Health Technology Assessment Charges

Anne Marie Morris Excerpts

Tuesday 4th December 2018 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

I rise to speak about health technology assessment charges in England. I am sad to see that there is not more interest in this debate, even at this very interesting early hour of the morning.

The Government are proposing to charge for technology appraisals undertaken by the National Institute for Health and Care Excellence. The House should understand that for a drug to be fully marketed, it has to go through three stages: it is required to be licensed, to go through NICE and then to go through the formulary. Licensing enables the drug to be certified as doing, in effect, what it says on the tin. The NICE process ensures that it offers good value for money and is something the NHS is prepared to make generally available. The formulary is all about endeavouring to ensure that the drug is available locally.

It is not common in other markets for technology appraisals to be charged for. It is not unheard of, as I am sure the Minister will tell me, but in the grand scheme of things, these pharmaceutical companies or life sciences businesses have already put billions of pounds into these particular drugs. As hon. Members will appreciate, there is quite a high failure rate at the first stage for licensing, but by and large, those that get to NICE are fit for purpose and are good value for money, and most of them are eventually passed.

Given the billions that the drug companies have already spent, to ask them to pay for this approval process, which is for the benefit of the NHS, seems a little churlish. Hon. Members may ask, given that the amount to be raised will be £10 million—with the cost for a single technology appraisal at £126,000 and a highly specialised appraisal of the same amount—whether this really matters. The answer is yes, it does. This is not a comment on NICE. NICE is incredibly well respected. It is a global leader in what it does. It makes very high-quality decisions, and it is absolutely clear that if we want to ensure something is fit for purpose and safe, NICE is where we want to go. Indeed, we need more NICE, not less NICE: we need more drugs to be available to patients.

The trouble with what is being proposed is that, while there is undoubtedly a need to look at the cost issues, it sends the wrong message, and that wrong measure will be far more damaging and costly to UK plc and to patients than the £10 million. The balance of risk between the taxpayer and the life sciences or pharmaceutical companies will change, albeit ever so slightly, but that message says that this is not something that we, UK plc, should be incentivising. That is wrong: it goes against the life sciences industrial strategy and against any recognition of the competition out there.

There is huge competition. The United Kingdom has some of the best brains in the world, but increasingly, because of the challenge of getting the drugs to market, competitors are looking at incubating in the UK, where we have the expertise, but when marketing and taking a drug to a competitive position, going to the USA or Japan, and failing that, Germany or France. What might seem a small figure is sending out the message, “Don’t invest here”.

Following Brexit, that is absolutely the wrong message. The sector could—and should—be a real source of this country’s growth post Brexit. It needs to grow: it can and must grow. We must send a strong message that we want people and businesses to invest in the UK to develop the medicines that we need and, most importantly, to ensure that the UK citizen has the best access to the best drugs in the world.

We then have to examine the NHS’s duties when it considers approvals for drugs. It has at least four duties. The first is to provide equal access to NHS facilities, irrespective of cost. The second is to promote research. The third is to take account of research and development costs when making decisions. The final duty is the family test to ensure that its actions respect the impact on the whole family of approving or not approving a drug.

The challenge with equal access is that the unmet need is for often expensive therapies and pharmaceuticals for very small patient groups. Increasingly, those new therapies are being developed by start-ups—new companies that focus on one particular disease area. Doubtless the Minister will say, “What if those small companies were offered a reduced rate, cut by 25%?” Frankly, that is the proverbial drop in the ocean. The negative message is still there. I am sure that the Minister will remind me that those small companies can phase payment. The problem is that that is front-loaded. The Minister will then no doubt say that there is the potential—as, when and if NICE decides not to proceed—of reimbursement. However, by that stage, most of the money—the equivalent of the £126,000—will have already been spent. It is a nice idea, but it does not work in practice.

The NHS has committed to promoting research, but as I have already mentioned, there is huge competition from America, Japan, Germany, France and many others. Not only will those who incubate here go to those countries to commercialise, develop and market that product, but in those countries, it is quicker, cheaper and easier to get to market. We are talking about businesses—those are business decisions—so why would they not do that? Sadly, we are no longer the first choice of place to commercialise, then sell and market drugs. We are often the second, third and even fourth choice. We cannot afford to lose pharmaceutical companies and investment. Compared with that, the £10 million the Government are looking to gain is a drop in the ocean. Post Brexit, we must do everything we can, in the interests of patients and our life sciences industry, to support our companies and ensure that they can continue to grow.

We must look at taking into account R&D costs. They are going up, not down. It is not clear from the regulations how many times the fee has to be paid, because there are several parts to those processes and there are also appeals processes. The other peculiar part of the way in which this has been shaped is that the charge applies only to medicines. It does not apply to medical devices and diagnostics, so it does not apply across all the possible cures that go through NICE. Are the pharmaceutical companies supposed to pick up the costs for medical devices and diagnostics, too? That does not seem right or fair.

Finally, there is the family test. The family will obviously be impacted by what happens to a member of it. If one member is suffering from something very acute, very rare and very debilitating, that will have a huge impact on the family members and the carers of that individual. The win in sorting this out is much greater than just that individual.

I propose to the Minister that none of the tests, to which the NHS has committed, has been met. Clearly, I would be with the Minister and the Government in saying that costs are an issue, but that is not the answer. Clearly we must look at ways of finding the money to produce more for less, but there are many other ways of doing that. Let us look instead at removing bureaucracy, improving efficiency and avoiding the duplication we see because of the three-part process of getting drugs licensed so they do what they say on the tin, going through the NICE process to see whether the Government and the NHS are prepared to ensure that they are readily available and, finally, going through the formulary process.

I submit that what we need to do is look at licensing, the NICE process, baseline commissioning and formulary decisions in the round. Let us look across those processes and cut out the duplication which other countries have achieved so successfully. I submit that we should not, in the best interests of patients and the country particularly post Brexit, introduce the regulations in April next year. We should look again at the broader issue and at all the processes in the round, and instead make this part of the NICE methodology review, which is due next year. Let us consult on efficiency and effectiveness, not just cost reduction.

We want more drugs assessed, not fewer. We want it done faster. We want it to be more efficient. We want it to be more effective and we want to make sure that UK patients get the benefit of lifesaving medicines more quickly than others. We need to strengthen the life sciences sector. We need to encourage investment in the UK. I say to the Minister, “Do not introduce the regulations. Think again.”

[The Parliamentary Under-Secretary of State for Health and Social Care (Steve Brine)]

Mr Speaker, you are remarkable for sitting here for all this time. I share the admiration for you, if not your football team after Sunday afternoon. Less said about that the better. I cannot even believe I have raised it. I know that you will have been there and will have enjoyed it. I just have to take my hat off to the 4-2 score. The return leg will come.

I am disappointed that only you, Mr Speaker, my Parliamentary Private Secretary, the Whip and my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who introduced the debate, and I are here. An Adjournment debate without the hon. Member for Strangford (Jim Shannon) is a rare thing. I can only feel that he will come running in at any time.

I have been asked to reply to the debate on behalf of the Under-Secretary of State for Health, Lord O’Shaughnessy, who sits in the other place and has responsibility for this policy area. I take a keen interest in it, as he knows. My hon. Friend the Member for Newton Abbot has a keen interest in this matter, both on behalf of her constituents and in her capacity as chair of the all-party group on access to medicines and medical devices, which I know she chairs with aplomb.

The main thrust of my hon. Friend’s remarks was about the charging process the NICE has proposed, but let me reiterate to the House that the Government are committed to ensuring that patients can benefit from rapid, consistent access to effective new treatments. It is always important to say that in these debates. NICE plays a key role in this aim, through its technology appraisal and highly specialised technologies programmes. Through both programmes, NICE produces authoritative evidence-based guidance on whether drugs and other treatments should be funded by our NHS. Where NICE recommends a treatment as value for money, the NHS is required to make funding available, so that the treatment can be provided when it is clinically appropriate for a patient. That is reflected in the NHS constitution as a right to NICE-approved treatments, as it should be. Since it was established, NICE has recommended around 80% of the drugs that it has assessed. Many thousands of our constituents have benefited from access to effective new treatments as a direct result of its guidance.

Over almost 20 years, NICE has gained a firm reputation as a world leader in its field, and I was pleased to hear my hon. Friend talk about us wanting more NICE. When I travel around—at the G20 last month, for instance—and talk to fellow Ministers, they are always respectful about and look with some envy at what NICE achieves as an organisation. If we did not have it, we would have to invent it, so it is crucial that the methods and processes for making recommendations continue to evolve and develop to meet new challenges. I totally take my hon. Friend’s point about the NICE methodology review next year. These issues will be talked about within that process, of course.

My hon. Friend talked at length about charging. We think it extremely important that we have a system such as NICE in place to ensure that the NHS spends its money—public money, our constituents’ money—in the most effective way possible. It is critical that NICE’s work operates on a sustainable footing in a way that enables it to continue to be responsive to developments in the all-important—I completely agree with what my hon. Friend said—life sciences sector.

To date, NICE’s technology appraisal and highly specialised technology programmes have been funded through the resources that it receives from Government. However, in common with all Government bodies, it is right that NICE considers how to operate with maximum efficiency, as well as who stands to benefit from the services that it provides. My hon. Friend is absolutely right to talk about the robustness of how it spends money and looking at efficiencies across the board. As she rightly points out, that is why it will be doing its methodology review and why it does that regularly. It is also essential for us that NICE continues to be able to respond to continuous change in the global life sciences market—it is a global market, of course—whether with the ever-growing movement towards personalised medicine or an increasing number of medical devices and digital products.

For that reason, the Government and NICE believe that the most appropriate and sustainable method for NICE’s appraisal programmes in future is for NICE to charge the companies that benefit directly from its recommendations. This is not without comment and controversy, as we have heard this evening, but it also has support. To this end, the Government carried out a public consultation between 10 August and 14 September on proposed changes to regulations that would enable NICE to charge companies for the cost of making technology appraisal and HST recommendations. The consultation followed extensive engagement by NICE with the life sciences industry on a possible charging model. During that engagement, NICE heard clearly from companies that it would be important to ensure that there was some mechanism for minimising the impact of charges on small companies—my hon. Friend rightly referred to that—wanting the NHS to invest in their innovative and effective new products.

The Government are committed to ensuring that there is appropriate support for small businesses—I do not know whether my hon. Friend saw my speech before the debate, but she seemed to know a lot of what was in it—and she is right that this was reflected in the Government’s recent consultation that proposed a small discount for small companies and provision for small companies to pay by instalments. That was in there, too. We are especially keen in the response to pitch this right as we move from the consultation to the Government response. That is probably as much as I can say about that, but I repeat: we are keen to pitch that right for small companies and have listened to responses, including from my hon. Friend, to that consultation. It also gave a clear commitment to reviewing the charging mechanisms over time to ensure that they are fit for purpose and respond to developments in the life sciences sector.

We received 78 responses to the consultation from a range of audiences, including the life sciences sector, the NHS, patient groups and professional groups, as well as my hon. Friend through the all-party group. A range of issues were raised in response to the consultation, such as NICE’s impartiality and the impact on drugs for rare diseases, as well as potential impacts on small companies. I was over the road at the Britain Against Cancer conference today talking, for instance, to Cancer52, which represents people with rarer cancers, so that is very important to me as the cancer Minister.

It would not be appropriate for me to pre-empt the Government’s response to the consultation, and I do not intend to do that this morning, but I can assure the House that the Government have been carefully considering all the issues raised and agree that any charging mechanism must include appropriate support for the small companies, while protecting the impartiality and benefit of NICE’s work to patients and, as my hon. Friend rightly says, the global nature of this business and the great opportunities in this sector from Brexit.

We will publish our response to the consultation very shortly. The Under-Secretary of State for Health, Lord O’Shaughnessy, has invited my hon. Friend to meet to go through these proposals in detail and discuss her response to the consultation. As chance would have it, I understand that the appointment went in the diary today—just before today’s debate. Who would have thought it? That is happening this Thursday.

[Anne Marie Morris]

Would it be right to say that the consultation assumed there would be a charging mechanism and that it was not about whether but about how?

[Steve Brine]

Yes, the consultation was about how, but we are listening very carefully to the “how”.

As my hon. Friend said, Members have expressed concern that the introduction of the charging mechanism will make us a less attractive country in which to invest. We are committed to ensuring that the UK is an attractive environment for the life sciences sector. Sir John Bell’s life sciences industrial strategy published last year set out the sector’s vision for how we will do that, and we fully support the strategy’s vision. We have committed £500 million of Government money, and that has been backed by significant investment from 25 different organisations across the sector. Strong progress has been made on that sector deal, therefore, and one year on we are working with partners to agree the second sector deal with the new measures to secure our lead in the areas of global opportunity.

[Anne Marie Morris]

I thank the Minister for answering my last intervention so honestly. Given that the last consultation was not about the “whether” but about the “how”, may I ask if there was ever a consultation on whether this was the most appropriate way to ensure better value and more money for NICE to develop more medicines more efficiently?

[Steve Brine]

Not to the best of my knowledge, but this will of course continue through the NICE review process next year, and I have no doubt that my hon. Friend will be able to discuss this at great length with Lord O’Shaughnessy on Thursday.

I stress that the Government share the views that we have heard today about the vital importance of NICE’s work and about protecting the UK’s place in this important sector, which a lot of people work in and which—more importantly—a lot of patients rely on. That is why we want to ensure that NICE can continue to develop its recommendations with the same authority, transparency and impartiality that have been the backbone of what is a world-leading organisation with a world-class reputation.

Question put and agreed to.