Health Service Medical Supplies (Costs) Bill

Mark Tami Excerpts

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

[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.

--- Later in debate ---

[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.