Healthcare Optimisation Plan: Kirklees

Debate between Philip Dunne and Justin Madders

Tuesday 12th December 2017 Westminster Hall

[Mr Dunne]

I will come on to that. The short answer is that I agree that the relevant clinicians should make those decisions.

Going back to where the CCGs are in this process, as I said earlier, they have not yet introduced the proposal. They have been working with the local population and with Healthwatch Kirklees, and have held a number of engagement events with local authorities and interested stakeholders to try to understand the reaction of those parties to the proposal. An engagement event was conducted in March and April of this year, and one with Kirklees Council in August and September of this year.

The CCGs have listened and responded to some of the points made. They have made several changes to their original proposals, including exempting children from the programme. They also recognise the limitations—amusingly identified by hon. Members in their contributions—of using BMI as a measure of body weight. Therefore, for example, people with high muscle mass should be excluded from the BMI calculation for the reasons that were well explained earlier in the debate.

The CCGs are including safeguards in the proposals, and they intend that, in exceptional circumstances, normal individual funding request processes will continue to apply. Hon. Members have criticised that as imposing an undue obligation on the individual to seek that route to secure treatment. That is effectively an appeal mechanism that applies across the NHS and is a well-worn and well-understood path for clinicians to support individual funding requests for patients where needed, which we should continue.

Both the hon. Member for Dewsbury and the hon. Member for York Central used the expression “lives at risk”. I would gently say that there is absolutely no intention that policies such as this should lead to lives being at risk. They are about trying to put individuals in a position where their own circumstances would lead to better outcomes from the proposed surgery. The hon. Ladies have called for evidence supporting the proposition —it was raised by the hon. Member for York Central when we met at the end of last month. I have asked for that evidence. A number of research papers support the propositions made by the CCG, in particular on the question whether obesity at the time of surgery is associated with a wide range of problems. Sustaining weight loss is the key. Rapid weight loss followed by rapid weight gain clearly do not help the patient, but the evidence from the research papers provided to me is that maintained weight loss or cessation of smoking undoubtedly and clearly have clinical benefits for the patient. There is evidence to support that.

I will come back to the point raised earlier on by the hon. Member for Dewsbury and the hon. Member for York Central, but I absolutely recognise that the clinician primarily responsible for the care, whether that is the GP or the secondary clinician, should have discretion to ensure that a referral is made, should a non-referral of a patient or a delayed procedure outweigh any benefits from a period of improving health and reducing risk factors prior to a routine operation. We will encourage the CCGs to ensure that that is in their final proposals, once those are made.

[Justin Madders]

The Minister says he will encourage CCGs to listen to clinical advice when making referrals. Is there any mechanism by which he will actually ensure that that happens?

[Mr Dunne]

As the hon. Gentleman knows, CCGs are subject to appraisal and are accountable to NHS England, which is accountable to Ministers. It is not for Ministers to direct individual CCGs as to how they should enact their policies, but there is a route through which we can provide some encouragement to NHS England to ensure that these policies reflect its national position. That is what we will do.

On where the process is, in October the two CCGs presented details of the proposed plans to Kirklees Council’s health and social care scrutiny committee. The committee requested that the CCGs undertake a further six weeks of engagements, especially with hard-to-reach communities in the area of the hon. Member for Dewsbury. The CCGs have assured me that they are committed to that further engagement with the local community to ensure that the plan is fit for purpose, so there is a continuing opportunity to reflect on the revised iteration of the proposals. I am also advised that the CCGs have not yet made firm decisions on the plans. Instead, as a result of the engagement with local stakeholders, they are considering four options, and variations on the four options, for implementing the proposed plan, including not proceeding with the programme, which remains on the table.

Those options include: first, a phased approach, beginning with applying the programme initially only to patients who smoke and subsequently rolling it out further to obese patients if appropriate; secondly, only implementing the plan for smokers; thirdly, introducing health optimisation periods across clinical thresholds and pathways, in line with NICE guidance; or fourthly, moving away from implementation of the plan as previously defined and focusing on a strengthened education campaign to reinforce the benefits to patients of stopping smoking and losing weight. Those options remain on the table and there will be a further period of engagement. A decision on which option will be taken forward is due to be made by the CCGs in January, and further engagement on the implementation of the recommended approach will then take place later in the new year.

I said earlier that the plan is not a blanket ban on treatment. Instead, the intention is to encourage patients who are obese or who smoke to lose weight and/or quit smoking. There is evidence that that will have benefits, in terms of both surgical outcomes, as I have said, as well as reduced risk for general medical conditions, and there are clearly also benefits to patients’ general health in the long term. Hon. Members can be assured that the CCGs are providing support to the patients on weight loss and smoking cessation, and have agreed to invest £133,000 a year in such services to account for any health optimisation-related increase in uptake.

The hon. Member for Dewsbury asked how we will assure that the plan is in accordance with national guidelines. As she would expect, NHS England has been closely reviewing this and similar proposals where they have been made to ensure that there is robust supporting clinical evidence and appropriate safeguards. The Government expect NHS England to ensure that the responsible CCG is not breaching its statutory responsibility to provide services that meet the needs of the local population. I can confirm to hon. Members that NHS England has had ongoing discussions with both CCGs about the health optimisation plan and will continue to do so to ensure that it works in the best interest of patients. That is the right approach, in terms of both protecting patients and both encouraging the population to put themselves in a condition to maximise the benefits from surgical procedures, without allowing CCGs to introduce an inappropriate blanket ban.

NHS England carries out regular assurance of CCGs and holds them to account through the CCG improvement and assessment framework to ensure that they are fulfilling their statutory requirements, and NHS England can and will intervene if a CCG is failing to discharge its key responsibilities. NHS England’s regional teams also have regular discussions with CCGs about their commissioning activities and plans.

It is important in a debate like this, in which there are allegations of there being a postcode lottery, that we recognise that it is down to clinicians at a local level, through their CCG bodies, to make decisions that affect their local population, rather than, as has happened in the past, central diktat from Whitehall. Those may lead to perverse consequences and a less relevant healthcare capacity and treatments for patients on the ground.

Oral Answers to Questions

Debate between Philip Dunne and Justin Madders

Tuesday 14th November 2017 Commons Chamber

[Mr Dunne]

As I said to the hon. Member for Keighley (John Grogan), the trust, which would consolidate subsidiaries in its accounts, would publish the accounts of subsidiaries as part of its consolidated accounts each year.

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

On Sunday, the Secretary of State said that

“good public services are the moral purpose of a strong capitalist economy”,

yet trusts are so strapped for cash that they are creating private companies to get around VAT laws. Not only does this take money away from the Exchequer, meaning that other parts of the NHS are effectively subsidising these trusts, but it also removes vital protections for staff, who will find that they no longer work for our national health service. Be in no doubt: this is another step down the road of privatisation. Will the Minister set out, therefore, what protections are in place to prevent any of these companies from being sold off in the future to the highest bidder?

[Mr Dunne]

I am afraid that the hon. Gentleman, for whom I have considerable respect, is trying, yet again, the tired old approach of weaponising the NHS by alleging privatisation—seeing privatisation fairies where there are not any. This is about responding to the review of Lord Carter—one of his hon. Friends in the other place, I remind him—of driving efficiency through the NHS, which I know he supports, and about finding the right structures to allow, for example, the back offices of different NHS bodies in an area to be combined. That requires a structure, and a number of foundation trusts are setting up subsidiaries to provide those services to each other.

Oral Answers to Questions

Debate between Philip Dunne and Justin Madders

Tuesday 7th February 2017 Commons Chamber

[Mr Dunne]

My right hon. Friend is a regular attender at Health questions, and I am pleased to be able to confirm to him, once again, that the success regime for mid-Essex is looking at the configuration of the three existing A&Es, none of which will close, and each of which might develop its own specialty.

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

Analysis of the STPs by the Health Service Journal this week found that a substantial number of A&E departments throughout the country could be closed or downgraded over the next four years. The Royal College of Emergency Medicine has described that approach as “alarming”. Over the past month, we have all seen images of A&E departments overflowing and stretched to the limit, so surely now is not the time to get rid of them. Will the Minister pledge today that the numbers of both A&E beds and A&E departments will not be allowed to reduce below their current level?

[Mr Dunne]

The hon. Gentleman is right to point out that the STPs are looking at providing more integrated care across localities. A number of indicative proposals have to be worked through. At the moment, NHS England is reviewing each of the STPs, and the results will be presented to the Department for its consideration in the coming weeks and months. On bed closures, I gently remind him that, in the past six years of the previous Labour Government, more than 25,000 beds were closed across the NHS. In the six years since 2010, fewer than 14,000 were closed by this Government and the coalition.

Agenda for Change: NHS Pay Restraint

Debate between Philip Dunne and Justin Madders

Monday 30th January 2017 Westminster Hall

[Mr Dunne]

I will make some progress.

We recognise that the NHS faces a number of very challenging pressures: not just the ageing population, but the expectations of the public, who rightly demand quality personalised care at home or in hospital every day, not just from Monday to Friday. Those pressures will not be resolved just through pay, but by engaging with staff as they adapt and respond to new ways of working, including by introducing change that comes with scientific development and by supporting them through appropriate training and development.

We know that inflation is increasing. We continue to rely on the independent pay review bodies, which for decades have applied their expertise and objectivity in making recommendations to Government, and we have huge respect for their important work. The hon. Member for Newcastle upon Tyne North and the hon. Member for Torfaen (Nick Thomas-Symonds) referred to the NHS Pay Review Body’s 2014-15 recommendations. Last year the Government accepted its recommendations for 2016-17. We have provided our evidence to the current round—as have others, including trade unions—and we expect its recommendations in the coming weeks.

[Justin Madders]

Will the Minister give way?

[Mr Dunne]

I will first answer, if I may, some of the comments made about the NHS Pay Review Body’s recommendations and how they sit alongside other elements of the NHS.

The allegation was made that there have been significant pay rises across NHS boardrooms, which are demoralising for those who have suffered pay restraint. However, I say to the hon. Members who raised that point that in 2016 the median rise across all board positions in NHS trusts was 0%. There are individual examples, when very senior managers are introduced to trusts that are going through a management change or are in difficulty, where higher pay rates may have to be introduced than for the previous incumbent, but generally speaking the opposite is happening: in many cases, those coming into new positions are coming in on slightly lower salaries.

--- Later in debate ---

[Justin Madders]

The Minister talks about respecting the independent NHS Pay Review Body’s recommendations. Without having seen them, can he say whether the Government are likely to respect those recommendations?

[Mr Dunne]

The hon. Gentleman will not be surprised to hear that I cannot give him any reassurances on that. We will have to see what the recommendations are and then take a view. However, we are not very far away from that point now.

The hon. Member for Foyle (Mark Durkan) referred to the national living wage. I got the impression from him that some NHS staff members in Northern Ireland are earning only the national living wage; I can reassure him that no NHS staff in England are earning only at that level.

--- Later in debate ---

[Mr Dunne]

No, I am afraid I am going to make some progress.

Hon. Members need to recognise that there is clearly a balance between pay and jobs in the NHS and across many public services. I note that the Opposition spokesman was full of recommendations about what not to do but had none, as far as I could calculate, about what should be done in relation to the delicate balance between pay and jobs. If pay were increased beyond the proposal from the NHS Pay Review Body, or beyond what the Government intend to pay, clearly there could be an impact on the number of jobs that can be afforded in the NHS within the financial envelope that we have.

[Justin Madders]

We are very clear that we believe that the recommendations of the independent NHS Pay Review Body should be accepted. Much of what I said was about how we should recognise that, given the pressures on nurses’ pay, that will not necessarily cost the Exchequer anything in the long run.

[Mr Dunne]

I am not sure that that provides much clarification, but I thank the hon. Gentleman for having a go.

Employers in the NHS know that they need to deliver greater efficiencies and improved productivity to help protect frontline jobs. Making the workforce more expensive, through higher pay rises, will not help.

It is therefore disappointing that trade unions have alleged that staff have suffered a pay cut of about 14% in real terms—an allegation that has been repeated by a number of hon. Members in the debate. The truth is that the Government have ensured that no NHS employee —indeed, no employee—should be paid below the national living wage. As I have said, no NHS employee employed under the Agenda for Change pay system is paid below that.

The truth is that average earnings of NHS staff as a whole remained well above the national average salary for 2015, which was £27,500, and have increased by more than annual pay awards. For most NHS staff groups, half of employees employed in 2010 and still in employment in 2015 benefited from double-figure increases in earnings, equating to between 2.2% and 2.9% annually, depending on staff group. The average annual consumer prices index figure over the same period was 2.4%.

Health Service Medical Supplies (Costs) Bill

Debate between Philip Dunne and Justin Madders

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

[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

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

Debate between Philip Dunne and Justin Madders

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.

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[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.

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[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.

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[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.

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

Debate between Philip Dunne and Justin Madders

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.

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[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.

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[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?

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[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.

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[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.

Oral Answers to Questions

Debate between Philip Dunne and Justin Madders

Tuesday 11th October 2016 Commons Chamber

[Mr Dunne]

My right hon. Friend managed to include several questions in his impressive supplementary. I can confirm that much of the waste that took place in the years he cited—2002 to 2007—related to projects of the previous Labour Government that they themselves then cancelled, such as the IT project. I can also confirm that savings generated in the NHS are kept in the NHS. Lord Carter, whose report I referred to earlier, has identified £5 billion of efficiency savings, which we hope to deliver during this Parliament.

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

There is a distinction to be drawn between realistic efficiency targets and systematic underfunding. Only last month, Simon Stevens told the Public Accounts Committee that for three of the next five years

“we did not get what we originally asked for”.

Chris Hopson, chief executive of NHS Providers, also said last month that

“we’ve got a huge gap coming… it’s the chairs and chief executives on the front line…who are saying they cannot make this add up any longer.”

On funding, the Government keep saying that the NHS is getting all that it has asked for; those actually running the NHS say something quite different. Who is right?