Health Service Medical Supplies (Costs) Bill

John Redwood Excerpts

Ping Pong: House of Commons
Wednesday 15th March 2017 Commons Chamber

[Mr Dunne]

The short answer is yes, it is. That is set out in the NHS constitution. The measures considered by the NICE board today provide some additional flexibility for NHS England in its handling of negotiations with the drugs companies over the introduction of new technology.

Let me conclude on amendment 3 by saying that the Government strongly believe that it would have a negative impact on the Government’s ability to operate price controls, so I ask Members to disagree with it.

I will deal briefly with the other amendments. Lords amendments 1 and 2 and amendments 4 to 24 were made in the other place. They are all amendments that the Government brought forward, having worked constructively with parliamentarians on improving the Bill.

Amendments 1 and 2 relate to the remuneration for persons providing pharmaceutical services in England and Wales respectively. The amendments provide for new regulation-making powers in respect of special medicinal products. These are unlicensed medicines that can be manufactured or imported to meet a patient’s individual needs when no licensed product is available.

The unique nature of specials—the hon. Member for Central Ayrshire (Dr Whitford) mentioned them during our consideration in this place—and their manufacturing arrangements mean that we need to do more to ensure that the prices paid by the NHS represent value for money for all these products. These amendments would enable England and Wales to develop options that will secure improved value for money—for example, by using a quotes system that has been trialled in Scotland, but there are also other options. We will consult the community pharmacy representative body on how best to take this forward.

Amendments 4 to 7 introduce a consultation requirement on the Government with regards to medical supplies. Again, the hon. Member for Central Ayrshire helpfully pointed out that such a requirement was in place for medicines, but not for medical supplies. I thank her for engaging with me and my officials, which has helped to improve the Bill.

The Government have listened to concerns in the House of Lords and in this House about the Government’s power to control the prices of medical supplies. These amendments would ensure that the first order to control the price of any medical supply would be subject to the affirmative procedure, giving both Houses an opportunity to discuss that order.

Amendments 8 and 9 and 15 to 17 are amendments to the information powers in the Bill. Responding to concerns from industry about the potential burdens of the proposed information power, they introduce an additional hurdle for the Government to obtain information by requiring them to issue an information notice whenever they require companies to provide cost information related to individual products, which can be appealed by the company concerned.

[John Redwood (Wokingham) (Con)]

One problem in coming to a fair price for a new drug—we want to reward the company for its innovation, but without being ripped off—is knowing what kind of production run or demand there might be for it. Is there any way that the NHS could get better at forecasting what its volume might be, as that might drive the price down?

[Mr Dunne]

As ever, my right hon. Friend, who is a champion of market solutions to some of these tricky problems, lights on an important point. We need to be better at trying to predict the take-up of medicines. Of course, until a new medicine has been introduced, it is very difficult to assess that, because it requires clinicians to get behind the product and to choose to prescribe it. He is absolutely right that we need to look at the way in which we model in order to have a negotiation with the pharmaceutical company that ensures that we build in as good a volume as we are expecting to maximise our prospects of getting the best price.

Let me return to Lords amendments 8, 9 and 15 to 17. When the Government ask a company to provide straightforward information about prices and other transaction costs or overall costs, there is no need for an information notice. The rationale is that there could be a significant burden on companies to provide product-level cost information. Any such request should be made only in exceptional circumstances—for example, in order to set the price of an unbranded generic medicine, when the Government would need insight into the costs and profits associated with the specific product.