Healthcare (International Arrangements) Bill (Changed to Healthcare (European Economic Area and Switzerland Arrangements) Bill)

Debate between Philip Dunne and Philippa Whitford

Ping Pong: House of Commons
Tuesday 26th March 2019 Commons Chamber

[Kevin Foster]

As always, I thank my right hon. Friend for his incisive intervention. The Channel Islands might use our currency and, in many ways, fly our flag, but people forget they have a very different constitutional status and are not part of the European Union. For some visitors, it can be a surprise that there is not a reciprocal agreement. There is a reciprocal arrangement with Gibraltar, for example, and it makes eminent sense to try to have such an arrangement between the UK and the Channel Islands, not least given the strong cultural links and the fact that many families split their time between the mainland and the islands.

Looking across the Commonwealth more widely, it might make sense to have arrangements with countries such as Canada and Jamaica in the long run, based on the fact that they have comparable systems of healthcare provision. That is perhaps where the oft-cited example of the United States starts to fall apart, because it is one of the handful of modern, developed countries that do not have a guaranteed system of universal healthcare free at the point of need rather than a system based on insurance schemes for which people may pay.

It is welcome to have ambition, and the Bill is clear about where we are going. I have no problems with the Lords amendments, which are welcome, and I am happy to support them. I am conscious that we are looking to move the debate forward, but I wanted to get those thoughts on the record.

[Dr Whitford]

Obviously, the Bill itself is quite small. It does not extend or protect continuing reciprocal healthcare rights; it is simply an enabling Bill that gives the Secretary of State powers to try to do that. It enables him to pay for overseas treatment in the EEA and Switzerland. We have heard how the Lords removed the powers to extend that worldwide and increase the scope, as well as limiting some of the Henry VIII powers.

The Bill will allow the Secretary of State and his team to negotiate healthcare agreements with the EEA and Switzerland as a group through the EU system or, failing that, to make bilateral agreements. Unfortunately, that would mean having bilateral agreements with 31 countries, which would inevitably be more complex, more bureaucratic and more expensive.

Clause 4 allows data exchange, which most Members would recognise is absolutely critical not just for collecting payments or swapping money, but for accessing medical health records if someone goes for treatment in another country. It is important that that will be handled only by an authorised person who is part of a statutory body—a public body.

I welcome the new clause in Lords amendment 11, which says that the devolved Governments must be consulted, because it is the three devolved Governments who deliver healthcare in Wales, Northern Ireland and Scotland. It is critical that they are involved in any agreements.

This legislation is needed whether there is a deal or no deal. As came out of the points of order exchange earlier, the withdrawal agreement would extend through the transition period, but we have all seen how the last three years have melted away like snow off a dyke. The next 20 months will also disappear, so legislation is required for the long-term protection of those who already live in Europe and want to stay there, particularly those who have been there only a few years and do not have five years-worth of residency rights in the country they have chosen to settle in. After the Bill is passed, it is therefore important that the Government hope to negotiate the continuation of reciprocal healthcare.

The problem is that reciprocal healthcare is not a free-standing thing on its own; it is there simply to enable freedom of movement. People cannot exercise their freedom of movement rights if they simply cannot afford healthcare where they choose to live, work, love, settle or retire. We have had the right over the past few decades to retire and settle anywhere. People are well aware of my husband’s situation as a German citizen who lives here and has spent virtually all his adult life working in our health system. That was certainly his first concern after the Brexit vote, and I am sure it is a concern for all 5 million people who have either settled here from Europe or settled in Europe from the UK.

The problem is that, as the Government reject freedom of movement and talk merely about a mobility framework, any reciprocal arrangement is likely to be proportional to that mobility framework, as is described in the impact assessment. The Government are not offering visas of over a year for unskilled workers. They are demanding that people be high skilled, possibly that they earn more than £30,000 a year and that they are economically active and are contributors. Will pensioners still be able to retire elsewhere, since they are not necessarily contributors in a major sense and are certainly not necessarily economically active?

People highlight the difference between what the UK has to pay into the European system and what we get back from Europe. A lot of that difference is quite simply because of the number of UK pensioners who choose to retire to sunnier climes—who can blame them?—and the general lack of obsession with retiring to the drizzle and moving in the other direction. Living in Scotland, I can vouch for that. Who would choose to leave the south of France and come to live in the mist, fog and drizzle? That is why the number of European pensioners retiring to the UK is considerably smaller than the number of UK pensioners who retire to the south of Spain and the south of France. That is simple logic.

[Mr Dunne]

Would the hon. Lady account for the massive diaspora of Scots all around the world as a comment on the mist and greyness of Scotland’s location? Why does she think so many Scots live abroad?

[Dr Whitford]

The right hon. Gentleman probably would not like me to get into the clearances of the 17th and 18th centuries when people were burnt out of their villages and put on boats, or when people were transported for criminal activities. There are all sorts of reasons why Scots have ended up all over the world, and they are not all about the weather.

NHS Winter Crisis

Debate between Philip Dunne and Philippa Whitford

Monday 8th January 2018 Commons Chamber

[Mr Dunne]

I am grateful to my right hon. and learned Friend for making those points. He brings to the House considerable experience of what it is like to be responsible for the NHS. He is absolutely right: the number of over-80s who are presenting to hospital A&Es is going up exponentially each year. Hospitals need to adapt the way that they treat such patients to try to keep them as healthy as possible so that they can live independently for as long as possible. That is why many hospitals are now introducing frail elderly units close to or at the front door of A&E departments so that they can turn around patients and avoid admissions. My right hon. and learned Friend is also right to point to the increasing integration between the NHS and social care that is necessary to encourage more people to live independently out of hospital and leave emergency departments for those people who are urgently ill.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I, too, pay tribute to staff across all four health services, where the normal pressures have been added to this winter by freezing weather and influenza. Scotland still leads in A&E performance across the UK, but we do not need to see four-hour data to understand the stress that NHS England is under. Thousands of patients have been held in ambulances for more than an hour outside A&E before they can even get in, which means that ambulances could not respond to other urgent calls, and that has obviously put other patients in danger. We have heard about patients being held in corridors for hours at a time, causing not just suffering and danger to patients, but enormous stress to those staff to whom we are paying tribute.

The Minister talks about the elderly population. We need to have beds for that population. England has halved its number of beds in the past 30 years, and now has only 2.4 beds per 1,000 population, compared with four in Scotland. Will he and the Secretary of State make sure that there are no further cuts in the sustainability and transformation reorganisation, and will they look at how they replace the money that has been cut from social care so that when elderly patients are ready to go home they can do so and free a bed for someone else?

[Mr Dunne]

As I have already said, the social care funding has gone up very significantly this year, and there is a second billion pounds to go into social care over the next two years. The hon. Lady is right to point to Scotland having a slightly better A&E performance than England, and the two countries are far better in performance terms than any other country that we regularly monitor, but she has to be a little careful when she talks about how Scotland is performing so much better. She talked about waits. It is the case that the over-12-hour trolley waits in England for November were half the rate of over-12-hour trolley waits in Scotland. We are providing information, and we are increasingly trying to be more transparent about the impact of winter on our health service in England. I strongly encourage her to take back to her colleagues in the Scottish Government the amount of data that is being published in England and to see whether they can try to match it.

Oral Answers to Questions

Debate between Philip Dunne and Philippa Whitford

Tuesday 14th November 2017 Commons Chamber

[Mr Dunne]

My hon. Friend is right to say that there has been a long-standing tradition of this country welcoming professionals from outside, through various waves of migration that go back several decades. It is important to point out to him that the Secretary of State announced a year ago a 25% increase in the number of doctors in training in this country and earlier this autumn a 25% increase in the number of nurses to be trained in this country, so that we become less reliant on overseas clinicians at a time of a shortage of some 2 million worldwide.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Being a member of the European Medicines Agency has allowed UK patients early access to new drugs, and it also plays a crucial role in quality control and safety monitoring, so what solution has the Department come up with to ensure not only timely access to new drugs after Brexit, but that any complications are spotted early?

[Mr Dunne]

As I indicated in response to the hon. Member for Glasgow South West (Chris Stephens), finding an appropriate relationship with the EMA post-Brexit is one of the core strands of work the Department is doing. As the hon. Lady will be aware, next Monday the other EU nations will vote to decide which country will host the new EMA. It is our intent, as we have made clear to the EU negotiators, to seek mutual recognition.

[Dr Whitford]

With the World Trade Organisation not having updated its drug list since 2010, all new drugs developed in the past seven years could incur tariffs. What contingency plans have been made to avoid shortages and increased costs in the event of a no-deal Brexit?

[Mr Dunne]

As the hon. Lady will be aware, we are looking for a relationship with the EU to ensure that we have tariff-free access to the single market, including for drugs and medicines, because the life sciences industry is such a critical element of our economy. Contingency plans are being put in place for a no deal. She will have to wait, as will the rest of us, to see whether or not that eventuality happens. Of course we do not want it to occur—it is not our intent.

Oral Answers to Questions

Debate between Philip Dunne and Philippa Whitford

Tuesday 7th February 2017 Commons Chamber

[Mr Dunne]

I urge the right hon. Gentleman not to indulge in scaremongering about the number of people applying to become nurses. There are more than two applications for each of the nursing places on offer to start next August. He needs to be careful about interpreting this early the figure for applications from EU nationals, which has gone down significantly, because it coincided with the introduction of the language test for EU nationals.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

With the reduction of 23% in applications to English nursing schools, the Minister might want to re-look at the policy. There has been a significant drop—a 90% drop—in EU nationals applying. With one in 10 nursing posts in NHS England vacant and a cap on agency spend, who exactly does the Minister think should staff the NHS?

[Mr Dunne]

I say gently to the hon. Lady that there are 51,000 nurses in training at present. The number of applications through the UCAS system thus far suggests that there will be more than two applicants for each place. As I have just said to the right hon. Member for Leigh (Andy Burnham), the reduction in application forms requested by EU nationals has coincided with the introduction of a language test.

[Dr Whitford]

Language test applications were more than 3,500 last January, so the reduction after the language test was from that to 1,300. In December, there were only 101 applications. This cannot all be blamed on the language test, so what is the Minister going to do to protect nursing numbers?

[Mr Dunne]

There are over 13,000 more nurses working in the NHS today than there were in May 2010. As I have just said to the hon. Lady, the language test came into effect from July last year, since when the number of applicants has been somewhat steady. It is down very significantly, but that is because, frankly, we have had applications from nurses from EU countries who have not been able to pass the language test.

Agenda for Change: NHS Pay Restraint

Debate between Philip Dunne and Philippa Whitford

Monday 30th January 2017 Westminster Hall

[Mr Dunne]

I can say to the hon. Lady that there are 51,000 nurses in training today—I cannot tell her whether that is a record number, but it is a very significant number. There are 1,600 paramedics in training, which I believe is a record number. She and one or two other hon. Members have given anecdotes today about applications for new courses starting in the autumn, but I cannot tell her what the figures will be, because I have not yet seen any numbers published by UCAS. I think that they are due in the coming days, so we will have to see.

[Dr Whitford]

Will the right hon. Gentleman give way?

[Mr Dunne]

I will, although I am not actually right honourable.

[Dr Whitford]

Honourable but not right—I accept that. The figures from NHS England itself suggest a drop in nursing applications of at least 20% to 25%.

[Mr Dunne]

The hon. Lady must have access to figures that my Department and I do not have. My information is that we have yet to receive any formal numbers from UCAS; there may be some early indications, but they do not represent the actual numbers. We will just have to wait for them. There is no point in speculating any further.

A number of hon. Members mentioned the potential impact of Brexit on EU staff, who currently represent a significant number of the professionals working in the NHS. Some 43,000 non-UK-born nationals work in the NHS—about 15% of the workforce—and about half of them come from the EU. It is very important that none of those staff are unnecessarily concerned about their future. The Prime Minister has sought to make it clear on several occasions that she wants to protect the status of EU nationals who are already living here and that the only circumstances in which that would not be possible would be those in which the rights of British citizens living in EU member states were not protected in return. We wish to provide as much reassurance as we can, both to NHS workers and to their employers, that they have a constructive future here in the UK.

However, it is important that we move towards a self-sustaining workforce. Frankly, that is at the heart of the reason behind the change in funding for nursing places, which is to bring nurses in line with doctors and those doing other degrees in England, so that from this autumn onwards they receive funding through student loans rather than bursaries.

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[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.

[Dr Whitford]

Looking at the graph going forward, however, those on bands 1 and 2 of Agenda for Change will fall not only below the real living wage, which they are already below, but below the national living wage, which is the minimum wage, in the coming years—2018-19 and 2019-20.

[Mr Dunne]

Once again, the hon. Lady is speculating about what might happen in future, and I am afraid that not only can I not comment on that, but I am not sure whether she is correct or not. There are some assumptions in what she said about what will happen to the national living wage. The Government are making some assumptions, but what the Government choose to do about the matter we will have to see. At present, the policy is certainly that nobody will be paid less than the national living wage. I can reassure her about that.

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[Mr Dunne]

I am very happy to give way to the hon. Lady.

[Dr Whitford]

I was basing my assumptions and suppositions on what the Government themselves announced when they said that the pay freeze would continue in the next four years. That was announced in the comprehensive spending review, so I am not just making it up, and if pay goes on the trajectory that was announced last year, it will fall below the national living wage, which is obviously due to rise towards 2020.

[Mr Dunne]

I have made the Government’s current position clear and we will have to see what emerges from the NHS Pay Review Body’s recommendations, and then how those are implemented over the coming years. I think it is fruitless to speculate on what might happen in future years, based on the suppositions that the hon. Lady made—

[Dr Whitford]

Why?

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[Mr Dunne]

No. The hon. Lady has had a fair crack. I will make a bit more progress.

I was challenged in this debate to refer to what the Government are investing in the NHS and I obviously take some relish in responding to that challenge. We are investing an additional £21.9 billion in nominal terms, which is equivalent to £10 billion in real terms, to fund the NHS’s own plan for the future. By doing so, we believe that we are playing our part, through the measures announced over the last 12 months or so, to help the NHS achieve its five year forward view. It needs to do that not only by realising benefits from the Carter review to improve productivity, but by clamping down on rip-off staffing agencies and encouraging employers to use their own staff banks for temporary staffing needs, so that they can invest in their permanent workforce. That has been referred to by a number of right hon. and hon. Members.

Agency and bank working provide an opportunity for NHS staff to engage in more flexible working to suit their own circumstances, so I would not want to characterise all agency working as bad. What is challenging is when NHS organisations need, in some cases, to go out to external agencies beyond their immediate bank and pay significantly higher rates. That is why the Department introduced, a year ago, a number of measures to start to limit the ability of agencies to charge the NHS such high fees, and we have had some success in that. In the period for which I have figures—roughly the middle of last year—the agency costs to the NHS had been reduced by 19% over the equivalent period the year before, so we are doing something about those fees. We are apprised of the problem and are bringing down the cost to the NHS of employing agency staff.

This issue is not just about pay. NHS staff, like many people, work hard to improve our public services. They have families and commitments, and they deserve to be rewarded fairly for what they do. However, as has been said, pay alone will not necessarily persuade the skilled and compassionate people that we need to choose a career in the NHS. It would be wrong to see the NHS employment package as just about headline pay. NHS terms and conditions have been developed over many years, in partnership with trade unions, and they recognise that it is a combination of pay and non-pay benefits, which need to keep pace with a modern, changing NHS, that help to recruit, retain and motivate the workforce.

[Dr Whitford]

Certainly the nurses I met during the lobby here, who had come from all over England, but particularly from London, described literally struggling and facing great financial hardship. That is very difficult for them. They work so hard for the benefit of all of us, yet feel that they cannot go on in their profession because they simply cannot keep their families here in London.

[Mr Dunne]

I have already explained to the hon. Lady that we have a London weighting, which reflects the increased costs of living in London. I have also explained to her that average pay for nurses is significantly above the national average pay. She herself referred to average nursing pay of some £31,000—

[Dr Whitford]

indicated dissent.

[Mr Dunne]

If not her, then another hon. Member referred to it, and that is from the latest available workforce statistics.

Picking up on the hon. Lady’s point, it is important that NHS staff are confident that their employment package is competitive. We want employers to make better use of the full package in their recruitment and retention strategies. NHS Agenda for Change staff have access to an excellent pension scheme, far in excess of arrangements in the wider economy, which includes life assurance worth twice the annual salary, and spouse, partner and child benefits. They have annual leave of up to 33 days—six and a half weeks—plus the eight bank holidays, which is far better than that which is available in the private sector, and in many other elements of the public sector. They have sickness and maternity arrangements that go well beyond the statutory minimum and, as I have touched on, there are flexible working, training and development opportunities for staff at all grades. For too long, the NHS employment package has been a well-kept secret and we want leaders to make the very best use of the overall NHS employment offer to help recruit and retain the staff they need.

Health Service Medical Supplies (Costs) Bill

Debate between Philip Dunne and Philippa Whitford

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

[Dr Philippa Whitford]

indicated dissent.

[Mr Dunne]

The hon. Lady is shaking her head. That is my information, but if that is not the case, perhaps she would like to enlighten me further.

[Dr Whitford]

It is a new medicines and rare diseases fund, and it includes orphan, ultra-orphan and end of life, but it is not only about end of life.

[Mr Dunne]

No, it is not only for end of life, but also for rare diseases. That was my understanding, but I stand corrected. However, my main point is that it should be for clinicians to decide what is spent across the range of activity. If money is ring-fenced into a specific fund for new medicines, that might not always be the right clinical decision.

[Dr Whitford]

Does the Minister accept that it is a slightly bizarre public relations thing to have a medicines fund that is only for cancer, ruling out people with other life-threatening illnesses? That is the case here in England.

[Mr Dunne]

The new cancer drugs fund was set up specifically to provide funds to deal with one of the most common causes of mortality in the country, and was a priority of the previous Government; I will not go into the reasons for that.

Returning to amendment 8, it was suggested that what happens to the receipts is not clear, but all income generated by the voluntary and statutory schemes is reinvested in the NHS. Estimates of income from the pharmaceutical payment regulation scheme are part of the baseline used in the Department’s spending review model. The model was used to calculate the funding increase that the NHS sought at the time of the 2015 spending review, and it helped to secure the £10 billion of real-terms funding over the course of this Parliament. The income from the voluntary and statutory schemes can and does fluctuate; that is the biggest problem with ring-fencing, which could bring risks in this area. For example, the annual income from the PPRS has varied between £310 million and £839 million in a full financial year in England, so there is the potential for the income that it generates to vary widely, which could disadvantage patients by making treatment dependent on income from a pricing scheme with unsteady income generation.

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[Mr Dunne]

I am grateful to the hon. Gentleman for his advice, but I am afraid that I do not think it is relevant to my point about the fluctuation in income coming from the scheme. It is relevant in relation to whether NICE or politicians make such decisions. They need to be made by clinicians.

[Dr Philippa Whitford]

rose—

[Mr Dunne]

I will give way, but then I will make some progress.

[Dr Whitford]

I thank the Minister for kindly giving way. The cancer drugs fund has a budget of some £350 million, so if he is saying that the money that can be retrieved varies from £300 million to over £800 million, that would allow for the expansion of a new medicines fund.

[Mr Dunne]

It might if the move was always in the same direction. My concern is that the amount could decline between one year and the next; it may not always go up—certainly not up in a straight line.

Separately from the Bill, the Government are taking action to secure the UK’s future as an attractive place for the life sciences sector and to support faster patient access to medical innovations. I have already touched on the recently published accelerated access review, which sets out ways to increase the speed at which 21st-century innovations in medicines, medical technologies and digital products get to NHS patients and their families. The review’s recommendations included bringing together organisations from across the system in an accelerated access partnership, and creating a strategic commercial unit within NHS England that can work with industry to develop commercial access arrangements. We are considering those recommendations with partners and will respond in due course.

NHS England and NICE are jointly consulting on several proposed changes to NICE standard technology appraisals and highly specialised technology appraisals, including around speeding up the appraisal process. The Department of Health continues to work closely with NHS England and other stakeholders to improve uptake of new medicines. A key element of that is the innovation scorecard that I have already referenced. With those comments about our concerns about what is proposed in amendment 8, I ask the hon. Member for Burnley (Julie Cooper) not to press her amendment.

Turning to amendment 9, tabled by the hon. Member for Central Ayrshire, the Government recognise that section 260 of the National Health Service Act 2006 does not explicitly state that the Government are obliged to consult industry. However, I am aware that the Act does explicitly state that there is an obligation on the Government to consult when it comes to controlling the cost of medicines. A similar amendment was tabled by the hon. Lady in Committee. I want to reiterate that I am happy to consider with her how we could best introduce a general requirement to consult industry in section 260. Indeed, my officials have been in discussions with her, and I am grateful for her time and constructive comments.

I note the hon. Lady’s reference to the effect of any pricing controls for medical supplies on maintaining the quality of those supplies. I assure her that the Government would take into account all relevant factors, including any concerns raised by industry about the quality of medical supplies, when making and consulting on any price controls for medical supplies. The Government would not however be in favour of putting one of those many factors in the Bill.

The Medicines and Healthcare Products Regulatory Agency is responsible for the safety, efficacy and quality of medical supplies, and the Bill will not change that. The MHRA has assured me that any use of the price control powers in the Bill would not affect any of the quality or safety requirements that must be met before medical supplies can be placed on the market.

The hon. Lady referred to the procurement system in Scotland; I assure her that the Government are committed to improving procurement across the NHS. She will be well aware of the Carter report, which concluded that there is considerable variation in the value that trusts extract from their expenditure on goods and medical supplies. NHS Supply Chain is working hard to deliver procurement efficiencies, to meet recommendations to increase price transparency, to lower costs, and to reduce the number of products and suppliers used across the NHS to deliver economies of scale. The hon. Lady referred to 600,000 products, but it has had success in reducing the range in the catalogue down to 315,000 to help NHS organisations purchase products more efficiently. It continues to work to reduce that number. I am aware of similar work in Scotland. In England, we are using the Carter review to deliver that.

While I understand the intent behind the hon. Lady’s amendment, I am not fully convinced that, as drafted, it would have the desired effect. If she will continue to work with me and my officials, the Government would be happy to consider, while the Bill is in the other place, how we could best introduce the requirement to consult into section 260. On that basis, I invite her not to press her amendment for now.

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[Dr Philippa Whitford]

rose—

[Mr Dunne]

I would like to conclude this point for the hon. Lady, as I hope it will satisfy her. Her concern is about how the Government will behave in response to requests from devolved Administrations; we recognise that we need to give reassurance to the devolved Administrations that, in the light of the constructive conversations we have already had with them, they will have full access to all relevant data that the Government collect. We are quite happy to do that. We have indicated that we will enter into a memorandum of understanding, which will be discussed and agreed with the devolved Administrations. Those discussions will cover whether they have automatic access to this information—in real time, or in some other format—and whether that is done through giving them direct access to the systems, or by forwarding the data that we collect, immediately on request. We need to get into the detail of that in discussion on the memorandum of understanding, rather than committing that to the Bill at this stage. On that basis, I hope that the hon. Lady will not press her amendment to a vote.

[Dr Whitford]

I welcome the Minister’s comments, and I am happy not to press the amendment if we can reach the point of a clear memorandum of understanding. I just point out that all my amendment does is to say that the groups listed by the Bill should be able to ask for data on request; it does not add anyone else. I understand that my attempt at the amendment in Committee included groups that it should not have, but that has been corrected. This amendment does not spread confidential information any more widely.

[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.

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

Debate between Philip Dunne and Philippa Whitford

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

[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.

[Dr Whitford]

I understand that, but I could not find reference to that in the National Health Service Act 2006, and I thought that the aim was to bring everything together in this Bill, so it seemed odd that there was no mention of English excepted persons. That is fine—that information is already being collected—but the Bill still separates the definition of English health service products from the definition of the health service products of the devolved nations. It seems an odd place to insert the amendment; it seems it is being attached to the definition of English health service products.

I totally accept that I am a complete novice, so there may be something I am not understanding, but to me, reading it logically, it does not seem to make total sense, and I thought that the aim of the Bill was to bring all the powers into one place. It seemed odd for there to be no definition of English excepted persons, even from an old Act, because what is happening here is that different things are being brought from the 2006 Act and from the Scotland Act 1978 into one place.

[Mr Dunne]

I thank the hon. Lady for that clarification. I hope that inspiration will arrive before I sit down.

To address the specific point made by the hon. Member for Ellesmere Port and Neston on devolution to Manchester, it is an interesting idea, which reflects some of the challenges arising from the increasing use of devolution of powers across our country. I can see why he might seek to secure a carve-out of income for Manchester. I would say, “Nice try”, but at present the funding arrangements for Manchester and other devolved areas in England are agreed via NHS England. That applies to the totality of funding available for health provision within the Manchester area, so the allocation already includes income derived from the voluntary scheme, and it will not be ring-fenced as a subset of the funds, because there chaos would lie.

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[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.

[Dr Whitford]

If the Minister looks at our amendment, which is incredibly short, he will see that all it says is “at that person’s request.” We do not want to widen the list in any way at all; we are not looking to add to the list. All we are saying is that, if it is accepted that a devolved Government should be able to access this information, it should be at the request of that devolved Government. It should not be, “We will tell you every April how you’re doing.” If a devolved country sees a pattern emerging, it should be able to say, “Can we request our data?” The issue is that data are to be collected centrally but not belong to the devolved nations to which they pertain. We are not trying to add anyone; we are just trying to give the devolved countries the power to request.

[Mr Dunne]

I completely understand that that is the intent of the hon. Lady’s amendment, and I think I have another way of addressing it, which I am now going to come on to. We think it entirely appropriate that at some point the devolved Administration might wish to change their information requirements. They might wish to add requests for information that they are not initially getting, which is a reasonable request.

We think that the right way to address that, rather than putting something in the Bill that might inadvertently allow other representative bodies access to information—I am sure the hon. Lady agrees that that might not be appropriate—is for a memorandum of understanding to be agreed between the Department of Health and each of the devolved Administrations that would allow requests for information to be submitted and dealt with in a manner agreeable to both parties. In the consultation process that will follow, we intend to enter into a memorandum of understanding that will include the procedures for requesting and sharing information.

I assure the Committee that the Government intend to continue to work constructively with the devolved Administrations to ensure that they have access to the relevant information collected in a format convenient to both sides, so that we do not end up with special data sets that are hard for an Administration to create because the data are not readily available from the information provided. Aside from that, we would honour the reasonable requests of any devolved Administration to be able to get access to the data, which I acknowledge the Administration may not own if the information has been gathered by the Department of Health.

On that basis, I hope that the hon. Lady and the hon. Member for Linlithgow and East Falkirk will not press their amendment.

--- Later in debate ---

[Mr Dunne]

Before I go into the clause as a whole, I would like to respond in further detail to the hon. Member for Central Ayrshire about excepted persons. Clause 6 will add a new section to the National Health Service Act 2006. It brings together information collection practices, both statutory and voluntary. The Secretary of State collects information from a sample group in England from time to time, but not from GPs and pharmacies in the devolved Administrations. Therefore, the definition of “excepted persons” covers those persons whom the Secretary of State does not intend to collect information from directly, because he would be relying on the devolved Administrations to do so. The terminology used in proposed new section 264B is new; it is not based on the 2006 Act, which the hon. Lady has read so diligently. I thank her for bringing the matter to the Committee’s attention and I hope that that explanation meets her concern.

[Dr Whitford]

To clarify, is there a rational reason for the positioning of the section as between English health service products and the other health service products? I am sorry if, as a novice, I am creating extra work.

[Mr Dunne]

I think that is to do with parliamentary drafting on which I stand to become an expert; I look forward to seeing whether there is a clear explanation for that, which I can give to the hon. Lady as we debate the clause.

The clause enables the Secretary of State to make regulations that require any person who manufactures, distributes or supplies health service products, which includes health service medicines, medical supplies and other related products, to keep, record and provide on request information on prices and costs.

The clause brings together and consolidates existing information requirements related to controlling the costs of health service medicines, as well as medical supplies, in one place in the Act, as we discussed this morning. It also allows the information to be used for the purposes set out in the clause.

The clause also expands and strengthens our information collection. It enables the Government to make regulations to put current voluntary information provision arrangements on a statutory footing. For example, we collect information from manufacturers and wholesalers of unbranded generic medicines and specials to inform reimbursement arrangements for community pharmacies. The Bill will enable us to make regulations to get information on more products and from more companies. That is necessary to ensure that reimbursement prices for pharmacies reflect market prices of the whole market, rather than just of those companies that currently supply data to us. As in any industry, there are new market entrants and participants leave the market; this is a dynamic market and we need the flexibility to bring in new products from new companies.

The clause will also enable the Government to collect information to assure us that adequate supplies of health service products are available, and that the terms on which they are available represent value for money. If we were to have concerns about the supply chain or parts of it, or about specific products, we could obtain information from companies in the supply chain to assure us that the products, or the supply chain, provided value for money to the NHS and the taxpayer. Although the Government are generally not the purchaser of health service products, they do pay for them and therefore transparency and value for money of the supply chain are important. For example, if we were to consider limiting the price of a high-priced generic, the power to obtain information would be crucial to determine whether excess profits were being made. We could obtain information from a manufacturer, which would help us to determine whether the price it was charging the NHS was unreasonably high. That information would also inform our decision on what the right price should be.

The purposes for which the Government can collect information are limited and involve three areas: cost and pricing schemes, reimbursement of pharmacies and GPs, and assessing value for money. The clause provides the Secretary of State with the power to request any information for the purposes set out in the Bill. It also provides an indicative list of the type of information that the Secretary of State may request. Most of the types of information listed are already collected by the Government under statutory or voluntary arrangements.

The clause will also enable the Government to share information with a range of bodies, including Ministers in the devolved Administrations, the NHS, other Departments and persons providing services to those prescribed bodies.

--- Later in debate ---

[Mr Dunne]

Again, I am grateful to the hon. Lady for drawing the Committee’s attention to the issue. I confirm, for the benefit of the Committee, what the specials are—she has characterised them well.

From our perspective, unlicensed medicines or specials can be manufactured or imported to meet a patient’s individual needs when no licensed product is available. By their nature, specials are bespoke, and costs need to be balanced against the availability of treatment for an individual. I am aware of concerns that some specials, especially those not listed in the drug tariff, are not being prescribed because of their cost—the hon. Lady highlighted those for dermatological treatment. It must be recognised, however, that with specials, because of their bespoke nature, there are few if any economies of scale and they can be expensive to manufacture.

Under section 262 of the 2006 Act, the Government have the power to limit the price of any health service medicine, as long as the manufacturer is not in the voluntary scheme. Manufacturers or importers of specials are generally not in the voluntary scheme. Specials are health service medicines and we can therefore limit their prices. At the moment, the Government do not use their power to control the prices of specials. The hon. Lady gave an example, without naming the product, of a significant price differential between Scotland and England; if she is willing to write me a note after the Committee, I am interested in exploring why we have chosen not to take advantage of the power that we already have in that case, because on the face of it, it would appear to be an example of where the power perhaps ought to be used.

[Dr Whitford]

While there are not major economies of scale, if national health manufacturers are used, it is possible at least on a regional basis to pool some together. As things are at the moment, a pharmacy can simply approach its sister or mother company and ask for a price, which creates a vested interest in making the price high. I think that things can be done, which seem to be working in Scotland, so they are worth trying.

[Mr Dunne]

Again, I am grateful to the hon. Lady—

--- Later in debate ---

[Mr Dunne]

As we broke—literally, I was saved by the bell—I was describing how setting prices as suggested by the new clause could have unintended consequences. We are concerned that it may lead to manufacturers stopping the production of some specials if they are no longer profitable and patients facing adverse consequences.

By setting reimbursement prices in the drug tariff in primary care, the Government encourage pharmacy contractors to source specials as cheaply as possibly, which in turn creates competition in the market and, as a result, reimbursement prices decrease. For those specials not listed in the drug tariff, pharmacy contractors have no incentive to lower the list price. Currently, less than 1% of the total expenditure on medicines in primary care is on specials. Nevertheless, I believe those products, like all other products destined for the health service, should provide value for money to the NHS and the taxpayer. The information power in the Bill will help the Government to determine whether the products provide value for money and the illustrative regulations include an obligation to review those provisions.

The new clause would require the Secretary of State to commission a review of the adequacy of existing powers to control prices of specials, including the enactment and enforcement of those powers. The Government keep their power to control prices under review all the time; it was a review of those powers that led to the Bill in the first place. The Government believe that we have sufficient powers to limit the prices of specials if need be. The hon. Member for Central Ayrshire appears to have evidence of specials being priced to Scotland materially more advantageously than to England. If she would be willing to make that information available to us, we would be delighted to consider it.

[Dr Whitford]

I wonder whether the Government have given any consideration to having NHS manufacturers provide these products or to including some of the topical specials in the drug tariff, so that the price is kept down. Otherwise, despite the Bill, these drugs will be left outside its provisions. They are going to be too expensive and patients will suffer from that.

[Mr Dunne]

For the reasons that I have said, we have the power to look at the pricing of the specials already and we have not had evidence that the pricing has been abusive. We already have that power. We will keep prices and specific drugs under review. The best way to take that forward is to leave the powers as they are and not to proceed with the new clause, but to invite hon. Members to highlight specific examples that they are aware of.

--- Later in debate ---

[Mr Dunne]

I am grateful to the hon. Lady for raising this issue by tabling her new clause, because it gives us an opportunity to discuss an issue of considerable interest across the House. I am delighted to be able to inform the Committee that we do not believe we need to review whether the Bill’s provisions should be extended to repurposed off-patent drugs, because they will apply to those drugs whether they are licensed branded medicines or generic medicines. The new clause is therefore not necessary, because those drugs are already included.

Any licensed branded medicines that are developed may be included in either the voluntary or statutory scheme and be subject to all the provisions of those schemes. Unbranded generic medicines are subject to competition in the market, which keeps prices competitive and secures value for money. As we know, and have already debated today, there are examples of unscrupulous companies making unjustified price hikes for unbranded generic medicines when there is no competition in the market. As we have said, both today and on Second Reading, the Bill provides the Secretary of State with powers to intervene in such cases, in addition to the powers that the Competition and Markets Authority can exercise.

Having once again explained the specifics of how repurposed medicines will be affected by the Bill’s provisions, it might be helpful if I outline for the Committee some of the progress that has recently been made in supporting repurposing. For the reasons the hon. Lady identified, repurposing has benefits for patients in allowing drugs to be introduced as quickly as possible to provide alternative treatments to those originally intended by their manufacturers, where there is robust clinical evidence for new uses of existing medicines. Since November last year, a range of organisations have come together to work collaboratively to examine the issues at play in drug repurposing and to develop positive ways of handling those issues to ensure that patients benefit from robust research outcomes.

Officials in the Department have been working on the issue with the Association of Medical Research Charities and many of its members, as well as with NHS England, NICE, the publishers of the “British National Formulary” and the Medicines and Healthcare Products Regulatory Agency. All are committed to taking non-legislative measures to make sure that there is a clear and accessible pathway to ensuring that robust evidence showing new uses for existing drugs can be brought more systematically into clinical practice to benefit patients. That working group has made significant progress, and I would like to thank the organisations that have come together in a true spirit of co-operation to achieve rapid progress.

The General Medical Council has provided better advice for doctors about prescribing drugs outside their licensed indications, when that is clinically indicated. The “British National Formulary” has introduced new processes to ensure that information about repurposed drugs is captured more systematically and is therefore much more readily available for the clinical prescribers whom the hon. Lady referred to as the people at the forefront of this innovation. The Committee has heard from Dr Keith Ridge about the role that regional medicines optimisation committees will be asked to take in supporting prescribers to take up and use new evidence, particularly about unlicensed medicine use. Significant work has also been done on the development of a pathway that maps the routes from research result into clinical practice, which will help researchers and clinicians ensure safe and timely implementation.

NICE has published more than 50 evidence summaries for unlicensed and off-label uses of medicines. Although I said I did not want to go into detail, there are a couple of examples that the hon. Lady will be familiar with but other members of the Committee might be less so. NICE has made recommendations and guidelines on the use of tamoxifen to prevent familial breast cancer, and on the use of antidepressants—selective serotonin reuptake inhibitors—to treat irritable bowel syndrome.

I hope that with that explanation, hon. Members will agree not only that repurposed medicines are included within the Bill’s provisions, but that robust action is being taken by the Department and across the medical establishment to support repurposing for the benefit of patients. I ask the hon. Lady to withdraw her new clause.

[Dr Whitford]

I welcome the Minister’s explanation of what has been happening behind the scenes since the Off-patent Drugs Bill last year. The Bill Committee, of which I was a member, had a lot of discussion about the need to have a system for recognising the drugs, giving doctors and other prescribers the reassurance they needed to use them, and using the “British National Formulary” as a tool. We have heard nothing for a long time, so I really welcome the update that the issue is being taken forward. Prescribers are not all doctors now, and it is important that everyone who prescribes has the reassurance of knowing that they can safely prescribe and not be open either to making an error or to litigation. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 5

Extending price control to other medical supplies

‘In section 260(5) of the National Health Service Act 2006, after first “includes” insert “, but is not limited to, investigative,”’—(Rob Marris.)

This new clause is to ensure that the Bill’s provisions on price control apply to other capital equipment such as MRI scanners by including such items within the definition of “medical supplies”.

Brought up, and read the First time.

[Rob Marris]

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

I am glad that the Committee has generously left me sufficient time to deal with the new clause, which involves a tweak in the wording of the Bill. Clause 6 inserts section 264A into the 2006 Act, and section 264A(9) states:

“‘Medical supplies’ is to be read in accordance with section 260(5)”

of that Act. There is a synopsis of the subsection in paragraph 66 on page 14 of the explanatory notes, which hon. Members may have in front of them.

Page 162 of the 2006 Act states, in section 260(5):

“In this section and Schedule 22—

‘medical supplies’ includes surgical, dental and optical materials and equipment…and ‘equipment’ includes any machinery, apparatus or appliance whether fixed or not, and any vehicle.”

That definition is fairly clear but not sufficiently wide, hence my new clause, which would clarify it. Regarding medical supplies, there are, to my mind, three adjectives there qualifying two nouns, the three adjectives being “surgical”, “dental” and “optical”, and the two nouns being “materials” and “equipment”. There is considerable NHS expenditure on equipment—and materials, but particularly on equipment—that is not, as I understand it, surgical, dental or optical. A particularly expensive form of such equipment, as I outline in the explanatory note, which is helpfully on the amendment paper, is MRI scanners. They vary, obviously, but in round terms they cost about £2 million a throw and the NHS, understandably, has an awful lot of them—they are a magnificent diagnostic tool. There may well be other pieces of equipment that are perhaps not quite as expensive but which would not come under the rubric of surgical, dental or optical.

It seems, therefore, that there is a gap in the 2006 Act, and the new clause, which I am sure the Government will accept, is intended to plug that gap by indicating that those three adjectives are descriptive of the two nouns, but other adjectives could also be applied. For example, “investigative” is included in the new clause. The new clause would therefore simply ensure that there is no misunderstanding of the intent of section 260(5) of the 2006 Act. It is a helpful clarification to the Government.

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

Debate between Philip Dunne and Philippa Whitford

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

[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.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

As the hon. Member for Burnley said, the system functions quite differently in Scotland. We have a new medicines and rare diseases fund, rather than a cancer drugs fund, which means that the use of funding to access new medicines is not limited to one cohort of patients. Our fund is £90 million, which, given that we are less than 10% of the UK population, means it is proportionately almost three times the size of the cancer drugs fund. As was mentioned, this is very much funded by the PPRS. It is committed to that. The pharmaceutical industry expects the rebates to be used to enable access to new medicines. One problem here is that the rebate goes into base funding, which means it disappears like water in the sand.

We have so many debates in this House about patients who are struggling to access new treatments. Amendment 46 talks about innovation and research, which we support in Scotland. We are quite a research-oriented country. Our research funding to our universities is 30% higher, in proportion to our population. The NHS in Scotland commissions research, particularly on things like informatics and data management around health and social care, which are the big challenges we face in the future.

The Scottish Medicines Consortium, which makes our decisions in the same way as NICE, was reformed in 2013. Since then, we have had a 40% increase in drugs being passed. What we see in England is that even if a drug is passed at the level of NICE, it sometimes does not come into use in the NHS, because the funding is simply not earmarked to make it available.

--- Later in debate ---

[Mr Dunne]

I do not have complete recollection of what the Secretary of State said, but he may have been referring to things such as the over-prescription of antibiotics, which we know is a problem globally. A great deal of work is being undertaken right across the NHS and with other health bodies around the world to reduce the scale of antibiotic prescription.

[Dr Whitford]

Is it not the case, however, that we seem to be developing this additional rationing system between NICE and patients of the NHS? I am talking about NICE’s recommendations being accepted but not funded. The hepatitis C drugs are basically being rationed to a certain number of patients per month, even though they have been passed by NICE and trying to eliminate the viral load in the community can be more effective in the long term.

[Mr Dunne]

Inevitably, some decisions have to be taken when introducing new drugs as to the extent to which they are applicable. Those are clinically-led decisions. There is not a completely bottomless funding pot for the prescription of medicine, so those decisions have to be taken by ordinary clinicians within their practices and within the infrastructure of approvals, which is entirely independent and led by NICE in England.

[Dr Whitford]

With respect to the Minister, that is not what I am hearing from clinicians who work in the field of HIV and hepatitis C. They are being told, “You can have”—for example—“50 patients a month,” and they are having to pick who gets the drugs and who does not.

[Mr Dunne]

I will not be drawn into the detail on a specific drug, because the hon. Lady may have access to information that I do not, but in relation to hepatitis C, as she has raised it, there has been a discussion between the trust and NICE. As I understand it, the trust is continuing to work with NHS England collaboratively to discuss the issue of access to the new hepatitis C drugs. We will always have some discussions about applicability when a new treatment is introduced, to see whether it is appropriate for all conditions; it may be that only some benefit from the drug. I think that that is as far as I can go on this issue.

To return to the Government’s view of the amendment, we are concerned that it would in effect circumvent the critical system of checks and balances around clinicians’ prescribing freedoms. That would present a danger to patients and the sustainability of the NHS. It is also not the purpose of the Bill to address matters other than the cost of medicines and medical supplies.

Treatments that do not demonstrate efficacy, safety and value for money should not be routinely available on the NHS. The National Institute for Health and Care Excellence, an internationally respected organisation that provides evidence-based guidance to the NHS, ensures that the treatments recommended for patients deliver value for money and improved patient outcomes. NICE’s recommendations are developed free from political interference and help NHS organisations to design services that are in line with the best available evidence and that meet the needs of their local populations.

--- Later in debate ---

[Mr Dunne]

Then I will continue.

Certain companies appear to have made it their business model to buy the marketing authorisations for medicines without any patents outstanding. They then de-brand the medicines and abuse the existing freedom of pricing for unbranded generic medicines. Although the practice is not widespread, it must be addressed, which is the reason for the clause.

Currently, our only recourse is to refer such cases to the Competition and Markets Authority, as I mentioned. When the CMA investigates, we must wait for the outcome, and in the meantime the NHS continues to have to pay high prices. The Department consulted on the issue as part of the consultation on the statutory scheme that was launched in December 2015. The Department has been working closely with the Competition and Markets Authority and has referred cases to it. The CMA is about to issue a decision in a case on a high-priced unbranded generic medicine. As I have just said, it has also recently opened another investigation.

The powers under section 262 of the 2006 Act to limit prices of health service medicines can be exercised through directions or regulations. The Government’s intent is to work with directions, which will enable us to limit the price of a specific medicine from a specific manufacturer. The Government are obliged to consult the industry representative body when we want to direct the price of a medicine. In the case of high-priced generics it would be the representative body of the unbranded industry—currently the British Generic Manufacturers Association, which appeared before the Committee last week.

The Government would of course also engage with the company involved before issuing a direction that limited the price of a medicine. As I have indicated, there may be good reasons for a price increase, and it is important that the Government understand the reason behind a price increase before issuing a direction. As I said, the new information powers will help us with that.

My officials have initiated talks with the unbranded generic medicines industry representative body and the CMA to explore how in practice we would determine what should be considered a reasonable price. Any decision by the CMA in the cases that I highlighted earlier could help set a useful precedent. I can reassure the Committee that companies charging unreasonably high prices for unbranded generic medicines is not a common practice. The Government do not intend to use the power where competition in the market for unbranded generic medicines is working. However, the Government need the right legislative tool to be able to address unreasonably high prices of unbranded generic medicines. The clause will give us that tool, and I ask the Committee to agree to it.

[Dr Whitford]

Basically, we welcome the measures in clause 2 to try to close the specific loophole whereby companies that are part of the PPRS voluntary scheme and that also produce generic medicines are able to increase the prices of generic medicines. However, the Minister talked about the British Generic Manufacturers Association—largely companies that focus on generic medicines—which would be more to do with clause 3. My understanding is that the change will close the specific loophole relating to large pharmaceutical companies that also produce generic medicines, rather than companies that focus only on generic medicines, which we will come on to in clause 3. We welcome the closing of that loophole, but those two things are quite different and we should therefore not conflate them. It is not the competition authority that would tackle them. That is much more related to purely generic companies.

[Mr Dunne]

We will obviously come on to clause 3 shortly. The primary intent behind clause 3 is to modernise the statutory scheme, rather than to address the difference between one type of company that produces only generics and another that produces generics and branded medicines. I am not sure that I agree with the hon. Lady’s distinction.

[Dr Whitford]

My point is just that what the Minister has described applies more to clause 3, on companies that produce purely generic medicines, so the attempt would be to strengthen the statutory scheme that they might be part of. It is the production of generics by the group of companies under the PPRS scheme, the big pharmaceutical companies, that is getting under the wire. That is covered by clause 2(2). The Minister was talking about the Competition and Markets Authority and the British Generic Manufacturers Association, and I think clause 3 is more relevant to that. Clause 2 is more of a surgical change, which we absolutely support.

[The Chair]

The Minister can respond either now or later.

--- Later in debate ---

[Dr Whitford]

One issue arises because the statutory scheme was based on prices in December 2013. The further on in time we are, the less proportional the return. Whether it is the same or a similar mechanism, we should avoid having a price rebate to the NHS stuck in time, which might be five years ago, and does not reflect the actual costs of the drugs.

[Mr Dunne]

The voluntary schemes are introduced and refreshed every five years. The current scheme was negotiated in 2014, so we are two years into that. One reason for having a time limit on the scheme, from the Government and NHS perspective, is that companies like to find ways during the course of time to adjust their commercial behaviour for their benefit. Having the opportunity to renegotiate the voluntary scheme every few years enables us to try to avoid the circumstances referred to by the hon. Lady.

[Dr Whitford]

If I could clarify, the voluntary scheme runs for five years but what I was talking about, with regard to clause 3, is the statutory scheme and the price rebate related to a requirement for a percentage reduction from the price in December 2013. That is how the rebate in the statutory scheme is defined. The further one gets away from that date point, the less one gains. It is the statutory scheme I am talking about rather than the voluntary one.

[Mr Dunne]

My understanding is that under the statutory scheme, the percentage applies based on sales achieved in the previous year. Therefore, the percentage reduction that we seek for the statutory scheme can be adjusted year by year. That is the intent of what we seek to do. I will seek further inspiration to ensure that I have exactly addressed the point that the hon. Lady makes.

Amendment 43 would have the effect of linking the payment mechanisms of the statutory and voluntary schemes. I understand why that might appear a desirable objective, so I understand the intention behind the amendment. We think there is merit in aligning the two schemes in some respects. However, to require them to be the same is inappropriate, because it removes some flexibility that the Government have, and from which the NHS benefits, in being able to negotiate the voluntary scheme on a periodic basis. The voluntary scheme has other aspects beyond pure price. Aligning the two in what will become a statutory scheme would restrict the scope for the two schemes to operate in a complementary manner.

The voluntary scheme is a matter for negotiation with industry on a periodic basis. As such, there is scope to include a range of measures. Those measures may change with each iteration of the scheme, to reflect the priorities of each side at the time of renegotiation. To illustrate that, the current voluntary scheme includes a range of provisions developed through negotiation with industry that sit alongside the payment mechanism. That includes price modulation, which enables companies to put prices up and down as long as the overall effect across their portfolio is neutral. That may have benefits for them, not only for their sales to the NHS but in the pricing references used by selling to the NHS in jurisdictions in other countries. That is of potential commercial value to companies, which may be willing to accept a higher payment percentage as a result—in other words, a higher discount to the NHS.

There are also provisions on the uptake of new medicines by the NHS, such as making NICE-approved medicines available within 90 days of a NICE decision. We are keen to encourage that. By contrast, the statutory scheme is intended to be a more straightforward approach. As such, the payment percentage applied may be slightly different from that applied to any voluntary scheme, in order to achieve a broadly similar level of savings once all elements of the schemes are taken into account.

As we heard in oral evidence last week, the freedom to negotiate the voluntary scheme is greatly valued by both industry and Government. We intend that any future voluntary scheme should be established through such negotiation, but linking the payment mechanisms would inevitably restrict that flexibility and freedom for both sides. In addition, while the Government welcome the collaborative approach of a voluntary scheme, we cannot guarantee that Government will always want two schemes in future. The amendment would constrain the Government’s discretion to run a single scheme if they and the House thought it best to do so. For those reasons, I urge the hon. Member for Burnley to withdraw her amendment.

--- Later in debate ---

[Mr Dunne]

The clause amends the provisions relating to statutory schemes in section 263 of the National Health Service Act 2006, which describes the purposes for which the Secretary of State can make statutory schemes. The amendments make it clear that a statutory scheme may require companies to make payments to the Government, based on their health service sales. For those companies not in the voluntary scheme, the Government operate a statutory scheme. That is currently based on a cut to the list price of products, rather than a payment mechanism on company sales, as in the voluntary scheme. The cut to the list price has delivered fewer savings to date than the payment mechanism under the voluntary scheme.

[Dr Whitford]

That was the point I was trying to make earlier. One is a percentage return on sales and profits, and the other is a cut in price. The further we are from the time set, which was December 2013, the less value we have from that in proportion to current prices.

[Mr Dunne]

I am grateful to the hon. Lady for making that clear to the Committee. The different approaches to price control between the voluntary and statutory schemes have led to some companies making commercial decisions to divest products from the voluntary scheme and sell them through the statutory scheme, thereby reducing the effectiveness of the voluntary scheme and savings to the NHS. The introduction of a payment mechanism in the statutory scheme would save the health services across the UK an estimated £90 million a year, as set out in the impact assessment.

In response to the Government’s consultation on introducing a payment mechanism in the statutory scheme, the pharmaceutical industry queried whether the Government had the powers to introduce a statutory payment system. The clause clarifies the existing powers to make it clear that the Government have the power to introduce a payment mechanism in the statutory scheme. The ability to make the statutory scheme by way of regulations rather than setting out the detail in primary legislation provides us with the flexibility to respond to changes in the wider economy, the medicines market and patient needs. We have provided illustrative regulations to support scrutiny of this delegated power.

The clause makes a further amendment to section 263 of the National Health Service Act 2006. Currently, the power to make a statutory scheme cannot be applied to members of a voluntary scheme, which means that if the Government introduced a statutory scheme for unbranded generic medicines—although we have no current plans to do so—we would be unable to apply the scheme to manufacturers of unbranded generic medicines that have a mixed portfolio of branded and unbranded generic medicines, and are members of the voluntary scheme. The clause therefore amends the Act in such a way that the power to make a statutory scheme cannot be applied to products covered by the voluntary scheme rather than member companies of the voluntary schemes.

The Government’s view is that, for the most part, competition works well to keep down the price of unbranded generic medicines. Should that situation change, this amendment would enable the Government to use their clause 2 powers to take action beyond individual products or companies. I hope that is clear to the Committee. If so, I ask the Committee to agree that clause 3 should stand part of the Bill.

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[Mr Dunne]

No, I mean the Home Secretary.

We believe that competition is the best way to drive prices of medicines down for the NHS, and generally speaking that works well. In the case of the specific unbranded generics where there is a single supplier, we have seen that there is an opportunity for market abuse, and I agree with my hon. Friend the Member for South West Bedfordshire that the clauses are designed to use the device of price controls to avoid excess profit abuse by individuals in British companies, which we have seen.

I gently remind the hon. Member for Wolverhampton South West that successive Governments since 1957, including the Government whom he proudly supported for many years, had price controls in place for the cost of medicines.

[Dr Whitford]

The Minister was obviously not happy with the amendment on aligning the two schemes, but he talks about a mechanism of price control under clause 4. Will he give us even the broad principle of what he thinks the price control mechanism in the statutory scheme will be?

[Mr Dunne]

The mechanism in the statutory scheme will be to allow the discount to be changed periodically. That will be determined through consultation with industry in the same way as applies in the voluntary scheme.

[Dr Whitford]

To clarify, therefore will the situation continue to be that the statutory scheme is based on a price reduction as opposed to a percentage above a mark being returned to the NHS, as in the voluntary scheme? Will it be a similar mechanism to what we have today?

[Mr Dunne]

I believe that that is the case, but if I have misunderstood the hon. Lady’s question I shall clarify that later in the sitting, if I may. Our intention is to consult on the matter, so the precise mechanism has not yet been finalised; hence there is some uncertainty.

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[Mr Dunne]

I can help the hon. Gentleman directly with a specific example. The Secretary of State already has those powers under the 2006 Act, which the hon. Gentleman’s Government enacted.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Control of maximum price of other medical supplies

[Dr Whitford]

I beg to move amendment 47, in clause 5, page 3, line 39, 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 manufactures, suppliers and distributors of medical supplies as part of the consultation.”.

This is a probing amendment on an issue of concern. The Secretary of State has obviously had powers since 2006, and perhaps earlier, to seek to control the price of medical supplies. That power has not really been utilised, and neither have the informatics of that. When controlling the price of drugs, the quality of those drugs is controlled by the Medicines and Healthcare Products Regulatory Agency so that pushing down the price does not result in loss of quality.

My concern is that, beyond a kitemark or a CE mark, we do not have anything in the United Kingdom that controls quality, particularly of consumables such as swabs and gloves. As a surgeon for 30-odd years, I can tell the Committee that the range in quality of things such as surgical gloves can be immense. A surgeon might use two or three pairs of gloves during an operation. If there is a leak in those gloves that is not visible, it might be only when the surgeon washes their hands afterwards that they see they have blood on their finger, which means that staff are exposed to blood contamination. Poor-quality swabs might result in thread or fluff coming off inside a patient, which can contribute to sepsis. There is no quality controller specific to medical supplies, so if we just drive down the price, we may drive down the quality.

We use a lot of central procurement in Scotland, and NHS National Procurement has helped us to control our prices for everything from consumables through to major machine purchases, which is already saving money for the NHS in Scotland. If there were a reduction in quality, our concern is that it would be UK-wide. It would be something that producers were doing, which would in turn undermine what the devolved Government were trying to do. Procurement remains devolved, but if the quality started to drop overall, that would affect all the devolved health services, as well as NHS England.

The amendment calls for consultation and for consideration of some form of quality regulation or control that would mean those items having to be way above the very basic CE level, at a point considered high enough quality for NHS use.

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[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.

[Dr Whitford]

If there is a move to more central procurement, will the Minister consider some form of quality control regulation or power at that point, so that central procurement is not just driven to accept the lowest price and there is some safety mechanism, in the same way we have the MHRA for drugs?

[Mr Dunne]

We will consult with industry on the impact of the Bill on medical supplies. Although I am not going to give the hon. Lady an absolute assurance that we can introduce a threshold for quality, which is quite hard to prescribe given the immense variety of supplies we are talking about, there is a clear intent that, if we are centralising procurement of equipment, that equipment has to meet a quality threshold in order to be acceptable to the clinician. I understand the point she makes. The intent is not to buy substandard equipment to treat patients, but to remove variability in pricing for the same equipment depending on different purchasers, which is inappropriate and means effectively the taxpayer is the funder of all these different entities.

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[Mr Dunne]

Yes, I think that is the correct answer. We do have those powers under the 2006 Act, but they have not been used, partly because generally speaking medical supplies is a competitive market. We have not seen the kind of abusive price behaviour that we are trying to address elsewhere in the Bill.

[Dr Whitford]

Will the Minister give way?

[Mr Dunne]

I am about to conclude but I will happily give way.

[Dr Whitford]

I would like to clarify the reason for introducing this, if there has not been a problem in the market, as we have seen with the price hikes in generics, and it is much harder to do. Why are the Government extending a power they have had for 10 years but never used?

[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.

[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.

[Dr Whitford]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Mr Dunne]

Clause 5 amends section 260 of the 2006 Act, which enables the Secretary of State to control the maximum prices of medical supplies other than health service medicines. As we have just discussed, the Government have powers to control prices of medical supplies and we are not currently using those powers. It is important that we continue to have those powers, should we decide it is necessary to control prices of medical supplies in the event of market abuse.

With an increasing spend on healthcare products, the Government need the tools to be able to control prices, if there is any indication that medical suppliers do not provide value for money to the NHS and the taxpayer. The measures would ensure that the same enforcement and territorial extent provisions apply to controlling the cost of medical supplies and health service medicines.

Existing enforcement provisions in relation to medical supplies are draconian compared with those for medicines. Currently, a contravention or a failure to comply is in fact a criminal offence in relation to medical supplies, whereas it is not in relation to medicines. We are aligning the enforcement provisions to those for medicines and making them much more proportionate. That is done through clause 7, through consequential amendments. On that basis, I ask the Committee to agree that clause 5 stand part of the Bill.

Oral Answers to Questions

Debate between Philip Dunne and Philippa Whitford

Tuesday 15th November 2016 Commons Chamber

[Mr Dunne]

My hon. Friend will be aware that the sustainability and transformation plans discussed earlier today are designed to bring closer integration of health providers and commissioners within a health system area, such as the east midlands. The ambition is to integrate better health and social care provision to avoid some of the challenges he identifies.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

The A&E target the Minister mentions is actually a measure of the entire acute system. Important in that is the flow of patients from admission through treatment to discharge. In Scotland, delayed discharges have fallen 9% since health and social care were integrated. In England, they have gone up 30%. Does the Minister accept the need to fund social care properly to relieve the back pressure on A&E?

[Mr Dunne]

I listen with great interest to what the hon. Lady says, but I gently remind her of two things. First, as the result of the generosity of the Barnett formula, Scotland receives £1,500 per capita more to spend on health than England. Secondly, the Auditor General for Scotland recently reported that NHS Scotland was failing to meet seven out of eight key targets, including waiting times for A&E.

[Dr Whitford]

I wonder how many targets are being missed in England. The Royal College of Emergency Medicine report demonstrates that in the 176 emergency departments in England there are only enough consultants to provide the cover of one for 16 hours a day. On top of that, rota gaps among junior doctors are causing safety concerns. What exactly is the Minister going to do this winter and will he agree to lift his ban on locum agency staff to help to keep A&Es functioning?

[Mr Dunne]

We recognise that there have been pressures on emergency departments for some years, which is why we have put particular effort into recruiting more consultants. There are, I believe, 50% more consultants working in emergency departments in England than there were in 2010, and 25% more doctors.

Oral Answers to Questions

Debate between Philip Dunne and Philippa Whitford

Tuesday 11th October 2016 Commons Chamber

[Mr Dunne]

I can reassure my hon. Friend that there is considerable excess demand from UK-based students to train to become a clinician in this country—only half of those who apply to train in medical school are accepted at present—so we are confident that there will be plenty of take-up for those extra places. With regard to clinical placements, we are in discussions with universities, colleges and teaching hospitals to ensure that there are adequate numbers of places.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I welcome the 25% expansion in medical student places, but I reject tying that to the elimination of 25% of overseas doctors who currently work in our NHS. With 10% of posts unfilled and ever-rising patient demand, the Secretary of State must know that we will always need international graduates in the future. Does he not recognise that he is creating unrealistic expectations and conflict with this idea of a British-only medical service?

[Mr Dunne]

I am grateful to the hon. Lady for giving me the opportunity to set the record straight and stop this scaremongering, which is undoubtedly unsettling many of the very valuable doctors, nurses and other foreign nationals who are currently providing vital services to the NHS. Last week’s announcement was about adding more doctors to be trained who are UK-based. We are not changing any of the present arrangements for international students being trained here, or doctors and nurses working here.

[Dr Whitford]

The Government might not be changing their position right now, but with one in 10 posts currently unfilled, and given the rhetoric used last week, how does the Minister expect us even to retain foreign doctors, let alone attract them to fill those posts?

[Mr Dunne]

There was no rhetoric used. In making that announcement, my right hon. Friend the Prime Minister used no rhetoric whatsoever regarding the very valuable contribution of foreign clinicians to our health service, and that remains the case.