Pennine Acute Hospitals NHS Trust

Justin Madders Excerpts

Tuesday 17th January 2017 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Blackley and Broughton (Graham Stringer) on securing this extremely important debate and on the knowledgeable way in which he introduced the subject. He set out the history of the concerns, which stretch back as far as the establishment of the trust. He made a powerful case about the need to give the people we represent in north Manchester the excellent health service they deserve.

My hon. Friend made the key point, which we should all reflect on, that life expectancy in that part of the world is much lower than in other parts of the country. We all want to see that improve. He said, and I agree, that there is a delicate balance between getting to the bottom of what has gone wrong and creating a credible plan for the trust’s future. I agree that the vast majority of clinicians at Pennine acute are highly committed and professional. He told us that he led a debate on the subject a decade ago. I have read extracts of the Hansard report of that debate, and many of the points that he raised then have been raised again today. We should all reflect on that. It is a completely unacceptable situation.

The hon. Member for Bury North (Mr Nuttall) said that the problems at Pennine acute are not all down to money, and that some of them date back to a time when the NHS was receiving record levels of investment, but I think that some of the staffing shortfalls are finance-driven—the Care Quality Commission report refers to the financial pressures. I agree that leadership is very much an issue, and that a period of stability is required.

My hon. Friend the Member for Heywood and Middleton (Liz McInnes) also spoke about having a period of stability, with great knowledge and experience from her long history of working in the NHS. She said with great eloquence that there seems to be a constant rollercoaster of change. She also pointed out that the trust is undergoing two initiatives, which seem to be pulling it and the staff in slightly different directions. She highlighted very well the anxiety that the staff feel about their future, and said that we need a period of stability. She also highlighted the maternity services’ funding issues, and said that they are dealing with about three times as many births as they receive funding for. If correct, that is an unsustainable situation.

My hon. Friend the Member for Oldham West and Royton (Jim McMahon) also has significant connections with the trust. He described it as a family, but he was right to say that that should not mean that we cannot ask difficult questions about what has gone on. He conveyed how demoralising it is for the staff who work there. He said that leadership is a key issue, as did the hon. Member for Rochdale (Simon Danczuk), who also said it is about capacity and resources. I think we all agree that leadership was lacking in the past, but most Members who spoke were positive about the new leadership.

I, too, pay tribute to everyone working at Pennine Acute Hospitals NHS Trust. As Members said, it is not an easy time for them. It is not an easy time for anyone working in the NHS, let alone for those who work in a trust that has been the subject of such negative coverage. We should be mindful of the fact that the crisis currently engulfing the whole of the NHS would be so much worse if it were not for the good will of the staff who go above and beyond the call of duty every day. As my hon. Friend the Member for Oldham West and Royton said, we should be extremely grateful for the contribution they make. I recognise how difficult it must be to work in a trust such as Pennine acute. As he said, it has sadly been in the headlines all too often for the wrong reasons. It is worth pointing out that the most recent CQC report into the trust rated the leadership inadequate, but rated the care good. Although we are deeply concerned about the reports about the trust, we recognise that the vast majority of staff are extremely dedicated and caring.

No one can read the CQC report or the other reviews that have been published without feeling deeply uncomfortable about what has gone on at Pennine acute. The report should be a wake-up call for the wider health service. It talks about low morale, severe staff shortages and, worryingly, a feeling among staff that until recently the culture focused on financial matters and operational delivery, rather than quality. We hear such concerns across the whole of the health service. I am not for a minute suggesting that the most concerning incidents at Pennine acute will be repeated, but we should recognise that the pressures that we hear about in Pennine acute can be found in many other trusts up and down the country. The history of this matter should act as a warning to us that such problems cannot be ignored and will not be resolved without effective interventions and leadership.

The CQC report made it clear that the issues it outlined are not new. To paraphrase it, they appear to be part of the culture at Pennine acute. As my hon. Friend the Member for Blackley and Broughton said, there is a strong resemblance between the CQC report and a 2005 report by Sir George Alberti, which was very critical of the trust. The only real difference between those reports is that the severity of the criticism has grown. During that decade, there was inaction, patients and staff were let down, and there was a lack of leadership. Although there are concerns about a number of services, the most serious issues appear to be with maternity services, where the CQC said it found

“a poor culture with deeply entrenched attitudes where some staff accepted sub optimal care as the norm…and specific needs were not appropriately considered or met.”

As we have said several times already, this is about leadership. Although it is not right to point a finger at individuals on this occasion, it seems that there have been repeated failures over many years and at many levels, and a failure to drive the changes needed to improve outcomes for patients. I was particularly concerned by the statement that not all reportable incidents were reported on the system because

“there was often no managerial response or feedback.”

The CQC report also says:

“Incidents and risks were not escalated in a timely way or at times not escalated at all; consequently they did not gain robust executive scrutiny or the required response from managers and the senior team.”

Although the report says that only some departments failed to respond correctly, it is deeply troubling that it happened at all. We can see why some of those incidents happened: there was a culture in which reports were not acted upon.

There were other warnings. Between 2010 and 2015, the trust paid the highest number of compensation claims of any trust within the NHS Litigation Authority. As my hon. Friend the Member for Blackley and Broughton said, in one year the compensation totalled £58 million. Compensation levels in maternity claims obviously tend to be extremely high, but no one could claim that those figures did not require further investigation and more action. However, only after the CQC inspection of February 2016 was decisive action taken.

In July last year the Manchester Evening News learned from a whistleblower that an internal review had been carried out into maternity services at North Manchester general and Royal Oldham hospitals. Unfortunately, the newspaper’s requests for a copy of the review were repeatedly sidestepped, until eventually, in August, the trust stated that the review did not exist. It was handed over only after further requests to the trust and the intervention of the Information Commissioner. What does denial of the report’s existence say about the trust’s defensiveness, secrecy and unwillingness to learn from mistakes?

As we have heard from Members today, the report painted a deeply concerning picture of a chronically understaffed service unable to provide patients with the level of care that they deserve. We have heard of incidents such as a mother dying of a catastrophic haemorrhage after her symptoms were attributed to mental illness; a baby who died because staff failed to identify the mother’s rare blood type; and a patient who was left with a colostomy because her condition was missed three times.

My hon. Friend the Member for Blackley and Broughton read out the most distressing of those reports, which was the case of a premature baby. It is incredibly difficult for us to comprehend just how distressing that must have been. I agree with him that that incident was inhuman. We cannot undo that terrible event, but we can do our best to prevent it from being repeated and to ask the pertinent question of why the warning signs, which occurred over a number of years, did not bring about more effective change. Only after the CQC got involved did change begin.

It is also deeply concerning that only the diligence of a single journalist at the Manchester Evening News pushed the issue of the internal review into maternity services. When the Minister responds, will he agree that steps should be taken to unearth the full extent of what happened at the trust, so that we may learn the right lessons for the future?

Members who have spoken in the debate have recognised that the leadership of Sir David Dalton since April has been received positively. The CQC has recognised the improvements made since his appointment. As the hon. Member for Bury North said, even an individual of Sir David’s ability, however, cannot be expected to lead two trusts, as large as they are, as well as carrying out his other responsibilities. I will welcome any comments the Minister might have about the long-term leadership at the trust.

The CCG has, I understand, been able to invest an extra £9 million, but the Government have not allocated any additional funds to the trust, as would usually be the case with a turnaround effort of that nature. The Secretary of State acknowledged that improving Pennine acute would be “incredibly difficult”, but suggested that it was possible after citing the example of the Frimley Health Foundation Trust. According to the Health Service Journal, however, Frimley Health will receive £90 million in revenue support, as well as £130 million of capital funding. Is the Minister therefore satisfied that the trust has the resources not only to maintain services in an incredibly challenging climate, but to drive through the improvements that are clearly needed?

Over the years, many opportunities to turn the trust around have been missed. I hope that the Minister will be able to satisfy us that this is a turning point and that we will not be back here in 10 years’ time with another set of patients and staff who have been let down badly.

Oral Answers to Questions

Justin Madders Excerpts

Tuesday 20th December 2016 Commons Chamber

[Mr Hunt]

I absolutely agree with the hon. Gentleman, which is why it is extremely frustrating that the current signals from the EU are that it is unwilling to bring forward negotiations about the status of EU nationals here, and indeed that of British nationals in the EU. No one from either side of the Brexit debate has ever said that there will be no immigration post-Brexit; they have simply said that we will control that immigration ourselves through this House and through decisions made by the British people at general elections.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

On behalf of the official Opposition, may I echo the words of the Secretary of State in relation to the tragic events in Berlin and send our condolences to the people there?

The Institute for Employment Studies has today warned that Brexit could make nursing shortages even worse. That follows The Times reporting that

“applications for nursing, midwifery and allied health courses were down by about 20%”

and that in some institutions applications had halved. The decision to scrap nurse bursaries is having the consequences that every expert predicted it would. With the uncertainty of Brexit looming over our workforce, now is not the time to be taking a massive gamble with our nurses so, in the light of the evidence, will the Secretary of State now agree to scrap that disastrous policy?

[Mr Hunt]

I simply say to the hon. Gentleman that the purpose of that policy was to allow us to train more nurses; in fact, we will be training 40,000 more nurses during this Parliament. We have more than 11,000 more nurses in our NHS wards, and at Countess of Chester hospital—the hon. Gentleman’s own hospital—there are 172 more nurses than in 2010.

Health Service Medical Supplies (Costs) Bill

Justin Madders Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 6th December 2016 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to consider:

Amendment 8, in clause 1, page 1, line 14, at end insert—

“(2A) In exercising functions in relation to the controls on the costs of health service medicines, the Secretary of State must ensure that any payments made by manufacturers or suppliers to whom the scheme relates calculated by reference to sales or estimated sales of medicines are utilised solely for the purpose of reimbursing the NHS for expenditure on medicines and medical supplies.”

This amendment would confirm that the Secretary of State has a duty to reinvest rebates in improving access to new and innovative medicines and treatments.

Amendment 9, in clause 5, page 4, line 5, at end insert—

“(7) Before making regulations under Clause 5 the Secretary of State must conduct a consultation on the potential effect of this clause on the maintenance of quality of those medical supplies, and seek representations from manufacturers, suppliers and distributors of medical supplies as part of the consultation.”

Government amendments 1 to 6.

Amendment 10, in clause 6, page 7, line 11, at end insert—

“(1A) Information provided by virtue of section 264A must be disclosed by the Secretary of State to persons listed in subsection (1)(a) to (i) at that person’s request.”

Government amendment 7.

[Justin Madders]

I rise to speak to new clause 1, which stands in my name; to amendment 8, which is in the name of my hon. Friend the Member for Burnley (Julie Cooper); and to the other amendments in the group. The Opposition do not oppose the Bill. Our proposals are a constructive attempt to help the Government to achieve their stated aims, and to close the growing gap between the UK’s record on developing new drugs and the ability of NHS patients to access them.

New clause 1 would put a duty on the Secretary of State to commission a review within six months of the Act coming into force, focusing on its impact on the pricing and availability of drugs and medical supplies; on research and development; and on the NHS’s legal duty to promote innovation. The pharmaceutical industry in this country employs more than 70,000 people, in predominantly high-skilled and well-paid jobs—just the sort of jobs Members on both sides of the House would want to encourage and see more of.

This country’s record in the pharmaceutical sector has been one of our great success stories, but we cannot take that success for granted, particularly because investment decisions are often taken by parent companies in other parts of the world. There is considerable unease in the sector about the relatively low take-up of new and innovative medicines by the NHS compared with that in comparable nations, and about the ongoing uncertainty surrounding the future of the European Medicines Agency. A number of major companies have based themselves here because of the EMA, and the worry is that they might wish to follow it if it relocates following Brexit.

The impact assessment for the Bill states, as we might expect, that there will be an impact on the revenue of the pharmaceutical sector, and that it could lead to a reduction in investment in research and development and consequent losses for the UK economy estimated at £l million per annum.

While we fully agree with what the Government seek to achieve with the Bill, we are mindful of the storm clouds on the horizon. We therefore believe that prudence requires that such a review takes place within a reasonable timeframe to ensure there are no unintended consequences and that we can remain confident that the pharmaceutical sector in this country will continue to be at the forefront. We face competition not only in Europe but from emerging nations such as Brazil and China. We also need to ensure that the NHS does not trail in the take-up of the new drugs. Worryingly, the Office of Health Economics studied 14 high-income countries and found that the UK ranked ninth out of those14 across all medicines studied.

Successive studies have demonstrated relatively low take-up of new medicines in the UK compared with other countries. That is bad for patients and bad for our pharmaceutical industry. The Bill therefore needs to achieve a balance. We need to ensure the best possible patient access to medication at the fairest price, but we also need to encourage the pharmaceutical industry to invest in research and development.

[Keith Vaz (Leicester East) (Lab)]

I am intervening in my capacity as chair of the all-party group on diabetes. The diabetes drugs bill is enormous: it runs into hundreds of millions of pounds. I accept what my hon. Friend says—that we need to ensure that pharmaceutical companies are able to invest in the provision of new drugs for diabetes—but there are other choices, such as those relating to lifestyle. Does he agree that they need to be investigated while we look for new drugs?

[Justin Madders]

I thank my right hon. Friend for his question. Indeed, if I had known he was in the Chamber, I would probably have anticipated it. He is absolutely right to raise the issue of diabetes drugs and the need for more measures to improve prevention. I attended the launch of the all-party group’s report last week, at which there were a number of interesting initiatives. The “diabetes village” is an interesting concept, which in the long term will hopefully reduce the cost of diabetes treatment for the NHS.

The review would look at the impact of the Bill on the pricing and availability of medicines and other medical supplies. We would gently point out to the Minister that two years ago, when the previous voluntary agreement was introduced, the Government said that it would

“provide an unprecedented level of certainty on almost all the NHS branded medicines bill.”

Evidently that has not come to pass. The review would enable us to identify any issues at an early stage and take the appropriate action. I know that the Government were not willing to commit to such a review in Committee. The Minister referred us to a clause in the draft regulations, referring to a review one year on from the introduction of the regulations. However, that is simply not the same thing as looking at the impact of the legislation in its totality. The way the regulations are currently drafted means that there is more than a little of the Minister being able to mark his own homework, so to speak. The draft regulations talk about the review in a much narrower sense: enabling the Minister to set out the objectives intended to be achieved by the regulations in the report itself rather than at this point, and only specifically mentioning whether those objectives could be achieved with less regulation.

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

Does my hon. Friend find it strange that the regulations that might be made pursuant to the Act—the Government have helpfully given us a draft—talk about a review being carried out? Paragraph 14(2) states that the report must in particular

“set out the objectives intended to be achieved by these Regulations”.

Would one not expect those objectives to be set out before the regulations were made? Are the Government not putting the cart before the horse?

[Justin Madders]

My hon. Friend is absolutely right. That is why there is anxiety that we may end up with a self-fulfilling prophecy with these reviews. No doubt the Minister can address that when he replies.

There is nothing to assess the potential impact of the Bill and the regulations on research and development investment, nothing on the potential impact on innovation, and nothing on the availability of medicines and other medical supplies. We believe our anxieties in these areas are well founded, so I hope the Minister will reconsider his stance on this proposal, or at least provide us with some reassurance that these areas of concern will be carefully monitored.

Amendment 8 would to compel the Government to reinvest the rebate from the pharmaceutical sector for the purpose of improving access to new and innovative medicines and treatments. On Second Reading, the Secretary of State confirmed that £1.24 billion had so far been returned to the Department of Health through and it is anticipated that the sum to be received annually will increase when the Bill is enacted.

Although numerous questions have been asked throughout the passage of the Bill, we have still not been able to pin down the Government on exactly where this money has gone, other than into the general pot. It is our fear that this new money, which could have delivered a step-change in access to treatments to the benefit of patients and the life sciences sector, will instead be simply added to the baseline, with every £1 from the pharmaceutical sector meaning £1 less coming from the Treasury. Given the often heated exchanges across the Dispatch Box about the true sums being put into the NHS, it would aid transparency if it were made clear that this money was being put in over and above Government funding and was ring-fenced for a specific use. In Scotland, rebates are already ring-fenced and reinvested to provide new treatments and medicines. Nothing that the Minister has said has dissuaded us from believing that that is the correct approach.

According to James Barrow from the Cystic Fibrosis Trust, using the rebate in this way provides both the access and transparency that are lacking in the rest of the UK. He cites the example of the medicine Kalydeco, which increases the lung capacity of people with cystic fibrosis by up to 10%. It has meant that some patients who were previously housebound are now able to run up to 5 km. Patients in England are unable to access this drug, whereas patients across comparable nations in Europe and in Scotland can benefit from its transformative effect. He points out:

“There is no comparable fund in England. Having the new medicines fund in Scotland provides a much greater chance for patients to be able to access these medicines. We just don’t see a clear pathway in England for how patients can access these medicines.”

There are many other similar examples.

The NHS is our proudest national achievement, but it is to our shame that people in England are deprived of vital drugs and treatments on the basis of financial, rather than clinical, judgments. In Committee, the Minister suggested that the fluctuations in income could have adverse consequences, but we understood the purpose of the Bill was to deliver certainty. In any event, ring-fencing does not preclude additional resourcing if required. For all those reasons, I hope the Government will give serious consideration to this proposal.

Turning finally to the remaining amendments, we welcome the further improvements tabled by the Secretary of State in relation to the devolved Administrations. However, questions perhaps have to be asked about the consultation process if such changes are being introduced by the Government at such a late stage. Perhaps this will be reflected on when it comes to future legislation.

We welcome the amendments to clauses 5 and 6 tabled by the Scottish National party. In particular, we welcome the call for a consultation on the potential impact of controls on other medical supplies. Those provisions were notably lacking from the initial consultation, so there is still considerable anxiety within the sector about how the controls will be used. I understand that this is a matter for future regulations, but it is less than satisfactory for the Government to ask us for powers before telling us how they will be used. We would say this is another reason for us to seriously consider setting out now the kind of review envisaged by new clause 1.

--- Later in debate ---

[Mr Dunne]

I am grateful to the hon. Lady for that clarification. I think this is best addressed through a memorandum of understanding, rather than in primary legislation, in case we need to adjust the memorandum in subsequent years.

Finally, I wish to address Government amendment 7, which provides a definition of “equipment”. The hon. Member for Wolverhampton South West took us through the drafting on the definition of “medical supplies”. The amendment gives a definition of “equipment” in the National Health Service (Wales) Act 2006 to ensure consistency with the National Health Service Act 2006. “Equipment” is defined as including

“any machinery, apparatus or appliance, whether fixed or not, and any vehicle”.

When taken in tandem with the common definition of “medical supplies”, the definition is broad enough to capture any medical supplies on the market, from bandages to MRI scanners. The point of distinction was not so much the definition of “medical supplies” as the definition of “equipment”, which is a subset of the medical supplies definition. I hope, therefore, that hon. Members will accept the amendment.

I have spoken at length on these amendments. I hope I have made my position clear, that Opposition Members will not press their amendments to a vote, and that the House will accept the Government amendments.

[Justin Madders]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Clause 6

Provision of information to Secretary of State and disclosure

Amendments made: 1, page 4, line 12, leave out from “products,” to end of line 13.

This amendment is linked to amendments 2 to 5. It is directly consequential on amendment 4.

Amendment 2, page 4, line 17, at end insert—

“(subject to subsection (6A)).”

This amendment is linked to amendments 1 and 3 to 5. It flags that the provision made by section 264A(2)(a) and (b) of the National Health Service Act 2006 is subject to the provision made by amendment 3.

Amendment 3, page 5, line 47, at end insert—

“(6A) Regulations under this section may not do any of the following—

(a) require any person who provides primary medical services under Part 4 of the National Health Service (Wales) Act 2006, or any person who provides pharmaceutical services under Part 7 of that Act, to record, keep or provide information relating to any Welsh health service products which are supplied by the person in providing the services in question;

(b) require any person who provides primary medical services under section 2C(1) of the 1978 Act, or any person who provides pharmaceutical care services under section 2CA(1) of that Act, to record, keep or provide information relating to any Scottish health service products which are supplied by the person in providing the services in question;

(c) require any person who provides primary medical services or pharmaceutical services under Part 2 or 6 of the Health and Personal Social Services (Northern Ireland) Order 1972 (S.I. 1972/1265 (N.I. 14)) to record, keep or provide information relating to Northern Ireland health service products which are supplied by the person in providing the services in question.”

This amendment is linked to amendments 1, 2, 4 and 5. It ensures that regulations under section 264A of the National Health Service Act 2006 may not require the persons specified to record, keep or provide the information specified.

Amendment 4, page 6, leave out lines 3 to 15.

This amendment is linked to amendments 1 to 3 and 5. It is consequential on the new provision made by amendment 3.

Amendment 5, page 6, line 36, leave out “(8)(d)” and insert “(6A)(b)”.

This amendment is linked to amendments 1 to 4. It is a consequential amendment.

Amendment 6, page 7, line 8, leave out “(h)” and insert “(i)”.—(Mr Dunne.)

This amendment makes a change which is consequential on the amendments made in Committee. The effect is to allow the Secretary of State to disclose information to a person who provides services to the Regional Business Services Organisation in Northern Ireland.

Clause 7

Provision of information to Welsh Ministers and disclosure

Amendment made: 7, page 9, line 38, at end insert—

“(and for this purpose ‘equipment’ includes any machinery, apparatus or appliance, whether fixed or not, and any vehicle).”— (Mr Dunne.)

This amendment provides a definition of “equipment“ for the purposes of the definition of “medical supplies” in section 201A(8) of the National Health Service (Wales) Act 2006.

Third Reading

--- Later in debate ---

[Justin Madders]

As the Minister said, the Bill is designed to enable the NHS better to control the cost of medicines and medical supplies and to close some of the loopholes in the system that have been the subject of blatant abuses in recent years. In seeking to achieve those aims, the Government have our support.

I wish to place on the record our appreciation for the amiable way the Minister dealt with our probing of the Bill. Although he has not accepted our amendments, he has explained why not in a reasonable and constructive manner. I would also like to record my appreciation of the work of the members of the Bill Committee, including my hon. Friend the Member for Burnley (Julie Cooper), who ably assisted me in tabling and speaking to Opposition amendments, and the hon. Member for Central Ayrshire (Dr Whitford), who spoke on behalf of the Scottish National party. Particular thanks go to my hon. Friend the Member for Wolverhampton South West (Rob Marris), who has been engaged and informed in equal measure throughout the Bill’s passage through this House.

Expenditure on medicines accounts for a significant and growing proportion of the NHS budget, standing at £15.2 billion in England in 2015-16, which is an increase of more than 20% since 2010-11. That reflects the incredible advances that continue to be made in the development of new and innovative medicines, often by our own life sciences industry here in the UK. Although we welcome and celebrate those developments, it is clear that taxpayers and patients have not always been well served by the market. It is important that we do all we can to secure value for money for the NHS, especially in the current financial context following six years of historic underinvestment by normal standards.

When the most recent five-year pharmaceutical price regulation scheme was agreed in early 2014, the Government said it would provide unprecedented certainty, but as we know and as was reported in February by the then Life Sciences Minister, the hon. Member for Mid Norfolk (George Freeman), estimated incomes in the UK from PPRS payments for 2016-17 were £647 million—a considerable reduction on the £800 million received in 2015, particularly at a time when the overall drugs bill has been increasing apace. Those figures and the fact that we are debating this Bill show that the original scheme has not gone entirely to plan.

There is much in the Bill to be welcomed. We certainly want an end to the playing of the system that has been going on. We hope that the Bill will finally put an end to such antics and deliver a mechanism that ensures consistency in appropriate circumstances. We support the rationale behind aligning the statutory and voluntary schemes, which will create a more level playing field between companies and offer a much better chance of delivering greater savings and value for money to the taxpayer.

We support measures to tackle the small number of cases where we have seen companies disgracefully exploiting loopholes in the regulations to hike the price of medicines, sometimes by more than 10,000%. As we know, the investigation undertaken by The Times in the summer found that the price of medicines was inflated by £262 million a year as a result of this practice. That continues to impact on patients, often those with rarer conditions.

An example is Keveyis, a drug that has been found to be extremely effective in treating some of the symptoms of muscular dystrophy. Until 2012 it was relatively inexpensive, costing around £100 a box per patient. Unfortunately, it was discontinued by its previous manufacturer. Recently Taro Pharmaceuticals obtained the rights under orphan drug status and is now manufacturing it once again. However, its forecast price in the EU is approximately £35,000 per patient per year, despite the fact that no new research and development costs have been incurred by the company. It is therefore very difficult to see what justification there can be for such a significant price increase. Because of the rise in price, the NHS in England is refusing to provide reimbursement for the drug, which means that patients lose out. It is this deliberate manipulation of the system that we want to see dealt with and we hope that this Bill will once and for all put an end to such scandalous practices.

Although we support the broad aims of the Bill, we have had a number of concerns, some of which we have touched on already, about what is perhaps missing from the Bill and about the Government’s policies more widely on access to medicines and treatments. Despite this country’s world-leading pharmaceutical sector, which we are all rightly proud of, successive studies have demonstrated how there is a relatively low take-up of new medicines by the UK compared with other high-income countries. Members across the House will no doubt have received many pieces of correspondence from constituents concerned about the lack of availability of medicines that they or their relatives are trying to obtain. We also see clinical commissioning groups rationing medicines and treatments in ways that would previously have seemed unthinkable.

If we are to create a level playing field for drugs companies, we should be trying to do the same for patients as well. One measure that we have proposed to tackle this issue is to ring-fence future rebates from the sector and invest them in improving access to medicines and treatments. We know that £1.24 billion of new money has been returned through the rebate since it was established. Surely there can be no more logical use for this money than to tackle the gulf between the UK’s record on developing new drugs and patients’ ability to access them.

We know that the Government were not willing to back our amendments, but I urge the Minister to look again at how a similar measure has worked in Scotland. As we heard in the debate today, there seems to be some difference of opinion about that. The hon. Member for Central Ayrshire spoke strongly in support of it.

We note that a number of amendments tabled by the Government during the passage of the Bill mean that the devolved Administrations are subject to the same arrangements, although it was pointed out in Committee that there appear to be no equivalent arrangements for the devolution of health in Greater Manchester. I recall that when the Minister responded to my questions on this point, he suggested that ring-fencing the appropriate amount of the rebate for Greater Manchester might lead to chaos, as its allocation from NHS England already includes an element of income from the rebate. I think the Minister underestimates his ability to resolve the issue and overestimates the difficulty that would ensue.

The annual health budget negotiated for Greater Manchester is about £6 billion, around half the Scottish budget and around a billion pounds less than the Welsh budget, so the size of the budget is not the issue. What is an issue, though, is transparency and consistency. I do not expect any late change of heart from the Minister, but we will be watching future developments in English devolution and the accompanying budgets with interest.

The other aspect about which we have concerns is how these proposals will impact upon the future of the pharmaceutical industry in the UK, in a climate where there is already considerable anxiety in the sector about the future of the European Medicines Agency as a result of Brexit. Clearly, we will be keeping a close eye on both the operation of the scheme and the general health of the sector, particularly in terms of future investment in research and development.

To conclude, we support the broad aims of this Bill and the Government’s aim of better controlling the costs of medicines. However, we should be doing more to tackle the present situation to prevent patients from missing out on innovative treatments, particularly when we compare our record to that of countries with similar wealth. We hope that the scope of the annual review envisaged in the draft regulations is sufficiently broad to enable us to judge the Bill’s effectiveness on this issue and on the others that we have raised, and we look forward to considering the Government’s response once the consultation on the draft regulations has been completed.

As the Minister said, this is a small Bill, but the sums at stake are large. We hope to see a positive outcome for the NHS as a whole. Thank you, Madam Deputy Speaker, for chairing our proceedings today. I thank the Members who served on the Bill Committee, the Chairs and all the staff and civil servants who successfully led the Bill’s passage through the House.

National Health Service Funding

Justin Madders Excerpts

Tuesday 22nd November 2016 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

This has been at times a high-quality and passionate debate that has made clear the concerns across the House about the sustainability of our health service. The Chancellor sadly could not be with us this afternoon—I assume he has a few other things on right now—but had he been here to hear the contributions from Members on both sides of the House, he would be in no doubt about the severity of the challenges facing the health and social care sector, or about the dire consequences that will follow if he does not deliver the rescue package that is needed tomorrow.

We have heard some excellent contributions. As right hon. and hon. Members have said, while we might have our political differences, we all appreciate the work that our staff in the NHS do—as we do the work of all public sector workers—and we thank them for it. The hon. Member for Totnes (Dr Wollaston), the Chair of the Health Committee, calmly and clearly explained how cuts to the health budget were used to help the Secretary of State reach his figure of £10 billion. Despite the huge volley of figures he mentioned in his speech, he failed to mention that amount at all. The hon. Lady pointed out how many of the cuts will store up other problems in the long term, and she is right that the moving of the goal posts that has taken place does nobody any credit.

My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), who described the savings required in her area as implausible, is clearly going to fight the closure of St Helier hospital. She rightly pointed out that that closure will undermine other services and hospitals in her area, and I have no doubt that her constituents will be relieved to have such a doughty champion on their side. The hon. Member for Strangford (Jim Shannon) spoke with great sincerity and passion about the variations in cancer treatment and alarming statistics setting out anticipated increases in incidences of cancer. He also rightly highlighted the expenditure on emergency cancer treatments, showing that much more needs to be done on earlier detection.

My hon. Friend the Member for Darlington (Jenny Chapman) said that there seemed to be a focus in her area on consolidating services where there was no problem with clinical outcomes, and she made it clear that her constituents would not be fooled into accepting a downgrade in their local hospital. Her local health chiefs have won the award for the worst use of management speak today by calling patients “passive recipients of care”. My hon. Friend the Member for Tooting (Dr Allin-Khan) brought her recent experiences of the health service to the Chamber and said of the NHS that everywhere we look the answer is a lack of funding. She told us that staff and patient morale were now at all-time lows, and she should know what she is talking about.

We also heard from the hon. Members for South West Bedfordshire (Andrew Selous), for South West Wiltshire (Dr Murrison), for Calder Valley (Craig Whittaker), for Henley (John Howell) and for Bosworth (David Tredinnick), although none of them referred to the deficits their own STPs were facing—perhaps they do not think there is a problem. I can tell the House, however, that in South West Bedfordshire, the deficit is £311 million; in South West Wiltshire it is £490 million; in Calder Valley it is a staggering £1.07 billion; in Henley it is £479 million; and in Bosworth it is £700 million.

[Andrew Selous]

I am well aware of the financial challenges in my own area, but I noted in my STP the 26% increase in funding up to 2020-21, which I think is quite commendable.

--- Later in debate ---

[Justin Madders]

I am delighted that the hon. Gentleman has actually seen his STP; many Members have still not got hold of theirs.

[Dr Murrison]

How much worse does the hon. Gentleman think that the deficit in South West Wiltshire would have been had Labour won in 2015 and uprated NHS spending by just £2.5 billion, rather than the figure we are currently enjoying?

[Justin Madders]

Our manifesto was very clear that we would put in £2.5 billion immediately, plus whatever was needed. Indeed, research by the House of Commons Library has shown that if health spending had continued at the levels maintained by the previous Labour Government, there would be an extra £5 billion a year by 2020.

The NHS has deteriorated on every headline performance measure since the Health Secretary took office. It now faces the biggest financial crisis in its history, with providers reporting a net deficit of almost £2.5 billion last year. That deficit was covered only by a series of one-off payments and accounting tricks that do not disguise the true picture of a service that is creaking at the seams, of a workforce stretched to the limit, and of a Health Secretary in denial about his own culpability for this shocking state of affairs. While he rightly paid tribute to the work of NHS staff, he must know that when morale is so low, his platitudes are just not enough.

[Ms Angela Eagle]

I asked my sister whether Liverpool had had any input into the Merseyside and Cheshire STP. Obviously my hon. Friend represents part of the area that it covers, so can he tell us whether Ellesmere Port has had any involvement in the development of that STP?

[Justin Madders]

Only last week Cheshire West and Chester Council, which covers the Ellesmere Port area, put forward a resolution indicating that it was not satisfied with its level of involvement in the STP. Indeed, I do not think any council in the Cheshire and Merseyside area is satisfied, including even the Conservative-controlled Cheshire East Council.

Faced with an unprecedented crisis, what did the Secretary of State have to say for himself when asked by the Health Committee about investment in the NHS over the next five years? He said:

“Whether you call it £4.5 billion or £10 billion does not matter.”

Well, it might not matter to him, but it matters to people up and down the country who are desperately worried about the future of their local health services. This is not loose change down the back of the sofa. We know the Secretary of State will not accept what the Chair of the Health Committee said about giving a

“false impression that the NHS was awash with cash”,

so perhaps he will listen instead to the head of the National Audit Office, who said yesterday:

“With more than two-thirds of trusts in deficit in 2015-16 and an increasing number of clinical commissioning groups unable to keep their spending within budget, we repeat our view that the financial problems are endemic and this is not sustainable.”

Perhaps he will listen to the Nuffield Trust, King’s Fund and the Health Foundation, which in a joint statement released this week said:

“The Department of Health’s budget will increase by just over £4 billion in real terms between 2015/16 and 2020/21. This is not enough to maintain standards of NHS care, meet rising demand from patients and deliver the transformation in services outlined in the NHS five year forward view.”

Ministers need to stop trying to hoodwink the public, patients and even their own Back Benchers about the extent of the crisis engulfing our health and social care sector. Every day we hear more about a service crumbling as six years of underinvestment and cuts in social care and public health come home to roost. At the weekend, we heard about the Yorkshire ambulance service piloting a new scheme that might involve heart attack victims waiting up to 40 minutes to get an ambulance. Only yesterday, there were claims from GPs that very young and elderly patients are dying because of worsening delays involving 999 calls. Indeed, the most recent ambulance figures were the worst on record, but what did we hear from the very top of the Government about the NHS this weekend? The only comment we heard was one reportedly attributed to one of the Prime Minister’s assistants that they were going to “fix” Simon Stevens, the chief executive of the NHS, because he had dared to contradict the Prime Minister over funding. I have a suggestion: instead of trying to fix him for telling the truth, why do they not try fixing the NHS instead?

It is time to be honest about where we are and the true nature of the STPs, which are now finally starting to emerge. Let me be clear that we are not opposed to the idea of a more localised strategic oversight of the NHS and the health sector, but it is becoming increasingly obvious that these plans are putting money ahead of everything else. As the British Medical Association set out yesterday:

“There is a real risk that these transformation plans will be used as a cover for delivering cuts, starving services of resources and patients of vital care.”

The few documents released so far reveal cuts to hospitals, services, beds and, in some cases, staff. As we have set out previously, we are deeply concerned by the lack of public, political and even clinical consultation, with two thirds of doctors not having been consulted on the plans and a third of them not even aware that the STPs exist. What a shambles!

It is also clear that without adequate resourcing, these plans will not lead to financial sustainability, and the only transformation that they will deliver will involve reduced services and longer waiting times. If the plans are as wonderful and transformative as Ministers claim, why will they not let us see them? The secrecy and the deliberate instruction not to release any of the information relating to the plans has only increased concern and cynicism among the public. That was, I believe, a serious error of judgment that the Government will come to regret.

We therefore call on the Government to publish immediately the plans that are not already in the public domain. We also ask them to ensure that there is a full consultation process before any of the changes are implemented. Consultation with the public does not mean presenting people with a completed plan and asking them whether they support it; it means involving them from day one, and the bigger the change, the better it is to start the consultation early. We are already playing catch-up, but genuine engagement can start now.

As we heard from my hon. Friends the Members for Wallasey (Ms Eagle), for Garston and Halewood (Maria Eagle) and for Wirral West (Margaret Greenwood), there are major concerns about the Cheshire and Merseyside STP. My hon. Friend the Member for Wallasey identified the three fatal flaws in the STP process: it is more about finances than patients; it is secretive; and it is run to deadlines that make consultation impossible. Every Member who talked about the Cheshire and Merseyside proposals rightly expressed concern about the devastating effect that they might have on local services. It seems that just about every council in the area has rejected them, or has said that it has not been involved. Indeed, there has been very little involvement with anyone.

My hon. Friend the Member for Garston and Halewood produced what I think was the runner-up in the competition for the worst use of management speak when she quoted the phrase

“The financial component has been a strong driver”.

That is the nub of it—this is all about money. Ministers must stop trying to pull the wool over our eyes and be realistic about the extent of the crisis that is engulfing our health and social care sector, because not one serious commentator or senior NHS manager believes that the sector will be financially sustainable without additional funding.

The Nuffield Trust, the Health Foundation, the King’s Fund, Unison, the Health Committee, the Association of Directors of Adult Social Services, the Local Government Association, NHS Providers, the British Medical Association, the Joseph Rowntree Foundation, the NHS Confederation and Age UK are all calling on the Government to act urgently to address the funding gap. I do not know whether that list was long enough for the Secretary of State—he does not appear to be too hot when it comes to numbers at the moment—but there were a dozen respected organisations there. Will he listen to them? Will he implore the Chancellor not to repeat the mistakes of his predecessor, and to ensure that the health and social care sector is given the funding that it needs? This is the last chance before the crisis overwhelms us. I commend the motion to the House.

Oral Answers to Questions

Justin Madders Excerpts

Tuesday 15th November 2016 Commons Chamber

[David Mowat]

I give my hon. Friend the categorical assurance that if local authorities and the NHS managers doing the planning work have not engaged properly, the plan will not be considered to be complete. That does not mean that every local authority has a veto on its STP.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Following on from that point, the Minister has previously said that STPs will

“not go ahead if councils believe they have been marginalised.”

Given that seven councils in London and west Yorkshire have already rejected their STPs and, as we have heard, that council leaders from both main parties have expressed concerns about the Cheshire and Merseyside proposals, does the Minister have a plan B when it comes to rejected STPs?

[David Mowat]

In a previous answer, I made the point that every local authority should be engaging with its STP, and the NHS must ensure that that happens. That is not the same as saying that every local authority has a veto on the STP, which was the implication of the hon. Gentleman’s point.

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

Justin Madders Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 15th November 2016 Public Bill Committees

[Mr Dunne]

Fortunately, the Committee has the benefit of the Scottish National party’s spokesperson on health, the hon. Member for Central Ayrshire, who I am sure would be happy to give us her experience. The fact is that we have had some experience in England of fluctuating income from these schemes, which is the primary basis for our position.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I am grateful to the Minister for his explanation. On the money that is received from the rebate from PPRS, responses I have had to written questions suggest that that is considered part of the baseline budget. With respect to the debate we have had recently about the £10 billion extra, or the £4.5 billion extra—whichever version we prefer—could he advise whether the rebate is included within that extra money, or is it part of the baseline funding?

[Mr Dunne]

The Department of Health receives income from a number of different sources. It mostly deals with expenditure but also receives income from activities conducted through the NHS. One source of income is the rebate through these schemes, which forms part of the funding available to the Department. We have committed that funds available out of the scheme will go into the NHS. The hon. Gentleman raised the issue of the £10 billion. I gently remind him that, in 2014-15, the funds available to the NHS from the Department of Health were £98.1 billion, and by 2021 that figure will be £119.9 billion, which in cash terms is a £20 billion increase and in real terms is a £10 billion increase.

--- Later in debate ---

[Mr Dunne]

Clause 2 will amend the power to control prices in section 262 of the National Health Service Act 2006. That section already allows the Secretary of State to limit the price of any health service medicines except when the manufacturer or supplier is in the voluntary scheme, the PPRS. Section 266 of the 2006 Act allows the prices of health service medicines to be controlled by way of regulation or directions. Clause 2’s amendments to the 2006 Act will enable us to address unreasonably high-priced unbranded generic medicines. Most manufacturers of unbranded generic medicines are members of the PPRS for their branded medicines, and we therefore cannot currently limit the prices of their unbranded generic medicines if they charge excessive prices. We rely on competition in the market to keep the prices of those medicines down. It generally works well and, in combination with high levels of generic prescribing, has led to significant savings for the NHS.

I am grateful for the contributions made on Second Reading by almost everyone who spoke. The intent behind the clause was widely recognised across the House as appropriate and desirable. Members were aware from their own experience, and particularly from a Times article in the summer, that in some instances where there has been no competition to keep prices down, a small number of companies have raised their prices to what look like unreasonable and unjustifiable levels.

There are some clear examples of price increases. The most egregious was one product whose price increased by 12,000% between 2008 and 2016. If the price had stayed the same, the NHS would have spent £58 million less on that medicine last year alone. Another medicine increased in price by 3,600% between 2011 and 2016; the NHS would have spent £2.1 million less on that single medicine had the price stayed the same.

[Justin Madders]

I am grateful for the Minister’s explanation. As he said, we support the broad thrust of the aims behind the clause. Has he engaged in any research or discussions with the developers to understand the reason for those rapid price rises?

[Mr Dunne]

We have had discussions with the trade association for the generic manufacturers. The trade association, which gave evidence to the Committee on a day when I was, unfortunately, not able to attend, made it clear that the generic medicine producers industry as a whole thinks it appropriate that we take this action. We are grateful for that support. Discussions are under way through other bodies. In particular, the Competition and Markets Authority has indicated that it is in discussions with some companies, one of which voluntarily issued a press release last month to tell the market that the Competition and Markets Authority is investigating it.

--- Later in debate ---

[Justin Madders]

What I was trying to elicit was whether anything had been put forward to explain any specific price increases. We are concerned that the clause will have the unintended consequence of limiting supply.

[Mr Dunne]

We are anxious to ensure that we do not inadvertently introduce a regime that might cause difficulty when there might be a valid reason for increasing a drug’s price significantly. That was the justification in the past for not addressing the issue, because abuses were seen to be pretty isolated. However, in the past two or three years, the prices of more drugs have risen seemingly unjustifiably. That is the justification for introducing these measures.

I recognise that there may be occasions when a manufacturer incurs some additional costs: for instance, if a production run or line has finished and the manufacturer must start a new line or restart an old one, that would lead to a justifiable price increase. The clause allows us to take action where we suspect a price has risen excessively. The rest of the Bill provides opportunities for the Department to gain information about the cost of supplies, which allows us to get a better handle on when we think an increase has been unjustifiable, and identify that more rapidly. [Interruption.] Does the hon. Member for Wolverhampton South West want to intervene, or is he just poised in an energetic way?

--- Later in debate ---

[Justin Madders]

I support the hon. Lady’s amendment. She spoke with great personal experience, which we all appreciate, about the importance of maintaining the quality and reliability of products in the NHS. Over the weekend, there were reports of the vast sums paid out by the NHS in clinical negligence costs. I am sure we all agree that that money would be better spent on patient care. Of course, many of those claims are down to human error, or to events that were in some other way avoidable. However, one obvious example of an area where we need to be reassured that the Bill will not have unintended consequences is infection control. About 300,000 people a year—about one in every 16 patients—get an infection while being cared for in the NHS. That causes additional suffering, inconvenience and, sometimes, serious illness or death. It also has a wider impact on the NHS, because patients with hospital-acquired infections spend two and a half times longer in hospital than uninfected patients, on average: they are usually admitted for approximately 11 days.

As well as the devastating impact on the patients affected, there is a significant financial impact on the NHS. I have referred to the costs incurred from clinical negligence claims. The most recent reliable estimate of costs from infections, which appeared in the Plowman report, put the figure at £1 billion a year. According to Professor Briggs’s report “Getting It Right First Time”, if someone gets an infection from an orthopaedic operation, it costs the NHS an extra £100,000 to put it right. We need to be confident that the Bill poses no risk of any reduction in quality, but we would have been more confident about that if there had been a proper consultation on that element in the first place.

[Mr Dunne]

Rather unusually, I start by thanking the hon. Lady for proposing the amendment. She has raised an issue for which we have considerable sympathy. She touched on the way in which medical products are procured in Scotland. I can confirm that we are looking to introduce more centralised purchasing across the NHS under the efficiency proposals made by Lord Carter in the other place. One of the areas of focus was the variability, in purchasing terms, of standard commodity items. She mentioned surgical gloves—I will not go into detail on those with her, because she has obviously used them considerably more than I can conceive of and is therefore very experienced when it comes to the variability not just in price but in quality of such commodity products. We are looking to introduce closer central purchasing—I think 12 items are currently being trialled or introduced in parts of NHS England.

We recognise that, as currently drafted, the Bill does not explicitly state in relation to section 260 that the Government are obliged to consult industry. I am aware that the 2006 Act, in relation to controlling the cost of medicines, does explicitly state that there is an obligation on the Government to consult. The hon. Lady’s amendment is appropriate in its intent. I invite her to withdraw it at this stage, but I undertake to work with her. My officials will consider how to amend the amendment to give it the effect that she seeks, but in a way that works in the context of the Bill. There are technical drafting issues with the amendment that mean that it would give us some unintended difficulties. That is the Government’s position on the amendment; I hope she is happy with that.

The hon. Lady referred to the effect of any pricing controls for medical supplies on the maintenance of those products’ quality. I can assure the Committee that the Government will take into account all relevant factors, including any concerns raised by industry about the quality of medical supplies, when making and consulting on price controls if they were to apply to medical supplies. The Government would not be in favour of putting any of those many factors in the Bill, because it may unnecessarily constrain the conduct of future Governments or the NHS.

--- Later in debate ---

[Mr Dunne]

In essence, we are trying to bring the regimes for medical supplies and drugs into the same environment, so that we are able in future to use the powers, which we are introducing for the first time for drugs, for medical supplies on the same basis, so that we do not have to treat one thing under one Act and the other under another. I hope that is clear.

[Justin Madders]

I am sorry to push this point, but are there any examples? We obviously have clear examples, for example, in the pharmaceutical sector. Is there anything in the supplies sector that would be equivalent?

[Mr Dunne]

I am not aware of any particular examples of medical supplies that we are concerned about at this point. However, I am sure that, if there are people outside watching who have good examples, they will let the Committee know before we conclude our deliberations.

Reverting to the hon. Lady’s amendment 47, we understand the intent behind it. We are not fully convinced that the current drafting would have precisely the effect that she is hoping. I invite her to work with me and my officials between now and Report. The Government will be happy to consider how we could best introduce the requirement to consult in relation to section 260. On that basis, I invite her to withdraw the amendment.

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

Justin Madders Excerpts

Committee Debate: 3rd sitting: House of Commons
Tuesday 15th November 2016 Public Bill Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I want to comment generally on the Minister’s amendments. I agree that it would have been helpful if they had been published earlier, but reasons why that was not possible have been given, and the Committee will be pleased to hear that I do not intend to go through each of them. I take the Minister’s assurances that there has been extensive dialogue with the devolved Administrations. I intend to direct my remarks not so much at those Administrations that have been taking responsibility for their health service for some time, but at those areas in England where they have embarked upon ambitious devolution arrangements that encompass health—Manchester is the most obvious and probably most advanced example. It is not at all clear to me how, if at all, the Bill will impact on them.

The Greater Manchester area has now been given a delegated budget of £6 billion per annum. I am sure that people there have made various representations about how that is short of the figure that they need, and a significant proportion of the annual budget will certainly be spent on pharmaceutical costs. Would it not be reasonable for the relevant proportion of the rebate to be returned to Manchester and such areas in the same manner as the initial funding is devolved down to them? Simon Wootton, who was the chief operating officer at the North Manchester clinical commissioning group, said that we have not had the PPRS money back into the local NHS in North Manchester.

I am not aware of any specific agreements as part of the devolution settlement for Greater Manchester, and nothing is in the Bill, so I would be grateful if the Minister, when he responds, set out whether there have been any discussions with local representatives in Manchester on the issue, and whether his intention is to ensure that, in common with other devolved Administrations, appropriate arrangements are put in place for the relevant proportion of the rebate to be paid directly to them.

[Mr Dunne]

First, in relation to amendment 11 and what the hon. Member for Central Ayrshire said, I think she made a perfectly reasonable point. As a lay reader of parliamentary drafting, if I may say so, it would be easy to be perplexed by the sequencing that she highlighted and brought to the attention of the Committee. I am advised, however, that the purpose of the amendment is to ensure that the UK Government collect information from English pharmacies and GP practices, but not from pharmacies in the areas of the devolved Administrations. Therefore, the reference to “Excepted person” includes pharmacies and GP practices in the devolved Administrations, but specifically does not include those in England, because their information is already collected by the UK Government. The terminology relates to where the GPs and pharmacies are and who is doing the collecting. I hope that helps.

--- Later in debate ---

[Justin Madders]

I appreciate that the Minister is not going to embark on a new area of debate and dialogue with Greater Manchester on this point, but will he advise whether future allocations intend to deal with the increased income from the rebate that is anticipated as a result of the Bill?

[Mr Dunne]

Each year, when NHS England agrees its commissioning budgets and tariffs with providers, an allocation is made. That is based on the overall sum received by NHS England. Increases in revenues that derive from the Bill will help to swell that pot relatively modestly, although every penny counts, and that will therefore be taken into account when determining allocations to all CCGs, including those in Manchester.

I will give the Government’s response in relation to amendment 48; I do not have many comments to make. I sincerely hope that, before I reach the end of these remarks, I will be able to address the further point, on English exclusion, made by the hon. Member for Central Ayrshire.

Proposed new section 264B in clause 6 enables the Secretary of State to disclose the information collected to a range of bodies, which includes Government bodies such as NHS England, special health authorities, NHS Digital, other Departments and the devolved Administrations. It also enables the Secretary of State to prescribe representative bodies, or other persons in prescribed regulations, to whom he can disclose information in the future. For example, that might include certain information going to trade associations or other bodies that it might be appropriate to provide information to in future, with respect to the operations of the Bill.

The effect of the amendment tabled by the hon. Members for Central Ayrshire and for Linlithgow and East Falkirk would be that any of those bodies could in future access any information that the Government have collected. We do not believe that it would be right for representative bodies to be able to access information that the Secretary of State collects, primarily for purposes of commercial confidentiality. There are examples in other legislation in which we have taken specific steps to protect commercially sensitive information. I am not suggesting that one company would directly get access to information on another company’s profitability, but third-party advisers, for example, might get access to that information.

We do not want to provide opportunities for risking breaches of commercial confidentiality, because that would undermine confidence in the information gathering for all the companies, which includes major multinational companies. We think that the amendment might open us up to criticism from the major suppliers that there was greater risk of that intervention, which we would not want to see.

--- Later in debate ---

[Mr Dunne]

I have had some extremely expert inspiration. In the event that their lordships choose to amend the Bill during its passage, it would be inappropriate to consult on the regulations finally until the Bill emerged from the other place. The consultation will therefore start as soon as we have Royal Assent, and the implementation of the proposals is therefore expected in the autumn.

Question put and agreed to.

Clause 9, as amended, accordingly ordered to stand part of the Bill.

Clause 10 ordered to stand part of the Bill.

New Clause 1

Provision of information to Welsh Ministers

“After section 201 of the National Health Service (Wales) Act 2006 insert—

“Provision of information about medical supplies etc

201A Provision of information by persons providing primary medical services or pharmaceutical services

(1) Regulations may make provision requiring any Part 4 provider or Part 7 provider to—

(a) record and keep information, or information of a description, specified in the regulations, and

(b) provide that information to the Welsh Ministers.

(2) Information, or a description of information, may not be specified in the regulations by virtue of subsection (1) unless the Welsh Ministers consider that the information may be required for the purpose of enabling or facilitating any of the following—

(a) the determination of the payments to be made to any Part 4 providers;

(b) the determination of the remuneration to be paid to any Part 7 providers;

(c) the consideration by the Welsh Ministers of whether—

(i) adequate supplies of health service products are available, and

(ii) the terms on which those products are available represent value for money.

(3) The information which the Welsh Ministers may require from a Part 4 provider or Part 7 provider by virtue of this section includes the following—

(a) the price charged or paid by the provider for health service products;

(b) the price paid by the provider for delivery or other services in connection with health service products;

(c) the discounts or rebates or other payments given or received by the provider in connection with the supply of health service products;

(d) the revenue or profits accrued to the provider in connection with the supply of health service products;

(e) such information about medicinal products, other medical supplies or other related products as is necessary to verify whether or not they are health service products.

(4) Regulations under this section may require information to be provided in such form and manner, and at such time or within such period, as may be prescribed.

(5) Regulations under this section may provide for a person who contravenes any provision of the regulations to be liable to pay a penalty to the Welsh Ministers.

(6) If regulations under this section make provision by virtue of subsection (5) they must include provision conferring on Part 4 providers and Part 7 providers a right of appeal against a decision of the Welsh Ministers to impose a penalty.

(7) The provision of information by virtue of this section does not breach—

(a) any obligation of confidence owed by the person providing it, or

(b) any other restriction on the provision of information (however imposed).

(8) In this section—

“health service products” means any medicinal products used to any extent for the purposes of the health service continued under section 1(1) and any other medical supplies, or other related products, required for the purposes of that health service;

“medical supplies” includes surgical, dental and optical materials and equipment;

“medicinal product” has the meaning given by section 130 of the Medicines Act 1968;

“Part 4 provider” means a person who provides primary medical services under Part 4;

“Part 7 provider” means a person who provides pharmaceutical services under Part 7.

201B Disclosure of information

(1) Information provided by virtue of section 201A may be disclosed by the Welsh Ministers to any prescribed person or person of a prescribed description.

(2) A person to whom any confidential or commercially sensitive information is disclosed under subsection (1) may not—

(a) use the information for a purpose other than a purpose specified in section 201A(2), or

(b) disclose the information to another person.

201C Sections 201A and 201B: supplementary

(1) Before making regulations under section 201A or 201B the Welsh Ministers must consult any body which appears to the Welsh Ministers appropriate to represent Part 4 providers or Part 7 providers.

(2) Nothing in section 201A or 201B requires information to be provided, or authorises information to be disclosed or used, in contravention of the Data Protection Act 1998.

(3) Nothing in section 201A or 201B affects any duties, obligations or powers to require or authorise information to be provided, disclosed or used which exist apart from that section.””.—(Mr Dunne.)

This new clause is linked to amendments 36, 37 and 39 to 42. Inserted after clause 6, the new clause allows Welsh Ministers to require the provision of information by providers of primary medical or pharmaceutical services under Part 4 or 7 of the National Health Service (Wales) Act 2006.

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

Reporting requirements of the Secretary of State

“(1) Within 12 months of this Act coming into force, the Secretary of State must prepare and publish a report on the use of the Secretary of State’s powers under this Act and must lay a copy of the report before Parliament.

(2) The report under subsection (1) shall include an assessment of the impact of the use of the Secretary of State’s powers on—

(a) the availability and cost of medicines and other medical supplies to the health service and the terms upon which they are made available;

(b) research and development;

(c) the NHS’s duty to promote innovation.

(3) Subsequent to the publication of the report in subsection (1), as soon as is reasonably practicable after the end of each financial year the Secretary of State must prepare and publish a report on the use of the Secretary of State’s powers under this Act during the preceding financial year and the impact of the use of those powers on the matters under subsection (2), and must lay a copy of the report before Parliament.”.—(Justin Madders.)

This new clause would place a duty upon the Secretary of State to place a report before Parliament on an annual basis on the impact of the Act on the pricing and availability of medicines and other medical supplies, research and development and the NHS’s legal duty to promote innovation.

Brought up, and read the First time.

[Justin Madders]

I beg to move, That the clause be read a Second time.

As is explained in the explanatory note, the new clause would put a duty on the Secretary of State to place before Parliament an annual report on the impact of the Act and, in particular, on the pricing and availability of medicines and other medical supplies, research and development, and the NHS’s legal duty to promote innovation. I think we all agree that there are examples of unreasonable behaviour, but there may be occasions when there is a difference of opinion as to what amounts to unreasonable pricing practices, not least between the producers and the NHS.

We would be more assured if the consultation on the regulations had been completed by this stage. We are obviously not going to be in a position to know what that consultation has to say for some considerable time, so we believe the implementation of such a requirement would allow Parliament to scrutinise the impact of the legislation.

There has been some unease in the sector about the impact of the legislation and there is a certain amount of uncertainty, particularly around the future of the European Medicines Agency and the medium-term implications of Brexit not only for that agency, but for the research and development sector and the pharmaceutical industry as a whole.

We are one of the foremost countries in the world for drugs development, and our share of sales of the top 100 prescription medicines is 14%. The UK pharma industry employs 73,000 people, with very high-quality jobs in academia and science, but we cannot be complacent about the state of UK pharma, particularly as investment decisions are often made by parent companies in other parts of the world. That concern is compounded by the small volume of sales in the UK compared with other countries. We face increasing competition from emerging economies for R and D investment, with rapid growth in areas such as Brazil and China. That is not a new problem.

A report for the Secretary of State for Health by Professor Sir Mike Richards in 2010 on the extent and causes of international variations in drug usage explored levels of medicines uptake for 14 categories of drug in 14 high-income countries during 2008-09. The study showed that the UK ranked eighth out of the 14 countries. A follow-up study by the Office of Health Economics updated the quantitative analyses and ranked the UK ninth across all the medicines studied.

Apart from disadvantaging patients, the relatively low take-up of new medicines may put at threat R and D investment in the UK. We need some assurance on that and an ability to monitor and engage with the Government on it. We know many other countries are queuing up to take the European Medicines Agency off our hands, and there are real concerns about the knock-on impact of that.

The impact assessment for the Bill says there will be a reduction in revenue for the pharma sector, unsurprisingly. It also says:

“Reduced pharmaceutical company revenues are also expected to lead to a reduction in investment in research and development… and consequent losses of spill-over benefits for the UK economy, valued at £1.0m pa.”

While we agree that it is vital that those who abuse the system to drive obscene profits for themselves are dealt with, we do not wish to find the UK becoming a less attractive place for research and investment because other countries have made themselves more attractive.

We ask that the report become an annual feature of the Secretary of State’s duties to ensure that we can judge the effectiveness of the Bill. The converse point is that if we continue to see price increases, we want to be assured that the regulations are effective in driving best value for the NHS.

[Dr Whitford]

I rise to echo some of the points raised. We have discussed a lot of issues around the decision to leave the EU, including the loss of the EMA. As well as possibly losing international and multinational pharmaceutical companies—particularly those from the London area, which have based themselves here because of the EMA—it is clear that drugs may end up going through a licensing process for the UK later than is currently the case. They are likely to go through the American market and then the EU market, which will still have 450 million people, and we are likely to slide down to be more like Canada and some other countries. This is a very unstable time for research, because of the loss of Horizon 2020 and the EMA, and for our pharmaceutical industry, which is a major player in the UK. It is incumbent upon Government to ensure that the Bill has no unintended consequences that exacerbate that.

--- Later in debate ---

[Mr Dunne]

I do not actually agree that there is a direct link. There is no question but that, in order to stimulate continued investment in R and D, it is appropriate for the industry to see a stable marketplace in a country as significant and important as the UK, and throughout the nations of the UK, for medicines and medical supplies. We are a large market. We spend more than £15 billion a year on pharmaceutical products, and we are also acknowledged by those companies to be a reference market for many other countries that do not have such a large or well-organised supply chain as we do. I accept that, in principle, it might be rather different if this were an emergent market.

Individual drugs are emerging through R and D programmes, but I do not think that is the same as the measures we are introducing, which are primarily designed to limit excessive abuses of pricing position, in which a company may be a monopoly supplier, in the case of the unbranded generics. For the branded products, we have a long-established procedure for recognising the recovery of R and D costs through the pricing mechanisms, and while we may not like paying for some of those branded products at the rate that we have to, we recognise that it is a competitive marketplace and, because of the cost of innovation—the cost of conducting clinical trials and so on—it is necessary to stimulate that innovation to ensure that those companies make a reasonable profit.

Promoting innovation is a high priority, not only for the Government and the NHS but for many other stakeholders in the industry. In our view, it would not be possible to quantify the contribution of the schemes in the Bill to that endeavour, for the reasons I have discussed. Trying to assess the impact on innovation is a much wider endeavour that does not just rely on price. For those reasons, I urge members of the Committee to reject the new clause.

[Justin Madders]

I hear the Minister, but I have to say that I respectfully disagree with some of what he said. I think there is a direct connection between the effects of the Bill and the impact on research and innovation. That is what the impact assessment clearly states. I feel that having draft regulations that have not yet been consulted on is not an adequate substitute for the assurances that we are seeking.

[Mr Dunne]

I am grateful to the hon. Gentleman for letting me intervene. We are not saying ourselves that there is no such direct relationship between innovation and the cost of drugs; we are taking evidence from a report on “Key Factors in Attracting Internationally Mobile Investments by the Research-Based Pharmaceutical Industry”, which was undertaken by NERA Economic Consulting, and from a publication specifically on the voluntary scheme by the Office of Fair Trading. Both those documents date from 2007, when the hon. Gentleman’s party was in office. The impact assessment, as he pointed out, refers to an impact of £1 million, which needs to be set against the benefit of close to £90 million that the high-value generic clauses impact. We therefore think, relatively speaking, that it is not significant.

[Justin Madders]

We will have to see whether those figures and estimates become reality, in particular in the light of the fact that the industry has not yet seen the regulations proposed. The approach is a wider one, based not only on the impact on research and development but on the continued duty of the NHS to promote innovation and the way in which the powers will affect the availability and cost of medicines and medical supplies. I will press this to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Mr Dunne]

We are now at the conclusion of our deliberations. Thank you very much indeed, Mr Pritchard, for using your new-found experience in chairing Bill Committees to such good effect. You have conducted our affairs in a characteristically skilful way, and I am grateful to you, the Clerks and the Doorkeepers for managing the Divisions. I am grateful to the Front-Bench spokesmen from both the official Opposition and the SNP, as well as to all Back Benchers who have contributed to our deliberations. We have given this short Bill adequate and appropriate scrutiny, and I hope it will proceed to consideration on Report, where it will get continued consensual support across the House, which is, frankly, a joy to participate in.

[Justin Madders]

I echo the Minister’s words of thanks, including to you, Mr Pritchard, for the sensitive way you have handled our discussions. We have made good time today, while enabling everyone to contribute who wished to. I am grateful to the Minister for his clarification on a number of points. There are issues we will have to continue to discuss, but in the main he has been able to put our mind at rest on a number of issues. I also thank the SNP Members for their contributions, as well as all Back Benchers.

[The Chair]

I thank the Clerks, officials, Doorkeepers, the Minister of State, shadow Ministers and all colleagues.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

SELECT COMMITTEE ON HEALTH

Justin Madders Excerpts

Thursday 3rd November 2016 Commons Chamber

Dr Sarah Wollaston (Totnes) (Con)

- Hansard - - Excerpts

The Health Committee held an inquiry into winter pressures in accident and emergency departments. What we found, however, was that those pressures are now year-round, and that they worsen in the winter.

I would like to start by thanking all those who work in our national health service and our ambulances services, and all those who submitted written evidence and presented oral evidence to our inquiry. I also want to thank all fellow members of the Committee and the Committee team, especially Huw Yardley and Stephen Aldhouse, for their contribution to the report.

The root of the problem is unprecedented demand. It is not just about the sheer number of people arriving in our accident and emergency departments—on average, around 40,000 people attended a major accident and emergency department per day in 2015-16, which was 6,000 more per day than five years previously—it is also about the complexity of the conditions with which they are presenting. The worsening performance that we are seeing, which is of great concern to the Committee, is also a reflection of system-wide pressures across the whole NHS.

We noted that only approximately 88% of patients arriving at major accident and emergency departments are being admitted, transferred or discharged within four hours. That is concerning, because it falls considerably short of the target performance standard of 95%. We should not think of this as just an arbitrary target or a tick in a box; it matters for patient safety and for patients’ experience of the care they receive.

Our report identifies a number of factors. We are also concerned about the level of variation in performance of accident and emergency departments. Often that performance cannot be attributed only to local pressures or demographics. We acknowledge that there are many things that hospital trusts can do to learn from the best performing departments to help improve the flow from the front door to the point of discharge, and to prevent people from getting caught in that revolving door by being readmitted. I pay tribute to the efforts of NHS England and of all those working locally and regionally to try to make sure that the NHS starts to learn from best practice, and I particularly commend Pauline Philip and her team for what they are doing.

One thing, however, comes across very clearly from our report: the impact that the deficiencies in social care are having on accident and emergency. If we cannot discharge patients at the end of their journey because no social care packages are available, it has a domino effect throughout the whole system. Not only that, but people arrive in accident and emergency departments who could have stayed at home if they had had the right social care package. The Committee therefore repeats its request to the Chancellor to look at social care in his autumn statement and to prioritise it.

We also recognised that many accident and emergency departments are under particular pressure because of their working infrastructure—the premises may be completely inadequate to cope with the increase in demand and complexity—so we repeat our call to the Chancellor to look in his autumn statement at the capital budgets in the NHS and to make sure that the funds are available to allow the transformative changes that can bring struggling A&Es up to the same performance level as those that are functioning the best.

There are also, of course, issues with the workforce. We are concerned about the impact of workforce shortfalls in the NHS, and we ask Health Education England to redouble its efforts to look at them.

When we visited East of England ambulance trust we found that it was concerned, as were others who submitted evidence, about the impact of delayed transfers at the front door of accident and emergency departments. Again, there is great variation, and it is not all about infrastructure. If ambulances are all gummed up in one accident and emergency department it has a serious knock-on effect within an ambulance trust area, so we call on those who are not putting in place the correct procedures to look carefully at the impact that that is having and to make changes this winter.

The Government also need to look at issues around alcohol policy. Anybody who has attended an accident and emergency department on a Friday or a Saturday night will know of the pressures that problem drinking creates. We ask the Government to consider making health an objective for licensing and to look at doing all they can to reduce the impact of alcohol. That impact is felt not just on waiting times, of course, but on the morale and wellbeing of staff working in our emergency services.

I thank all those who have contributed to this inquiry, and I look forward to hearing the Government’s response.

Justin Madders (Ellesmere Port and Neston) (Lab)

- Hansard -

I echo the words of the Chair of the Select Committee in thanking all the staff who work so hard in the health service. I also thank those who produced and contributed to the Select Committee’s report, which is important and concerning in equal measure.

The report is clear that years of underfunding in social care are now having a dramatic effect on A&E presentation. Does the Chair of the Select Committee agree that, ahead of the autumn statement, if there is to be the necessary injection of cash into the social care sector the Chancellor will have to come up with a better solution than one that relies on hard-pressed local councils raising the necessary funds locally?

Dr Wollaston

- Hansard - - Excerpts

I thank the shadow Minister. The Committee agrees that there needs to be more funding for social care. We were concerned that the evidence we heard in this inquiry and previous inquiries is that the money raised from the social care precept has been swallowed up by the cost of the living wage. We absolutely welcome an increase in pay for hard-pressed care workers, but we feel that the increase in funding is completely inadequate to deal with the scale of the increase in demand.

A&E Departments: Winter Pressure

Justin Madders Excerpts

Thursday 3rd November 2016 Commons Chamber

[Dr Sarah Wollaston (Totnes) (Con)]

The Health Committee held an inquiry into winter pressures in accident and emergency departments. What we found, however, was that those pressures are now year-round, and that they worsen in the winter.

I would like to start by thanking all those who work in our national health service and our ambulances services, and all those who submitted written evidence and presented oral evidence to our inquiry. I also want to thank all fellow members of the Committee and the Committee team, especially Huw Yardley and Stephen Aldhouse, for their contribution to the report.

The root of the problem is unprecedented demand. It is not just about the sheer number of people arriving in our accident and emergency departments—on average, around 40,000 people attended a major accident and emergency department per day in 2015-16, which was 6,000 more per day than five years previously—it is also about the complexity of the conditions with which they are presenting. The worsening performance that we are seeing, which is of great concern to the Committee, is also a reflection of system-wide pressures across the whole NHS.

We noted that only approximately 88% of patients arriving at major accident and emergency departments are being admitted, transferred or discharged within four hours. That is concerning, because it falls considerably short of the target performance standard of 95%. We should not think of this as just an arbitrary target or a tick in a box; it matters for patient safety and for patients’ experience of the care they receive.

Our report identifies a number of factors. We are also concerned about the level of variation in performance of accident and emergency departments. Often that performance cannot be attributed only to local pressures or demographics. We acknowledge that there are many things that hospital trusts can do to learn from the best performing departments to help improve the flow from the front door to the point of discharge, and to prevent people from getting caught in that revolving door by being readmitted. I pay tribute to the efforts of NHS England and of all those working locally and regionally to try to make sure that the NHS starts to learn from best practice, and I particularly commend Pauline Philip and her team for what they are doing.

One thing, however, comes across very clearly from our report: the impact that the deficiencies in social care are having on accident and emergency. If we cannot discharge patients at the end of their journey because no social care packages are available, it has a domino effect throughout the whole system. Not only that, but people arrive in accident and emergency departments who could have stayed at home if they had had the right social care package. The Committee therefore repeats its request to the Chancellor to look at social care in his autumn statement and to prioritise it.

We also recognised that many accident and emergency departments are under particular pressure because of their working infrastructure—the premises may be completely inadequate to cope with the increase in demand and complexity—so we repeat our call to the Chancellor to look in his autumn statement at the capital budgets in the NHS and to make sure that the funds are available to allow the transformative changes that can bring struggling A&Es up to the same performance level as those that are functioning the best.

There are also, of course, issues with the workforce. We are concerned about the impact of workforce shortfalls in the NHS, and we ask Health Education England to redouble its efforts to look at them.

When we visited East of England ambulance trust we found that it was concerned, as were others who submitted evidence, about the impact of delayed transfers at the front door of accident and emergency departments. Again, there is great variation, and it is not all about infrastructure. If ambulances are all gummed up in one accident and emergency department it has a serious knock-on effect within an ambulance trust area, so we call on those who are not putting in place the correct procedures to look carefully at the impact that that is having and to make changes this winter.

The Government also need to look at issues around alcohol policy. Anybody who has attended an accident and emergency department on a Friday or a Saturday night will know of the pressures that problem drinking creates. We ask the Government to consider making health an objective for licensing and to look at doing all they can to reduce the impact of alcohol. That impact is felt not just on waiting times, of course, but on the morale and wellbeing of staff working in our emergency services.

I thank all those who have contributed to this inquiry, and I look forward to hearing the Government’s response.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I echo the words of the Chair of the Select Committee in thanking all the staff who work so hard in the health service. I also thank those who produced and contributed to the Select Committee’s report, which is important and concerning in equal measure.

The report is clear that years of underfunding in social care are now having a dramatic effect on A&E presentation. Does the Chair of the Select Committee agree that, ahead of the autumn statement, if there is to be the necessary injection of cash into the social care sector the Chancellor will have to come up with a better solution than one that relies on hard-pressed local councils raising the necessary funds locally?

[Dr Wollaston]

I thank the shadow Minister. The Committee agrees that there needs to be more funding for social care. We were concerned that the evidence we heard in this inquiry and previous inquiries is that the money raised from the social care precept has been swallowed up by the cost of the living wage. We absolutely welcome an increase in pay for hard-pressed care workers, but we feel that the increase in funding is completely inadequate to deal with the scale of the increase in demand.

Health Service Medical Supplies (Costs) Bill

Justin Madders Excerpts

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

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I thank the Secretary of State for outlining the overarching principles of this Bill, which, as we have heard, seek to allow the NHS to better control the cost of medicines and to close some of the loopholes, which have been the subject of blatant abuses in recent years.

I also thank the Minister of State for taking the time to meet me and other hon. Members last week to set out what the Government were seeking to achieve with this Bill. I only hope that this increased appetite for state intervention in the market that we have on display will spread more widely across Government. As my hon. Friend the Member for Wolverhampton South West (Rob Marris) said, this kind of approach used to be called Marxist, anti-business interventionism. I never thought that I would say this, but, having heard what the Secretary of State said today, I believe that he is now a fully fledged Corbynista.

In all seriousness, it is clear that the market is not serving the patient or the taxpayer as well as it could. As we have heard, expenditure on medicines is a significant and growing proportion of the NHS budget, standing at £15.2 billion in England in 2015-16, an increase of more than 20% since 2010-11. One can only imagine where we would be now if the whole of the NHS had seen such an increase during the same period.

The incredible advances in science that we have seen in recent decades, often led by companies here in Britain, mean that people in this country are living longer, healthier lives than ever before. Although we celebrate that, it is also right that we work hard to secure value for money for the NHS to ensure that as many patients as possible can benefit from medical advances.

[Keith Vaz (Leicester East) (Lab)]

May I declare an interest as a type 2 diabetic and chair of the all-party diabetes group? Ten per cent. of the expenditure of the NHS budget is on dealing with diabetes and complications related to it. Does my hon. Friend agree that there may well be a desire to prescribe more medicines, which will cost more, rather than providing diabetics with a structured education which, if appropriately used, can bring down the cost of diabetes to the health service? It is not just about pills.

--- Later in debate ---

[Justin Madders]

I thank my right hon. Friend for his intervention and pay tribute to him for his great work on diabetes. It is a matter that he consistently raises in the House, and he is right to do so. Of course he is right that there are many ways in which the diabetes bill can be tackled, and some of the shocking statistics that I have seen on the level of take-up of education courses is something on which we can do much better.

We support the broad aims of the Bill and of what the Government are trying to achieve, but we have a number of concerns, which I hope the Minister will address when this debate is drawn to a close, both about what is in the Bill and about the Government’s policies more widely on access to treatments.

Historically, the technical mechanisms used by the NHS to control expenditure on medicine have not set the public’s imagination alight, but in June we were all appalled to read reports that a small number of companies were exploiting loopholes to hike up the cost of medicines. In the past few years, we have also seen headline after headline about one effective treatment or another being denied to patients in desperate need on the basis of cost. I will address each of those issues after briefly touching on the Government’s proposal to harmonise the statutory and voluntary schemes for price control and on the new reporting requirements.

As we have heard, there are currently two schemes for controlling pricing: the voluntary scheme, the pharmaceutical price regulation scheme, which applies to the vast majority of suppliers; and the statutory scheme, which, in 2014 covered around 6% of branded medicine sales in the UK.

The voluntary PPRS scheme is based on companies making payments back to the Department of Health based on their sales of branded medicines to the NHS. By contrast, the statutory scheme operates on the basis of a cut to the published prices of branded medicines. These different approaches appear to have produced different results. Since 2014, the statutory scheme has delivered significantly lower savings than those of the PPRS, partly as a result of companies either switching individual products or switching wholesale into the statutory scheme, which is one reason why we have seen a significant reduction in the level of the rebate. Therefore, we support the rationale behind aligning the two schemes, which will create a more level playing field between companies and also give us a better chance of delivering greater savings to the taxpayer.

However, as we have heard, this Bill extends beyond closely aligning the two schemes and adds a new provision, giving the Secretary of State the power to require all medicines manufacturers and suppliers to provide information relating to prices.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend will know—I am sure that we all know this—that there is a difference between the list price that is advertised and the price that the NHS actually pays. That is a very important point, and we have to be very careful that, in gaining all this information, we do actually bring down the cost for the NHS. Those companies may well charge other people higher amounts, and we need to put that in context.

[Justin Madders]

My hon. Friend is absolutely right. That is one reason why we must tread carefully, and hear what regulations the Government produce for consultation.

Some of the measures did not form part of the initial consultation, and there is a feeling that they have been added to the Bill at the last minute. Given the damaging cuts to the community pharmacy sector that were announced only last week, there is an anxiety about what costs could be created by any additional administrative burden.

[Sue Hayman (Workington) (Lab)]

Does my hon. Friend agree that pharmacists often know their patients much better than over-stretched GPs do? They can also advise on the prescription of appropriate cheaper drugs. Does he also agree that, instead of putting further pressure on the pharmacy sector, the Minister should be supporting it to reduce the burden on GPs and to help the NHS save money?

[Justin Madders]

My hon. Friend is absolutely right. There was real concern about the announcement last week. From the surveys that have been taken, we know that approximately one in four people who currently use the pharmacist would go to their GP if they were unable to seek advice from the pharmacy. We know the pressure that GP surgeries, and indeed the NHS, are under. We will have to watch carefully the impact of these proposals, which I hope will not be as serious as a number of Members fear.

The impact assessment does not offer many clues. It states that the additional costs that could be incurred

“have not been quantified, as their magnitude will not be known until after consultation on subsequent regulations.”

We need to tread carefully. The Secretary of State is asking us to give him new powers before setting out exactly how he will use them. That is a far from perfect state of affairs. I hope that we will get some further clarity when the Bill reaches Committee.

[Mark Field]

The hon. Gentleman has been fair in his broad analysis of the problems that we face between the statutory and voluntary schemes. It is a salutary lesson that whenever a statutory scheme is put in place, it can easily be gamed by anyone in the industry. Is he encouraged by the fact that the Association of the British Pharmaceutical Industry supports the Government’s proposal and wants to work with the Secretary of State so that we can, hopefully, reach an agreement that will work for the future, rather than a draconian recommendation being issued by Richmond House?

[Justin Madders]

I agree that it is important that we keep the dialogue open with industry. We are proud of what the pharmaceutical industry can deliver for this country. It is a world leader and we certainly do not want to throw the baby out with the bathwater.

The Government will be aware that concern has been expressed by the medical technology sector that medical supplies are to be brought within the scope of a regime designed ostensibly to tackle a problem in the pharmaceutical industry. The medical technology sector has expressed concern that the Bill’s measures will put additional burdens on that sector and could lead to higher costs overall for the NHS. We welcome the assurances given by the Secretary of State today that the 99% of businesses in this industry that are small or medium-sized will not be unduly troubled by onerous additional reporting requirements. We hope to discuss that in further detail.

The former Minister for Life Sciences reported in February 2016 that the estimated income in England from PPRS payments in 2016-17 would be £518 million. That is considerably less than the amount received in 2015, at a time when the overall drugs bill is increasing, so that tells us that the scheme is not going according to plan. The Government have stated that the measures would save the health service around £90 million a year, so let us consider what has been going on and whether this Bill can address the issues that have arisen.

One of the benefits we have heard about is that the Bill will help to close the loophole that I referred to earlier which has led to extortionate prices being charged for a number of generic medicines. This occurs, as we heard, when a small number of companies purchase off-patent drugs for which there are no competitor products or there is a dominant supplier. They then remove the brand name, which takes the drugs out of the current pricing controls, allowing the companies to hike up the costs by many hundreds or even thousands of per cent. It is clear that some of these companies have made this strategy a key part of their business model.

In the past few months we have seen this House expose some of the worst excesses of capitalism, from Mike Ashley and his employment practices at Sports Direct, to Philip Green, but there should be a special category of obloquy for those who make themselves extremely wealthy by using loopholes in the law to prey on the sick and vulnerable and to extract obscene profits from our health service. An investigation in The Times highlighted how a small number of companies including Amdipharm, Mercury, Auden Mckenzie and Atnahs raised the cost of medicines by £262 million a year through this practice.

When a US pharmaceutical company hiked the price of HIV medication, people across the world were united in their condemnation, but it is less well known that at the same time the price of over 200 medicines more than doubled in this country, with 32 rising by more than 1,000% and in one case, as we heard, an unbelievable increase of 12,500%. An indication of how central to the business plan of some companies this practice has become can be found just by looking at their websites. The company Amdipharm boasts that it was sold to a private equity company for £367 million and talks of acquiring and commercialising niche generic medicines. Another of these companies, Concordia International, which now owns both Amdipharm and Mercury, is quite open about the fact that it

“specializes in the acquisition, licensing and development of off-patent prescription medicines, which may be niche, hard-to-make products.”

This may sound like a noble pursuit, but we know that it can in fact be code for establishing and then abusing a dominant market position to the detriment of vulnerable patients and the taxpayer.

[Rob Marris]

My hon. Friend speaks of the abuse of a dominant market position, and this Bill extends the powers of the Secretary of State effectively to confiscate profits, rather than acting through taxation. Does my hon. Friend agree that the same approach may be worth considering in the case of a company such as Google? It has 85% of the world mobile phone market for Android operating systems, and people use Google for 85% of the searches carried out in the United Kingdom. That is a dominant market position and there are questions about the tax paid by Google. Perhaps profit confiscation might be considered.

[Justin Madders]

My hon. Friend tempts me a little way outside my brief. I note, though, that our health service is entering into partnerships with Google, so I hope that questions are being asked by Ministers about the taxation arrangements.

We know that the vast majority of the generics sector is well controlled by competition and delivers value for money to the taxpayer, and we welcome the extension of pricing controls where competition has failed. Is the Minister confident, however, that the steps taken in the Bill are adequate? We have seen, as my hon. Friend the Member for Wolverhampton South West mentioned, how adept international companies can be at moving figures around to avoid taxation, and we clearly want to ensure that the system that we develop is not vulnerable to the gaming that we have seen elsewhere. I do not think for a minute that given the vast sums of money at stake, the companies will just shrug their shoulders and take the hit if they can avoid it.

I was more than a little concerned when I read a section about this Bill in a Concordia investor presentation, which said that in the past the Department of Health

“would seek informal negotiations with manufacturers where it believed there were pricing issues. We believe this step will remain.”

The notion of informal talks with officials brings up uncomfortable memories of the sweetheart deals between multinationals and Her Majesty’s Revenue and Customs. Although I am happy for chains of communication to be open with such companies, can the Minister reassure us that in all cases prices will be regulated through a transparent, formal process and not through behind-the-scenes talks?

[Steve McCabe]

Where the advertising budgets of pharmaceutical companies dwarf their R&D budgets, is there not an argument for the Government to look again at the tax position of those companies, as well as at the price of their products?

[Justin Madders]

We will not get very far with this Government on corporation tax. They have been going in a direction that we would not have chosen. They have decided on the measures in the Bill as the best way to control prices and we will see how they get on. Will the Minister confirm that if it becomes clear in a few years that we have opened up another set of loopholes, we can expect the Department to take the lead and to be proactive in its investigations, rather than relying on a team of journalists to expose the problem?

We know that in Scotland the rebate that has been generated has been used to create a dedicated fund to give patients access to new medicines. Will the Minister consider investigating similar models and ensuring that the benefits of the scheme are used for the purpose of improving our frankly poor record in allowing patients to benefit from new medicines? We accept that there will always be challenges in matching funding to new drugs, but there is at least a degree of logic in allowing savings made in the drugs bill to be reinvested to enable new products to reach patients more quickly.

We welcome today’s report by the Accelerated Access Review, which sets out an ambitious plan that could see patients accessing new lifesaving treatments up to four years sooner. We hope the Minister will take this opportunity to give financial backing to the aims of the review by committing to using future rebates from the pharmaceutical sector to improve access to treatments. I ask the Government to seriously consider this, as there are growing concerns about access to new drugs and treatments in this country, and particularly about the widening gulf between the UK’s record on developing new drugs and the ability of the NHS to ensure that all patients benefit sufficiently.

The “International Comparisons of Health Technology Assessment” report published in August by Breast Cancer Now and Prostate Cancer UK shows that NHS cancer patients in the UK are missing out on innovative treatments that are being made available in some comparable countries of similar wealth. This is at the same time as a number of medicines have been delisted by the Cancer Drugs Fund after it overspent its budget, and the failure to extend this scheme to innovative treatments as well as medication. There was a report in The BMJ in July entitled “A pill too hard to swallow: how the NHS is limiting access to high priced drugs”. It came to similar conclusions when looking at new antiviral drugs that held out a real prospect of eliminating hepatitis C but which were very expensive.

[Mark Tami]

Does my hon. Friend agree that we have to be careful not to discourage drug companies from doing research, particularly into those rarer illnesses, because they would not see a financial return?

[Justin Madders]

My hon. Friend is absolutely right. We must be careful of the law of unintended consequences with this piece of legislation. Commercial decisions will be taken on investment if the return is not sufficiently high, so we have to get the balance right between encouraging investment and getting value for money for the taxpayer.

The BMJ report showed how NHS England, having been unable to budget for broad access to the drugs I mentioned, sought to alter the outcome of the National Institute for Health and Care Excellence process and, when it failed, defied NICE’s authority by rationing access to those drugs. There was also widespread controversy over attempts by NHS England to avoid funding anti-HIV pre-exposure prophylaxis by passing on responsibility to local authorities at the same time as cutting the public health budget allocated to councils. If we are to strive to create a level playing field for drugs companies, we should look to do the same for patients and their ability to access treatments.

Labour established NICE to speed up the introduction of clinically proven and cost-effective new medicines and procedures. An order was made by Parliament in 2001 to mandate the funding of healthcare interventions approved by NICE through its technical appraisal process. They were intended to be available to patients three months after publication of the appraisal. However, subsequent orders have chipped away at that, culminating in the current consultation by NICE and NHS England, which will again potentially delay or deny access to important treatments. Therefore, as well as looking at ring-fencing the payments received under this scheme, will the Minister look more widely at access to medicines? Successive studies have demonstrated that there is relatively low take-up of new medicines by the UK compared with other high-income countries. Not only does that let patients down, but it could impact on the future of the pharmaceutical industry in the UK, particularly given the sector’s concerns about the relatively small value of sales in the UK, compared with other countries, and given the uncertainty surrounding the future of the European Medicines Agency following our decision to leave the European Union.

I am sure Ministers are aware of the concerns that have been raised about that and of the need to ensure that the country is still seen as a leader in the research sector. The Prime Minster has said:

“It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry”,

and the Opposition agree, but we cannot be complacent about the state of UK pharma, particularly as investment decisions are often made by parent companies based in other parts of the world. I hope the Minister will take seriously the interrelationship between decisions about access to treatments and the future of pharmaceutical research and development in the UK, particularly when we know that other countries across Europe are using the current uncertainty as a result of Brexit to eye up opportunities to steal a march on our own industry.

To conclude, the Opposition support the broad aims of the Bill and what the Government seek to achieve in terms of better controlling the cost of medicines. In Committee, we will seek to explore in more detail the new information powers and the details of the impact of those new powers on the supply chain. We will also continue to hold the Government to account and ensure that patients are able to access the best available treatments without any unnecessary delay.