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Medicines Control Agency

Volume 173: debated on Wednesday 6 June 1990

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To ask the Secretary of State for Health if the Medicines Control Agency is included among those autonomous agencies, as defined by Treasury documents Cm. 914, on "The Financing and Accountability of Next Steps Agencies", published in December 1989.

To ask the Secretary of State for Health (1) under what statutory authority he has ruled that the Medicines Control Agency may not charge turnover-related fees;(2) whether the Medicines Control Agency may charge turnover-based fees;(3) why a system of turnover-related fees has not been adopted by the Medicines Control Agency, as authorised by the Medicines Act 1988.

No ruling has been given prohibiting the MCA from charging turnover-related fees. In order to meet the criteria for exemption from gross running cost control the agency has to be self financing from receipts which vary in line with the demand for its services. Another requirement was that such fees had to be seen as related to the cost of the services provided: a turnover-related levy could not satisfy this criterion.

To ask the Secretary of State for Health under what statutory authority the Medicines Control Agency budget for 1990–91 is projected to make a net profit.

The Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Order 1989 SI 1989 No. 684 sets out the matters to be taken into account in setting fees under the Medicines Act 1971. There is no statutory requirement to make a net profit, but any past deficit is subsequently recovered.

To ask the Secretary of State for Health if he will define the interpretation and meaning of the exemption from gross running costs control, applied to the operation of the Medicines Control Agency.

The meaning of running cost control and of exemption from such control is explained in paragraph 21.3.10 of the 1990 public expenditure White Paper (Cm. 1021). The Medicines Control Agency, while remaining part of the Department of Health, may be exempted from gross running cost control provided certain conditions are met, one of which is that its costs, excluding British Pharmacopoeia Commission activities, are recovered from fees payable by licence holders and applicants. Like other parts of the Department, the MCA is required to submit a bid for funds each year. The effect of exemption from gross running cost control is that, once funds have been voted by Parliament, the MCA will not be subject to a reduction in those funds, otherwise than by supplementary estimates submitted to and approved by Parliament or other parliamentary instructions.

To ask the Secretary of State for Health if he will list the statutory instruments or other legislation which sets out the establishment and basis of the existence of the Medicines Control Agency.

No statutory instrument or other legislation was needed to establish the Medicines Control Agency.

To ask the Secretary of State for Health what is the projected revenue, gross running costs and net profit or loss for the Medicines Control Agency for 1990–91.

The latest published figures are contained in the Department of Health supply estimates 1990–91 dated 20 March 1990, copies of which are available in the Library. The forecast net profit or loss figures for 1990–91 are not yet available. They await the completion of the agency's accounts for the year to 31 March 1990.

To ask the Secretary of State for Health when, and by what authority, the Medicines Control Agency became, or is proposed to become, an autonomous agency.

The Medicines Control Agency is not an autonomous agency but remains part of the Department of Health. No decision has been taken on whether in due course it might become a next steps agency.

To ask the Secretary of State for Health how his Department has applied the provisions of the Health and Medicines Act 1988 in relation to the charging of licence fees for medicines on the turnover of a company and of a product as well as on a fixed basis, and authorisation of the Medicines Control Agency to fix charges on those criteria.

Until 31 March 1989 fees in relation to applications for licences or certificates under the Medicines Act 1968 were charged on two bases—an annual fee or turnover levy related to the turnover of licensed products and capital fees in relation to particular applications payable on submission of the application. From 1 April 1989 the annual fee was abolished.Section 21 of the Health and Medicines Act 1988 clarified the basis under which regulations could be made in relation to an annual fee and also validated the basis on which previous annual fees had been charged.

To ask the Secretary of State for Health what guidelines setting out their relationship and terms of reference for the operation of the Medicines Control Agency have been issued by him.

The Medicines Control Agency was set up from 1 April 1989 following the recommendations of the Evans Cunliffe report on the control of medicines. I refer my hon. Friend to the reply my right hon. Friend the then Minister for Health gave my hon. Friend the Member for Lewisham, West (Mr. Maples) on 14 April 1988 at column 206, indicating the particular recommendations which were accepted as the basis of the agency's operations.