NHS Funding

Debate between Jeremy Hunt and Rob Marris

Monday 31st October 2016 Commons Chamber

[Mr Hunt]

My right hon. Friend is absolutely right. That, of course, is why all parts of the NHS in England are embarking on the sustainability and transformation programme, which is designed to do precisely what my right hon. Friend says—to find smart ways to reduce demand. That will include, for example, better use of pharmacies, better use of GPs, more mental health provision—[Interruption.] Opposition Members are shouting, but why were they not prepared to put the money into the NHS to help us implement these plans? There would be no sustainability and transformation plans on the thin gruel that they promised for the NHS at the last election.

[Rob Marris (Wolverhampton South West) (Lab)]

I was always against the private finance initiative. This Government have set up a £1.5 billion bail-out fund for PFI. I put it to the Secretary of State that that is to rewarding past profligacy and penalising frugal trusts such as the Royal Wolverhampton NHS Trust. When will the Secretary of State redress this imbalance, stop rewarding profligacy and reward frugality?

[Mr Hunt]

I am getting more and more impressed with the hon. Gentleman’s questions. Last time, he accused me of being a Corbynista, and today he is criticising me for profligacy, when the general tone of most Members seems to be that we are being rather too parsimonious with the NHS. I completely agree with him that private finance initiatives were an utter disgrace, leaving the NHS with over £70 billion-worth of debt by 2010. Unfortunately, there does not seem to be a strong correlation between shiny new buildings and good care for patients, as can be seen in a number of Care Quality Commission reports. We are doing everything we can to unwind that very difficult problem.

Health Service Medical Supplies (Costs) Bill

Debate between Jeremy Hunt and Rob Marris

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

[Mr Hunt]

My hon. Friend obviously knows about these matters in a great deal of detail and should be reassured that this Bill should prevent people who are part of the current voluntary pharmaceutical price regulation scheme—PPRS—from parallel-importing through European subsidiaries, which currently under single market rules we are not able to do anything about. That loophole will be closed.

The first element of the Bill relates to controls on the cost of branded medicines. For many years the Government have had both statutory and voluntary arrangements in place with the pharmaceuticals industry to limit the overall cost of medicines to the NHS. Companies can choose to join either the voluntary scheme or the statutory scheme. Each voluntary scheme typically lasts for five years before a new scheme is negotiated.

The current voluntary scheme is the 2014 PPRS. The objectives of that agreement include keeping the branded health service medicines bill within affordable limits while supporting the availability and use of effective and innovative medicines. For industry, the PPRS provides companies with the certainty and backing they need to flourish both in the UK and in the global markets.

The current PPRS operates by requiring participating companies to make a payment to the Department of Health of a percentage of their NHS sales revenue when total sales exceed an agreed amount. So far the PPRS has resulted in £1.24 billion of payments, all of which have been reinvested back into the health service for the benefit of patients.

[Rob Marris (Wolverhampton South West) (Lab)]

The early part of the Bill appears incredibly tortuous, because it relates to whether something is under the voluntary scheme or the statutory scheme and to switching back and forth between the two. Is that because we have a voluntary scheme which started in 2014 and will run until 2019, and the Government intend not to renew it? If the Government are minded to consider renewal in 2019, why have parallel schemes making the whole thing much more complex than it needed to be?

[Mr Hunt]

The hon. Gentleman makes an important point. It will be for this House and the Government to reflect prior to 2019 on whether it is worth carrying on with two schemes, which has been the arrangement for many years. Successive PPRS voluntary agreements have covered the vast majority of sales to the NHS and the statutory scheme has been a back-up for people who do not want to participate in the voluntary scheme. Recently, however, there has been an element of gaming the system whereby more and more firms have been moving from the voluntary scheme into the statutory scheme. The Bill will remove the incentives for them to switch between schemes and will make the benefits to the NHS essentially the same whichever scheme people choose. It will be for this House to reflect on and for the Government to consider whether the dual structure is right going forward.

--- Later in debate ---

[Mr Hunt]

I am happy to look into that—some of my own constituents have been affected by that issue. I am not aware that there is scope to consider that important point in the Bill, but we should reflect on what we can do to deal with some of the anomalies in the drug licensing regime that lead to the unintended consequences that my hon. Friend talks about.

We have a statutory scheme for companies that are not in the PPRS that is based on a cut to the list price of products, rather than a payment mechanism on company sales. Since the introduction of the rebate mechanism in the PPRS, the volumes of drugs going through it have been lower than estimated. At the same time, the statutory scheme has delivered lower savings than predicted. The inequity between the two schemes has led to some companies making commercial decisions to divest products from the PPRS to the statutory scheme, further reducing the savings to the NHS.

Last year, the Government consulted on options to reform the statutory medicines pricing scheme by introducing a payment mechanism, in place of the statutory price cut, broadly similar to that which exists in the PPRS. Our clear intention was to put in place voluntary and statutory schemes that were broadly comparable in terms of savings. Of course, companies are free to decide which scheme to join and may move from one to the other depending on the other benefits they offer, but the savings to the NHS offered by both schemes should be broadly the same.

NHS respondents to the consultation supported our position, but the pharmaceutical industry queried whether the Government had the powers to introduce a statutory payment system. Following a review of our legislative powers, we concluded that amendments should be made to clarify the existing powers to make it clear that the Government do have the power to introduce a payment mechanism in the statutory scheme. The Bill does that by clarifying the provisions in the NHS Act 2006 to put it beyond doubt that the Government can introduce a payment mechanism in the statutory scheme. The Bill also amends the 2006 Act so that it contains essential provisions for enforcement action. Payments due under either a future voluntary or statutory scheme would be recoverable through the courts if necessary. That would include the power to recover payments due from any company that leaves one scheme to join the other.

The powers proposed in the Bill to control the cost of medicines are a modest addition to the powers already provided for in the 2006 Act to control the price of and profit associated with medicines used by the health service. The powers are necessary to ensure that the Government have the scope and flexibility to respond to changes in the commercial environment. The intended application of the powers will, of course, be set out in regulations. We will provide illustrative regulations to reassure the House that we will be fair and proportionate in exercising the powers.

[Rob Marris]

I voted for the 2006 Act, but I have to say to the Secretary of State that profit controls are pretty draconian, particularly for a Conservative Government. The Government appear to be extending them when we have historically dealt with what society refracted through this House as excessive profits through taxation, such as the windfall tax on banks and so on. The Secretary of State now proposes to extend profit controls to a major part of the economy, which would no doubt be loved by the Leader of Her Majesty’s Opposition. To a socialist such as me, a Conservative Secretary of State doing that seems a bit counterintuitive. Could he say a bit more about why he is extending profit controls?

Oral Answers to Questions

Debate between Jeremy Hunt and Rob Marris

Tuesday 5th January 2016 Commons Chamber

[Mr Hunt]

First, I thank my hon. Friend for the campaigning he does for his local hospital. He knows that I very much support that merger and hope that it will go ahead. It is worth paying tribute to the staff at the trust, who have brought down mortality rates to within the NHS average. The Care Quality Commission says that plans to improve safety are working well. We should celebrate the fact that even the trusts in special measures have hired 700 more doctors and 1,800 more nurses and are making real progress in improving patient safety.

[Rob Marris (Wolverhampton South West) (Lab)]

Private finance initiatives are costly and damaging; they always have been and always will be. Can the Secretary of State tell us what percentage of hospitals in special measures have had significant PFI funding?

[Mr Hunt]

I can write to the hon. Gentleman with the details, but I can tell him now that the Government inherited £70 billion of PFI debt, which has caused enormous pressure throughout the NHS.