Health Service Medical Supplies (Costs) Bill

Baroness Finlay of Llandaff Excerpts

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

[Baroness Finlay of Llandaff (CB)]

My Lords, I have some sympathy with the amendment of the noble Lord, Lord Warner. It strikes me that the information being asked for in the Bill requires a degree of detail that probably is not going to reflect reality. This is very often a global industry, so defining a “UK producer” will be quite difficult. If we make the information requirements too difficult, I see a risk of some of the larger companies deciding to produce more offshore rather than here.

The other difficulty with the pricing of any medical treatment that comes to market is that it has often had a very long lead time—over years. So the true cost of that particular item becomes almost impossible to disaggregate from all the other costs. Then, once it is produced and packaged, there are distribution costs, the mark-up at wholesale level and so on. I can see how a producer, in wanting to keep a cost high, could potentially move around its budgeting line to protect itself. But the problem is that if you do not have a trigger, you may get so much data that you cannot actually extract the true knowledge and the important information from them. I understand why you would want to have a lot of data to be able to move the cost and map it efficiently, but there is only any point in mapping it if it has accuracy attached to it.

I have a question for the Minister. In all these information requirements, how will a “UK producer” be defined, as distinct from an international producer from elsewhere? I may have missed it, but I could not find it defined in the Bill; I can see only products defined.

It will become almost impossible to know where the true cost is, but if a cost is going up, that becomes counterintuitive. Generally, for medication that is out there on the market, the cost should fall. Usually, production costs drop, because, for example, antibiotic production used to be incredibly expensive and is now very much cheaper because of efficiencies and the way that the science has moved forward. So you would expect, with bulk sales and technological advances, that the cost should come down. I therefore have a question for the noble Lord, Lord Warner, on the trigger mechanism. Is his price absolute—in pounds—or is it also considered relative to other products in that field that may be on the market? For example, we have seen some major discrepancies with ophthalmic products. Eye drops for glaucoma have been incredibly expensive compared to exactly the same substance that is being used in oncology and has been priced at a much lower rate. The question has to come up as to whether the price is being held and maintained inappropriately, rather than having gone up.

[Lord Warner]

In response to the noble Baroness’s point, I would not claim to have actually considered the detail of what level of pricing we will use. My point in this amendment is to try to establish the principle of a trigger mechanism, and I am happy to be advised on ways of improving it.