Oral Answers to Questions

Debate between Philip Dunne and Rob Marris

Tuesday 21st March 2017 Commons Chamber

[Mr Speaker]

The hon. Member for Southport (John Pugh) shoehorned Question 21, which we did not reach, into a Question that we did reach. He blurted it out so quickly that it took us a while to notice that it had absolutely nothing whatsoever to do with the private finance initiative. Very naughty boy!

[Rob Marris (Wolverhampton South West) (Lab)]

PFI always was idiotic. It carried on under the coalition Government and has left a huge financial hangover. Will the Minister have a word with his colleagues in the Treasury, because the Treasury figures on hospital liabilities are different from the figures that some of the hospitals themselves produce? As there is a discrepancy, we do not even know what the liabilities are.

[Mr Dunne]

The hon. Gentleman has been assiduous, as is his wont, in trying to get to the bottom of the costs of the PFI impact on the hospital in his area. If he has a discrepancy, it would be very helpful if he pointed it out to me in writing. I will then respond to him.

Oral Answers to Questions

Debate between Philip Dunne and Rob Marris

Tuesday 7th February 2017 Commons Chamber

[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.

[Rob Marris (Wolverhampton South West) (Lab)]

13. What proportion of prostate cancer patients wait for more than two months to begin cancer treatment after the hospital has received an urgent GP referral.

Health Service Medical Supplies (Costs) Bill

Debate between Philip Dunne and Rob Marris

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

[Rob Marris]

Medical supplies in this part of the Bill seem to be to do with physical equipment. But, again, what is equipment? We can refer to the definitions, which state:

‘medical supplies’ includes surgical, dental and optical materials and equipment”.

Drugs are dealt with elsewhere in the legislation.

I think the Minister has got the point, but I will repeat it very briefly. He is seeking clarification for the Wales legislation through amendment 7 when I understood him to say that he did not think such clarification was needed for the same definition contained in the legislation pertaining to England. I would like him to explain that apparent anomaly. If it is not an anomaly, perhaps he could tell the House that he is going to clarify the definition as it relates to England in the later stages of this Bill.

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

I rise to speak to the new clause, the Government amendments and all other amendments tabled on Report. I want to start by expressing my gratitude to the Opposition Front-Bench spokesmen, who both confirmed their intent to continue in the spirit of constructive dialogue we have had thus far in our consideration of the Bill. I am pleased that they support the Bill’s objectives, and I will seek to respond to their amendments.

Hon. Members will recall that we debated at length in Committee the issue raised in new clause 1. I want to take this opportunity to provide some additional reassurance that this is an important issue for the Government. We have already included in the illustrative regulations for both the statutory scheme, in regulation 32, and the information regulations, in regulation 14, an annual review of the regulations and a requirement to publish our report of each review. These annual reviews go further than the specific single review proposed by the hon. Member for Ellesmere Port and Neston (Justin Madders) in new clause 1, the effect of which would require the Government to only undertake a single review within six months of the Act coming into force.

We accept that reporting is an important principle. However, setting out the requirements in primary legislation is too restrictive. We believe that the proposed single review within the first six months of the Act coming into force would provide an insufficient timeframe in which to assess the impact of the provisions, whereas the annual reviews we have set out in the illustrative regulations in effect place a duty on the Government to review both the statutory scheme and the information regulations to ensure their effectiveness, and to do so every year. Of course these provisions will be subject to consultation as part of the wider consultation on the regulations.

Over time we expect that both the statutory scheme and the information requirements will be amended through their respective regulations to reflect changing circumstances. It is essential that the review and reporting arrangements are able to be similarly flexible so that they remain appropriate to the schemes in operation.

The hon. Member for Ellesmere Port and Neston asked whether objectives should be set out before the regulations come into force. As I have said, the Government will consult on regulations before they come into force. The objectives of the regulations will be explored in the consultation and set out in the Government response to that consultation. I hope that addresses his point.

The illustrative regulations require an annual review to set out the objectives of the scheme, assess the extent to which they have been achieved, and assess whether they remain appropriate. These requirements will be tested through the consultation on the regulations, and we will of course take account of those views.

[Rob Marris]

First, I say again that I am very grateful to the Government for publishing the illustrative draft regulations to help us debate the Bill. Let us consider the provision of information in connection with the draft health service products regulations 2017. Regulation 14(2)(a) states that the report must in particular

“set out the objectives intended to be achieved by these Regulations”,

and then regulation 14(2)(b) says it must

“assess the extent to which these objectives are achieved.”

It seems a bit odd to say that in one review we are going to set out the objective and then decide whether the objective has been achieved or not. That seems, temporally, to be a bit wrong.

[Mr Dunne]

As I have indicated, we intend to undertake these reviews every year. It will probably be impossible to assess in the first review whether the objectives have been achieved—there might be some ability to assess it—but in subsequent iterations we will be able to look back and see how well they have been achieved.

I notice that the right hon. Member for Leicester East (Keith Vaz) is heading for the exit—[Interruption.] He has now resumed his seat. This is not specifically the right point in my speech to pick up on the points he has raised, but I would like to respond to his characteristically constructive contribution on the subject of diabetes. He is the chair of the all-party group on diabetes, and he might recall that I used to be the vice-chair of that group, as I have family members with type 1 and type 2 diabetes. I have considerable sympathy with the points that he made about the importance of adequate advice for individuals who might be unaware that they have diabetes. He also talked about the importance of adopting innovation through NHS treatment of the condition. We share that objective, and nothing in the Bill will do anything other than to continue to encourage innovation. I will be making further remarks, perhaps when the right hon. Gentleman is not with us, on the subject of innovation, but I just wanted him to be aware that I had taken his points on board. He might be disappointed by my conclusion on the specific amendment, but I shall go on to explain how his point is being addressed in other ways.

Returning to new clause 1 and the question of regulations, I wish to make a further point. Much of the information provided to the Secretary of State will be commercially confidential. We touched on this in Committee. I am sure that suppliers have every confidence that the Government will maintain that confidentiality in anything we publish, but it is important to reinforce the principle. This means that there is a limit to the level of detail we are able to publish, and I am sure that the hon. Member for Ellesmere Port and Neston will appreciate the commercial sensitivity reasons involved. Any information we do publish will be at a consolidated level, protecting suppliers’ confidentiality but allowing the Secretary of State to be clear on the basis of the conclusions of his review. We will of course be able to use supporting information to evidence our conclusions.

Turning to the detail of the new clause, its requirements reflect the duties placed on the Secretary of State in the Bill, but I must be clear that the content of such a report should not be restricted and must be able to address the key issues arising during the year that may affect the operation of the schemes. The other significant element of the new clause, which I have touched on in response to the right hon. Member for Leicester East, was discussed at length in Committee. This was the question of whether it would be appropriate for such a report to address matters relating to the NHS duty to promote innovation.

The Government’s position is clear that it is not appropriate to link the measures in the Bill, which relate purely to the cost of medicines and medical supplies, to the NHS duty to promote innovation. Promoting innovation is a high priority not only for the Government and the NHS but for many other stakeholders. Promotion of innovation quite properly requires action across many different fronts, and it would not be possible to quantify the contribution of the schemes in the Bill to that endeavour in any meaningful way. The NHS is already doing great work to promote innovation, and I would like to draw hon. Members’ attention to the latest data from the innovation scorecard, a quarterly data publication showing the uptake of innovative drugs and medical technologies following NICE approval in England. This is now a nationally published statistic.

The hon. Member for Wolverhampton South West (Rob Marris) asked specifically about this in his remarks. I can tell him that the latest publication, on 12 October this year, shows that the rate of uptake for 85 medicines recommended by NICE is increasing, that 77% of those medicines had positive growth uptake between March 2015 and March 2016, and that 54% of the 85 medicines had a growth uptake greater than 10%. These data are made available on a quarterly basis, and hon. Members can follow their progress through the official national statistics.

The Government are taking broader action to secure the UK’s future as an attractive place for the life sciences sector, particularly in the light of the EU referendum and the consequent Brexit. We are clear in our commitment to the life sciences, and to building a long-term partnership with industry. The hon. Member for Wolverhampton South West also asked me to address the question of the NICE process and whether this takes evidence into account. He also asked about the process for the subsequent review of previous decisions. This is a continuous process. It does not happen for every drug all the time, but there is a routine procedure under which, on the basis of new evidence, NICE will look again at a decision and decide whether to uphold or amend it. That procedure could allow drugs that had previously not been approved to become approved on the basis of new evidence, and NICE will look at evidence from wherever it comes. I hope that that reassures the hon. Gentleman.

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[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.

[Rob Marris]

I understand where the Minister is going with that, but I want to caution him. He spoke earlier about flexibility—my word, not his—and his example was that a clinical commissioning group or a medical body might want to spend some of this money on staffing. Owing to the fluctuation to which he refers, however, spending funds on staffing is probably not a good idea.

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[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.

[Rob Marris]

rose—

[Mr Dunne]

I am afraid that I must press on to cover the Government amendments.

Government amendments 1 to 5 address a possible loophole in the Bill. Clause 6 amends the National Health Service Act 2006 to give the Secretary of State the power to make regulations to obtain information from any UK producer that is not an excepted person. A “UK producer” is defined in the Bill as anyone involved in the manufacture, distribution or supply of health service medicines, medical supplies and other related products required for the purposes of the health services in the United Kingdom. An “excepted person” is defined in the Bill as any person providing pharmacy or GP services for the health services in Scotland, Wales and Northern Ireland. The purpose of these provisions was to reflect the agreement with the devolved Administrations that, for devolved purposes, they would collect information from pharmacies and GP practices in their nation. However, there may be circumstances in which a company supplies products in the devolved Administrations and also in England, and could claim that the provision, as drafted, would allow it to become an excepted person, because it was operating in the devolved Administrations. That is clearly not the intent of the Bill, so we have proposed these amendments to address this loophole.

Government amendment 6 is a minor consequential amendment that was unintentionally omitted when the Government tabled amendments in Committee. The amendment relates to clause 6, which provides the Secretary of State with the power to disclose information to the list of bodies set out in proposed new section 264B. The amendment clarifies that the list of people to whom the Secretary of State can disclose information includes those persons providing services to the Regional Business Services Organisation in Northern Ireland; it had previously been omitted. I hope that hon. Members will accept these amendments.

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[Mr Dunne]

I beg to move, That the Bill be now read a Third time.

As we have already discussed today, it has been a pleasure to take this short, albeit technical, Bill through the House with such a wide degree of consensus from all participating parties.

We have had a very constructive debate. Points have been raised by hon. Members from both sides of the House through amendments and in debate, and we have sought to take them on board. We will look to take some of them forward as the Bill moves to the other place.

I thank Opposition Members for their contributions. They include the hon. Members for Ellesmere Port and Neston (Justin Madders), for Burnley (Julie Cooper), who is just about in her place, and for Central Ayrshire (Dr Whitford), who leads for the Scottish National party. We have had some strong contributions from Back Benchers, including the hon. Member for Wolverhampton South West (Rob Marris), who served on the Committee in his usual diligent fashion, and the right hon. Member for Leicester East (Keith Vaz). We have also had contributions from Government Members. In particular, I thank my hon. Friends the Members for Peterborough (Mr Jackson) and for Torbay (Kevin Foster), who was active in Committee. I also thank my Parliamentary Private Secretary, my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), and the Whips on both sides of the House.

More than £15.2 billion has been spent on medicines in the most recent full year—an increase of nearly 20% since 2010-11 and of over 7% since last year. The purpose of the Bill is to close loopholes to ensure that the NHS secures as much value for money as it can from this very significant spending on pharmaceutical and medical products. We are looking to clarify and modernise provisions to control the cost of national health service medicines and to ensure that sales and purchase information can be appropriately collected and disclosed.

Briefly, the Bill puts it beyond doubt that the Secretary of State can require companies in the statutory scheme to make payments to control the cost of NHS medicines. That is expected to save the health service across the UK some £90 million a year.

Secondly, the Bill would enable the Secretary of State to require companies to reduce the price of an unbranded generic medicine, or to impose other controls on that company’s unbranded generic medicine, even if the company is in the voluntary scheme—currently the 2014 pharmaceutical price regulation scheme—for its branded medicines.

Members will recall the examples raised on Second Reading and in Committee of companies charging the NHS unreasonably high prices for unbranded generic medicines. Without competition, companies have raised prices totally unreasonably—in the most extreme case by as much as 12,000%. Companies can do that because we rely on competition to keep prices of unbranded generic medicines down. Although that generally works well, the Government need the tools to be able to address the situation in which a small number of companies are exploiting the NHS, patients and the taxpayer by raising prices when there is no competition.

Thirdly, the Bill enables the Secretary of State to make regulations to obtain information on sales and purchases of health service products from all parts of the supply chain, from manufacturer to pharmacy, for defined purposes. These purposes are reimbursement of community pharmacies and GPs, determining the value for money that the supply chain or products provide, and schemes to control the costs or prices of medicines. By bringing these requirements together, the Bill streamlines and clarifies all the relevant requirements currently in place, providing a statutory footing for them all. This includes the existing statutory requirements already in the NHS Act 2006, and those agreements that currently have a voluntary basis only.

In Committee, the Government tabled a number of important amendments to reflect the views and requests of the devolved Administrations on how they want to apply the information power in their territories. We tabled the amendments following constructive discussions that resulted in agreement that the UK Government will collect information from wholesalers and manufacturers for the whole of the UK. It would not make sense for each nation to collect its own information from wholesalers and manufacturers, which would lead to duplication of effort and unnecessarily increase costs across the system.

We have also agreed that each nation will collect information from its own pharmacies and GPs. The devolved Administrations will have full access to all the information that the Government collect. I have committed to develop a memorandum of understanding to underpin these arrangements, and my officials are working closely on that with officials in the devolved Administrations.

To ensure that the Bill makes the Government’s intentions absolutely clear, we tabled a small number of minor and technical amendments on Report to close a potential loophole that would have enabled some companies not to provide us with any information if they also provided pharmacy or GP services to the devolved health services.

This is a relatively small Bill, technical in nature, which has received considerable support from across the House, for which I am extremely grateful. The Bill will help to secure better value for money for the NHS from its spending on medicines, while ensuring that the decisions made by the Government are based on more accurate and robust information.

I thank you, Madam Deputy Speaker, for presiding over today’s debates. I also thank the members of the Panel of Chairs, especially my hon. Friend and neighbour, the Member for Telford—

[Rob Marris]

The Wrekin.

[Mr Dunne]

I stand corrected—my hon. Friend the Member for The Wrekin (Mark Pritchard), under whose chairmanship I served for the first time. Finally, I thank the parliamentary Clerks and counsel, Hansard and the Doorkeepers for helping us to bring the Bill to its conclusion today.

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

Debate between Philip Dunne and Rob Marris

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

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

Mr Pritchard, thank you for calling me and, more particularly, for taking time out of your schedule to chair this important sitting.

On amendment 44, I was interested in the comments of the hon. Lady about the motivation behind it, with which I have some sympathy. I hope that what I say will reassure her that her amendment is unnecessary.

The amendment would require income from the pharmaceutical price regulation scheme and the statutory scheme to be ring-fenced to fund and increase access to new and innovative medicines and treatments. As a Government, we are committed to ensuring that patients have faster access to new and innovative medicines and treatments—I mention briefly the accelerated access scheme that we have introduced.

The hon. Lady touched on the compelling and sometimes tragic cases of individual constituents, friends and relatives seeking to get access to innovative drugs, in particular once those drugs have become authorised. Between 1 March 2000 and 30 June 2016, NICE, the National Institute for Health and Care Excellence, made individual recommendations for 646 separate propositions, 81% of which were recommended or optimised, so there is a steady track record of introducing innovative treatments and, in particular, drugs into our health service. That is done, properly, through the independent NICE structure. I am sure we will talk more about that in Committee.

[Rob Marris (Wolverhampton South West) (Lab)]

On the number of drugs to which the Minister referred, will he give an indication now or later of how many, if any, of those drugs were repurposed? I am thinking, for example, of a drug that has recently had a lot of publicity; it is primarily used for osteoporosis, but there are indications that it may be very helpful with breast cancer. What about such repurposed drugs, as opposed to brand new drugs?

[Mr Dunne]

I do not have that figure in my head, as the hon. Gentleman might expect. I hope to get inspiration during the sitting and will try to address that question later.

We know that investing in new and innovative medicines and treatments, where they are proven to work and are a clinical priority, has the potential to transform the care of patients and to improve outcomes, which is what we all want. However, it is a fundamental principle of NHS funding that it should be allocated according to clinical priorities based on the judgment of clinical commissioners. That may include new treatments, but it may include scaling up older effective treatments—through repurposing, as indicated by the hon. Gentleman—or investing in more staff.

We understand the intention behind the amendment, but it is for NHS England and clinical commissioning groups to determine clinical priorities and to spend that money on what is clinically most important. It is also important to point out to the hon. Lady that income from the voluntary and statutory schemes can fluctuate from year to year, so allocating such income by means of a ring fence to a specific area, such as new medicines, brings risk because in some years the income received may go down. The perverse consequence of the amendment’s ring-fencing may therefore mean less money being spent in a subsequent year, in the event of the scheme not generating an increase in income. That would disadvantage patients by making treatment dependent on income from medicine pricing schemes, which we do not think should be the determinant of available medicine.

--- Later in debate ---

[Rob Marris]

The Minister was talking about such decisions being clinically led. Will he therefore assure the Committee that the decision to cut spending on public health in England, to put the money into frontline medical services, was a clinical decision?

[Mr Dunne]

As the hon. Gentleman knows, decisions to allocate spending across the responsibilities of the Health Department were determined as a result of the spending review last year. The decisions within the NHS that I am talking about, on treatments, rather than preventive public health, are determined by clinicians.

Separate to the Bill, 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. For example, the recently published accelerated access review 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. 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 a number of 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, published quarterly. It is designed to help users—clinicians, patients, commissioning groups, Government and other stakeholders—to understand and monitor the uptake of innovations in the NHS and should ultimately be used to promote an equitable spread of clinically effective, cost-effective innovations.

I hope that having heard in particular what I said about the way in which income from these schemes does not rise in a continuum but fluctuates, the hon. Member for Burnley will recognise that the amendment could have the adverse consequence of leading to a reduction in funding available for medicines.

--- Later in debate ---

[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.

[Rob Marris]

The Minister read out what I understood to be the role of NICE. May I focus for a moment on the words “value for money”? My understanding is that if NICE in England says that a particular medicine—perhaps a new medicine or a repurposed medicine—is value for money, then because that cost-benefit analysis has taken place, the drug should be freely available to clinicians to prescribe in medically appropriate cases. However, we are hearing quite a lot of stories, particularly about the prophylactic HIV drug or hepatitis C drugs, of when that is not the case. In other words, NICE says that a drug is value for money, but clinicians are blocked from prescribing it, even when they think it would be medically efficacious for their patient. Why is that?

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[Mr Dunne]

We are anxious to ensure that we do not inadvertently introduce a regime that might cause difficulty when there might be a valid reason for increasing a drug’s price significantly. That was the justification in the past for not addressing the issue, because abuses were seen to be pretty isolated. However, in the past two or three years, the prices of more drugs have risen seemingly unjustifiably. That is the justification for introducing these measures.

I recognise that there may be occasions when a manufacturer incurs some additional costs: for instance, if a production run or line has finished and the manufacturer must start a new line or restart an old one, that would lead to a justifiable price increase. The clause allows us to take action where we suspect a price has risen excessively. The rest of the Bill provides opportunities for the Department to gain information about the cost of supplies, which allows us to get a better handle on when we think an increase has been unjustifiable, and identify that more rapidly. [Interruption.] Does the hon. Member for Wolverhampton South West want to intervene, or is he just poised in an energetic way?

[Rob Marris]

I am always ready.

[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.

--- Later in debate ---

[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.

[Rob Marris]

What a pleasure to appear before you for the first time, Mr Pritchard. As you know, my mother is one of your constituents and was quite a frequent correspondent. She is now in quite frail health so I suspect that you have not heard from her recently, but I thank you for your courtesy in your replies to her over the years. It is a particular pleasure to appear opposite a fellow west midlands MP, the Minister, who represents Ludlow, the constituency in which my mother used to live. She is still in the same house, but the constituency boundaries have changed.

[Mr Dunne]

She may move back again.

[Rob Marris]

Indeed. I very much welcome clause 3 because it is to do with extending the statutory scheme. The helpful library briefing cites the Department of Health consultation from December 2015, which points out:

“In 2014 the statutory scheme covered around 6% of branded medicines sales in the UK”,

in contrast to the voluntary scheme, which covered about 75%. Those are the relative sizes of the schemes.

The Minister said—forgive me that this is not an exact quote, but I do not write that fast—that one of the effects of the clause 3 changes will be to broaden the statutory scheme to cover companies that have a mixed portfolio of branded and unbranded drugs, and are members of the voluntary scheme. As he pointed out, the clause clarifies the power of the Secretary of State to make the statutory scheme—something that was debated or contested by some companies.

In particular, I welcome the clause philosophically or ideologically because it amends section 263 of the National Health Service Act 2006—a Labour Act for which I voted proudly. Section 263(1) of that Act provides the Secretary of State with the power to make a statutory scheme for the purposes of “limiting the prices” or, as in section 263(1)(b) “limiting the profits”. This is something of a damascene conversion for this Government.

I hope, Mr Pritchard, that you will give me a bit of latitude, as I am about to read a quotation from this morning’s edition of The Times. An article entitled “Energy companies face caps on ‘rip-off’ tariffs” says:

“Measures designed to cap the household energy bills of millions of British families on ‘rip-off’ standard variable tariffs are being considered by ministers.”

I think we heard about that in my party’s manifesto at the general election; there has been a damascene conversion by the Government. That article also says:

“Greg Clark, the business and energy secretary, said: ‘I have made clear to the big firms that they must treat customers properly or be made to do so.’”

--- Later in debate ---

[Mr Dunne]

Thank you very much indeed, Mr Pritchard. I hope I am not going to disappoint you, given that build-up.

As ever, I am delighted to see the hon. Member for Wolverhampton South West, who is almost my parliamentary neighbour and with whom I served on countless Finance Bill Committees when he was previously in this place. He always entertained the Committee with his interventions, some of which were occasionally on the subject of the Bill, rather like on this occasion. He has craved your indulgence, Mr Pritchard, and I am glad that you allowed him to point out what I am going to take a stage further, if you will indulge me a little.

The Conservative party is the party of the working man in Britain in 2016. As the hon. Gentleman may have heard, because he is a keen student of these things and because the Conservative party conference was held in Birmingham this year, which is not too far from his constituency, the Home Secretary made it clear that she regards the Conservative party as the party of the consumer in 2016. I will take that one step further.

[Rob Marris]

Do you mean the Prime Minister?

[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.

--- Later in debate ---

[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.

[Rob Marris]

On the detail, while the Minister is pondering, we talked about the date of December 2013 for the 15% price reduction—the questioning of the hon. Member for Central Ayrshire particularly related to that—but I understand that medicines launched after that date are not in the statutory scheme.

At some point—perhaps later in the sitting—will the Minister clarify whether the Government intend that medicines launched after December 2013 could be in the statutory scheme? Might it be altered in that way to encompass that possibility?

[Mr Dunne]

Companies are free to join the voluntary scheme. If they choose not to, but they want to sell unbranded generics into the NHS, they will be caught within the statutory scheme. The statutory scheme is the default scheme under which unbranded generics are sold into the NHS. It will pick up new unbranded generics as they come forward, unless their manufacturers are in the voluntary scheme and choose to have them dealt with through it.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

Clause 4

Enforcement

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

[Mr Dunne]

The clause amends sections 265 and 266 of the 2006 Act in relation to enforcement. It ensures that the existing enforcement provisions in the Act apply to the contravention of any of the new powers in clauses 1, 2, 3 and 5. The maximum penalties are a single penalty of £100,000 or £10,000 per day for the duration of the contravention. The Secretary of State has the power under the 2006 Act to increase or further increase, by order, those maximum penalties.

The clause also ensures that provision can be made in regulations for companies to appeal any enforcement decisions under the new information powers in clause 6. That simply extends the possibility of appealing any enforcement decision under the information powers. Furthermore, clause 4 clarifies the fact that payments or penalties can be recovered as a civil debt through the courts.

In light of the Secretary of State’s flexibility to amend the penalty amounts in future, I hope the Committee will recognise that the proposed penalties are appropriate, but in the event they are deemed not to be appropriate, there is sufficient flexibility in the clause to allow the Government of the day to amend the penalties to whatever they deem appropriate.

On that basis, I ask the Committee to agree that the clause stand part of the Bill.

[Rob Marris]

Will the Minister—if not now, later—give other examples of where a Secretary of State has such apparently wide-ranging powers to set a penalty? In any judicial system there is often discretion among the judiciary as to the penalty imposed on a wrongdoer, but this is not a judicial system. It is a quasi-judicial system, at best. The Government seem to be taking broad powers, and it may be that Governments, including Governments under which I served, have done so in the past, but I cannot think of any examples.

I hope the Minister can provide clarity, because the Secretary of State will be able to exercise the new powers not only by making regulations—such regulations, of course, would come before the House—but by giving directions, which is a much more elastic and broader term. A little clarity on that would be helpful.

[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

--- Later in debate ---

[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.

[Rob Marris]

rose—

[Mr Dunne]

I think the hon. Gentleman is looking to intervene—or is he stretching again?

[Rob Marris]

I urge the Minister to have a greater familiarity with the quality of surgical gloves, which are great for delivering leaflets. They give a bit of weather protection. You don’t have to lick your finger to get the next leaflet, you don’t get letterbox knuckle, and—best of all—the dog gets latex, not flesh.

[Mr Dunne]

Again the hon. Gentleman strays, but not too far beyond his brief, because surgical gloves have been raised now by three members of the Committee. I am grateful for that tip. With the onset of winter weather, that could be quite useful for those of us who will be going to Sleaford and North Hykeham over the next few weeks to leaflet. I will take it upon myself to bring a box of surgical gloves when I visit.

With your indulgence, Mr Pritchard, I will take this opportunity to pick up the points made by the hon. Member for Central Ayrshire about the way the statutory scheme is intended to operate. To be crystal clear, clause 2 relates to unbranded generics and allows us to make regulations and directions to specific companies, while clause 3 relates currently only to branded medicines but could, if we wanted it to, also relate to unbranded medicines in future. The statutory scheme will be used where a company is not a member of the voluntary scheme, as I indicated to the hon. Member for Wolverhampton South West. The statutory scheme is intended to operate through setting a percentage of sales to be paid to the Government. Details of the scheme’s operation will be set out in regulations. A draft of the illustrative regulations is available to the Committee.

I will revert to the hon. Lady’s amendment 47. The Government do not currently control prices of medical supplies. As was referred to earlier, the MHRA is responsible for the safety, efficacy and quality of medical supplies. That provides some check of quality in relation to not only medicines but medical supplies.

[Rob Marris]

The Minister has lost me there. It is probably my ignorance, but I thought he just said that the Government do not currently control the cost of medical supplies. If that is what he said, is that because they do not use the power they already have under section 260(1) of a 10-year-old Act?

[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.

--- Later in debate ---

[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.

[Rob Marris]

May I again congratulate the Government? This appears to be the only piece of criminal legislation I have ever heard of that apparently has a 100% deterrence rate. That is, the Government have the power to penalise a course of action and, as far as the Government are aware, no company is pursuing such a course of action, meaning that Government do not have to exercise their powers, criminal or otherwise. What a great piece of legislation passed by the Labour Government in 2006.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Mark Spencer.)

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

Debate between Philip Dunne and Rob Marris

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

[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.

[Rob Marris]

In the Minister’s helpful letter to the hon. Member for Vale of Clwyd, sent yesterday, he said:

“At this moment the Government does not foresee any routine collections for those involved in the manufacture, distribution or supply of medical supplies”.

I just understood the Minister to say—he will correct me if I misunderstood—that in certain non-routine circumstances in relation to medical supplies, the Government may wish to have information. I understand that, but I must say to him that that might create a problem for those medical suppliers that are not routinely supplying information, but feel that they still have to keep all the information as outlined in the clause just in case a little way down the road the Government decide that the circumstances are exceptional. Will he clarify that?

--- Later in debate ---

[Mr Dunne]

You will be pleased to hear, Mr Pritchard, that I have nothing to add in the clause 7 stand part debate, and I commend the clause to the Committee.

[Rob Marris]

I hope the Minister does have a bit more to add. Clause 7 is very much the twin, or the other side of the coin, of clause 6. Clause 6 introduces big changes to the information supply regime, which we have just discussed. Clause 7 is getting rid of bits of the hitherto existing supply regime—not all of it, but bits. I want to probe him a little bit on that.

On page 7 of the Bill, clause 7(16) states:

“In Schedule 22 (provisions in relation to section 260) omit paragraphs 2 to 11.”

Schedule 22, paragraphs 2 to 11, of the National Health Service Act 2006 is about enforcement. I am probing the Minister, given our discussion this morning when I said, in relation to some parts of the Bill and this area of human endeavour, that it was the only area I am aware of where a criminal penalty regime appeared to have been 100% successful and there had been no such prosecutions—intimating, although not proving, that that wrongdoing had been dissuaded by the legislation. We then come to clause 7, and the enforcement regulations and regime are altered. I want to be reassured by the Minister that the alterations do not weaken the enforcement regime. I am applying the Marris test to it; I cannot read absolutely every word of the 2006 Act, which I was involved in 10 years ago and runs to 258 pages—I will not do that—but what is being removed is a whole lot longer than what is being substituted in. That may be a welcome shortening, clarification and simplification of the law, or it may be a weakening of enforcement. I hope that the Minister can elucidate to the Committee, in broad terms, whether it is the former or the latter.

[Mr Dunne]

I am astonished that the hon. Gentleman does not have complete recall of everything that was involved in the 2006 Act, given the assiduous way in which he approaches legislative scrutiny. Accepting that uncharacteristic lapse in his memory, I should perhaps have said that the subsections in clause 7 merely bring forward the relevant consequential amendments, following on from the earlier clauses, to the National Health Service Act.

This morning, we discussed the one material change in enforcement that we are introducing through the Bill: reducing the criminal penalty currently available under the 2006 Act for bad practice uncovered in the supply of medical supplies, so that it is in line with the enforcement regime for medicines. To that extent, if the threat of criminal sanction were—as hinted at by the hon. Gentleman—the primary reason for the lack of convictions of a criminal nature for the supply of medical supplies, he might have a legitimate concern that we are watering down an enforcement regime that had worked so effectively that there had been no prosecutions. I would gently say to him that, as far as I am aware, not only have there been no convictions, but there have been few if any—I hesitate to say none, because I might not be able to prove that—prosecutions under those sections in the 2006 Act against suppliers of medical supplies. That is as much because it has not been brought to the attention of the Department that there is abusive pricing behaviour happening in the medical supplies marketplace. For that reason, there have been no prosecutions and, therefore, no convictions. That is why we think it appropriate to remove the criminal sanction, so we may bring it into conformity with enforcement actions for medicines.

To put it in ideological terms, this is part of reducing the burden on business, because the power has proved to be one that is unnecessary for the Government to have—the power to introduce a criminal enforcement regime has not been used since its introduction by the hon. Gentleman in 2006.

[Rob Marris]

I understand what the Minister is saying. I am not in any way suggesting that the overwhelming majority of medical suppliers are on the straight and narrow only because they know what the penalties would be for going off the straight and narrow. However, he needs to be a little careful about the direction of his argument, because—I think he would agree, but he can say if he does not—if crime in the United Kingdom fell to zero, I would not suggest getting rid of all police officers. I would say, “They are doing a fantastic job and it’s great that we have all these law-abiding citizens. Let’s just encourage them to carry on being law-abiding by making it clear that there are enforcement mechanisms and penalties for not being so.” That is the philosophical, if not ideological, approach.

[Mr Dunne]

I agree with the hon. Gentleman. Neither he nor I is suggesting that there is cause and effect here in the element of the enforcement penalty element—

[Rob Marris]

I don’t know.

[Mr Dunne]

Well, we do not believe so. What we do believe is that it is more important for us to have a consistent approach to enforcement when it comes to any future breaches or alleged breaches in respect of supply to the NHS. Frankly, it will be easier for the NHS to manage and easier for the industry supplying us to operate if they are all operating within the same enforcement regime. Therefore, I commend the clause to the Committee.

Question put and agreed to.

Clause 7, as amended, accordingly ordered to stand part of the Bill.

Clause 8

Extent

Amendments made: 36, in clause 8, page 7, line 29, at beginning insert “Subject as follows,”.

This amendment is linked to amendments 37 and 38.

Amendment 37, in clause 8, page 7, line 29, at end insert—

“( ) Section (Provision of information to Welsh Ministers) extends to England and Wales only.”

This amendment is linked to amendments 36 and NC1. Its effect is that the provision made by NC1 will extend to England and Wales only.

Amendment 38, in clause 8, page 7, line 29, at end insert—

“( ) Section 7(A1) extends to Scotland only.”—(Mr Dunne.)

This amendment is linked to amendments 31 and 36. Its effect is that the provision made by amendment 31 will extend to Scotland only.

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

--- Later in debate ---

[Mr Dunne]

Briefly, clause 9 deals with the commencement of the Bill and ensures that clauses 1 to 8 come into force as determined by regulations. As I have indicated, there will be a public consultation on the regulations. It is the Government’s intent that that consultation take place over the winter and it will conclude to enable the Bill to receive Royal Assent, following its passage through the House of Lords, by the end of the current Parliament.

[Rob Marris]

That is half of what I wanted to know—the Bill will have Royal Assent by then. Will the Minister say when it might come into force, pursuant to clause 9(2)?

[Mr Dunne]

The Department’s intent is for it to come into force as soon as is practicable. The timetable for their lordships’ House in determining legislation is way above my pay grade and, I would suggest, the hon. Gentleman’s. We are therefore in the hands of the parliamentary authorities, but it is certainly our hope and expectation that, with effect from 1 April, the regulations— [Interruption.] I am seeking inspiration from the Department.

--- Later in debate ---

[Mr Dunne]

I thank the hon. Member for Ellesmere Port and Neston for raising the issue of reporting requirements, which is very important. I will come on to explain what is currently proposed through regulation. The hon. Gentleman and the hon. Member for Central Ayrshire mentioned the risks to investment in this country for our critical life sciences and pharma industries, which is a legitimate concern that the Government share. Irrespective of the manner in which Brexit takes place, it is important that we maintain the UK as a vibrant centre for such investment. We are aware of concerns from industry about the wider landscape, including Brexit, but the Bill is about getting value for money for the NHS and the taxpayer. It is just one element of the action that the Government are taking in the field of medicine and life sciences. Key industry stakeholders have indicated their support for many of the provisions in the Bill, as we heard in last week’s oral evidence session, and for the broad principles of aligning the voluntary and statutory schemes and taking action against those companies that have made unjustified price hikes.

Separate from the Bill, the Government are taking action to secure the UK’s future as an attractive place for the life sciences sector. We are clear in our commitment to life sciences, and to building a long-term partnership with industry. As an example, I draw Members’ attention to the accelerated access review, which made recommendations on reforms to accelerate access to innovative medicines and medical technologies for NHS patients. The Government and our partners are considering those recommendations, and we will respond in due course. We want to make the UK the best place in the world to design, develop and deploy life sciences products. We do not believe that the Bill will have any material impact on that effort, other than the minor impact noted in the impact assessment, which was referred to by the hon. Gentleman.

I point Committee members to the illustrative regulations for both the statutory scheme and the information provisions. First, the final regulation—regulation 32 on page 16 of the draft regulations—refers to the publishing of an annual report on the impact of the regulations. I think that is what the new clause is calling for, but it is already intended in the regulations. Secondly, the final regulation of the information provisions—regulation 14 on page 8—refers to the publication of a review of the information requirements we are proposing.

I accept that reporting is an important principle, but we believe that setting out the requirement to do so in primary legislation is too restrictive. It is expected that, over time, both the statutory scheme and the information requirements will be amended through their respective regulations to reflect changing circumstances. It is essential that the review and reporting arrangements can be similarly flexible so that they remain appropriate to the schemes in operation. Were the new clause introduced as the hon. Gentleman proposes, there would be a lot of prescription in primary legislation. Given the pressures on legislative time, we do not believe that that is the right way to do it.

I reassure Opposition Members that our illustrative regulations require an annual review to set out the scheme’s objectives, and to assess the extent to which our objectives have been achieved and whether they remain appropriate. Those requirements will be tested through the consultation on the regulations. We will of course take account of the views expressed. Much of the information provided to the Secretary of State will be commercially confidential. I am sure that suppliers have every confidence that the Government will maintain that confidentiality in anything they publish, but I want to take this opportunity to reinforce that principle.

[Rob Marris]

If the draft regulations are to pass into legislation as currently drafted, I congratulate the Government on the annual review in draft regulation 32 and its Doppelgänger in draft regulation 14. They are excellent, because they actually talk about assessing the effectiveness, or otherwise, of a particular piece of legislation. That is often sorely lacking in this place, so I offer my congratulations.

[Mr Dunne]

Rare praise indeed from the hon. Gentleman. That is definitely going to go down in the annals of the Wolverhampton Echo, which I am sure will attribute an appropriate front page to that praise for the Government from the Member of Parliament.

To revert to where I had got to, I am sure hon. Members appreciate that there is clearly a limit to the level of detail we are able to publish, and I am sure that hon. Members appreciate that. Any information that we publish will be at a consolidated level, protecting suppliers’ confidentiality, which I have touched on several times, but will allow the Secretary of State to be clear on the basis of the conclusions to his review. We will, of course, be able to use supporting information to evidence our conclusions.

Turning for a moment to the detail of the proposed new clause, while the requirements set out in it reflect the duties placed on the Secretary of State in the Bill, I must be clear that the content of such a report should not be restricted. It must be able to address key issues arising during the course of the year, in the case of the annual report, and during the seven-year duration of the information regulations, in the event that such implications might have an impact on the operation of the schemes. Flexibility is at the heart of our proposals to address the issue through regulations. It would not be appropriate for such a report to address matters relating to the NHS duty to promote innovation. That is the one point of more substantive difference that we have with the drafting proposed by the hon. Member for Ellesmere Port and Neston.

We have already discussed the Government’s position on innovation. We are very clear that we are for it, as is the hon. Gentleman. However, we do not think it is appropriate to link measures in the Bill to that issue, which is a wholly different and much more wide-ranging issue than the narrower one of pricing and the cost of the medicines and medical supplies.

--- Later in debate ---

[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.

[Rob Marris]

The Minister says that the Government have the power. He may well be right, but for us lay people these are quite complex issues. The power to which he adverted is section 262 of the 2006 Act, which, as far as I can see, is not amended by clause 7 of the Bill. As I understand it, section 262 continues unamended. Section 262(2) says:

“The powers conferred by this section are not exercisable at any time in relation to a manufacturer or supplier to whom at that time a voluntary scheme applies.”

This may well be my ignorance when it comes to topical medicines, specials and so on. Perhaps all specials are produced by manufacturers or suppliers that are not in the voluntary scheme. I can see the possibility. If the Minister can confirm that, I will see that section 262 does not apply.

[Mr Dunne]

The hon. Gentleman has again surprised me by apparently not being as attentive as usual to the comments that I made earlier. I said while introducing the new clause that manufacturers or importers of specials are generally not in the voluntary scheme. There may be some exceptions, but by and large, they are not. Therefore, we are in a position to limit the price of specials, but as a rule we have not adopted that power.

[Rob Marris]

That is helpful of the Minister, but it still confuses me a bit, and I hope that he can help to elucidate. He said that manufacturers and suppliers are not generally in the scheme; that is the adverb that he used a moment ago. That suggests to me that some of them might be, and would therefore not be subject to the section 262 price controls, which he prays in aid when he says, as I understood him to say to the hon. Member for Central Ayrshire, “Nice try, but no cigar. We’re not going to accept this.” One reason that he gave—not the only reason—was that we already have the power. The adverb “generally” suggests to me that in relation to some companies, we do not.

[Mr Dunne]

But this applies to all companies in the voluntary scheme. There is no particular difference between a special and a non-special. If a company is supplying products in the voluntary scheme, it is in the voluntary scheme. Therefore, it is at the negotiating table when it comes to considering the circumstances in which it supplies those products. If the company is in the scheme, that includes the specials.

[Rob Marris]

I thank the Minister; that is helpful. He is on top of his brief, as ever, and needed no inspiration to tell me that. It is helpful. The power does exist. I would like to ask the hon. Member for Central Ayrshire, because she has considerable expertise in the field. My expertise, such as it is, is as a lawyer. I see in her new clause the words

“ unlicensed medicinal products for human use”.

She may be able to tell me, because it is her new clause and she may have been looking at this issue. Where in the 2006 Act, or indeed in the Bill, although I think not, can we find what that phrase means? It may well be understood by medics—the topicals, the specials and so on—but it may not be understood by judges, for example. Can she help me on that when she winds up this debate? Otherwise, it seems to me as a layperson that the phrase

“ unlicensed medicinal products for human use”

could cover homeopathic so-called remedies. I do not think that the Secretary of State should be reviewing the pricing of homeopathic remedies.

To make my position clear, I think that homeopathy is bad science and a load of nonsense except for the placebo effect, but I use it as an example of unlicensed products that claim to be medicinal. I suspect that the hon. Member for Central Ayrshire would agree with my broad characterisation of homeopathic so-called medicines, apart from the placebo effect. What does that phrase in her new clause mean, and is it defined anywhere in law, or is it so obvious to medics that they and everybody in the pharmaceuticals business know what it means?

--- Later in debate ---

[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.

[Mr Dunne]

I am sure that you share, Mr Pritchard, my pleasure that the Committee has had the benefit of the hon. Gentleman’s forensic scrutiny and his particular facility for not only the English language but its parliamentary use. If we had not had a new clause tabled by him we would have all gone away deeply disappointed. I am grateful to him for taking such trouble to table the new clause and to explain its intent.

I can assure the hon. Gentleman and the Committee that MRI scanners, by way of example, and all other investigative medical supplies are covered by the current definition of “medical supplies” in the 2006 Act. When looking at the definitions in the first draft of the Bill, I had a concern that we were describing products too widely. My concern was not that we would exclude specialist medical equipment but that we might include other materials used in the construction of buildings used by the health service—for example, bricks—as an object for price control, which clearly is not the intent. We looked carefully at the definitions, which is why I can say with some confidence that the hon. Gentleman’s new clause is unnecessary.

I will explain that more specifically. Section 260 of the 2006 Act makes it clear that “medical supplies” should be read in the context of medical supplies required for the purposes of the health service. That excludes all medical supplies not destined for the health service. MRI scanners clearly are destined for and used in the health service. Secondly, section 260 provides examples of products that would be included by the term “medical supplies” and does not limit it to those products.

The Government consider that the current definition of “medical supplies” already includes the examples given by the hon. Gentleman and other investigative products and that there is no need to make the proposed amendment. We are concerned that by including further examples and trying to provide a definition that meets the hon. Gentleman’s intent, we might inadvertently find ourselves excluding other things that are in fact included within the more general description of medical supplies. The current definition is sufficiently broad to cover all medical supplies required for the purpose of the health service. Notwithstanding the hon. Gentleman’s enthusiasm, I encourage him to withdraw the new clause.

[Rob Marris]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Mr Dunne]

We are now at the conclusion of our deliberations. Thank you very much indeed, Mr Pritchard, for using your new-found experience in chairing Bill Committees to such good effect. You have conducted our affairs in a characteristically skilful way, and I am grateful to you, the Clerks and the Doorkeepers for managing the Divisions. I am grateful to the Front-Bench spokesmen from both the official Opposition and the SNP, as well as to all Back Benchers who have contributed to our deliberations. We have given this short Bill adequate and appropriate scrutiny, and I hope it will proceed to consideration on Report, where it will get continued consensual support across the House, which is, frankly, a joy to participate in.

Health Service Medical Supplies (Costs) Bill

Debate between Philip Dunne and Rob Marris

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

[Mr Dunne]

Just to reassure the hon. Lady, I can tell her that the establishment cost for each pharmacy is currently £25,000, and there will be a reduction in that cost rather than a much larger cost. She must be referring to companies that have several establishments, rather than to individual ones. I will touch on the points that she has raised about information gathering in a moment.

We have heard a number of allegations during the debate, starting with those made by the hon. Member for Ellesmere Port and Neston (Justin Madders), who I am sure will be joining us shortly, that the Conservative party appears to have broken out in a rash of Corbynism. I can assure the hon. Gentleman categorically that that is not the case. What we are seeking to do through the Bill is address points, which have been made by hon. Members on both sides of the House, about the potential for exploitative pricing, particularly of unbranded generics that are of low volume, in circumstances where there is no competition from an alternative supplier in the market. I believe that there is considerable agreement on that across the House.

I welcome the support for the Bill from the Labour Front Bench, from the Front Bench of the Scottish National party and from the Liberal Democrat spokesman, the right hon. Member for North Norfolk (Norman Lamb). They all support the principles behind the Bill. I look forward to what I hope will be a rapid conclusion to proceedings on this short Bill in Committee. Doubtless hon. Members will be raising important points in Committee, but I am sure that we will continue to have constructive contributions throughout.

The hon. Member for Ellesmere Port and Neston mentioned difficulties of access and funding for new medicines. These points were also raised by the hon. Member for Central Ayrshire (Dr Whitford). The NHS is investing in innovative medicine and, in the first year of the current voluntary scheme, medicines covered by the innovation scorecard saw an increase of more than 18% compared with growth of about 5% in medicines not on the scorecard. That illustrates that we are prepared to fund patients’ use of innovative medicines under the existing scheme. However, we recognise the need to continue to ensure patient access to new medicines. That is why my right hon. Friend the Secretary of State referred earlier to the accelerated access review, which was announced earlier today. That will accelerate the speed at which 21st-century innovation in medicine and medical technologies can be taken up by patients and their families through the NHS. That will present a real advantage—bringing forward innovations from pharmaceutical companies, not only in this country, and driving them through for use in the NHS.

A number of hon. Members have referred to the investigative work of The Times in helping to highlight the problems with unbranded generics. I would like to add our welcome to the investigation that was undertaken by those journalists, but gently to point out that the Government were already aware of some of the problems. Indeed, we published a consultation in December last year raising that issue, and I think it was partly in the light of that that The Times decided to do its work. I do not wish to decry that work in any way, however. It was clearly helpful.

We have referred cases to the Competitions and Markets Authority, as the hon. Member for Wolverhampton South West (Rob Marris) mentioned. The CMA has imposed fines in one case, as he said, and it is expecting to reach a final decision on another in the coming months. Two more cases were opened in March and April this year. We are looking to refer examples of bad practice to the relevant authorities when we come across them.

The hon. Member for Central Ayrshire asked how the data collection would work. That point was also raised by other hon. Members. We already collect significant data from the supply chain for medicines under the voluntary scheme and the statutory scheme. We collect data from manufacturers and wholesalers of generics, and from pharmacies themselves. As part of developing the regulations, and of the consultation that will take place before we introduce the scheme, we are looking to identify as many automated data collection solutions as possible, in order to minimise the burden to which the hon. Member for Worsley and Eccles South referred. In particular, we recognise that some of the medical products companies are small companies, and we want to make their burden as light as possible.

The hon. Member for Central Ayrshire referred to the devolved Administrations and how we will work with them. Our intention is that they would be able to access data not on a timing of our choosing, but as they require, and that, again, will be undertaken in a manner that we hope to capture in a memorandum of understanding so that there is clarity between each Administration and ourselves as to how that will work.

The right hon. Member for North Norfolk asked in particular about how we intend to control the medicines bill overall, and a number of Members have mentioned that. The cost of medicines across the NHS is rising quite rapidly. That is a concern, and it gets to the heart of why we have sought to introduce this legislation.

We are looking in the first place to align the statutory and the voluntary cost control schemes for the supply of medicine. At present, companies may decide to join either scheme depending on the other benefits they perceive in the schemes, but we believe that the financial benefit to the NHS of each scheme should be the same. Our proposals will put beyond doubt the Government’s powers to amend the statutory scheme to achieve this objective, which the impact assessment has indicated should save the taxpayer some £90 million a year. Draft regulations of these provisions will be available at the Committee stage.

The second element of the Bill strengthens the Government’s powers to set prices of medicines where companies charge unreasonably high prices for unbranded generic medicines. In most cases, competition works well to keep prices down. However, when it does not, and when companies are making excessive profits, the Government should be able to take action. This Bill closes a current loophole in the legislative framework. We are all agreed across the House that we cannot allow profiteering at the expense of the NHS.

Thirdly, the Bill will strengthen the Government’s powers to collect information on the costs of medicines, medical supplies and other related products from across the supply chain. Putting existing voluntary provision of information regarding medicines on a statutory footing will enable the Government to set more accurately and fairly the reimbursement arrangements for community pharmacies and dispensing GPs. In addition, the power will provide vital data to underpin the reformed statutory scheme for controlling medicine pricing, and will give us more evidence about whether companies are making excessive profits at the expense of the NHS.

I want to reiterate what my right hon. Friend the Secretary of State said in his opening remarks to assure the House about the impact of the information powers on the medical technologies industry. It may surprise Members, and in particular Opposition Members, that the powers to require information from suppliers already exists in section 260 of the National Health Service Act 2006—[Interruption.]—which the hon. Member for Wolverhampton South West says from a sedentary position he remembers bringing into effect, but we think that those enforcement powers are draconian and wish to make them more proportionate. The Government have never in fact used the powers under the 2006 Act, and we want to marry powers for information gathering with those we will have for medicines, so that there is no confusion in future about which information regime applies.

[Rob Marris]

First, may I say in passing that it does not sound very draconian if the powers have never been enforced? Section 260 of the 2006 Act refers to medical supplies and defines them, as I said earlier, as

“surgical, dental and optical materials and equipment”.

Will the Minister look at that definition, because it seems to me that it is not as wide as many people think, and therefore there is a way to get around it if certain technological companies wish to do so, such as the manufacturers of MRI scanners, which I do not think is the intention of the House. Will he look at that definition?

[Mr Dunne]

I think the hon. Gentleman may be making a pitch to the Committee of Selection and I would be delighted to see him committing his considerable intellect to this topic. I think we will spend much of our discussion refining the definitions of what information is appropriate and how it will be gathered.

The Government intend to table amendments to the Bill to reflect how the information-power provisions will apply in the devolved Administrations. The amendments will ensure that the Government can collect information that relates to devolved purposes and share it—with appropriate safeguards relating to confidentiality—with the devolved Administrations, enabling them to use the information for their own purposes. To avoid duplication, we have agreed with the devolved Administrations that the Government will collect information from manufacturers and wholesalers for the whole of the UK while each country will collect information from the pharmacies and GPs in their territories.

The degree of consensus and the support that we have received from across the House, for which my colleagues and I are extremely appreciative, has made this a remarkable debate. Medicines are a vital part of the treatments provided by our NHS. Robust cost control and data requirements are key tools to ensure that NHS spending on medicines across the UK continues to be affordable while delivering better value for taxpayers and freeing up resources, which supports access to services and treatments. The Bill will ensure a more level playing field for our medicine pricing schemes while ensuring that Government decisions are based on more accurate, robust information on medicine costs. This will be fairer for industry, for pharmacies and for the NHS, patients and the taxpayer. I am pleased to commend this Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Health Service Medical Supplies (COSTS) BILL (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Health Service Medical Supplies (Costs) Bill:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 17 November 2016.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and up to and including Third Reading

(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Andrew Griffiths.)

Question agreed to.

Oral Answers to Questions

Debate between Philip Dunne and Rob Marris

Tuesday 11th October 2016 Commons Chamber

[Rob Marris (Wolverhampton South West) (Lab)]

4. What estimate he has made of the value of assets funded by PFI health projects which will remain in private ownership after the contracts for those projects have concluded.

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

Between 1997 and 2010, 103 NHS hospital PFI schemes reached financial close, creating liabilities for the NHS of £77 billion. Three legacy PFI schemes have been signed since 2010 on stricter terms, with liabilities of £1.7 billion, and one scheme has been signed under the new PF2 model, worth £340 million. In nearly all cases, except for a few of the early schemes, ownership of the hospital reverts to the NHS at the end of the PFI contract. But even in those schemes, the NHS always has the first option on whether to end or continue with the contract.

[Rob Marris]

Effectively, those figures will mean even more debt for the next generation. Will the Minister commit the Government to abandoning all PFI? It always was an idiotic scheme. No more PFI, no more PF2, etc—just abandon it, Minister.

[Mr Dunne]

The hon. Gentleman has a consistent track record in opposing PFI, even when the vast majority of the schemes were put under contract by the Government of which he was a member—so I will not take any lectures from him about how to deal with PFI. We will continue to use the new stricter terms as and when appropriate.