in debate ---

[Lord Warner]

My Lords, from time to time I have been approached by plasma companies and vaccine companies about supply issues, particularly where there have been changes in the structure of the industry and a reduction in the number of producers of some of these products, and sometimes on the point of whether British companies may start to go out of business because of some of those structural changes. My question to the Minister is whether the amendment would actually help enable the Secretary of State to deal with some of those supply problems when this becomes an issue. It becomes an issue for those patients who really need that particular product when no other will do. Is this the kind of amendment that would help with these supply problem areas, which to my knowledge have been experienced from time to time, particularly in plasma and vaccine areas?

[Lord O'Shaughnessy]

My Lords, I am grateful to my noble friend for his amendment and for providing the opportunity to talk about this important issue. It is important to note that the substance of this amendment is different from the substance of the amendment that was tabled in Committee, which would have given a blanket exclusion, while this is much more about providing the Secretary of State with the opportunity to exercise his or her judgment to exempt a product.

I absolutely appreciate the intent of the amendment, and reassure my noble friend that we believe it unnecessary. Due to the powers in the 2006 Act, the Secretary of State already has the ability to exempt individual products or groups of products from the terms of any statutory scheme, so this amendment would duplicate existing powers. For example, the Secretary of State uses these powers in the current statutory scheme to exempt products already under a contract or framework agreement. It is currently the Government’s intention that under the new statutory scheme, products procured under framework agreements that were entered into prior to the regulations coming into force would be exempt from the pricing controls and payment mechanism. However, branded products procured after the regulations come into force would be subject to the pricing controls and payment mechanism. Like any other cost, companies would be able to take this into account when proposing a price in response to a new tender. The regulations will of course be subject to consultation.

The point here is that there may well be cases where an exemption is required, and noble Lords have given examples of what that might look like. I hope your Lordships would agree that it would not be responsible for me to try and set out a list of them now, but clearly there will be occasions where that might be necessary. Any statutory scheme must of course also be sensitive—as indeed the legislation demands that it is—to the differing R&D costs that apply to the development of different medicines.

I hope that provides some reassurance on the points that noble Lords have made. We would be able to use the powers that already exist in the creation of the new statutory scheme for whichever purposes are desired at the time. On that basis, I ask my noble friend to withdraw his amendment. I hope those reassurances have done the trick.

Health Service Medical Supplies (Costs) Bill

Debate between Lord O'Shaughnessy and Lord Warner

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

[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.

Health Service Medical Supplies (Costs) Bill

Debate between Lord O'Shaughnessy and Lord Warner

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

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Mental Health and NHS Performance Update

Debate between Lord O'Shaughnessy and Lord Warner

Monday 9th January 2017 Lords Chamber

[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.