Pharmacies and the NHS

Jamie Reed Excerpts

Wednesday 20th November 2013 Westminster Hall

[Mr Jamie Reed (Copeland) (Lab)]

I thank the hon. Member for Ipswich (Ben Gummer) for bringing this debate to the whole of Parliament today—we often forget that Westminster Hall is Parliament. Issues of the utmost importance have been raised regarding pharmacies and the pharmaceutical industry, and shocking allegations have been made. The House of Commons has a duty to learn the facts and to act accordingly, whether by expanding the role of the pharmaceutical industry and pharmacies or by remedying any wrongdoing in existing price structures.

The hon. Gentleman is right to extol the virtues of community pharmacies for many reasons and I will touch on them in due course. He is right to open up an extremely broad debate, and we have touched on its potential breadth. We need to explore the scandal of what The Daily Telegraph called the drug price racket. I can understand a patient missing an appointment which regrettably wastes the time of clinicians and costs the NHS money. I can understand the worried well occupying GPs’ time when they have no real need to do so. I can understand patients not taking a full course of antibiotics or keeping the medicine cabinet at home filled with prescribed drugs for which they have no real need. All those behaviours cost the NHS money, but individuals will not be aware of the costs they are incurring for the NHS, nor do they intend to divert scarce resources. There is no deliberate disregard for the NHS, for other patients, or for the taxpayer in these instances, but clearly more work needs to be done to reduce these costs.

Let us consider one of the central allegations before us today—the drug price racket. Some private interests—pharmaceutical companies and pharmacies—are knowingly and deliberately committing fraud. We live in a world that is very different from the pre-crisis world that existed before the global economic crash. We live in an era that is set to be defined by austerity, and public finances are still in a parlous state. In society at large, not just in Parliament and across the political spectrum, but at the school gate, in the high street, and in the boardroom, it is understood that public money is valuable and scarce, and that it should be spent wisely and prudently.

Drug price fraud is happening in our most valued public service at a time of economic crisis, and it has occurred by design and not accident. Those responsible are not simply undertaking a grotesque financial deceit of patients and taxpayers, but are probably depriving the NHS of resources that could and should be used for patient care. To take the point to its logical conclusion, these parties have fraudulently diverted from the NHS resources that could have saved lives.

A few years ago, the Prime Minister referred to lobbying as

“the next big scandal waiting to happen”.

We now know that he was wrong. Shamefully, in recent months and again today, we may have unearthed the next big scandal that the Prime Minister warned of. My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry), the shadow Attorney-General, wrote to the Serious Fraud Office about the drug price racket in July:

“You will be aware that the Telegraph has brought to light extremely serious allegations that pharmaceutical companies in collusion with chemists have been rigging the market in prescription drugs that are generally not covered by NHS price regulations…If the allegations are substantiated it will mean that the NHS has been systematically overcharged hundreds of millions of pounds. This would represent a colossal fraud on the taxpayer. An offence of that magnitude would surely warrant the attention of the Serious Fraud Office and not just an internal inquiry of the counter-fraud department of the NHS. I would be grateful if you could let me know what steps, if any, the SFO intends to take on what appears to be prima facie evidence of conspiracy to defraud.”

David Green, CB QC, of the Serious Fraud Office responded on July 19 and concluded:

“The SFO are working closely with NHS Protect and the allegations that have been made are the subject of careful consideration. If, having considered the available information, evidence of fraud is identified, further consideration will be given as to which agency is the most appropriate to investigate these matters.”

My hon. Friend has received no other communications from the Serious Fraud Office in the intervening period, and I have today written to Mr Green asking what progress the SFO has made with its considerations. I have also written to the Chairs of the Select Committee on Health and of the Public Accounts Committee to alert them to these issues with a view to their undertaking their own inquiries.

The Daily Telegraph should be congratulated on its investigative journalism. There is absolute consent on that. It has provided a great service to the public and the NHS. We should be cognisant of the awful parallel that it rightly exposed: the parliamentary expenses scandal. That was another truly remarkable service entirely within the public interest. It is an apt comparison. The abuse of public money represented by the parliamentary expenses scandal resulted in the jailing of Members of Parliament and of peers. Shocking as that was to the public and seismic as it was to the political establishment, the fraud and false accounting pales into insignificance in monetary terms compared with the sheer scale of the embezzlement that is now being alleged in the drug price racket.

I repeat that this is not just a get-rich-quick caper, but the knowing and deliberate abuse of public money that should have been used to save lives. That is the scale of the allegations. We need the pharmaceutical industry, and we need pharmacies and pharmacists. We need the pharmaceutical industry to help to deliver our national life sciences strategy. We need it to help to underpin academia so that we can continue to break new ground in medicine research and to develop new treatments, new drugs and new medicines. We need to recognise and reward the public good that that represents.

We need to expand the role of community pharmacies if we are better to deliver a more integrated, efficient and effective health care system. We need to make better use of the 1.6 million interactions that will take place today between the population in England alone and pharmacies. The average person visits the pharmacist 14 times a year—more than once a month—and we need to capture better and utilise those interactions for improved individual and public health. Of that, there is absolutely no doubt.

However, for us to do any of that, we need to be able to trust the motives and actions of all the groups involved. Let me say to the pharmacists and pharmaceutical companies that are doing no wrong—clearly, that is the overwhelming majority—that I regret the distress that this issue will inevitably cause them, but it is essential for all of us involved with the sector to leave no stone unturned in establishing the facts, if we are to be able to maintain the faith and trust of the public. I know that the Minister, for whom I have genuine respect, will be as appalled by the revelations as anybody else, and I hope that he will be able to answer the questions that I put to him today. If not, I would appreciate a written reply.

The Daily Telegraph describes the Government announcement of drug-pricing caps in 2011 as “a ‘hallelujah’ moment” that has led to significant fraud. Does the Minister consider that that is the case, and will he investigate why it is that those disposed to committing fraud are using the announcement as the basis on which they are able to defraud the NHS? On 20 July, the Secretary of State for Health told The Daily Telegraph that he had ordered an investigation into the allegations. Will the Minister tell us where those investigations are up to? What has been investigated? What is the scope of the investigation? When will the investigation be completed? The Minister will note that Serco has been made to repay £24 million to the Treasury for financial wrongdoing in the course of delivering public services. Will the Minister support repayments to the NHS if price fraud allegations are proven?

Finally, we all want to develop the role of community pharmacies. We all want to help our pharmaceutical industry to thrive and innovate, and we all have a duty to spend public money effectively, properly and honestly. I look forward to the Minister’s reply.

--- Later in debate ---

[Dr Poulter]

On how drugs are accessed, one of the problems—this was why the cancer drugs fund was set up—was that some people, as the hon. Gentleman rightly outlined, had been receiving drugs in other countries for many years, but we in this country were a little slower to respond to some of those innovations. But of course we need to ensure that, whatever fund we set up for providing medications, those medications are shown to be effective and there is an evidence base for them. However we do things, there will always be new treatments on the horizon that we would like to get through to people more quickly, and we need to ensure that those treatments are always evidence-based. I think that we can be pleased that the cancer drugs fund has made a significant difference by providing treatments in a more effective and much quicker manner, but if the hon. Gentleman would like to discus the matter further, I would be very happy to see him and talk it through in more detail.

I think that it would be useful for me, picking up on the points raised early in the debate, to outline the processes involved in opening a pharmacy. Anyone can open a pharmacy anywhere, subject to the premises being registered with the General Pharmaceutical Council, when the owner’s service model includes the sale or supply of pharmacy medicines or prescription-only medicines against prescriptions from that pharmacy. However, there are extra criteria for providing NHS pharmaceutical services. Anyone wanting to provide NHS pharmaceutical services is required to apply to the NHS to be included on a pharmaceutical list.

Before September 2012, there were control of entry requirements. The NHS (Pharmaceutical Services) Regulations 2005 determined whether a pharmaceutical contractor could provide NHS pharmaceutical services. In England, no new contractor could be entered on to a PCT pharmaceutical list unless it was “necessary or expedient” to secure the adequate provision of pharmaceutical services locally. That was the control of entry test. If a new service provider was judged neither necessary nor expedient, the NHS, or the PCT in question, had to refuse the application. There were rights of appeal to the family health services appeal unit, which is run by the NHS Litigation Authority. That was available if there was a concern.

Part of the reason for the strict criteria relates to the pricing mechanism and how pharmacists are paid, which I will come to later. Obviously, the local health economy is an issue, and pharmacists are not paid just for the number of prescriptions that they provide; they are also given a baseline fee. When we have a publicly funded health service and we need to ensure that need and demand are aligned, it is important that we look at this in the round. I sympathise very strongly with the points about the need to de-bureaucratise the NHS where possible—those were good points well made—but we also have to recognise that this is not just about arbitrary mapping; it is about aligning need and demand for a service within the pricing framework in place. That is not just about the number of prescriptions that are provided; it is a much more complex mechanism. I will come to those points later.

[Mr Jamie Reed]

I am grateful to the Minister for giving way; he is being typically generous. On pharmacy numbers, does he think that we have too few or too many, or is the number about right?

[Dr Poulter]

The hon. Gentleman will be aware that under the previous Government, the Office of Fair Trading did a review and recommended total deregulation of the pharmacy industry. That was in 2003. The previous Government put in place a strong package of reforms to recognise that we need some degree of what my hon. Friend the Member for Ipswich would call market forces but I would probably refer to more as patient choice. We need to support patient choice as much as we can, but within the context in which we have a publicly funded service that needs to be regulated. It is a health care service; it is treating and looking after patients. We need not only to secure good value for the taxpayer, as part of how we fund that service, but to ensure that there is independent regulation and some regulation by Government as well. That is about ensuring that we have the highest-quality services available.

Given that I am running short of time, I will write to my hon. Friend or I would be happy to meet him—whichever he prefers—to talk through the specifics of the context of mapping out a local needs assessment, which is now carried out by health and wellbeing boards. That is a pharmaceutical needs assessment. I am happy to talk through with him in detail how that interrelates with the pricing mechanism and how we need to ensure that the two are kept in balance in the context of the conversation that the hon. Member for Copeland and I have just had.

It is worth highlighting the fact that pharmacists and pharmacies play an increasingly important role in our NHS. Many pharmacies now provide additional services. They are contracted to do so outside those pricing frameworks. That is done locally by clinical commissioning groups. Health and wellbeing boards or local authorities can also contract pharmacists to provide services. As my hon. Friend will be aware, responsibility for public health—40% of that budget—has now passed to local authorities. Given that public health responsibility, there is a strong role for local authorities in commissioning local health care services if they feel that that would be in the interests of the local population.

Under the Health and Social Care Act 2012, other providers of health care services, outside the traditional framework of GP and community services and secondary care, were given more of an opportunity to put themselves forward and offer to provide valuable services. This is a real opportunity for pharmacists to bring forward to CCGs what they do and to make the case that they can provide many services in a way that will be focused on primary prevention and that will save the local health economy money but also deliver better care. The track record of pharmacies and pharmacists is very good in delivering community care—whether looking after people with diabetes or providing simple services for other patient groups. Under the 2012 Act, there is now a much greater opportunity for pharmacists to come forward and put in offers, within an integrated health service, and make the case about how they can provide services. They may be able to do that in a much better way, as they are often embedded in their communities, than some of the traditional mechanisms in the NHS.

I hope that my hon. Friend will be reassured by the fact that the legislation that we have put in place as a Government has given pharmacists a much greater opportunity to contribute to their local health economy, not just in economic terms and in terms of the economic benefits that that will bring for pharmacists, but by delivering the very good care that we know they can deliver.

We have had a wide-ranging debate. I think that we can be sure that there is in place a robust pricing mechanism, which on the whole works very well and secures good value for the taxpayer and for local patients, but there are issues about certain items that pharmacists can prescribe, and we do need to look into them. There is a role for NHS Protect in doing that. We value the innovation that pharmacists provide locally in delivering better—higher-quality—patient-centred care, and the 2012 Act has put us in a better place to support local pharmacists in delivering the kind of patient care that we all want to see in our local communities.