Health Service Medical Supplies (Costs) Bill

Mark Field Excerpts

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

[Mr Hunt]

Our march on to the centre ground carries on apace. [Laughter.] In response to the hon. Gentleman’s fascinating point, I gently reassure him that our approach will be fair and proportionate. This is not about bringing in wide profit controls. It is important to say that we recognise—our view is shared across the House—the pharmaceutical industry’s incredibly important role in medical advances, and we want Britain to be its European centre of operations post-Brexit. Many Members have campaigned about dementia and we hope that we can get a cure—it could happen in this country—and we recognise that profits are what fund the research that makes such remarkable changes possible.

It is important, however, that we are able to see what profits are being generated from a company’s choice between the PPRS scheme and the statutory scheme as a clue to whether the company is being fair to the NHS, which is funded by taxpayers. That is why the Bill’s measures strike the right balance.

[Mark Field (Cities of London and Westminster) (Con)]

I hope that not only the Opposition but Government Members are reassured by those comments in response to the hon. Member for Wolverhampton South West (Rob Marris). Will the Secretary of State take this opportunity to emphasise the great contribution that the pharmaceutical industry makes not only in this country but as a global player? As he says, the profit motive is important to ensuring the competition that allows for reform and the new drugs that will transform our lives and the lives of future generations.

[Mr Hunt]

I am happy to give that reassurance. As I said, this industry contributes £56 billion to the UK economy, with tens of thousands of jobs. When the Prime Minister talks about where she sees our competitive advantage, she talks, first, about financial services, and life sciences is the very next industry she mentions. I completely agree with right my hon. Friend about its incredible importance, not just to this country but to the future of humanity. That is why we seek in this Bill to establish a fair relationship between the NHS, which we have to represent as we are funding it through the tax system, and the pharmaceutical industry. It is also fair to say that there have been times when some pharmaceutical companies’ practices have been disappointing, and because we want to make sure that that does not happen and that we can continue with a harmonious and productive relationship we are proposing this Bill to the House.

--- Later in debate ---

[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.