Medicines and Medical Devices Bill

Debate between Lord Sharkey and Baroness McIntosh of Hudnall

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 19th October 2020 Grand Committee

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

I call the noble Lord, Lord Sharkey.

[Lord Sharkey (LD) [V]]

[Inaudible.]

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

Could the noble Lord please unmute his microphone?

[Lord Sharkey (LD) [V]]

Can you hear me now? Yes? Good. Noble Lords will be relieved to hear that I will not start again. I will speak to Amendments 34, 36 and 37.

Clause 4 deals with clinical trials, which delivered £1.5 billion in GVA and £335 million to the NHS in 2018-19. They are an absolutely critical part of UK life sciences and part of what makes the UK a global leader in medical research. Anything that reduces the number or share of clinical trials in the UK weakens that leadership and could delay access to new drugs or treatments.

In its briefing, the APBI points out that our share of clinical trial applications and patient recruits has fallen since 2016. As the noble Lord, Lord Hunt, said, we now rank behind the US, Germany and Spain for phase 3 trials—and Covid has had a dramatic effect. The University of Southampton has published research showing that 1,500 clinical trials of new drugs and treatments for cancers, heart disease and other serious illnesses have been permanently closed down in Britain, with a further 9,000 suspended.

The Government know all this and acknowledge the importance of clinical trials. Given that, Clause 4 is a surprisingly weak response. It does not require the Government to do anything at all. It simply says that they may regulate—it does not say how they may regulate—and lists the areas in which they may regulate. This is another example of the abuse of secondary legislation. It gives unspecified policy-changing powers to Ministers without saying what these policies might be, except that they should do no harm—not a very demanding qualification.

When questioned about this and asked which bits of the CTR they will carry across, the Government’s response is, “The elements that are in the UK’s best interests.” These best interests are to be identified after consultation with interested parties. This all seems unnecessarily feeble. Researchers, commercial and academic, need certainty and stability as soon as possible. Ideally, they would like the provisions of the new UK regime to incorporate all possible provisions of the CTR as they come into force. We know what these provisions are. We know all the thinking behind them. The UK played a central part in their construction in the first place. Our amendments try to give some clarity and certainty to the situation.

Amendment 34 would replace “may” with “must”. It would oblige the Government to do something and does not just give them the power to do something if they feel like it. Substituting “must” for “may” would mean that the Government must make provision corresponding or similar to provision in the CTR.

Amendment 36 would modify this requirement slightly to acknowledge that we cannot adopt certain provisions of the CTR. These are the provisions that relate to the EU clinical trials information system and the assessment model involving co-ordinated decision-making on multi-state trials. Amendment 36 would add “where possible” to the requirement to make provision corresponding to or similar to provision in the CTR to allow for this.

Amendment 37 specifies two features of the CTR that the Government must incorporate. These are specified because they are new and very important, and for the avoidance of doubt about the meaning of “corresponding to” or “similar”. The two new features are the new definition of clinical trials and the allowing of co-sponsorship. In its briefing, CRUK notes that the MHRA has had considerable input in the new definition of clinical trials. It notes in particular that the new definition expands the scope of low-risk trials and excludes altogether some studies, such as pure pharmacology studies that are focused on how medicines work rather than on the extent to which they do. The CTR also defines and allows co-sponsorship, where two or more sponsors across multiple countries may share responsibilities. CRUK regards this as a very positive move, allowing for more flexibility in trial set-up and helping to foster collaboration. We helped to design both these new features. We should ensure that they are incorporated into our new regulatory regime.

Civil Liability Bill [HL]

Debate between Lord Sharkey and Baroness McIntosh of Hudnall

Committee: 1st sitting (Hansard continued): House of Lords
Thursday 10th May 2018 Lords Chamber

[Lord Sharkey (LD)]

My Lords, the long string of amendments in my name and that of my noble friend Lord Marks has a very simple purpose: to enable us to debate the proposed tariff and, in particular, two different types of tariff. The first, essentially contained in Amendment 11, is a tariff based on the Judicial College Guidelines. The second is a fixed, specified and structured tariff. This is essentially contained in Amendment 96, where the amounts are place-holders based on the average of awards actually made. Before I discuss either of these variations, I should again mention the Delegated Powers Committee recommendation that,

“it would be an inappropriate delegation of power for damages for whiplash injury to be set in a tariff made by Ministerial regulations rather than on the face of the Bill”,

and that the tariff,

“should be set out on the face of the Bill, albeit amendable by affirmative statutory instrument”.

At Second Reading, the Minister noted this recommendation and responded by saying:

“We consider that being able to regulate the tariff by the affirmative procedure is a more flexible way of being able to respond to changes”.—[Official Report, 24/4/18; col. 1531.]


That is precisely what the DPRRC proposed should happen after first setting out the tariff in the Bill. I hope that when the Minister responds, he will give a fuller answer as to why he believes that the tariff should not be in the Bill but should be fixed by an unamendable statutory instrument.

I turn to the question of the tariff itself. Should damages remain determined by application of the Judicial College Guidelines, or should they be fixed amounts? If fixed amounts, what should those be? These questions go to the heart of the matter. If we stay with the Judicial College Guidelines, the system would be relatively unchanged, although we could reduce awards for injuries of less than three months’ duration if, for example, we thought that that was where fraudulent claims were concentrated. If we move away from the Judicial College Guidelines to the example tariff contained in the impact assessment or to the tariff published yesterday by the Government, there will be very profound changes. The tariff published yesterday is even lower—by about 4.7%—than the example tariff on page 26 of the impact assessment. It would be interesting to know how these tariff levels were arrived at and what objectives were used in deriving them. For example, was there a target reduction in the cost of total damages awarded? If so, on what basis was this target chosen? Can the Minister explain the basis of the construction of the tariff amounts and tell us whether there was indeed a target for overall damage reduction?

Whatever method was used to devise the Government’s proposed tariff levels, in either the example tariff or yesterday’s tariff, both would have a very large effect. These new tariffs would transfer £1 billion away from claimants, via insurers, wholly or partially to motorists in the form of reduced premiums. That is a very large transfer. It is made up of £240 million in claims that would no longer proceed under the new tariff—assumed to be around 133,000—£550 million because of the reduced awards for every successful claimant, and £190 million from insurers no longer picking up legal fees and VAT. On the way, and as a consequence of this transfer, the general taxpayer would be hit for £140 million by reduced revenue from IPT and some loss of revenue to the NHS. If the Government’s tariff levels are applied, there will be, they calculate, a lot fewer claimants and, it is to be hoped, fewer fraudulent claimants, deterred as they might be by the banning of no-med settlements and very low tariff awards. This means that those successful claimants remaining will carry the burden of this transfer. Claimants will be £1 billion worse off; motorists will be £1 billion better off. What is the Government’s justification for such a massive transfer of funds? There are two questions to answer. First, what is the evidence base that justifies any transfer? Secondly, why this amount? Why such a very large reduction in amounts awarded to claimants? Why not a smaller reduction—or, for that matter, a larger one? What is the justification for this level of transfer?

In the impact assessment and in the Minister’s speeches at Second Reading, it was clear that some care had been taken to avoid using fraudulent claims as the main reason for the proposed changes. However, I note that today the Minister seems clear that this is in fact the main driver. As we noted at Second Reading, claims about the incidence of fraud are highly contested. Is there in fact a reasonable and properly evidenced consensus about the extent or cost of fraudulent or exaggerated claims? I worry that there is not.

There are certainly competing claims from all the many vested interests involved, including the insurance industry, but no independent assessment to help us reach an evidenced view. The Government more or less recognised this when they set out in the impact assessment the principal justifications for the proposed changes. They were all economic and based on a need they saw to correct three alleged market failures. The first failure—if you can really call it that—was asymmetric information. Only a victim could really know the extent and duration of the pain and suffering caused by whiplash, and the Government see this as an incentive to fraudulent or exaggerated claims. So it may be, but we do not seem to know how many or to what extent. But punishing all genuine whiplash claimants by hugely reducing their awards is surely not a reasonable remedy. Why punish these people and reward motorists for an unquantifiable, or at least unquantified, number of fraudulent or exaggerated claims?

The second market failure is alleged to be that of perverse incentives. This refers to legal fees. The Government claim that if legal fees were not recoverable or were less recoverable, this would bring down the number of claims. So it might, but would this be reasonable? In any case, this alleged saving is by no means the major element in the transfer of funds away from claimants.

The third alleged market failure is that of insurance companies settling claims without proof of injury. Here, there is obviously a genuine market failure, and I am very glad to see the Bill banning this practice. However, nowhere in the impact assessment’s justifications for action is there any reference to the huge transfer—over £500 million—that is brought about simply by the introduction of much lower awards for all claimants. Again, what is the evidence base for such a reduction?

The Government’s proposed tariff is significantly lower than the current actual awards in every duration band. For injuries lasting up to three months, current awards average £1,800; the Government propose £225. For injuries lasting between three and six months, current awards average £2,250; the Government propose £450. That carries on all the way up the duration scale. This all looks like an arbitrary and huge transfer of money from claimants to motorists via insurance companies. The Government have given no justification for the scale of this transfer and no explanation why claimants should be so punished and motorists so rewarded. I imagine that we will hear such claims as, “It is generally accepted that claim levels are too high”. This is not a sound basis for policy decisions, certainly not involving huge transfers of funding on this scale, which also create very serious anomalies.

As we pointed out at Second Reading, an injury of 24 months’ duration identical in its effects, if suffered at work, would attract up to £6,500. For whiplash, the Government would restrict you to £3,725. If the Government want a fixed tariff, as they clearly do, then they should put this tariff in the Bill, so that we have the opportunity to amend it. As importantly, they must justify this £1 billion transfer from claimants to motorists. They must explain why all claimants for whiplash should suffer and all motorists benefit.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, if this amendment is agreed to, Amendments 12 to 22 inclusive cannot be called by reason of pre-emption.