Health Service Medical Supplies (Costs) Bill (First sitting)

James Berry Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 8th November 2016 Public Bill Committees

[Maggie Throup (Erewash) (Con)]

Q I have another question for Mr Kennedy, and anyone else if they want to add to it. Is the definition of medical supplies under the National Health Service Act 2006 sufficient, or do you think it needs to be clarified further?

Philip Kennedy: Again, I welcome the question. The definition envisaged here is extremely broad. It is difficult to define exactly what is a medical device or a medical technology. I think that some of the wording is “or any product”. I understand the desire to give this a wide scope, but it is extremely important that we differentiate between a medical device or a diagnostic product and a pharmaceutical or a generic pharmaceutical. They are quite distinct industries, very different in their structure and scope. We would welcome a much tighter definition and a tighter definition for the companies that produce those defined products of the intent—of what exactly is being asked of them by the legislation.

[James Berry (Kingston and Surbiton) (Con)]

Q We have had a submission from the British In Vitro Diagnostics Association, which says that if its products are included within the definition, it does not envisage that the new information required under clause 6 would be too burdensome and that much of the information that it would be required to provide is information that companies record anyway. Do you disagree with that analysis?

Philip Kennedy: I do disagree with that. From our members’ perspective, the data, as we understand it—we would greatly seek some clarity on exactly what data are being requested—are not routinely collected, particularly for small companies. Of course we collect data for tax purposes, productivity and all the usual parts of running a business, but data on profitability at a product level would be a huge additional burden for companies that are relatively small in scope. They would not normally do that. Even if the information was available, I am not sure how it would be analysed and reported on effectively, to give the information that is sought. We are happy to collect data to run our businesses, but the definition of what is being asked here is something that we would greatly appreciate clarity on.

[Jo Churchill (Bury St Edmunds) (Con)]

My question is to Dr Ridge and to Mr Kennedy. I have a concern about how the Bill might have an impact on pharmaceutical companies’ research and development, particularly in the light of medical innovations and how they are moving on. We do not want to stop that innovation with things such as pumps and so on. We know that we are trying to reduce the viscosity of insulin to get the pumps to work more effectively. How does this cover the case? Is it a medicine or an innovation? Can you give me a little more of your thoughts of how we pin things down? On the personalised front, are we future-proofing? Good legislation should be adaptive, I would argue, so that we do not revisit this.

Dr Ridge: In the first instance, I should make it clear that NHS England is very supportive of the proposals in the Bill and, indeed, the £5 million cut-off point around SMEs. We are also very supportive of innovation in the UK. For example, we have recently launched a scheme around innovation acceleration and the like. We want to see a thriving pharmaceutical and medical devices industry—that is, life sciences—more generally. There is no doubt about that.

The Bill will make a contribution to the financial challenge I mentioned. I am sure that in due course, with this pharmaceutical price regulation scheme due to expire at the end of 2018, there will be a negotiation in the normal way. NHS England will want to play its part around that.

The world is changing and personalised medicine is an important development for us all, but it needs to be delivered in a way that is both effective and affordable. This way of filling a bit of a problem between the PPRS voluntary and statutory scheme in the short term will also perhaps give us a basis for a further negotiation, I am sure, in the context of many things, including personalised medicine.

There is a lot more to do around getting best value and outcomes from medicines more generally in a variety of care settings, whether in hospitals, care homes or whatever it might be. We spend a lot of money on medicines and are going to be spending more, but we do not always see best outcomes, in many ways because of the way medicines are used. NHS England is looking carefully at how to optimise medicines and their use, and that will include personalised medicine.

Philip Kennedy: If I can clarify your question, I think it specifically related to insulin and the cost of that. It may be more appropriate that Mr Smith answers around pharmaceutical development by plan.

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[Martyn Day (Linlithgow and East Falkirk) (SNP)]

Q The Scottish Government have used payments from the PPRS towards a specific fund for access to new medicines. Does the panel think that a similar model would be good elsewhere in the UK?

Dr Ridge: From an NHS England point of view, the ring-fencing of moneys to support medicines, which I guess is what you are referring to, is not a position we have previously supported. We largely want to retain the position whereby NHS England and clinical commissioning groups are able to determine their own priorities, in terms of how available funding or savings are used. That is where we are on that. Priorities vary, as you know, from locality to locality and the ability to utilise moneys in a way determined locally strikes me, and strikes NHS England, as being the way to go.

[James Berry]

Q Dr Ridge, are there any disadvantages with the Scottish system, which is different from the one you run in NHS England?

Dr Ridge: I am not sure that it is particularly for me to comment on that.

[James Berry]

Q No, but why are we not adopting the Scottish situation? There must be some disadvantages if we are not following it here.

Dr Ridge: I can see that some people would say that ring-fencing funding to support, for example, the uptake of innovative medication is one way to approach this, and some would say that that would have some advantages, but we have taken the view that it is up to NHS England and the CCGs how they utilise their funding.

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[The Chair]

Thank you. Two more people have indicated, and I hope to get both in.

[James Berry]

Q I will be very quick. We have had submissions from suppliers and trade associations, and they made the point that there are a number of powers in the 2006 Act that have not been used and that this Bill merely extends those powers. Is the logical conclusion of your argument that you do not agree that the Government should have had the powers in the 2006 Act in the first place because they are too burdensome on your industry?

Philip Kennedy: We support the existing legislation and its current use.

[James Berry]

It has not been used.

Philip Kennedy: But the certainty and clarity for how it exists is there. Increasing the uncertainty and the scope does not serve the medical device sector. We very much support its application elsewhere, but for the medical device sector, which is different and unique for all the reasons I have expressed, we would seek other mechanisms by which to achieve the end.

[Jo Churchill]

Q Thank you for that answer on the off-patent or repurposed drugs, Mr Smith. Perhaps putting them in the British National Formulary might help. What is the one thing, gentlemen, that you would do to get better value for the NHS? If costs have gone up by 59% since 2010—I think that is the statistic you threw in at the beginning—we have to do something. What is the one thing you would do to make the NHS provide better value for drugs?

Dr Ridge: The one thing.

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[The Chair]

We will continue now, Mr Watson, with evidence from the Association of the British Pharmaceutical Industry. Please introduce yourself and then we will go straight to questions.

David Watson: Good morning. My name is David Watson. I am director for pricing at the Association of the British Pharmaceutical Industry.

[James Berry]

Q Mr Watson, do you think it is right that the Government should take action to stop profiteering from the NHS on drug prices?

David Watson: Specifically on the issues that we were widely covered by the media, yes. We have been very clear. We think the Government should have the powers to step in where there are price hikes, frankly, in unbranded products. We agree with that and with the intention of the Bill to widen the powers to apply to any company.

[Rob Marris]

Q Do you think there are further steps, besides what is in the Bill, that could be taken to ensure that the NHS gets best value for money?

David Watson: The Bill specifically addresses the point of unbranded generic prices. It also specifically talks about a new mechanism for the statutory scheme. Most branded medicine spend—about 80% of it—is actually in the voluntary scheme. We think that the voluntary scheme has operated very well to help address the issue of affordability and pricing.