Health Service Medical Supplies (Costs) Bill

Steve McCabe Excerpts

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

[Mr Hunt]

I am grateful to my hon. Friend for raising that issue. Although the measures he mentions are not directly covered in this Bill, he reminds the House that the business of getting value for money from our drugs business is everyone’s business throughout the NHS. There is a huge amount of prescribing of medicines that is not strictly necessary. Indeed, we had further evidence of that from the Academy of Medical Royal Colleges this morning. My hon. Friend makes an extremely important point: this Bill is part of the effort to get better value for money from our medicines budget, but initiatives such as the one he talks about are equally important.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Further to that question, I can see how the Bill will deal with the issue of debranding, and that is very welcome, but I understand there are three other areas of concern. There is the question of price delay, which the Competition and Markets Authority has been looking at, and there are the problems of tying and bundling and so-called loyalty schemes, all of which act to inflate the cost of medicines to the NHS artificially. Will the Bill also deal with those areas?

[Mr Hunt]

It will deal with some of those concerns, and we will listen to all the concerns raised by hon. Members during the progress of the Bill. On the particular issue the hon. Gentleman raises, the CMA is already investigating the behaviour of pharmaceutical companies in certain situations, but it has become clear to us that there is a particularly unethical and unacceptable practice of drugs companies getting control of generic drugs for which they command a monopoly position and then hiking the prices. There was one product whose price increased by 12,000% between 2008 and 2016, and if the price had stayed the same as before the increase, the NHS would have spent £58 million less. The Government’s conclusion is that the simplest and quickest way to sort this out is through new legislation, but I will happily take the hon. Gentleman’s other concerns offline and look into them further.

--- Later in debate ---

[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?

[Steve McCabe]

Where the advertising budgets of pharmaceutical companies dwarf their R&D budgets, is there not an argument for the Government to look again at the tax position of those companies, as well as at the price of their products?

[Justin Madders]

We will not get very far with this Government on corporation tax. They have been going in a direction that we would not have chosen. They have decided on the measures in the Bill as the best way to control prices and we will see how they get on. Will the Minister confirm that if it becomes clear in a few years that we have opened up another set of loopholes, we can expect the Department to take the lead and to be proactive in its investigations, rather than relying on a team of journalists to expose the problem?

We know that in Scotland the rebate that has been generated has been used to create a dedicated fund to give patients access to new medicines. Will the Minister consider investigating similar models and ensuring that the benefits of the scheme are used for the purpose of improving our frankly poor record in allowing patients to benefit from new medicines? We accept that there will always be challenges in matching funding to new drugs, but there is at least a degree of logic in allowing savings made in the drugs bill to be reinvested to enable new products to reach patients more quickly.

We welcome today’s report by the Accelerated Access Review, which sets out an ambitious plan that could see patients accessing new lifesaving treatments up to four years sooner. We hope the Minister will take this opportunity to give financial backing to the aims of the review by committing to using future rebates from the pharmaceutical sector to improve access to treatments. I ask the Government to seriously consider this, as there are growing concerns about access to new drugs and treatments in this country, and particularly about the widening gulf between the UK’s record on developing new drugs and the ability of the NHS to ensure that all patients benefit sufficiently.

The “International Comparisons of Health Technology Assessment” report published in August by Breast Cancer Now and Prostate Cancer UK shows that NHS cancer patients in the UK are missing out on innovative treatments that are being made available in some comparable countries of similar wealth. This is at the same time as a number of medicines have been delisted by the Cancer Drugs Fund after it overspent its budget, and the failure to extend this scheme to innovative treatments as well as medication. There was a report in The BMJ in July entitled “A pill too hard to swallow: how the NHS is limiting access to high priced drugs”. It came to similar conclusions when looking at new antiviral drugs that held out a real prospect of eliminating hepatitis C but which were very expensive.