Oral Answers to Questions
Rob Marris Excerpts(7 years, 8 months ago)
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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.
Oral Answers to Questions
Rob Marris Excerpts(7 years, 9 months ago)
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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)
The Parliamentary Under-Secretary of State for Health (David Mowat)
The national standard is that we expect 85% of all cancer patients to receive initial treatment within two months of an urgent referral. For cancer overall, the most recent data indicate that we achieve 82%, and for prostate cancer around 78%, against that standard. The lower figure for prostate is due to the fact that the pathways are more complex than average.
Rob Marris
I am disappointed by the figures, but at least they are available. When I asked this as a written question last month, the information was not available, nor was information available about the number of vacancies for prostate cancer surgeons, their training or the equipment that they use, because that information, I am told, is not collected centrally. When will the Department collect adequate information to run the health service properly?
David Mowat
More information was published on cancer by clinical commissioning groups since the back end of last year than at any time in the history of the NHS. [Interruption.] The hon. Gentleman is right to say that prostate is grouped with neurological cancers in general, and that is the type of surgeon being employed. But the fact is that the Government have been incredibly transparent in terms of information published on cancers.
Oral Answers to Questions
Rob Marris Excerpts(7 years, 11 months ago)
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Nicola Blackwood
At the moment, NHS England and Capita are focusing very hard on improving service delivery, which I think must be the top priority, but we are also looking into exactly what inconvenience and costs GPs have suffered, along with dentists and optometrists, and that will be considered and discussed with GPs.
Rob Marris (Wolverhampton South West) (Lab)
The Parliamentary Under-Secretary of State for Health (David Mowat)
Directly comparable figures are not available, but it is clear that in the past two years there has been a substantial increase in delayed discharge figures attributable to social care at the trust, which this year were among the worst currently being recorded across the NHS.
Rob Marris
Sadly, those figures are no surprise, despite the well-managed New Cross hospital, because central Government have cut Wolverhampton City Council’s total income by almost 50% in the past six years. The primary care vertical integration pilot in Wolverhampton is a redesign of services so that a single organisation—the hospital trust—deals with patients from initial contact to ongoing management and end-of-life care. What steps is the Department of Health taking to support vertical integration as one potential way to improve care and lessen hospital admissions and delayed discharges?
David Mowat
The hon. Gentleman is right that budgets are part of the issue, which is why last week’s announcement about increased funding is important. However, funding alone does not explain the delayed transfers in Wolverhampton, which are five times worse than those of Telford, which is just down the road; twice as bad as Sandwell, which is very close; and, indeed, 30 times worse than the best performing councils, such as Newcastle, Knowsley and St Helens. With regard to his specific point about the vertically integrated pilot, this is a very exciting project and I commend the people of Wolverhampton for doing it. It is based on a model from Spain that has produced big results. We are watching it carefully and will support it as required.
Health Service Medical Supplies (Costs) Bill
Rob Marris ExcerptsTuesday 6th December 2016
(7 years, 11 months ago)
Commons ChamberRead Full debate Health Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 6 December 2016 - (6 Dec 2016)
Justin Madders
I thank my right hon. Friend for his question. Indeed, if I had known he was in the Chamber, I would probably have anticipated it. He is absolutely right to raise the issue of diabetes drugs and the need for more measures to improve prevention. I attended the launch of the all-party group’s report last week, at which there were a number of interesting initiatives. The “diabetes village” is an interesting concept, which in the long term will hopefully reduce the cost of diabetes treatment for the NHS.
The review would look at the impact of the Bill on the pricing and availability of medicines and other medical supplies. We would gently point out to the Minister that two years ago, when the previous voluntary agreement was introduced, the Government said that it would
“provide an unprecedented level of certainty on almost all the NHS branded medicines bill.”
Evidently that has not come to pass. The review would enable us to identify any issues at an early stage and take the appropriate action. I know that the Government were not willing to commit to such a review in Committee. The Minister referred us to a clause in the draft regulations, referring to a review one year on from the introduction of the regulations. However, that is simply not the same thing as looking at the impact of the legislation in its totality. The way the regulations are currently drafted means that there is more than a little of the Minister being able to mark his own homework, so to speak. The draft regulations talk about the review in a much narrower sense: enabling the Minister to set out the objectives intended to be achieved by the regulations in the report itself rather than at this point, and only specifically mentioning whether those objectives could be achieved with less regulation.
Rob Marris (Wolverhampton South West) (Lab)
Does my hon. Friend find it strange that the regulations that might be made pursuant to the Act—the Government have helpfully given us a draft—talk about a review being carried out? Paragraph 14(2) states that the report must in particular
“set out the objectives intended to be achieved by these Regulations”.
Would one not expect those objectives to be set out before the regulations were made? Are the Government not putting the cart before the horse?
Justin Madders
My hon. Friend is absolutely right. That is why there is anxiety that we may end up with a self-fulfilling prophecy with these reviews. No doubt the Minister can address that when he replies.
There is nothing to assess the potential impact of the Bill and the regulations on research and development investment, nothing on the potential impact on innovation, and nothing on the availability of medicines and other medical supplies. We believe our anxieties in these areas are well founded, so I hope the Minister will reconsider his stance on this proposal, or at least provide us with some reassurance that these areas of concern will be carefully monitored.
Amendment 8 would to compel the Government to reinvest the rebate from the pharmaceutical sector for the purpose of improving access to new and innovative medicines and treatments. On Second Reading, the Secretary of State confirmed that £1.24 billion had so far been returned to the Department of Health through and it is anticipated that the sum to be received annually will increase when the Bill is enacted.
Although numerous questions have been asked throughout the passage of the Bill, we have still not been able to pin down the Government on exactly where this money has gone, other than into the general pot. It is our fear that this new money, which could have delivered a step-change in access to treatments to the benefit of patients and the life sciences sector, will instead be simply added to the baseline, with every £1 from the pharmaceutical sector meaning £1 less coming from the Treasury. Given the often heated exchanges across the Dispatch Box about the true sums being put into the NHS, it would aid transparency if it were made clear that this money was being put in over and above Government funding and was ring-fenced for a specific use. In Scotland, rebates are already ring-fenced and reinvested to provide new treatments and medicines. Nothing that the Minister has said has dissuaded us from believing that that is the correct approach.
According to James Barrow from the Cystic Fibrosis Trust, using the rebate in this way provides both the access and transparency that are lacking in the rest of the UK. He cites the example of the medicine Kalydeco, which increases the lung capacity of people with cystic fibrosis by up to 10%. It has meant that some patients who were previously housebound are now able to run up to 5 km. Patients in England are unable to access this drug, whereas patients across comparable nations in Europe and in Scotland can benefit from its transformative effect. He points out:
“There is no comparable fund in England. Having the new medicines fund in Scotland provides a much greater chance for patients to be able to access these medicines. We just don’t see a clear pathway in England for how patients can access these medicines.”
There are many other similar examples.
The NHS is our proudest national achievement, but it is to our shame that people in England are deprived of vital drugs and treatments on the basis of financial, rather than clinical, judgments. In Committee, the Minister suggested that the fluctuations in income could have adverse consequences, but we understood the purpose of the Bill was to deliver certainty. In any event, ring-fencing does not preclude additional resourcing if required. For all those reasons, I hope the Government will give serious consideration to this proposal.
Turning finally to the remaining amendments, we welcome the further improvements tabled by the Secretary of State in relation to the devolved Administrations. However, questions perhaps have to be asked about the consultation process if such changes are being introduced by the Government at such a late stage. Perhaps this will be reflected on when it comes to future legislation.
We welcome the amendments to clauses 5 and 6 tabled by the Scottish National party. In particular, we welcome the call for a consultation on the potential impact of controls on other medical supplies. Those provisions were notably lacking from the initial consultation, so there is still considerable anxiety within the sector about how the controls will be used. I understand that this is a matter for future regulations, but it is less than satisfactory for the Government to ask us for powers before telling us how they will be used. We would say this is another reason for us to seriously consider setting out now the kind of review envisaged by new clause 1.
Keith Vaz
My hon. Friend is absolutely right. We both serve on the Administration Committee, and whenever banqueting is raised, we all highlight the need to make sure that the food MPs get, especially in the Tea Room, is compatible with decreasing obesity and calorie levels. You will know, Madam Deputy Speaker, when you have your cup of tea, that on offer are Club biscuits and Victoria sponges and all these other things. I am not saying that all this comes within subsection (1)(c) or that it could be regarded as a question of innovation; I am simply saying that innovation is not just about new technology.
None the less, there is incredible new technology around as far as diabetes is concerned, as I saw for myself last week. People no longer need to do the finger prick test. The HbA1C test can be bought at the local chemist. It costs slightly more than a finger prick test, which is obviously free for diabetics, but it allows us to test our diabetes without having to fast, and it gives a three-month reading. Moreover, there are now machines that clamp to the side of one’s arm and which, when a mobile phone is put to them, will give a glucose reading. These incredible innovations show why the new clause is worth accepting. It has been carefully thought out by my hon. Friend the Member for Ellesmere Port and Neston, who is doing an amazingly important job on the Front Bench on these matters.
The new clause would benefit the taxpayer. Innovation is very important as far as an illness such as diabetes is concerned, but, as I said, the solution is not just about the technological revolution; it is also about lifestyle changes. I notice that the SNP spokesperson, the hon. Member for Central Ayrshire (Dr Whitford), is here. Scotland is highly advanced in terms of diabetes monitoring. One can get diabetes statistics centrally in Scotland, whereas here we cannot get them even if we write to our local clinical commissioning groups. That is why new legislation of this kind, designed to bring down the cost of drugs to the taxpayer, is very important, and why I support subsection (1)(c) and the review.
Finally, in respect of research and development, as mentioned in subsection (1)(b) of the new clause, pharmaceutical companies make an enormous amount of money—they are some of the biggest companies in the world—and we need to encourage them to plough back a good proportion of their profits into research and development. The Steno centre in Denmark only exists because of money from Novo Nordisk, one of the biggest diabetes drugs companies in the world. A person can go to the Steno centre, and in the first room they can have their blood taken by a diabetes nurse; in the next room, they can have their feet looked at by a podiatrist who is an expert in diabetes; in the next room, they can have their eyes tested—those of us with diabetes have eye problems; in the next, they can have their consultation with a GP; and if necessary, they can see a consultant. That is what I meant when I talked about the diabetes village. It comes from the concept of the Steno centre. At the moment, as a diabetic I have to go to different centres and hospitals to see my GP and others. In one case, I had to carry my own blood—
Keith Vaz
In a little test tube! I carried my own blood to the laboratory, because it was the quickest way I could get a reading. Incidentally, from the look of him, my hon. Friend carries his blood very well. We want this innovation and research and development. The drugs companies should be able to plough back profits within the industry, and in the long run this innovation will make a great deal of difference.
When I went to New York for a meeting on Yemen, I stopped in at the diabetes centre of the Mount Sinai Hospital, and was told about the incredible innovation in diabetes in the US. I also went to see Mayor Bill de Blasio’s diabetes team. As Members will know, New York cut the level of sugar in soft drinks, as we are doing now, but the centre of its diabetes initiative is the lifestyle coach, not the GP.
As we look at these provisions, we see every opportunity for a cogent and coherent review that will particularly help—this is my main argument today—those with diabetes, but also others with similar problems connected with their illnesses. I urge the Minister, who I know has been extremely reasonable on this Bill, to look seriously at the new clause. If he cannot accept new clause 1 itself, will he at the very least give an undertaking from the Dispatch Box that the points embodied in it will be reported back to Parliament in a few months’ time?
Rob Marris
As hon. Members know, overall I welcome the Bill, which is broadly a socialist Bill. It reinforces price controls and profit controls on big pharma, when appropriate. I always like to encourage the Conservative party, sadly now in government, to come a little further down the socialist road. They claim to be the workers’ party, and that is good.
New clause 1, tabled and moved by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), is central to what we should be talking about in many spheres of public life—namely, evidence-based policy. All too often in this House—this applies to Governments of both colours—policy appears to be made on a political whim.
I remember in, I think, 2008 the then Leader of the House, the right hon. Member for Blackburn, Jack Straw, writing certainly to Labour MPs asking what we wanted in the Queen’s Speech that year—[Interruption.] We were in government, but perhaps he should have written to the right hon. Member for Chelmsford (Sir Simon Burns). I replied, because I believe in evidence-based policy, that in that year’s Queen Speech I wanted not a single piece of legislation. I said that after 10 years of a Labour Government, I wanted Parliament to spend a year on scrutiny, looking at the legislation that we had introduced over that period to see what had worked and what had not worked.
To my astonishment, the Leader of the House did not accept that proposal, as those who were Members then will recall, and we had another full legislative programme. Let me add, as an aside—if you will grant me a small bit of latitude, Madam Deputy Speaker—that by the end of the Labour Government I had stopped voting on crime Bills because we had had so many. Some of them—this may have happened under the previous Conservative Government—repealed parts of earlier crime Bills introduced by a Labour Government which had never been brought into force. That was extraordinary.
I urge the Minister to recognise that evidence-based policy making is encouraged by new clause 1. I hope that, in the context of innovation, which was so eloquently addressed by my right hon. Friend the Member for Leicester East (Keith Vaz), he will say a little about the way in which the National Institute for Health and Care Excellence operates.
As the Minister may know, there is an issue involving cystic fibrosis and the drug Orkambi, which NICE turned down owing to a lack of sufficient data. I understand that, because it is NICE’s job to weigh the evidence, such as it may be. The drug is registered for use in this country, but it is not available on the NHS. Since NICE decided that the cost-benefit analysis did not stack up, some long-term data from the United States, which I understand to be robust, has been made available. I gather, although I may be wrong, that NICE has not yet reviewed its decision on Orkamb, although the evidence from the United States suggests that in certain cases it can be extremely effective in treating cystic fibrosis. I hope that when we are discussing processes, innovation, efficiency and policy-based decision making, the Minister will say a little, not necessarily about Orkambi itself, but about the process whereby NICE might, in the light of new evidence, promptly—I stress the word “promptly”—review its decisions.
Dr Philippa Whitford
There is an additional issue. Drugs or treatments are being passed by NICE but not actually introduced. Either they are rationed and limited to a certain number of patients a month, as is the case with hepatitis C drugs, or the decisions are being left to clinical commissioning groups, which means that we are enshrining postcode prescribing instead of getting rid of it.
Rob Marris
I entirely agree with the hon. Lady, who, as ever, speaks with authority on these issues. I am a bit of a centraliser, because I do not like postcode lotteries. We will already have that in a cross-border sense—between England and Wales, Scotland and Northern Ireland—but it is a great deal worse when just some CCGs in England are making a drug available when it has been signed off by NICE as safe for use but it is not mandatorily available, and not every patient for whom it is medically appropriate can obtain it from every CCG. That sort of postcode lottery undermines the “national” part of the national health service, which is regrettable.
Amendment 8, tabled by my hon. Friend the Member for Burnley (Julie Cooper), would ring-fence savings made through the provisions of this Bill and earlier legislation so that the money thereby saved, or paid into the pot by a pharmaceutical company, can be retained for expenditure on medicines and medical supplies. I hope the Government will support that. All too often we hear that Governments do not like ring-fencing, and I understand why: it fetters their discretion. Earlier this afternoon, however, I asked the Secretary of State for Justice whether the education budgets devolved to prison governors would be ring-fenced, because I feared that a prison governor who was under other budgetary pressures might not spend the money on education and prison education would not improve as it needs to. I was greeted with a very welcome one-word answer, which was “Yes.” I hope that, in a slightly different context, the Minister can give the same assurance this afternoon, because this is an excellent amendment which clarifies a slight gap in the Bill.
As for amendment 9, about which the hon. Member for Central Ayrshire (Dr Whitford) spoke so eloquently, efficiency is of course important, but so is quality. I do not know whether the old saying “Penny wise and pound foolish” is used in Scotland—she is nodding—but it certainly is in my part of the west midlands. We have seen that time and time again with privatisations. When services are privatised they go to the lowest bidder, and what do we find? Either the service is not up to scratch, or, all too often—I think this happened when Circle ran Hinchinbrooke hospital—the companies go bust because they find that it is not as easy as they thought it would be to make a profit out of, in this case, the health service. That may happen to other suppliers as well. Quality matters, and the national health service is not a commercial organisation.
Sir Simon Burns (Chelmsford) (Con)
I am listening carefully to what the hon. Gentleman is saying about Hinchinbrooke hospital. Might I suggest, tactfully, that he go and look at that hospital? Patients in Huntingdon would say that the hospital had vastly improved, but because of the conditions, it was not possible to make a financial success of it. The company did not go bust; it decided to withdraw. However, in the view of the patients who used it, the quality of the care provided by what had been a failing hospital had vastly improved. Moreover, the trade unions agreed to the deal that was done to put Circle there.
Rob Marris
I am grateful to the right hon. Gentleman for making my point for me. This is about quality; it is not just about price. That company got its price wrong. It said that it could provide a quality for a certain price, and it did provide the quality but not for that price, and it jacked the contract in.
Sir Simon Burns
I think that what the hon. Gentleman said at the beginning of his comments on Hinchinbrooke —we will know for certain when we see the Official Report tomorrow—showed that he was using that example inaccurately to make a point about privatisation. He said that privatisation caused quality to go down, but that in this case the company had gone bust. He was wrong on both counts.
Rob Marris
The right hon. Gentleman may well be correct on that specific point, and I fully accept that. There is in privatisations, however, a nexus between quality and price, and very often—although not always—the companies that promise a quality at a certain price are unable to deliver it. They cannot deliver the quality of service, and/or they cannot do so at the price at which they promised to do so. He can correct me on this if he wishes, but we see that time and again when rail franchisees come back to the Government and say, “We promised a certain level of service for a certain price. We cannot do it: we need a bigger bung.”
Mr Stewart Jackson (Peterborough) (Con)
I think that the hon. Gentleman may have stumbled into a quagmire in referring to Hinchinbrooke. The Public Accounts Committee, of which, as he may know, I was a member for four and a half years, found that pricing was not the significant issue that led to the end of the franchise of the private provider Circle. The significant issues involved the wider healthcare economy, and the failure of the strategic health authority to discharge its duties in respect of clinical business for the hospital.
Rob Marris
The hon. Gentleman has considerably more knowledge than I have. I have talked about evidence-based policy making, and I am entirely prepared to accept the evidence that he presents. However, the company could not make a go of it, although I accept that that may not have been the company’s fault,
Amendments 1 to 5 come as a package. Amendment 3, which is a substantive amendment, refers to a
“person who provides primary medical services”.
I hope that the Minister can talk us through that, in the light of a trend that is starting in some parts of England and is most advanced—if I may make a value judgment—in Salford, where the GPs who provide primary services are directly employed by the hospital trust. So the hospital trust is no longer just secondary or even tertiary; it is primary. I just wanted to unpick the wording to make sure that that development of service delivery in England has been taken into account and that the amendments do not assume that the existing silos between primary and secondary continue, because that development has now arisen in Wolverhampton, which I represent. There are three GP practices in Wolverhampton that are piloting their staff being employed by the excellent Royal Wolverhampton NHS Trust. I say it is excellent because it is one of the 15% of hospital trusts in England that does not have a deficit, and I think part of that is related to the fact that it has only £15 million of private finance initiative. But that is another debate that I will not get into now.
Mr Jim Cunningham (Coventry South) (Lab)
My hon. Friend’s analysis of medical supplies is very interesting. I would have thought that pharmaceuticals, for example, would be classified as medical supplies, given that they have always been a contentious area of negotiations over costs. I am surprised that they are not included in the definition.
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.
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.
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.
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.
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—
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.
Rob Marris
I propose, Madam Deputy Speaker, not to take the remaining three hours. Earlier, when the Minister would not take an intervention, he seemed to think there was a rush on time. My reading of the Order Paper is that we have another three hours for the Bill, but I will not take that long.
I want to put the Bill in context, because this is a socialist Bill. It builds on the Labour Government’s National Health Service Act 2006, which applied to England. Looking around, Madam Deputy Speaker, I think you and I may be the only Members present who voted for the 2006 Act—that was obviously before you were in your esteemed position. In putting the current Bill in context, it is worth reviewing what it is building on.
The 2006 Act made reference to the voluntary schemes for price control that existed then. The current voluntary scheme, of course, is the 2014 pharmaceutical price regulation scheme—the PPRS. Those voluntary schemes were to do with limiting the profits of pharmaceutical companies. Now, I stress to the House that the Labour party and I are not opposed to pharmaceutical companies per se; they do fantastic research, and there are probably millions of people alive now who would not otherwise have been alive, because of the research and development done by pharmaceutical companies—many of them, happily, based, or having major operations, in the United Kingdom. The companies are very welcome here, but they have to play by the rules, and so do those that buy up off-patent drugs, horse around with them and put up their prices by hundreds and hundreds of per cent. Sometimes, it is a minority of private equity companies that are doing that, and they are not welcome here.
Pharmaceutical companies must act responsibly, and they may need statutory encouragement to do so. The 2006 Act started the process of statutory encouragement with a statutory scheme, which enabled Her Majesty’s Government, in appropriate cases, to limit prices and the profits of pharmaceutical companies—that is why I say this is a socialist scheme. Before those on the Government Benches get all aerated about this, let me say that the Labour party and I do not wish to nationalise or control the prices in every corner store in the country—not at all—but there are certain big operations where market intervention is helpful and is needed when there is market failure. It was perceived—rightly—by the Labour Government that there was some market failure, and they needed some stern measures to sort it out.
The Bill builds on that work from 10 years ago because, as adverted to by the Labour Front-Bench spokesperson, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), some medicine supply companies—again, a minority—were, frankly, taking the mickey. They were leaving the voluntary scheme in favour of the statutory scheme because that was more advantageous to them. I understand why they would do that—they wished to maximise their profits—but they must act in a responsible way, and if they will not do so as a result of being urged to show corporate social responsibility, which some of them will not, we need statutory measures, and that is what the Bill puts in place. One of the things the Bill does is to address the issue of companies leaving the voluntary scheme to go into the statutory scheme because it is a better deal. The Bill resets the schemes, as it were, to make sure that a company is not encouraged to do that, because there is not that comparative advantage.
The Bill also makes provision for a new power to enable the Secretary of State for Health to require a company in the voluntary scheme to pay sums due under that scheme. Even though it is a voluntary scheme, the Bill will give the Secretary of State the power to pursue non-payers through the courts. I regard that as progressive legislation. For those companies that are not acting responsibly—that are taking the mickey, as I characterised it—that is a good thing. This Government have come down the socialist path to agree with such market intervention.
The Government have also come down the Labour party path in wanting to marshal information so that we can treat these companies equally and fairly, and so that they treat the society in which they operate—refracted principally through their supply of medicines to the NHS—equitably and fairly. Under the Bill, the Secretary of State will have the power to make regulations for the marshalling of information, building on the work done in the NHS Act 10 years ago.
That is important, but on the context of the Bill, I would like to tempt Health Ministers a little further down the socialist path. The Minister described it in his opening remarks as a technical Bill, which it broadly is. However, it also has an ideological or philosophical aspect, which I have tried to set it out, because it is broadly a socialist Bill. One of the things it seeks to do is to save money for the NHS and to raise money for the NHS through clawbacks on overpriced medicines or medical supplies because the NHS—this is the context of the Bill, which is not purely technical—is in serious financial difficulty. The Minister referred to the extra £10 billion of funding for the NHS over the lifetime of this Parliament, but even the Health Committee does not accept that calculation. It is a sleight of hand.
Part of that sleight of hand relates to what is being done on social care, which is leading to a growing problem of delayed discharges. Social care is not being properly funded in this country, and the precept that councils in England are allowed to charge is in effect a mandatory charge because the Government calculate the revenue support grant and all such local government things on the assumption that councils will raise the precept. That is having an effect on the NHS because of delayed discharges.
In the context of the crisis in social care, although the extra funding it will provide for the NHS is welcome, the Bill comes nowhere near addressing the underfunding of the NHS. In the financial terms of what it will raise or save for the NHS, the Bill—in relation to what the NHS needs and, coupled to that, what councils in England need for social care—is a drop in the ocean. The Bill will encourage a certain level of efficiency in the production, purchase and procurement of medicines and medical supplies. All of us in the House would sign up to the concept of efficient procurement. We might sometimes have different definitions of what does and does not constitute efficient procurement, but procurement is central to the Bill.
Although the NHS can, like any massive organisation, almost always act more efficiently—I hope the Bill will encourage the NHS to do so—we must bear it in mind that, in international comparisons, the NHS is one of the most efficient organisations in healthcare delivery in the world. If we look at healthcare delivery in the United States of America, for example, we can see that it spends, as a proportion of GDP, as much on public health as the United Kingdom. However, because its public health system is not run efficiently, as it is all fragmented, the USA spends the same proportion of GDP again on private health—
Madam Deputy Speaker (Natascha Engel)
Order. May I remind the hon. Gentleman that the Bill is quite specific and that this is a Third Reading debate? He is venturing into areas that are not specifically in the Bill, and he may wish to come back to what is in the Bill.
Rob Marris
I am grateful to you for your guidance, Madam Deputy Speaker. As I have said, I am putting the Bill in the context of the NHS and its effect in addressing the much deeper problems of the NHS. I was simply adverting to some of those deeper problems, but I take your guidance.
I repeat to Ministers that the Government have come some way, as the Bill demonstrates, down a socialist path for the delivery of healthcare, and I encourage them to come back with another Bill, building on this one, to abandon privatisations and let us have a public NHS.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Health Service Medical Supplies (Costs) Bill (Second sitting)
Rob Marris ExcerptsTuesday 15th November 2016
(8 years ago)
Public Bill CommitteesRead Full debate Health Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 November 2016 - (15 Nov 2016)
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.
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.
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?
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?
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.
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.
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.’”
Andrew Selous (South West Bedfordshire) (Con)
Many Conservative Members may see the Bill as limiting the ability of drug companies to rip off the Government in a wholly unacceptable way, rather than as introducing price controls in the manner to which the hon. Gentleman refers.
Rob Marris
With respect to the hon. Gentleman, that is precisely what price controls do: they stop rip-offs. If one has price controls for other reasons, that is a separate debate. The price controls discussed in the Bill and in the 2006 Act are, as I understand it, precisely to stop rip offs. It appears that the Secretary of State for Business, Energy and Industrial Strategy is now looking at the same thing, as the newspaper quote suggested. It may be an incorrect quote—I give that caveat—but it is a direct quote from the Secretary of State to say that the Government are looking at these things. That does not necessarily mean that they will do them, but it is an ideological watershed for a Conservative Government to look quite rightly at legislating to stop rip-off Britain with regard to prices, but also with regard to limiting profits.
That is what a statutory scheme has the power to do under section 263(1) of the 2006 Act. As I understand it—the Minister can correct me if I am wrong—clause 3, which is at the heart of this provision, does not say, “There has been a debate about whether we can have a statutory scheme or not”. For the sake of certainty, we are saying in clause 3 that the Government will have the power to make a statutory scheme, but I do not hear the Minister going on to say, “But that statutory scheme will have nothing to do with limiting profits.”
In the absence of the Minister’s saying that, he appears ideologically to encompass the concept that I embrace, which is that, in certain circumstances in capitalism, it is incumbent and right for a Government to intervene in the market to limit not only prices—rip-off Britain and so on—but profits. On certain occasions, the Government should have that power, and I think a pharmaceutical supplier to the NHS is one such example. There is a very narrow range of things I could see this happening in, but in pharmaceuticals it is possible.
I congratulate the Government on coming over to a socialist perspective, not only on pharmaceuticals but apparently, if The Times report is right, coming our way on energy companies. Long may that continue. Perhaps we can look at rail fares next. Will the Minister have a word with his fellow Ministers on that?
The Chair
If the Minister is in Churchillian mode—I do not take a view on that; I am completely neutral as Chair—that is something I have always wanted to see. In fact, we have two Churchills in the debate, as Members will recognise. That is probably a first, which is great.
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.
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.
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
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
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.
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)
Rob Marris ExcerptsTuesday 15th November 2016
(8 years ago)
Public Bill CommitteesRead Full debate Health Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 November 2016 - (15 Nov 2016)
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship today, Mr Pritchard. I am somewhat reassured by many of the Minister’s comments, and I thank him for his explanations. Much of this stuff is technical, and I hope he sees amendment 48 in a similar light. I think it would improve and strengthen the measure.
The clause does not currently set out a mechanism for the disclosure of information to devolved Administrations or bodies. For example, how will the information be disclosed, and by what means? Will it be only the Secretary of State who can disclose? In short, will the devolved Administrations be able to get the information when they want and need it, so that it ties in with the figures and statistics they are seeing and they can see patterns? It is about flexibility.
The amendment is fairly straightforward and we think it would help to strengthen and improve the Bill. I hope that the Minister agrees. We would like him to clarify whether the Government intend to leave disclosure to the discretion of the Secretary of State, on an ad hoc basis. Otherwise, what would the terms of disclosure be?
Rob Marris (Wolverhampton South West) (Lab)
To tease out the amendment a little more, proposed new section 264B(1)(h) relates to the provision of information to
“any person who provides services to any person falling within any of paragraphs (a) to (g)”.
Is the hon. Gentleman concerned that under his amendment there might be disclosure to other private providers; or is that covered because only paragraphs (a) to (g) are specified?
Martyn Day
I thank the hon. Gentleman for his intervention, and I hope that I can clarify my clarification. It is about timing—when the information is disclosed, not to whom it is disclosed. The Bill covers that and we are quite comfortable with that.
I was saying that we think our amendment would strengthen the clause. I am reminded that on Second Reading the Secretary of State referred to fact that there would be amendments—we are grateful to see many of them today—
“to reflect the agreement between the Government and the devolved Administrations, so that information from wholesalers and manufacturers can be collected by the Government for the whole of the UK and shared with the devolved Administrations.”——[Official Report, 24 October 2016; Vol. 626, c. 80.]
We think our amendment would enable him to get his wish and provide a mechanism in the Bill.
We feel strongly about the matter and want to push it to a vote if we do not receive the necessary assurances from the Minister. I hope that he can provide them.
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?
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
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.
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.
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.
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?
Dr Whitford
The phrase is the standard definition of specials. I cannot remember off the top of my head where exactly it comes from, but it is the recognised definition. It would not usually mean things such as homeopathic medicines. It is often things that are quite old and that have been around a long time that are not worth licensing, because they are not new and nobody will make any money out of them. We have a lot of products like that, but they are recognised within the practice of medicine. They are particularly common within dermatology, because of different topicals and the need to make different strengths of topical depending on the condition being treated.
I wanted to try to draw attention to this matter. The Minister has said that the Government have had the power all of this time and not used it. In part it is about bringing powers into line and creating consistency. I call on him to use those powers. Even though only a relatively small percentage of drugs are affected, the impact on patients from not being able to access them is significant. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
Review of extending provisions to repurposed off-patent drugs
‘(1) Within six months of the passing of this Act, the Secretary of State shall commission a review on whether the provisions of this Act shall extend to the regulation of the prices of repurposed off-patent drugs and shall lay the report of the review before the House of Commons.’—(Dr Whitford.)
Brought up, and read the First time.
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.
NHS Funding
Rob Marris Excerpts(8 years ago)
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Mr Hunt
My right hon. Friend is absolutely right. That, of course, is why all parts of the NHS in England are embarking on the sustainability and transformation programme, which is designed to do precisely what my right hon. Friend says—to find smart ways to reduce demand. That will include, for example, better use of pharmacies, better use of GPs, more mental health provision—[Interruption.] Opposition Members are shouting, but why were they not prepared to put the money into the NHS to help us implement these plans? There would be no sustainability and transformation plans on the thin gruel that they promised for the NHS at the last election.
Rob Marris (Wolverhampton South West) (Lab)
I was always against the private finance initiative. This Government have set up a £1.5 billion bail-out fund for PFI. I put it to the Secretary of State that that is to rewarding past profligacy and penalising frugal trusts such as the Royal Wolverhampton NHS Trust. When will the Secretary of State redress this imbalance, stop rewarding profligacy and reward frugality?
Mr Hunt
I am getting more and more impressed with the hon. Gentleman’s questions. Last time, he accused me of being a Corbynista, and today he is criticising me for profligacy, when the general tone of most Members seems to be that we are being rather too parsimonious with the NHS. I completely agree with him that private finance initiatives were an utter disgrace, leaving the NHS with over £70 billion-worth of debt by 2010. Unfortunately, there does not seem to be a strong correlation between shiny new buildings and good care for patients, as can be seen in a number of Care Quality Commission reports. We are doing everything we can to unwind that very difficult problem.
Health Service Medical Supplies (Costs) Bill
Rob Marris ExcerptsMonday 24th October 2016
(8 years, 1 month ago)
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Mr Hunt
My hon. Friend obviously knows about these matters in a great deal of detail and should be reassured that this Bill should prevent people who are part of the current voluntary pharmaceutical price regulation scheme—PPRS—from parallel-importing through European subsidiaries, which currently under single market rules we are not able to do anything about. That loophole will be closed.
The first element of the Bill relates to controls on the cost of branded medicines. For many years the Government have had both statutory and voluntary arrangements in place with the pharmaceuticals industry to limit the overall cost of medicines to the NHS. Companies can choose to join either the voluntary scheme or the statutory scheme. Each voluntary scheme typically lasts for five years before a new scheme is negotiated.
The current voluntary scheme is the 2014 PPRS. The objectives of that agreement include keeping the branded health service medicines bill within affordable limits while supporting the availability and use of effective and innovative medicines. For industry, the PPRS provides companies with the certainty and backing they need to flourish both in the UK and in the global markets.
The current PPRS operates by requiring participating companies to make a payment to the Department of Health of a percentage of their NHS sales revenue when total sales exceed an agreed amount. So far the PPRS has resulted in £1.24 billion of payments, all of which have been reinvested back into the health service for the benefit of patients.
Rob Marris (Wolverhampton South West) (Lab)
The early part of the Bill appears incredibly tortuous, because it relates to whether something is under the voluntary scheme or the statutory scheme and to switching back and forth between the two. Is that because we have a voluntary scheme which started in 2014 and will run until 2019, and the Government intend not to renew it? If the Government are minded to consider renewal in 2019, why have parallel schemes making the whole thing much more complex than it needed to be?
Mr Hunt
The hon. Gentleman makes an important point. It will be for this House and the Government to reflect prior to 2019 on whether it is worth carrying on with two schemes, which has been the arrangement for many years. Successive PPRS voluntary agreements have covered the vast majority of sales to the NHS and the statutory scheme has been a back-up for people who do not want to participate in the voluntary scheme. Recently, however, there has been an element of gaming the system whereby more and more firms have been moving from the voluntary scheme into the statutory scheme. The Bill will remove the incentives for them to switch between schemes and will make the benefits to the NHS essentially the same whichever scheme people choose. It will be for this House to reflect on and for the Government to consider whether the dual structure is right going forward.
Mr Hunt
I am happy to look into that—some of my own constituents have been affected by that issue. I am not aware that there is scope to consider that important point in the Bill, but we should reflect on what we can do to deal with some of the anomalies in the drug licensing regime that lead to the unintended consequences that my hon. Friend talks about.
We have a statutory scheme for companies that are not in the PPRS that is based on a cut to the list price of products, rather than a payment mechanism on company sales. Since the introduction of the rebate mechanism in the PPRS, the volumes of drugs going through it have been lower than estimated. At the same time, the statutory scheme has delivered lower savings than predicted. The inequity between the two schemes has led to some companies making commercial decisions to divest products from the PPRS to the statutory scheme, further reducing the savings to the NHS.
Last year, the Government consulted on options to reform the statutory medicines pricing scheme by introducing a payment mechanism, in place of the statutory price cut, broadly similar to that which exists in the PPRS. Our clear intention was to put in place voluntary and statutory schemes that were broadly comparable in terms of savings. Of course, companies are free to decide which scheme to join and may move from one to the other depending on the other benefits they offer, but the savings to the NHS offered by both schemes should be broadly the same.
NHS respondents to the consultation supported our position, but the pharmaceutical industry queried whether the Government had the powers to introduce a statutory payment system. Following a review of our legislative powers, we concluded that amendments should be made to clarify the existing powers to make it clear that the Government do have the power to introduce a payment mechanism in the statutory scheme. The Bill does that by clarifying the provisions in the NHS Act 2006 to put it beyond doubt that the Government can introduce a payment mechanism in the statutory scheme. The Bill also amends the 2006 Act so that it contains essential provisions for enforcement action. Payments due under either a future voluntary or statutory scheme would be recoverable through the courts if necessary. That would include the power to recover payments due from any company that leaves one scheme to join the other.
The powers proposed in the Bill to control the cost of medicines are a modest addition to the powers already provided for in the 2006 Act to control the price of and profit associated with medicines used by the health service. The powers are necessary to ensure that the Government have the scope and flexibility to respond to changes in the commercial environment. The intended application of the powers will, of course, be set out in regulations. We will provide illustrative regulations to reassure the House that we will be fair and proportionate in exercising the powers.
Rob Marris
I voted for the 2006 Act, but I have to say to the Secretary of State that profit controls are pretty draconian, particularly for a Conservative Government. The Government appear to be extending them when we have historically dealt with what society refracted through this House as excessive profits through taxation, such as the windfall tax on banks and so on. The Secretary of State now proposes to extend profit controls to a major part of the economy, which would no doubt be loved by the Leader of Her Majesty’s Opposition. To a socialist such as me, a Conservative Secretary of State doing that seems a bit counterintuitive. Could he say a bit more about why he is extending profit controls?
Justin Madders
I agree that it is important that we keep the dialogue open with industry. We are proud of what the pharmaceutical industry can deliver for this country. It is a world leader and we certainly do not want to throw the baby out with the bathwater.
The Government will be aware that concern has been expressed by the medical technology sector that medical supplies are to be brought within the scope of a regime designed ostensibly to tackle a problem in the pharmaceutical industry. The medical technology sector has expressed concern that the Bill’s measures will put additional burdens on that sector and could lead to higher costs overall for the NHS. We welcome the assurances given by the Secretary of State today that the 99% of businesses in this industry that are small or medium-sized will not be unduly troubled by onerous additional reporting requirements. We hope to discuss that in further detail.
The former Minister for Life Sciences reported in February 2016 that the estimated income in England from PPRS payments in 2016-17 would be £518 million. That is considerably less than the amount received in 2015, at a time when the overall drugs bill is increasing, so that tells us that the scheme is not going according to plan. The Government have stated that the measures would save the health service around £90 million a year, so let us consider what has been going on and whether this Bill can address the issues that have arisen.
One of the benefits we have heard about is that the Bill will help to close the loophole that I referred to earlier which has led to extortionate prices being charged for a number of generic medicines. This occurs, as we heard, when a small number of companies purchase off-patent drugs for which there are no competitor products or there is a dominant supplier. They then remove the brand name, which takes the drugs out of the current pricing controls, allowing the companies to hike up the costs by many hundreds or even thousands of per cent. It is clear that some of these companies have made this strategy a key part of their business model.
In the past few months we have seen this House expose some of the worst excesses of capitalism, from Mike Ashley and his employment practices at Sports Direct, to Philip Green, but there should be a special category of obloquy for those who make themselves extremely wealthy by using loopholes in the law to prey on the sick and vulnerable and to extract obscene profits from our health service. An investigation in The Times highlighted how a small number of companies including Amdipharm, Mercury, Auden Mckenzie and Atnahs raised the cost of medicines by £262 million a year through this practice.
When a US pharmaceutical company hiked the price of HIV medication, people across the world were united in their condemnation, but it is less well known that at the same time the price of over 200 medicines more than doubled in this country, with 32 rising by more than 1,000% and in one case, as we heard, an unbelievable increase of 12,500%. An indication of how central to the business plan of some companies this practice has become can be found just by looking at their websites. The company Amdipharm boasts that it was sold to a private equity company for £367 million and talks of acquiring and commercialising niche generic medicines. Another of these companies, Concordia International, which now owns both Amdipharm and Mercury, is quite open about the fact that it
“specializes in the acquisition, licensing and development of off-patent prescription medicines, which may be niche, hard-to-make products.”
This may sound like a noble pursuit, but we know that it can in fact be code for establishing and then abusing a dominant market position to the detriment of vulnerable patients and the taxpayer.
Rob Marris
My hon. Friend speaks of the abuse of a dominant market position, and this Bill extends the powers of the Secretary of State effectively to confiscate profits, rather than acting through taxation. Does my hon. Friend agree that the same approach may be worth considering in the case of a company such as Google? It has 85% of the world mobile phone market for Android operating systems, and people use Google for 85% of the searches carried out in the United Kingdom. That is a dominant market position and there are questions about the tax paid by Google. Perhaps profit confiscation might be considered.
Justin Madders
My hon. Friend tempts me a little way outside my brief. I note, though, that our health service is entering into partnerships with Google, so I hope that questions are being asked by Ministers about the taxation arrangements.
We know that the vast majority of the generics sector is well controlled by competition and delivers value for money to the taxpayer, and we welcome the extension of pricing controls where competition has failed. Is the Minister confident, however, that the steps taken in the Bill are adequate? We have seen, as my hon. Friend the Member for Wolverhampton South West mentioned, how adept international companies can be at moving figures around to avoid taxation, and we clearly want to ensure that the system that we develop is not vulnerable to the gaming that we have seen elsewhere. I do not think for a minute that given the vast sums of money at stake, the companies will just shrug their shoulders and take the hit if they can avoid it.
I was more than a little concerned when I read a section about this Bill in a Concordia investor presentation, which said that in the past the Department of Health
“would seek informal negotiations with manufacturers where it believed there were pricing issues. We believe this step will remain.”
The notion of informal talks with officials brings up uncomfortable memories of the sweetheart deals between multinationals and Her Majesty’s Revenue and Customs. Although I am happy for chains of communication to be open with such companies, can the Minister reassure us that in all cases prices will be regulated through a transparent, formal process and not through behind-the-scenes talks?
Sir Simon Burns (Chelmsford) (Con)
As any constituency MP will know, the pressures on the NHS grow year in, year out, partly because of our ageing population and partly because of developments in medical procedures—advanced drugs that can help to overcome illness, to continue a patient’s recovery or to stabilise their condition. That is why it is a constant battle for the NHS to root out waste and increase efficiency in the delivery of patient care without compromising that care.
The Nicholson challenge, launched in 2010, sought to save £20 billion over the last Parliament. As my hon. Friend the Minister of State said at Health questions, the NHS managed to achieve £19.4 billion—not £19.4 billion of savings that then went back to the Treasury, but £19.4 billion that was reinvested in front-line services and the NHS.
At the same time, though, we have great pressure, as my right hon. Friend the Secretary of State alluded to during his comments, on the ever-increasing drugs bill. In England, the drugs bill was £15.2 billion in the last financial year—£11.2 billion on branded medicines and £4 billion on unbranded, generic medicines. That represents a 20% increase since 2010 and a 7% year-on-year increase. With an ever-increasing, ageing population, those figures will continue to go upwards in future years.
We also see more and more new drugs being developed to combat illness. How may illnesses that were killers even during our lifetimes can now be cured or stabilised because of research and the work of pharmaceutical companies in developing the drugs that provide those results? Anyone will accept that the research involved in developing the drugs to tackle illness and disease is phenomenally expensive for the companies involved and sometimes takes many years. Therefore, we have to have a balance. The pharmaceutical companies, which have to invest horrendous amounts of money to find a new drug—a new cure or stabilising medicine—for medical conditions, obviously have to benefit from the horrendously large investments they make, but that does not mean that that should be a licence for them to simply charge what they like, for as long as they like, for the largest profits possible. There is a median between the two situations.
That was highlighted by the Times investigation a few months ago, in which one saw some of the price increases made by pharmaceutical companies that had, in effect, a monopoly on a drug because there was no competition. Let me give one or two examples to show the scale of the problem. Between 2008 and 2016, the price per packet of hydrocortisone tablets rose from 70p to £85—a 12,000% increase. With certain antidepressant tablets, one sees a 2,600% increase. With certain tablets for insomnia, there was a 3,000% increase. Frankly, even if this is with a relatively small number of drugs, it is totally unacceptable and extremely difficult to justify.
I accept that the cost of drugs to the NHS is extremely complicated. As hon. Members will know, branded medicines are controlled through the voluntary pharmaceutical price regulation scheme, which was agreed from 2014 to 2019. For those companies that choose not to join the PPRS, the Government operate a statutory scheme for branded medicines. The PPRS is based on a payment mechanism whereby companies make payments back to the Department of Health based on their sales of branded medicines, whereas the statutory scheme operates on the basis of a cut to the published list price of branded medicines. As a result, the statutory scheme has delivered significantly lower savings for the NHS, and that is clearly not satisfactory.
I welcome the Bill as a means for the Government to secure better value for money for the NHS and taxpayers. The first important change it will introduce is to clarify the law to allow, beyond any doubt, for the power of the Secretary of State to require a payment mechanism in the statutory scheme to limit the cost of medicines. That clarification will enable the Secretary of State to combat the current situation, whereby manufacturers and suppliers are allowed to choose the scheme by which they are controlled. That has led to numerous companies being covered by the statutory scheme rather than the voluntary scheme, because the statutory scheme makes less effective savings to the NHS and thus benefits them disproportionately.
In effect, the Bill will allow the Government to require companies to reduce the price of an unbranded generic drug, even if the company is in the voluntary scheme. The Government intend to use that power to limit the price of unbranded generic medicines when competition in the market fails and companies charge the NHS unreasonably high prices for them, as highlighted by the investigation by The Times.
Rob Marris
According to the Library briefing, since the Bill’s publication the share price of Concordia International, which has been playing that game and owns AMCo, has gone down by 28%. That is good news.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Like the right hon. Member for Chelmsford (Sir Simon Burns), I pay tribute to some of the research and development that has been done by the pharmaceutical industry. Europe has become the biggest research network in the world, and the biggest beneficiary of that has been the United Kingdom, through Horizon 2020 funding, in collaboration with others, and the European Medicines Agency. As others have said, however, both of those are going to change, so the pharmaceutical industry in this country will be rather nervous and anxious about its future.
Obviously, every new drug that the industry discovers creates an additional cost pressure for the NHS, hence the reason for the pharmaceutical price regulation scheme, which has existed since the 1950s. The current scheme has been in existence since 2014 and has brought significant benefits, as the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), has said. In Scotland it directly funds our new medicines and rare diseases fund. Ours is not a cancer drugs fund, so it gives us greater flexibility to treat very rare diseases. The patient’s condition does not need to be cancer, so we are giving Sofosbuvir for hepatitis C and Everolimus for tuberous sclerosis.
It is necessary, however, to have some form of management over the cost pressure, so the Scottish Government and my colleagues welcome the way in which the Bill tidies up the situation by closing some of the loopholes faced by the NHS. We have heard in particular about those who have a monopoly over generic medicines, whereby companies that are part of the PPRS can charge what they like for them. There needs to be much greater alignment and it needs to apply to all drugs, not just all companies.
The Secretary of State also mentioned the collection of data. As someone who has worked in the NHS, I have to say that it has struggled with that, and I have concerns about how it will work across the entire NHS, the entire pharmaceutical industry and medical technology and other supplies. We need to make sure that data collection is relatively simple and straightforward, and I also hope that we will bring together and use data that have already been collected.
I speak as a representative of one of the devolved nations and it is important that our Government are able to access those data easily. The Bill states clearly that the data gathered will be shared with Scottish Ministers, but on what basis? Will it be down to Scottish and Welsh Ministers to request data when they want them, or will they have to wait for an annual return, which might not happen when they want it to happen?
The Secretary of State said that there had been consultation, but I hope that that will continue, because the devil will be in the detail when it comes to the extension to all medical supplies. Scotland already uses a lot of central procurement to keep costs down, so it is important that the Bill enables, rather than interferes with, that.
Rob Marris
The hon. Lady is making a powerful speech, as ever. May I pick her medical brains, as it were, on the question of medical supplies? They are defined by the National Health Service Act 2006 as
“surgical, dental and optical materials and equipment”.
Would she, as a clinician and a surgeon, include a CAT or an MRI scanner, as a piece of surgical equipment? It is certainly not dental or optical. It seems to me, as a layperson, albeit a lawyer, that it is not surgical equipment, but investigative equipment, and MRI scanners, as she and many other Members will know, start at about 2 million quid.
Dr Whitford
That is an area that needs to be looked at. A narrow definition that covers only blades and swabs and that does not take into account our hugely expensive infrastructure would not make sense. When we buy those kinds of machines in Scotland, we tend to consider central procurement and assessment, which opens up the potential for massive savings. A lot more work will have to be done in Committee and then in regulation to make the process function in the way that everyone wants it to function.
We need something much more radical. That aspiration may not happen with this Bill, so it will have to come later. Patients in the UK face a delay of about five years to access new medicines. If we compare cancer survival rates, we will see that we are often ahead when it comes to patients with early disease. We are one of the earliest nations doing population screening for breast cancer. However, we start to fall behind when it comes to people with more aggressive or advanced disease. I think that that is where our poorer outcomes and survival rates by comparison with European countries come from, because it is palpable on the ground. Part of that is sometimes the eye-watering initial prices of new drugs. Yes, we can set methods to try to control that, but a lot of those drugs do not get through the system introduced by the National Institute for Health and Care Excellence because they are expensive. In my interactions with some of the major pharmaceutical players since I have been in the House, I have discovered an appetite for a different way of doing it. Prices could be much lower but there could be a guaranteed number of patients before a drug became generic. We might need to look at risk sharing, because at the beginning we often do not know whether a drug will really be as good as it is cracked up to be. If the price starts, like some cancer drugs, at £100,000, we will struggle to get it through any of our pricing systems.
Something else we have to deal with is the question of how we expect pharmaceutical companies to make a profit on drugs that we never intend to use. We need new antibiotics, but any brand-new class of antibiotics—we have not had such a class for 30 years—will have to be left on the shelf. The existing system will simply not fund research for such a drug. While the Bill tidies up some of the issues that we face now, we need to do much more blue-skies thinking on equipment, drugs and the way in which we develop different things. Otherwise we will have interminable debates, such as those in which I have participated in Westminster Hall: in one debate, we say that we want more research on, for example, brain tumours, but the next week we have a debate on the fact that we cannot access a brand new drug that has been developed by the pharmaceutical industry in the UK.
Andrew Selous (South West Bedfordshire) (Con)
It is a pleasure to follow the extremely well informed speech given by the hon. Member for Central Ayrshire (Dr Whitford). I hope that Ministers will continue to study what happens in Scotland, as they do elsewhere around the world so that we can share information and copy best practice, whether in Scotland or elsewhere. I am aware of Scotland’s fine medical tradition and what it contributes to the United Kingdom.
I pay tribute to The Times for the investigation that it began on 3 June. We often have cause to complain about the press in Parliament. We are often the subject of their inquiries, which we may find unwelcome, and from time to time the press are irresponsible, and should be more responsible. In this case, we can all thank The Times for shining a spotlight on unacceptable practice in the pharmaceutical industry in the UK, which has huge implications for the NHS, which we all love and have been sent here to protect and improve.
Rob Marris
The hon. Gentleman is extolling the work that The Times did in a series of articles this June. May I remind him and the House that in discussing the earlier adoption of drugs, we should bear in mind the work that The Times did in the 1960s to uncover thalidomide as a terrible drug? It was never licensed in the USA because of concerns that testing was not adequate. Yes, we want things to go to market earlier when that is possible, but we have to be extremely careful.
Andrew Selous
If memory serves, it was a team of investigative journalists from The Sunday Times that focused on that issue. However, the hon. Gentleman is right: we should pause and reflect, and be thankful for the tremendous tradition of British investigative journalism, which helps us and is our ally in Parliament. It is important to put that on the record. What The Times did contributed to the Secretary of State launching the Competition and Markets Authority inquiry. I am pleased that that happened.
A number of speakers have made a valid point, with which I strongly agree, that it is absolutely vital that we continue to have a strong pharmaceutical industry in the UK. In the months before she was appointed, the Prime Minister said:
“It is hard to think of an industry of greater strategic importance to Britain”
than the pharmaceutical industry, and she was absolutely right. The briefing from the House of Commons Library says that the output of the pharmaceutical industry in 2015 was £12.7 billion, which amounts to 8% of the UK’s entire manufacturing output. Let us look at one or two of the larger players.
GlaxoSmithKline is active in more than 150 markets around the world, and has 110,000 employees globally. It has 80 manufacturing sites, and it is the largest vaccines business in the world. Of particular significance is the fact that it conducts all its research in two research hubs: one in Philadelphia and the other in Stevenage in the United Kingdom, where a number of my constituents are proud to work. AstraZeneca is another large pharmaceutical company that is active in the UK. It has 6,700 UK employees, and supports a further 35,000 jobs in the UK. It operates across seven sites, including one in Luton, close to my constituency. Again, a number of my constituents are rightly proud to work there.
As the Secretary of State said, the medicines bill for NHS England, at £15.2 billion in 2015-16, is the second largest cost for the organisation, after staff costs, so it is absolutely vital that we secure value for money in this huge area of spend. It is a concern that the CMA has spoken of “excessive and unfair prices” and has referred to companies that have “abused a dominant position”. There have been incidences of no competition or insufficient competition, so it is right that the Government have stepped in to deal with the issue. That touches on a broader philosophical point. We had a brief exchange on this earlier. In a response to me only a couple of days ago on the morality of business behaviour, the Prime Minister wrote:
“we need to ensure that the free market has an ethical basis”.
I absolutely agree.
The Library briefing for the debate looks at the top 11 medicine price increases, ranging from ascorbic acid, with an eye-watering 1,012% price rise, right up to Doxepin, which had a 5,281% price rise. In some cases—if some of the ingredients and some of the raw material for a particular drug are suddenly in short supply—a price increase such as that may be justified, but the Department knows that, in the majority of cases, there is no valid reason for the huge increases. That is why the Government have, properly, acted. Therefore, I welcome the Bill’s powers to reduce prices, to impose price controls and, importantly, to gather information. However, I have a couple of questions for my hon. Friend the Minister on gathering information.
Getting information is vital, and I am pleased that the Government have included measures in the Bill to obtain complete information. Is the Minister satisfied that there is sufficient analytical ability in his Department to really know what is going on? I ask that for this reason. I have had the huge privilege of working with members of the senior civil service in a different Department in the past two years, but sometimes we expect civil servants to have a range of skills that it is not fair of us to expect them to have. Is there the necessary commercial expertise in his Department to really work out what is going on with the additional information that he and his officials will have at their fingertips? Is there a scheme for secondments between pharmaceutical businesses and the Department of Health, so that his officials really know how the market works and any particular games that might be played? That is important.
I am aware that one permanent secretary in post at the moment had a secondment earlier in his civil service career to Diageo, but it is important that the Minister and the permanent secretary ensure that there is that capability in their Department. If it is not there, I hope that he and the ministerial team will take steps to ensure that it is. I say that because, if we look at some of the emails that came into the public domain as a result of the investigation by The Times—some were brought to light through freedom of information requests—it seems that there was not quite the level of serious analysis, probing and inquiry that we would all, including the Minister, have liked to see.
The Government have introduced the Bill because they care passionately about the future of our NHS. They will do everything necessary to protect it and that very much includes getting value for money from the drugs that the NHS pays for. On the Conservative Benches, we value and care about the role of the free market. We know that it is the greatest economic mechanism in the history of mankind for creating wealth and for relieving poverty. It is because we care about it that we will act to reform where that is necessary, whether that be in the interests of the NHS or any other part of our country.
Kevin Foster (Torbay) (Con)
It is a pleasure to follow my hon. Friend the Member for Vale of Clwyd (Dr Davies) and to hear many of the points he made. He spoke of the NHS spending £262 million a year on 50 drugs; that is actually £262 million extra that we are spending on those drugs courtesy of the greatly increased prices. That really brings home the problems here and why the Bill needs its Second Reading.
As many hon. Members have already focused on a range of issues, I will focus in particular on generic drugs and some of the huge price increases we have seen. It is right to say—and this was perhaps touched on by the Secretary of State in response to the intervention by the hon. Member for Wolverhampton South West (Rob Marris)—that it is not unreasonable for a pharmaceutical company to make a profit in exchange for investment in developing a new drug and bringing it to market. But that is what our patent system is for. The patent is there to protect for a period of time the ability of the company to charge a reasonable price to reflect the risk it took in its investment.
The key point is that the drugs we are considering are now out of patent. The company has had a reasonable period of time to make its investment back. The issue is that there is only a very limited supply of them. It is only right that we deal with what is an emerging business model. There can be no two ways about it. Some of the names on the list of companies, such as AMCo and Atnahs, seem consistently to have unusually high increases in prices, in the thousands of per cent. It is clear that a business model is developing to take advantage of a loophole in the legislation and ultimately not to make a profit but to profiteer, at the expense of the NHS and people who need those treatments. I am sure we can all think of instances where drug company lobbying points to patients who are unable to get treatment; this is exactly the sort of thing that means people cannot get treatment.
It was highlighted earlier that it is slightly ironic that here we are, as Conservatives and under a Conservative Government, arguing for price controls. But this is not about intervening in a market but about intervening to deal with market failure, where the normal procedures of competition are not producing a fair or reasonable outcome either for the NHS or for the patients on whose behalf we are providing products.
I went to see the amazing work being done on brain tumour research at Plymouth University recently—the skills and the groundbreaking research that will bring real benefits. But that is not the business model of the companies the Bill deals with. Their model is to look for a drug that needs to be prescribed and has only one supply, then buy it, get hold of the supply and jack the price up. That is nothing to do with delivering new and innovative products. The Bill is therefore very welcome, as it looks to intervene in that situation.
It is also right that to be able to tackle the problem we need information. Let us be blunt; if a company is looking to put its product price up by 12,000% it is not going to be particularly co-operative with an inquiry into whether that is fair, so it is right that the Secretary of State will have powers to require that more information be supplied.
Rob Marris
I am grateful to my new friend, another socialist, for giving way. May I tempt him to suggest some other areas of the economy where he and what I must now call his Christian Democrat fellows would be prepared to address the issue of profiteering, as we on the Opposition Benches would?
Kevin Foster
The hon. Gentleman tempts me, but I see you are now in the Chair, Mr Deputy Speaker, and you are very tough on any irrelevant points or points off subject, so that could be very dangerous territory.
Rob Marris
May I suggest another industry it might be worth looking at, where this situation obtains, namely the defence supply industry—not all of it, but parts of it?
Kevin Foster
I thank the hon. Gentleman for that intervention. As a member of the Public Accounts Committee I have spent plenty of time looking through examples of defence procurement that went wrong. The Minister might be new to the Department of Health but he certainly is not new to defence procurement. It is noticeable that much of what now makes its way to the PAC for a review of what went wrong concerns legacy issues—for example, the military flying contract—rather than modern procurement. But I am conscious that with Mr Deputy Speaker in the Chair I need to get back to the price of drugs for the NHS.
Looking through the evidence it is clear that the current system of regulation is not effective. Companies can, in effect, put their branded products into the voluntary scheme and use that as a way of jacking up costs for their generic products. That is just not right. As other Members have touched on, we are facing demands and pressures on the NHS. I have no problem with companies that give a good service charging a fair price and making a fair return on their investment.
That is clearly not what is going on with this business model. We can see numerous examples, in particular in the chart put together by the House of Commons Library, which shows increases of thousands of per cent. across a number of products. It is impossible to believe that such increases are going on for any of the input materials for those products. As we have said, this is flagrant racketeering and profiteering at the expense of patients and of people in pain. Even if the drug is still provided, that money should have been spent on other NHS services.
I am therefore pleased at the almost unanimity breaking out in the House on the proposals. They will clearly need to be discussed in more detail in Committee. But it is the right time for the Bill. It is not about tackling fair and legitimate profits but about getting rid of profiteering, which is why it has my full support.
Maggie Throup (Erewash) (Con)
It is a pleasure to be called to speak and to follow my hon. Friend the Member for Torbay (Kevin Foster).
From what I understand, the Bill will close the loopholes and gaps that so obviously exist in the current powers attributed to the Secretary of State; hon. Members who have spoken before me highlighted many of those. The measures are important, to ensure that we have value for the taxpayer across the medicines budget, but I take issue with the inclusion of medical supplies and “other related products” in clause 6. The clause introduces a new information power for the Secretary of State. Although I welcome that in principle, I fear it may prove quite onerous for the many small and medium-sized enterprises that supply on this side of the business and dominate the medical supplies industry.
I am sure that much of the required information is already collated by each company, but it is important that it can be transmitted easily and in a timely fashion. I listened carefully to the Secretary of State. He implied that he does not want these measures to be burdensome, but I seek the Minister’s assurance on that. As my hon. Friend the Member for South West Bedfordshire (Andrew Selous) highlighted, the ability to use the data effectively is also important. There is no point in collecting lots of data and not being able to use them.
Rob Marris
Coupling those two points together, does the hon. Lady agree that it might be advisable for the Government to look at some sort of threshold—say, a turnover threshold for a company—below which the information would not have to be supplied or might instead be supplied to a lesser extent or in a lesser quantity? That would address the issue of how onerous the requirement might be, but could also address the issue of whether the Government have the capacity to crunch the figures thereby generated.
Maggie Throup
The hon. Gentleman makes a very good point. There is already a cut-off for some of the data collection of, I think, a turnover of £5 million. Perhaps we could have clarification on that.
What concerns me more is who will define what is classified as medical supplies and other related products. As the hon. Member for Wolverhampton South West (Rob Marris) alluded to earlier, how long is that piece of string? Proposed new section 264C to the National Health Service Act 2006, which is inserted by clause 6 and supplements proposed new sections 264A and 264B of that Act, requires the Secretary of State—I quote from the explanatory notes to the Bill—
“to consult any body (such as the Association of the British Pharmaceutical Industry) which appears to the Secretary of State to represent manufacturers, distributors and suppliers of health service medicines, medical supplies or other related products required for the purposes of the health service in England or the United Kingdom before making any regulations under section 264A or 264B.”
That is quite a mouthful.
If the definition of “medical supplies” is unclear, how will the Secretary of State know who to consult? He indicated that he has already had discussions with medicine and medical devices suppliers, but I fear that there might be many more product areas out there that have been missed out of the initial discussions. I therefore ask the Secretary of State to provide clear guidance on what he understands as
“medical supplies and other related products”.
For example, do they include in vitro diagnostic products? This is an area of medical supplies with which I am very familiar. If they include IVDs, will he agree to consult the British In Vitro Diagnostics Association, the trade association that represents this industry across the UK? This is an important area of the life sciences industry, with nearly 900 million pathology tests performed every year and approximately 70% of every clinical decision being made using some form of IVD. If they are to be included in the Bill, it needs to be around the table to participate.
I conclude by saying that in general terms I am in favour of the Bill, as it will ensure good value for money for the taxpayer and, ultimately, the patient. At the end of the day, we need to be thinking about the patient. Clarification is required on various parts of the Bill, but I am sure that that will be sorted out in Committee, and I am happy to support it.
Barbara Keeley (Worsley and Eccles South) (Lab)
I thank all Members who have made contributions to the debate. We find ourselves in a situation where we have some time available, which is amazing.
Let me refer to the interventions we heard in the early part of the debate, because a range of interesting points have been raised. The hon. Member for Totnes (Dr Wollaston) made the point that the Bill provides the opportunity to look at drugs that have not been licensed, such as Lucentis and Avastin, which is not licensed for age-related macular degeneration but is so needed by that group of people. I was pleased to hear the Secretary of State say that he would look at that.
My hon. Friend the Member for Wolverhampton South West (Rob Marris), in a number of amusing interventions, talked about policy on profit control of the pharma sector and found that the Conservative party is marching on to the centre ground—or has perhaps gone past the centre ground.
My right hon. Friend the Member for Leicester East (Keith Vaz) talked about the proportion of the NHS budget spent on dealing with diabetes. He was concerned about the increase in the drugs bill and suggested the use of structured interventions, not just more drugs, because such a large proportion of the NHS budget is being spent on diabetes.
My hon. Friend the Member for Alyn and Deeside (Mark Tami) made the important point that we need to ensure the measures in the Bill do not act as a disincentive for pharma companies to conduct research into rarer conditions. I think that hon. Members who have contributed know we are walking the line in terms of making savings but making sure there are not disincentives.
The right hon. Member for Chelmsford (Sir Simon Burns) welcomed the Bill. He talked about our ageing population—we returned to that with our last speaker—and the increasing drugs bill. He talked about the importance of new drugs, but also the need to deal with unacceptable profiteering, something referred to by a number of Members.
The hon. Member for Central Ayrshire (Dr Whitford) talked about the UK having the biggest research network in the world. She talked about change and the fact that the pharma companies would be nervous and anxious. She welcomed the tidying up aspect of the Bill and I think the general view of Members in all parts of the House was to welcome that. Like a number of hon. Members, she talked about not just enabling the management of cost pressures but doing something more radical. That has been a real flavour of the debate: using this as an opportunity to do something different. I agree with her concerns about the data collection aspects of the Bill and I will say more about that. I also agree that we need to do something more radical. She talked about tackling the five-year delay to access new medicines and rightly pointed out that that is probably where our poorer survival rates are coming from.
The hon. Member for South West Bedfordshire (Andrew Selous) commended The Times for investigating this issue. He also talked about the information powers and questioned whether the Department of Health had the analytical ability to use the data being gathered. That is an important question. If new data needs to be gathered, what are we going to do with it?
The right hon. Member for North Norfolk (Norman Lamb) acknowledged the value of the competitive market, but talked about the sometimes outrageous increases in the price of generic drugs—and we have heard some staggering examples today. He gave the example of a rise of £600 per item dispensed in one particular case, and he hopes, as other hon. Members do, that the Competition and Markets Authority will take action. That has been a key theme in tonight’s debate.
The right hon. Gentleman also talked about not wanting to pit the needs and interests of some patients who need drugs such as PrEP against those who need other drugs. I agree, and I do not think that we should go there in our debate. He spoke about the slippery slope when we get into debating whether to delay adopting even approved treatments. In his view, that provides more evidence that the NHS needs more resources.
The hon. Member for Vale of Clwyd (Dr Davies) talked about the impact on his constituent of a drug prescribed to her that helps her to work and increases her energy levels, the cost of which has increased by 645%. We must maintain a focus on the impact on individuals of the decisions that we make. She has found a drug that suits her, and it would be dreadful for her if it were withdrawn. The hon. Gentleman also talked about the difficulties of introducing new competition into the market. His constituent is hoping that the Bill goes through, as are many others here tonight, and wants action on competition and markets. Let us all hope this goes through.
The hon. Member for Torbay (Kevin Foster) talked about intervention to deal with market failure. In his view, we need to separate out the companies that are doing good research, such as the brain tumour research that he has recently seen, and those that have nothing to do with producing new and innovative products, but are just making money.
Rob Marris
I would like to cite for my hon. Friend and the House the Library briefing, which shows that it is not exactly as cut and dried as the hon. Member for Torbay (Kevin Foster) seemed to think. It tells us that the Competition and Markets Authority took action against pharmaceutical companies with regards to generic pricing, and that GlaxoSmithKline and a number of other companies were fined £45 million when it was found that payments had been made in order to prevent the antidepressant medication Paroxetine being offered on the generics market. GSK is a great pharma company for coming up with new drugs, but it crossed the line in this case, according to the Library briefing, so it is not always either/or when it comes to these pharma companies.
Barbara Keeley
No, but I think the hon. Member for Torbay was talking about companies that are not doing any research, but just buying up generic products and profiteering from them. There has been general condemnation of those sort of companies on all sides.
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
Rob Marris Excerpts(8 years, 1 month ago)
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Rob Marris (Wolverhampton South West) (Lab)
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.
Brain Tumours
Rob Marris Excerpts(8 years, 7 months ago)
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Rob Marris (Wolverhampton South West) (Lab)
Last Friday, I had the very great privilege of spending quite a long time with Peter Realf, who is here today with his family, at the University of Wolverhampton’s brain tumour research centre in my constituency. We discussed a range of things related to brain tumours with Professor John Darling and Professor Tracy Warr, who gave evidence to the Petitions Committee.
I want to make a couple of brief points to remind the Minister that money spent on generic cancer research—important though that research is—is often not applicable to brain tumour research. One cannot say that 3% of cancers are brain tumours and therefore 3% of the generic cancer research funding can be attributed to brain tumour research. There are about 120 different types of brain tumours. As Professor Warr herself pointed out to the Committee, that generic research is not applicable to many of the brain tumour situations. I repeat what she said to the Committee—it is quoted in paragraph 53 of the report:
“It is a very complex disease and a lot of the general non-site specific translational work from other tumours cannot be applied to brain tumours”.
Also, on the same page of the report, in paragraph 55 —this has been mentioned earlier in the debate but it bears repeating—the actual amount, as far as one can tell, that is spent on brain tumour research in the United Kingdom at the moment appears to be in the order of £2.2 million.
I asked Professors John Darling and Tracy Warr how big the brain tumour research community—for want of a better word—is in the UK and they said that it is in the order of 100 people—very specialist people. I asked them what the chances are of scaling up if, as we hope, we get a considerable increase in research funding from the Government as a result of pressure from both sides of the House. It is all very well the Government saying they are going to increase funding for brain tumour research—as I hope they will—but if the researchers are not there to do it, we cannot scale up in a short time; it is very complex work.
The professors told me and Peter Realf that we could scale up if, for example, the funding were doubled. Some have suggested that it should go up by £35 million, but if it is £2.2 million now and that were to double, we could scale up. The brain tumour research centre at the University of Wolverhampton—a national centre of excellence that does this work—is losing doctoral and post-doctoral students to other fields, such as that related to leukaemia, or to places such as Chicago, because the positions are not there for them in the UK. I ask the Minister to please consider this: we can scale up, we do have the skills there and we can double the research funding. It will cost about £2 million to £2.5 million a year to double the research funding—please do that.