Health Service Medical Supplies (Costs) Bill

Flick Drummond Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 24th October 2016 Commons Chamber

[Mr Hunt]

We have made some assessments of those things, but, in essence, our concern is that, even without comparisons with what is happening in other countries, we are talking about totally unreasonable behaviour. I mentioned one example earlier, but I can give another of a medicine whose price increased by 3,600% between 2011 and 2016. I just do not think we can justify that. Given that we want to have strong, harmonious, positive relationships between the NHS and the pharmaceutical industry, we need to eliminate the possibility of that kind of behaviour happening in the future.

This Bill therefore amends the 2006 Act to allow the Government to control prices of these medicines, even when the manufacturer is a member of the voluntary PPRS scheme. We intend to use the power only where there is no competition in the market and companies are charging the NHS an unreasonably high price. We will engage with the industry representative body, which is also keen to address this practice, on how we will exercise this power.

The final element of the Bill will strengthen the Government’s powers to collect information on the costs of medicines, medical supplies and other related products from across the supply chain, from factory gate to those who supply medicines to patients. We currently collect information on the sale and purchases of medicines from various parts of the supply chain under a range of different arrangements and for a range of specific purposes. Some of these arrangements are voluntary, whereas others are statutory. The Bill will streamline the existing information requirements in the 2006 Act relating to controlling the cost of healthcare products. It will enable the Government to make regulations to require all those involved in the manufacture, distribution or supply of health service medicines, medical supplies or other related products to record, keep and provide on request information on sales and purchases. The use of this information would be for defined purposes: the reimbursement of community pharmacies and GPs, determining the value for money that the supply chain or products provide; and controlling the cost of medicines. This will enable the Government to put the current voluntary arrangements for data provision with manufacturers and wholesalers of unbranded generic medicines and manufactured specials on a statutory footing. As the arrangements are currently voluntary, they do not cover all products and companies, which limits the robustness of the reimbursement price setting mechanism.

A statutory footing for these data collections is important so that the Government can run a robust reimbursement system for community pharmacies. I know that some colleagues have raised concerns about the implications of our funding decisions for community pharmacies, and today I want to reassure the House that this Bill does not impact on those decisions, nor does it remove the requirement for consultation with the representative body of pharmacy contractors on their funding arrangements in the future. However, the information power will give us more data on which to base those discussions and decisions, rather than relying on data only available to us under voluntary schemes and arrangements. The information power would also enable the Government to obtain information from across the supply chain to assure themselves that the supply chain is, or parts of it are, delivering value for money for NHS patients and the taxpayer—we cannot do that with our existing fragmented data.

[Mrs Flick Drummond (Portsmouth South) (Con)]

In this regard, will my right hon. Friend be giving consideration to asking pharmacies that can prepare their own medicines—aqueous cream and things—as tremendous sums could be saved for the NHS? Will he be considering that in the overall scheme of getting information on the medicines they are providing?

[Mr Hunt]

The information we collect might make it possible for us more robustly to analyse issues such as the one my hon. Friend rightly brings to the House’s attention. Even if it does not, we should consider the issue, and I am happy to write to her to see whether we can make more progress in that area.

I also wish to reassure the House about the application of the information power to the medical technology industry. More than 99% of the companies supplying medical technologies to the NHS are small and medium-sized enterprises. Their products may be less high profile than the latest cancer medicine, but they are no less innovative or vital for patients. We have no interest in placing additional burdens on those companies.

The 2006 Act already provides powers for the Government to require suppliers of medical technologies to keep and provide information on almost any aspect of their business. This Bill will clarify and modernise those powers, and I am committed to exercising them in a way that is fair and proportionate to companies, to the NHS and to taxpayers who rightly demand value for money from the supply chain. Companies are currently required to hold information on their income and sales for six years for tax purposes. We will work closely with industry to ensure that the requirement to keep and record data does not significantly increase this burden.

My officials have already been in discussion with all parties across the supply chain—for both medicines and medical devices—about these powers to ensure that their implementation is robust but proportionate. We will provide illustrative regulations to aid debate on these provisions. I also want to reassure colleagues that, following Royal Assent, a full and open consultation will take place on the regulations specifying the information requirements.

I thank Ministers and their officials in the devolved Administrations for their constructive input and engagement with my Department on the Bill. Although many of its provisions are reserved in relation to Scotland and Wales, some information requirements that currently apply to England only could also apply in the territories of the devolved Administrations.

We intend to propose amendments to the Bill to reflect the agreement between the Government and the devolved Administrations, so that information from wholesalers and manufacturers can be collected by the Government for the whole of the UK and shared with the devolved Administrations. That avoids the burden created by each country collecting the same information.

The Welsh Government have also asked me to enable them to obtain information from pharmacies and dispensing GPs—a power that the Scottish Government and the Northern Ireland Executive already have. The Government will therefore propose an amendment to the Bill to amend the NHS (Wales) Act 2000 so that Welsh Ministers can obtain information from pharmacies and dispensing GPs.

Medicines are a vital part of the treatment provided by our NHS. Robust cost control and information requirements are key tools to ensuring that NHS spending on medicines across the UK continues to be affordable. They also help to deliver better value for taxpayers and to free up resources, thereby supporting access to services and treatments. This Bill will ensure that there is a more level playing field between our medicines pricing schemes while ensuring that the decisions made by the Government are based on more accurate and robust information about medicines’ costs. It will be fairer for industry, fairer for pharmacies, fairer for the NHS, fairer for patients and fairer for taxpayers, and I commend it to the House.