Health Service Medical Supplies (Costs) Bill

Philip Dunne Excerpts

Tuesday 25th April 2017 Commons Chamber

[The Minister of State, Department of Health (Mr Philip Dunne)]

I beg to move, That this House disagrees with Lords amendment 3B.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss Government amendments (a) and (b) in lieu.

[Mr Dunne]

When we last debated the Bill, I reminded the House of its importance. I do not intend to go over all that ground again, save to note the three primary purposes of the Bill: first, to give powers to align broadly our statutory scheme for the control of prices of branded medicines with our voluntary scheme, by introducing the possibility of a payment percentage for the statutory scheme, which could deliver £90 million of funding for the NHS every year; secondly, to give us stronger powers to set prices of unbranded generic medicines where companies charge unjustifiably high prices in the absence of competition; and, thirdly, to give us stronger powers to require companies in the supply chain for medicines, medical supplies and other related products to provide us with information. We intend to use that information to operate our pricing schemes, to reimburse community pharmacies for the products they dispense and to assure ourselves that the supply chain or specific products provide good value for money for the NHS and the taxpayer.

We agreed with 23 amendments made by their lordships during the passage of the Bill through the other place. Those, we accept, have made this a better Bill. We rejected just a single amendment. Despite the strength of our arguments, the other place has now made amendment 3B, which to all intents and purposes has the same effect as the original Lords amendment 3. It would introduce a duty on the Government, in exercising their functions to control costs, to take into account the need to promote and support a growing life sciences sector and to ensure that patients have access to new medicines. As I explained previously to this House, the amendment, which is no different in its effect from previously, would undermine one of the core purposes of this Bill: to enable the Government to put effective cost controls in place.

In our view, the amendment could encourage companies to bring legal challenges where the cost controls have not in themselves promoted growth in the life sciences industry. That could significantly hinder the Government’s ability to exercise their powers effectively to control costs. That would have a particularly detrimental effect if the Government were to take action to control the price of an unbranded generic medicine where it was clear that the company was exploiting the NHS—a point on which there was cross-party agreement when we debated the matter. That is because the Government might be challenged, not on the basis that the action was inappropriate, but on the basis that it did not promote the life sciences sector. Nevertheless, as I am sure all Members would agree, such action could be the right thing to do for the NHS, patients and taxpayers. The powers in the Bill that enable such action have received universal, cross-party support in both Houses.

Through debate on the issue in the other place, we have clarified that their lordships did not intend to undermine the core purposes of the Bill. Rather, the intent was to ensure a mechanism, laid out on the face of the Bill, to ensure that the Government pause to reflect on the impact of any proposed price control scheme on the life sciences industry and access to cost-effective medicines. With this clarity, the Government are now proposing amendments in lieu of Lords amendment 3B that will achieve that intent without undermining the core purpose of the Bill.

Consultation requirements prior to the implementation of any new statutory price control scheme for medicines are already set out in section 263 of the National Health Service Act 2006. Our amendment (b) in lieu would amend the 2006 Act to include particular factors that must be consulted on before proceeding with a new statutory scheme. They are:

“(a) the economic consequences for the life sciences industry in the United Kingdom;

(b) the consequences for the economy of the United Kingdom;

(c) the consequences for patients to whom any health service medicines are to be supplied and for other health service patients.”

The requirements are framed in that way to allow us not only to consider the economic consequences for the life sciences industry and for patients who may benefit from new medicines, but to balance those factors against wider considerations. I am sure the whole House can agree that while a thriving life sciences industry and access to new medicines are highly desirable, they must not come at any cost. It is the Government’s responsibility to achieve the right balance, and, indeed, to be held to account for it.

--- Later in debate ---

[Mr Dunne]

I had not intended to make a significant response in the light of this debate, but other colleagues have taken advantage of this being their final appearance at the Dispatch Box or speaking for their party in this Parliament and I cannot resist the opportunity to join the club.

I follow the hon. Member for Ellesmere Port and Neston (Justin Madders) in thanking Members for their work both in Committee and on the Floor of the House during the passage of this Bill. He gave us a valedictory, perhaps hinting that he may not be returning to this House, which in some respects I would welcome and in other respects I would regret because he has been a co-operative colleague on this Bill.

Again, I place on record my thanks to the hon. Member for Central Ayrshire (Dr Whitford) for her contribution to the passage of the Bill. I also briefly thank my Parliamentary Private Secretary, my hon. Friend the Member for Kingston and Surbiton (James Berry), who has been a stalwart supporter throughout the Bill. I also thank the departmental Whip, my hon. Friend the Member for Beverley and Holderness (Graham Stuart), who has also joined us today, for his efforts in this Parliament to help the work of the Department of Health, which is not always the smoothest ride for Government Whips.

The hon. Member for Ellesmere Port and Neston spoke about the budget impact test, and he challenged me to identify whether certain specific drugs will be caught by it, which is a nice try. The test applies for new drugs, of course, so drugs that are already licensed and on the list will not be caught because they are already licensed and in use. The intent, which came through in the consultation that concluded in January, is that this should not be seen as a threshold that will have a direct impact on the applicability of these drugs; it was designed to provide an opportunity for the NHS to have negotiating scope to try to get a better price on prospective drugs that will have a significant cost.

Although the hon. Member for Central Ayrshire is concerned about the delay resulting from the Bill and the delay from the potential loss of the EMA, we do not necessarily see it impacting in quite that way. We think it will have on impact on one in five new medicines that are brought forward for use in this country. As we have said repeatedly, we have a strong desire to see a vibrant life sciences industry in this country. There have been some significant investments by life sciences companies in this country since the referendum on 23 June, with this Bill in prospect, so we do not share the fears expressed today.

Finally, the hon. Member for Wolverhampton South West (Rob Marris) was here for the previous debate, but he served on the Health Service Medical Supplies (Costs) Public Bill Committee. He has had a distinguished career in this House and served on Finance Bill Committees with me ad nauseam. I was therefore pleased but somewhat trepidatious to see him put himself forward to serve on the Health Service Medical Supplies (Costs) Public Bill Committee. He lived up to all expectations, and I wish him well.

Lords amendment 3B disagreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 3B.