To preface the debate, I thank the secretariat of the Select Committee on Health, whose seven members have worked hard for us. I also thank our three advisers on the report—Professor Joe Collier, Professor Alan Maynard and Dr. Hilary Pickles—who gave us excellent advice.

The report took some time to gather. We had some 124 memorandums and 31 witnesses, and we visited Scotland, France and Canada—I am not sure whether it was in that order. On our visit to Canada to see similar organisations, their representatives spoke in glowing terms about the National Institute for Health and Clinical Excellence, saying not only that NICE co-operates well with Canada but that it is leading large areas of the world in assessment and the use of drugs in the health care system. I ought to put on record that NICE’s international co-operation does it and the United Kingdom proud.

I will make some general comments about the report—what we were considering, and what we found—and the Government’s response, and then I will probably pose a few questions that my right hon. Friend the Minister may wish to reply to, either during this debate or later. We examined the work of NICE. Members will know that NICE was established in 1999. We found that in the eight years since it was established, in response to internal and external review, NICE has shown itself ready to change. Initially, it appraised technologies, mainly medicines, and produced clinical guidelines. Its remit was soon expanded to cover interventional procedures. Subsequently, technology appraisals were made mandatory and the single technology appraisal was established to speed up the evaluation process. Since 2004, it has also examined public health issues. It is in no way an organisation that has been static since it was set up. Indeed, it has responded positively to many issues.

During our inquiry, we received a good deal of evidence that NICE is carrying out many of its functions effectively. However, NICE also has its critics, which is one of the reasons why we undertook the inquiry. We examined three main areas of relevant concern—the evaluation process, the affordability of guidance and implementation. In addition, after the Office of Fair Trading report on the pharmaceutical price regulation scheme, we decided to consider NICE’s potential role in such a new system, although I must say that at the time, I believed that if the PPRS were to be renegotiated and not removed, we would not necessarily have to spend much time on that. I will say something about that later.

We identified several problems with the evaluation process. The first is topic selection. Only a few selected medical technologies are chosen as suitable for assessment as technology appraisals. There is also far too little emphasis on disinvestment. I think that we trod on one or two toes when we commented on that in our report, but the Health Committee has previously considered NICE and commented on disinvestment. A few older treatments do no good at all, and many of them are not cost-effective. Because NICE selects what it assesses, we might be able to disinvest more than we do.

The wider benefits of treatment to society—for example, issues involving the cost of carers—are not included in NICE’s cost-benefit analyses. I could go on from there. We used the specific example of carers, but in taking evidence, we often asked questions about employment, and whether that would be taken into account in determining the cost-effectiveness of keeping somebody, maybe a family member, in work. It was a bit difficult, but we did not draw up a shopping list. There are probably wider issues that could also be taken into account.

NICE often does not have all the information that it needs to make a full assessment. It does not have access to all the information used by the Medicines and Healthcare products Regulatory Agency, and clinical trials are usually designed without NICE’s work on cost-effectiveness in mind. We made some specific recommendations on that point that have not gone down particularly well, and I may return to that later.

Experts are not used well. That is not a criticism of the experts involved in NICE. Members will remember that in challenges in the courts, clinicians who advise NICE have often been criticised by other clinicians. We thought that that was unfair, because it is a trap for someone advising NICE on a particular issue. We heard that criticism, which also came out in the media. Some of us have been to lobbies in this place and heard people say that the right people had not given NICE evidence during its assessment procedures. I have mentioned the names of three people who advised us on the report. They were with us all the time, and they helped us to gather witnesses and put the report together, but in the end, they took no part in the final decision. However, our advisers were constant. We wondered whether NICE ought to consider using experts in that way, instead of asking them to give an opinion as well.

Publication of guidance is slow. Licensed medicines are often not prescribed while primary care trusts and clinicians wait for NICE to make a decision. Again, some of the challenges involve that issue. The industry calls that NICE blight, because it takes so long for decisions to be made.

We made a number of recommendations to address the problems. Key among them was that a system is needed under which all medicines are assessed at launch. A shorter, less in-depth evaluation should be made between licensing authorisation and marketing, so that clinicians can prescribe useful and cost-effective drugs as soon as they are launched. A lower cost per quality adjusted life year threshold should be employed during early assessment to ensure that only the most cost-effective and clinically effective products are available straight away. A full appraisal should be made thereafter, so that the threshold can be increased, if that is warranted.

In order to ensure that NICE has the information that it needs, it should have access to the same material used by the licensing body, clinical trials should be registered and NICE and the pharmaceutical industry should work together more closely. That is particularly important to the effective assessment of drugs in time for launch. I recognise that that could involve major problems. Pharmaceutical companies are not all based here, and their way of doing research and development might not be easily read over, but discussions could be held with them to see whether some international consensus is possible, so that assessors—not only NICE but people doing the same job in other parts of the world—could use a measurable framework.

We recommended that more be done to encourage disinvestment. No evaluation of older, possibly cost-ineffective therapies has taken place to date, although two are under way. As I have mentioned, our predecessors on the Committee made the same recommendation. We would like to be convinced that NICE is moving a bit quicker.

In our last report on NICE, we also recommended that the legislation be changed to accommodate the need to ensure that assessments of products take account of the wider benefits to society. We have made that recommendation again. The affordability of NICE guidance and the threshold that NICE uses to decide whether a treatment is cost-effective are of serious concern. It has been in the headlines practically throughout NICE’s life. The threshold is not based on empirical research and is not directly related to the national health service budget. It seems to be higher than the threshold used by PCTs for treatment not assessed by NICE.

We heard from witnesses, including those from patients’ organisations and pharmaceutical companies, who thought that NICE should be more generous with its cost per quality threshold and approve more products. On the other hand, some PCTs struggle to implement NICE guidance at the current threshold, and other witnesses argued that a lower one should be used. We recommend that the threshold used by NICE in its full assessment should be reviewed. Further research comparing PCT thresholds with those used by NICE should also be undertaken. That is denied in the response, but we believe that we have found enough evidence—although perhaps not concrete evidence—that NICE uses levels that are different from some PCTs. We also believe that an independent body should determine the threshold used when making judgments on the value of technologies to the NHS. I shall return to that subject at the end of my opening remarks.

The implementation of non-mandatory guidance is variable, owing to a variety of causes, including the threshold used by NICE for determining cost-effectiveness, a lack of clarity about the status of guidance, a lack of involvement by PCTs in the development of guidance and disagreements between clinicians about the worth of some of NICE’s guidelines. I have no doubt that that has been the case for the eight years that NICE has existed. However, there is a glimmer of hope that people will start to concentrate on implementation a little more. NICE is not the only body that needs to act, and the entire health care community should take part as well. I do not know whether the Darzi review of the NHS will consider that, but some of the Committees that Lord Darzi is using are obviously made up of clinicians. Lessons should be learned from that about ensuring that PCTs are engaged and have ownership of some of NICE’s procedures.

To improve the implementation of NICE guidance, we have recommended more help for PCTs, better assessment of the level of uptake, a larger role for PCTs in development, the better use of experts in development and a change in the terminology used by NICE to clarify to patients what they can expect by right from their local NHS organisation. We also recommend that elements of clinical guidelines be made mandatory. A suitable example is risk assessment for all patients at risk of developing venous thromboembolism.

Some of the problems with affordability and the implementation of NICE guidance relate to the price of medicines. As I have mentioned, the OFT recently recommended that a new system of value-based medicine prices replace the PPRS. We found support for that, but there were concerns about how it would work in practice. We understand that discussions between the Government and the pharmaceutical industry are under way, so our report makes no large-scale recommendations for the new scheme. However, we agree with the Government that better mechanisms are needed to ensure that the NHS pays a fair and affordable price for medicines. We also recommend that NICE should be involved in any new system and that any change to its remit should be adequately resourced. I shall ask a few questions about that at the end of my remarks, but I want to say now that although we did not consider that in great detail, we believe that NICE ought to assist in any major changes, if there are to be any.

We concluded that NICE does a vital job in difficult circumstances. The development of more and more health technologies and procedures, alongside rising patient expectations and the ageing population, will make it even more difficult in the future. Health care budgets in England, as in other countries, are limited. Patients cannot expect to receive every possible treatment, and demand outstrips resources and priorities have to be determined. In other words, rationing is essential, and NICE has a key role to play. In the past, NICE has changed in response to new challenges, and we are sure that it can do so again. Given the difficult environment, NICE requires the backing of the Government. It also needs Ministers to support it—not to seek to undermine it. It must not be left to fight a lone battle to support cost-effectiveness and clinical effectiveness in the NHS.

The Government’s response was generally supportive, certainly in tone, but it was non-committal about some of the details. Of course, much depends on the Government’s decision about the PPRS. The response to our recommendation about quality adjusted life years is not untypical:

“The government will consider with NICE the need for further research”.

That is fine, but we are unlikely to look again at the pharmaceutical industry or NICE in the near future. Furthermore, the Care Quality Commission will consider inspection of the implementation of NICE guidance. This morning, we actually interviewed the Government’s nominee to take over the chair of the CQC.

The Government rejected a number of our recommendations, such as the recommendation that a separate mechanism be put in place to advise on the cost per quality adjusted life year range and that NICE be given the right to see all the evidence used by the Medicines and Healthcare products Regulatory Agency. The Government pointed out that several of the Committee’s recommendations are matters for NICE, including the use of experts, information for consultees and the use of implementation consultants. We accept that.

It was unusual and pleasing that NICE itself submitted a response to our report, for which I thank those responsible—I see that at least one of them is within earshot. We decided this morning that we will publish its response, in the same way that the Government publish their response—although, probably not with a crown on it. The NICE response accepts some of our recommendations, but stresses that it is already doing much that the Committee urged it to do. For example, on topic selection, it does not focus excessively on expensive drugs. Furthermore, it is looking at disinvestment, the issue of experts and information about processes to consultees. Like the Government, however, it also rejects a number of what we believe to be key recommendations, notably on early “rough and ready”—I think that that is what it called it—appraisal of all drugs at launch.

As I said, we visited Scotland and the Scottish Medicines Consortium—this is probably more a matter for the Department than for NICE. People often tell those of us who represent English constituencies about how quickly drugs are available in Scotland, as opposed to those appraised by NICE. We effectively, without mirroring it exactly, made recommendations that would introduce in England something not dissimilar to the system in Scotland. That recommendation was knocked back not only by those who responded statutorily to our report, but by the pharmaceutical industry itself. If the latter is listening, I say to it that we cannot have NICE blight here when everything is better in Scotland.

When we make recommendations that are not too dissimilar from what is happening in Scotland, we do not want the kind of response that we got from its trade body, which opposed the recommendation on the grounds that it looked “quick and dirty”—I think that those were the words that it used. Quite frankly, however, we can only do the assessments that we did, and the matter will probably need to be looked at further by the Government, the pharmaceutical industry and NICE, because something needs to be done. There is a constant clamour, not necessarily from the pharmaceutical industry, but from patient groups and constituents asking, “Why are we waiting so long for a drug that is available in Glasgow or Edinburgh?”

NICE also rejected our recommendation on the threshold. It suggests that its threshold is not out of line with those used by PCTs. I said earlier, “some PCTs”, but I still believe that we saw evidence for that in our inquiry. Recommendations 2 and 25 refer to NICE’s role and use the R-word—rationing. They deal with rationing arrangements and essentially ask the Government to work with NICE to make those arrangements clear to the public. In neither of her responses, does the Minister use the word “rationing”. Effectively, she has dodged the issue in this very big public debate. The Government’s response avoids using the word, and one or two members of the Committee—I will not look round—found it difficult to accept that we should use that word in the report and in the conclusion, but rationing is what NICE does.

Rationing has been around inside the national health service for nearly 60 years, and we all recognise that fact. It would be better if we were to have an open debate about rationing inside the national health service, instead of talking about “postcode prescribing.” Some people think, “If I moved across the road or down the way, I would be able to get this drug.” We should have an open and honest debate about why people contact us and say, “Why can I not have a drug in this particular PCT, but I can have one next door?” If we take on the issue, we will better serve the public. The Minister may ration her response when she speaks later, but I personally think that we should have such a debate.

In the response to recommendations 15 and 16, in which we asked for a more rapid and non-selective appraisal of all known drugs and for guidance on each drug to be made available at its launch, the Government said:

“The Government continues to work with NICE to ensure that the STA process works as it should.”

That is fine. I am very happy with that, but will the Minister tell us exactly what she means when she says that the Government will work with NICE in considering this area? Has she any specific ideas about what they will be looking at?

The Government’s position on NICE’s work on disinvestment is not too clear, but the Minister said that she was keen for NICE to give a high priority to that activity. In view of the history, I wonder whether there is a mechanism by which the Government can consider the question of disinvestment.

In recommendation 36, we asked for a separate independent body to review the threshold that NICE uses when it decides whether to make a medicine available to the NHS. Effectively, we wanted a one-off review of thresholds. We wanted to know how those thresholds fit with the NHS budget as a whole and with non-NICE-related purchasing decisions made by trusts, and to assess on what grounds the thresholds might vary. We believe very strongly in that proposal, but the Government dismissed it:

“The Government is not convinced that any potential benefits of establishing a separate mechanism of the kind envisaged by the committee outweigh the likely disadvantages.”

The recommendation may have been badly worded. It was not our intention to have a separate body for ever, but we wanted some independent tests of the thresholds. The question whether our constituents are being treated fairly by the national health service goes round and round in the media. If the Government do not think that there is a need for a standing mechanism to consider thresholds, could we assess them and get them independently tested, so that there is another voice in the debate?

In recommendation 30, we argued that there is public confusion about the status of the various types of advice published by NICE. The Government’s response says that they will

“consider further whether there is more appropriate terminology.”

The Government do not say that they disagree with us about the public confusion. If they do not disagree, then there must be some better terminology that we can use—that sounds a bit taut, so perhaps I will revisit that later. I say to my right hon. Friend the Minister that unless the Government say that there is no public confusion, there must be something there. We think that the public would be better served by better terminology.

Last but not least, I want to revisit our old friend, the PPRS, and consider what is happening at the moment. As I have said twice, we did not look at the matter in any great depth. We had one evidence session on the likely outcome of the Government’s reaction to the OFT report. If we had thought that they were going to implement the OFT report, we would probably still be taking evidence now.

As a distraction from the other things that were going on last Thursday, I read this headline in The Daily Telegraph, “Drug makers hit out at new pricing deal”. It has since come to my notice that in March, a letter was sent out to 180 companies, which had participated in the PPRS, officially terminating the present scheme from September 2008. That was not my understanding of the situation when we were taking evidence. I did not know that the PPRS was to be terminated, and I would have accepted its renegotiation. I do not have the Government’s press statement on the issue, but I was very surprised to read that headline. I must say to my right hon. Friend that I recently met the new president of the Association of British Pharmaceutical Industries. I was not prompted by him to bring up the matter; I was prompted by what the retiring president said in the press. We are ripping up the pharmaceutical price regulation scheme, which has stood the test of time—some 50 years now. The scheme has loosely held together the pharmaceutical industry, which is a credit to this country and a great arm of ours when it comes to manufacturing and selling abroad. The Minister will have seen some of the first-class research and development that is done in this small nation of ours—in many areas, it is world class. I was surprised to see that, effectively, the PPRS had ended, and I assume that some sort of voluntary agreement will replace it.

I am sorry to interrupt my hon. Friend in mid flow, but I think that it would be helpful if I tell him now that part of the renegotiation of the PPRS also requires a formal notice to be issued that the current one will terminate within a certain period. It is all part and parcel of the renegotiations and how the PPRS works. It is not a separate process.

I am grateful to the Minister for that. I know that if someone is given a strong letter that says that their contract ends in six months’ time, one is likely to get them to the table in a more positive manner. I understand what negotiations are like, but the system has survived in this country for half a century now. I do not say that I endorsed everything that the OFT recommended in its report. None the less, the Minister’s words are reassuring. Under those circumstances, six months is not a very long period of time to replace, review or amend an organisation, although I accept that that may be different now. I thank my right hon. Friend for that. I would like to sit down now, but before I do I want to thank the members of the Health Committee who were involved in the evidence sessions and drawing up the report. I suspect that quite a number of them will want to catch your eye this afternoon, Mr. Gale.

It is a great privilege to follow our Chairman, who is allowing us to get out some quite strong condemnatory reports—not that this is one of the most condemnatory. It is also a huge privilege to speak second, because the Chairman has left us with a little more to say, and I can get in before all my hon. Friends—and I do call them friends—on the Committee.

The first matter that I want to raise is the use of experts, which the Chairman has already mentioned. We heard criticisms about that from several witnesses from various walks of medical life. The Government’s response was that that should be left to NICE, while NICE’s response was that there should be extensive engagement. Its response to recommendation 11 stated:

“The Committee’s suggestion reflects our current arrangements. We will re-examine our arrangements for providing our advisory bodies with access to appropriate expert advice from individuals unencumbered with actual or potential conflicts of interest.”

I suspect that the difficulty is finding people who are unencumbered in that way.

I shall give two examples that are related to criticisms made by the Committee. There was a rather unkind article in the Journal of the Royal Society of Medicine last October headed “A NICE mess”. It did not actually prove that it was a horrendous mess, but in discussing anti-dementia drugs, it pointed out the fairly limited contribution that expert geriatric psychiatrists were able to make. One of our strongest recommendations was that if NICE could find suitable, unencumbered expert advisers—we as the Health Committee prize and value our expert advisers tremendously—that would be well worth doing.

Secondly, NICE’s guidelines rightly point out that there is no hard evidence that antibiotic prophylaxis is necessary for bacterial endocarditis, but then go a step further and imply that it is no longer worth using antibiotic prophylaxis, the use of which is time-honoured. In a letter in the British Medical Journal this week, some cardiologists have questioned whether NICE has gone a little too far.

The hon. Gentleman will appreciate that there is a great difference between time-honoured and evidence-based. Just because we doctors have done something for a long time, it does not necessarily make it worth doing.

I thank my friend and medical colleague for that. I absolutely accept that, but things should not be discarded lightly.

The Chairman of the Committee mentioned the speed of decisions. In our recommendations 15 and 16, we toyed with the idea of shorter inquiries or evaluation at launch. The Government’s response was fairly defensive, but NICE’s was rather better. It stated that it was not asked early enough and that it did not have enough capacity. That needs to be looked at. It also stated that the appeals process slowed down decisions.

The hon. Gentleman talks about the need to get evidence earlier. Is that because it comes from the later stages of treatment? For example, evidence about cancer drugs comes from metastatic stages, rather than from the earlier stages of detection and prognosis.

That is one of the huge difficulties with drugs. Some of their effects—good and bad—are not discovered until a long time after they have been used by hundreds, if not thousands, of people.

NICE concluded its response to recommendations 15 and 16 by stating its aim to start assessment when a manufacturer requests marketing authorisation. It said that it might then be able to create at least draft proposals within three months of licensing. That is something excellent to aim for.

The Chairman of the Committee mentioned the confusion about the differences between guidance on technology appraisals, which is mandatory, and clinical guidelines and public health guidance, which are advisory. That is a real problem, and it is demonstrated in the Government’s response. Within about four paragraphs, they use the term “clinical guidelines” once and “guidance” eight times. I am still not convinced that they know the difference between technology appraisals and general guidance.

In their response, the Government objected to the word “directive”, stating:

“we believe that re-branding appraisal decisions as ‘directives’ might be taken to imply that they are intended to override clinical decision-making.”

If it is cut and dried that something is far better than anything else, who wants clinical freedom? Doctors do not need it. They do what they are—[Interruption.] Well, I am speaking as a retired doctor, and I am prepared to stand up for that. If something is right, and if it is far better than anything else, it should be used. I would have no objection to the use of the word “directive”, or a slightly softer, kinder word if one could be thought of. Tremendous confusion is caused by calling three things “guidance” when one of them is mandatory.

I am slightly confused by the hon. Gentleman saying that we do not want clinical freedom. I am sure that he agrees that patients come in all shapes and sizes. There is no such thing as the average patient, and there are occasions when a patient is not textbook and there needs to be flexibility. I agree with his general point, but there is a danger that his comment about clinical freedom might be misconstrued. I am trying to help him out.

I am grateful for that helpful comment. I do not want to be misconstrued. I am talking about when it is absolutely cut and dried that one thing is right and others are not. That is when the word “directive” should be used, or another word, if we can think of one.

I echo the Chairman of the Committee’s comment that there could be one mandatory element in some clinical guidelines. He mentioned NICE’s current work on venous thromboembolism. Of the recommendations that have been made on that, the risk assessment should be mandatory for everybody going into hospital.

Disinvestment is an incredibly important part of NICE’s work. We are not going to get any more money coming into the health service, so we want to make absolutely sure that what we have is being used as best it can be. I was pleased to read about NICE’s recommendation reminders in its optimal practice review, and the fact that it recommends savings in its technology appraisals. That is a hugely important part of its work.

If we cut out inappropriate prescribing, we will make huge savings. The Department of Health made a start on that with its “Better Care, Better Value” indicators, which showed some time ago that just by prescribing generic statins at the right time, the NHS could save £80 million a year, which is amazing. If we can make such savings through appropriate, correct prescribing, we will do the health service a power of good.

On implementation, I was pleased to read about implementation consultants, but slightly disappointed that there are only six of them for the whole of England. The Chairman of the Committee mentioned our trip to Canada, on which we found that NICE’s equivalent there had such people in every part of the country. They were making a huge difference.

Why are there so few in Britain? Is it just not an appetising job?

An advertising job?

Appetising. Well paid.

Oh! I have no information about how much those people get paid. No doubt some of guests in the Public Gallery might tell us afterwards.

I understand that NICE has an implementation directorate and an interactive costing tool. I do not know—perhaps the Minister does—whether that applies just to mandatory technology appraisals, to voluntary guidelines, or both.

Recommendation 27 deals with the better measurement of guidance implementation. At the moment, the Healthcare Commission relies on those involved declaring that they have implemented NICE guidance, and I wonder how the Care Quality Commission will deal with that issue.

I was delighted that our Chairman took the bull by the horns and used the word “rationing”. Some people might remember that I tried some time ago to secure an Adjournment debate about rationing in the NHS, but somebody—I still do not know who—changed the title to prioritisation, so my debate was about that, rather than rationing. We must face up to the issue of rationing. In one of its responses, NICE stressed the importance of disinvestment and of looking at investment and disinvestment opportunities, which really comes down to rationing.

To finish, my one regret about the report is that we shied away from QALYs and incremental cost-effectiveness ratios—we were probably scared of delving into the unfathomable mathematics of calculating them. After we completed our inquiry, I received a piece of paper that had fallen off the back of a lorry, but it confused me even more. It gave figures from the Southampton university health technology assessment for the cost per QALY of three anti-dementia or Alzheimer’s drugs. I can understand why the cost of all three was pretty high—when people are not convinced that a drug works or that it has much benefit, the cost per QALY will be high—but I could not understand why it was so extraordinarily different for all three. As we have recently learned, the Appeal Court has ruled in favour of the makers of the one of the drugs for Alzheimer’s. I hope that that will bring into the open a little more about how the cost per QALY is worked out, because unless we know that, a little of the transparency that we want, and which NICE is aiming for, will be missing.

I shall start by paraphrasing Kryten from the TV series “Red Dwarf”. There are two problems facing every health care system in the world: first, it is impossible to meet every need and, secondly, it is impossible to meet every need. I realise that, technically, that is only one point, but it is such a good one that it is worth making twice. The fact is that no system in the world can ever meet every competing need; indeed, if it did, that would prove that it was failing. One of the drivers of change in the health service is the constant striving for improvement, for better value for money and for better patient care. That automatically implies that one must keep pressing for change and improvement. Always having to look over one’s shoulder to see what one can afford is one of the major drivers in that respect. That sounds a bit harsh, but it is important.

The hon. Member for Wyre Forest (Dr. Taylor) talked about rationing. One reason why I am not happy with the word “rationing” is that rationing is actually very easy, whereas health care apportionment is very difficult. Those in the room who are old enough to remember rationing—that does not include me, of course—will know that it is relatively easy to tell somebody that they can have one egg or one ounce of butter a week or that they can have a British standard loaf every two days—that makes sense. It is easy to do that because the one thing that everybody in the world does that has a cost to society is eat. What makes rationing even simpler is that everyone has broadly the same nutritional needs, so the parameters are quite narrow. It is easy to say, “I have 1,000 kg of rice and 1,000 people, so they can have a kilo each.”

Unfortunately, it does not work that way with health care. Let us imagine that I have 1,000 people in the room and I have six replacement hips, 20 doses of penicillin and 30 doses of Aricept. First, those replacement hips might be completely inappropriate for those 1,000 people because none of them might need a hip replacement; alternatively, by luck, 100 of them might need one. In other words, it is far more difficult to work out who should get what. Furthermore, how do we compare a hip replacement and Aricept to decide which does the greater good? That is an extremely complex and delicate decision.

I agree with those who have said that we need a much wider public debate about how we make such decisions. Such things are not news to society; the concept of distributive justice has been with us for thousands of years, although we have not always called it that. If we talk about distributive justice or competing claims for resources, rather than simply about rationing, that will make it easier for the public to join the debate. They will begin to understand the complexities of how people make some of these extraordinarily difficult decisions about distributing resources.

The Committee’s Chairman referred to this earlier, but I have taken part in two events organised by NICE in the past couple of months to look at public policy and access to health, particularly for disadvantaged groups—in that respect, I owe a lot to my friend Bren McInerney, who is on the participation panel at NICE. NICE is moving in the right direction, and such events change the perception that NICE deals only with decisions about which medicines will get over which hurdles.

My hon. Friend makes the important point that we are moving in the right direction, but we have a long way to go in helping members of the public understand for themselves the difficult decisions that somebody ultimately has to make.

Some health care systems ration by price, and if people cannot afford a health policy, they get pretty awful insurance; other systems ration by exclusion, and still others ration by availability. If people want to use the word “ration”, then I would say that we in this country have always tended to ration by queuing. The health service has traditionally said, “There are this many surgeons and this many beds. Form an orderly queue, and when you get to the top, it’s your turn.” That is certainly a coherent way of doing things; it is just not a very good one. I am pleased that we have now moved away from that and that we have much shorter queues and shorter waiting times.

Would my hon. Friend include orphan drugs and ultra-orphan drugs in the mystique that he mentions, which makes it difficult for the public to understand these things? Most MPs find it difficult to understand the definitions of ultra-orphan and orphan drugs, compared with the classic cancer drugs.

I pay tribute to my hon. Friend, who does a huge amount of work for cancer patients and who has quite an international reputation for standing firm, helping cancer patients through difficult times and helping to make rational decisions. It is difficult for the public to understand what an ultra-orphan drug is. It is also difficult for the Government to deal with them, because they sometimes have such a skewing effect on overall health budgets, particularly in a relatively small health economy. The problem therefore needs special attention, and I pay tribute to my hon. Friend for raising it.

In this country, we have settled on the idea of measuring health benefits and deciding how to distribute resources using the QALY. As everyone knows, the QALY is a cost-utility index that combines the duration and quality of life. In some ways, it can be used as a comparative index. Perfect health is the equivalent to a QALY of 1, death is a QALY of zero and the various health states in the middle can be worked out on a fractional basis. In many cases, therefore, estimates of cost per QALY can be used to devise an indication of the relative value of different treatments and interventions.

That method certainly has the merit of being extensively researched in Europe, north America and Asia, but a number of people have expressed quite a few reservations about the manner in which NICE has used QALYs. For instance, John Harris, the joint editor-in-chief of the Journal of Medical Ethics, argues:

“There are two ways in which QALYS can be used...to determine which of rival therapies to give to a particular patient or which procedure to use to treat a particular condition, in short which of two different treatments is the more cost-effective, better for patients, better for society.... QALYS are also used, however, to determine not which of rival treatments to give to a particular patient or group of patients, but whether or not to offer any treatment at all to some patients, or whether to offer a particular treatment to some patients even when no alternatives are preferred.”

It is that latter approach which Professor Harris understandably objects to on moral grounds, and he exemplifies that by reference to the treatment of patients with Alzheimer’s disease. He claims that

“it is not the drugs that have been judged not to be cost-effective when compared with rival treatments, it is the patients who are being condemned as not cost-effective to society.”

Meanwhile, Maurice McGregor of McGill university in Canada has said:

“The assumption of distributive neutrality (ie individual considerations are not taken into account) that underlies the QALY frequently violates societal concerns for fairness in the allocation of healthcare resources. For example, in general, society does not consider a unit of health gained by a severely ill individual to be of equal value to a unit of health gained by an individual who is less severely ill.”

That is a complex concept, but it makes the point that QALYs can be applied in different ways and can mean different things to different groups of patients.

In evidence to the Select Committee inquiry, Dr. David Anderson, from the faculty of old age in the Royal College of Psychiatrists, told us that experts often did not understand how some QALY-based decisions were made, and that they believed the process to be somewhat arbitrary. He told us:

“When clinicians hear about health economic analyses many of them see it as made-up stuff. You just take some data and create an equation that is based on assumption after assumption... You fiddle about with an equation and come out with a number. If you want you can fiddle about with it some more and come out with a different number.”

Other witnesses argued that the use of QALYs could lead to bias against treatments for long-term chronic conditions. Lower cost per QALY and therefore greater likelihood of NICE approval were claimed to be associated with treatments for acute conditions. Steve Winyard of the Royal National Institute of Blind People told the Committee:

“Drugs that extend life will always achieve higher values…The use of QALY values puts people with long-term conditions at a disadvantage over people with life-threatening conditions”.

NICE’s cost-effectiveness threshold has also attracted much controversy. For instance, an article in the British Medical Journal last year by Professors Appleby, Devlin and Parker strongly criticised the way in which the threshold operates. It said that the threshold that it has used since its inception of £20,000 to £30,000 per QALY

“has no particular basis in either theory or evidence”.

It suggested that the threshold may be too generous and that, as consequence, NICE may have recommended too many new technologies. That would also mean that when primary care trusts implement NICE’s guidance, resources may be diverted from other health care services that give better value for money. Indeed, it points to evidence suggesting that there is a mismatch between NICE’s threshold range and that apparent elsewhere in the NHS. The average primary care trust spends about £12,000 to gain an extra QALY in circulatory disease and about £19,000 in cancer. In contrast, an analysis of NICE’s decisions suggests that its threshold is in practice even more generous than it admits, being closer to £45,000.

The article posits two possible approaches for setting a cost-effectiveness threshold. The first is to decide the worth or value of a QALY and set the NHS budget so that all health care is provided at a cost at or below that value. The second is to decide how much we wish to spend on the NHS, and let the value of a QALY emerge from the decisions made by NHS purchasers. It also asks why NICE should be required to set and defend what is an NHS-wide cost-effectiveness threshold. That is of course something that the Committee itself has questioned.

The BMA article suggests that the NHS should have a threshold committee with a similar structure to that of the Monetary Policy Committee; and NICE, primary care trusts, and other NHS purchasers should be required to adopt a common NHS threshold. I question whether simply creating another bureaucratic arm is necessarily the way forward.

We all like to get hung up on the question of thresholds, but surely the hon. Gentleman saw the evidence, as I did, that there seems not to be an automatic cut-off, and that, for the rarer drugs to treat rarer conditions, there is no hard line that must be passed; instead, decisions are made about whether, in the absence of other treatments, we should pay a little more. There is no pass or fail magic number, and the thought of a British Medical Association committee sitting to make that decision fills me with horror, because there may be unintended consequences that are not seen now.

I accept the hon. Lady’s point, which underlines the great difficulty that we had in making some of the decisions. However, she will have heard the evidence that it is assumed, particularly by drug companies, that if a drug comes in below the threshold, it will pretty much get through without much argument, if it is in the middle the company has a bit of a fight on its hands, and if it is over the top it does not have much chance, unless, as my hon. Friend the Member for Norwich, North (Dr. Gibson) said, it is an ultra-orphan drug, which would be treated slightly differently. Whether or not we stick hard and fast to the thresholds, they are widely accepted and used in practice. The question is whether NICE is the right body to make the decision: should it set the threshold?

As I mentioned, the threshold has not really changed since NICE was set up, and it is about time that we had another look at it, to decide whether it is appropriate and whether a much wider body of NHS experts and users should be involved in making the decision. I merely put the question whether it is time for a rethink about the basis on which the process is carried out. Certainly, NICE gets a lot of criticism now, much of which I think is unwarranted. Nevertheless it has to take it. The question is whether it should be part of a bigger mechanism, so that others in the health service, including users of the service, get a say.

My point is that if the public could fully understand the process by which decisions are made and could have a better idea of how much the drugs and procedures cost and a flavour of the level of competing claims, they might feel more empowered and able to make decisions affecting their lives in a more rational way. Everyone accepts that we cannot have everything. What is not accepted is the obscurity about decisions, and difficulty in understanding how they are made.

I could say much more, but many colleagues want to contribute. My final point is that it is now time for a much more in-depth look at how such decisions are made throughout the world. We can learn from other countries, in the same way that, as my right hon. Friend the Member for Rother Valley (Mr. Barron) said, other countries study NICE to see how we do things in this country. That would lead to a much more grown-up decision-making process, to ensure not only that the health service delivers for patients, but that it is seen to do so.

It is with a little caution that I rise to speak after the hon. Members for Dartford (Dr. Stoate) and for Wyre Forest (Dr. Taylor), because I have no medical experience. The report, however, raises many issues that affect my constituents and businesses in my community. As the right hon. Member for Rother Valley (Mr. Barron) has said, the work of NICE is about ensuring that constituents get a fair deal from the NHS, which affects us all.

NICE has a vital role to play, and I commend the Select Committee and its Chairman for their work on the report and for giving us an opportunity to air our views today. It is right that the decisions on which drugs are available in the NHS are made by clinicians and not by politicians, and I respect the independence of NICE. The NHS budget is not infinite, and difficult decisions must be made, whether by what is called rationing or in other ways, but NICE was established to ensure that there is equity in the system. The report points out that the current situation falls short in many areas. I want to raise three important issues for me and some of my constituents, namely the evaluation process, the issue of non-statutory guidelines and the role of NICE in the future of the UK pharmaceutical industry.

Other hon. Members have already touched on the evaluation process. The report stresses that the speed of technological appraisal is of great concern, and that there are long periods between the licensing of a medicine and the publication of NICE guidelines. None of us can dispute the fact that that is fuelling a postcode lottery throughout the country, and some think that that is leading to problems for the NHS in keeping its universal promise that treatment should be available to all in accordance with their need. Some clinicians can prescribe during the period between licensing and the issuing of guidance, and some cannot because of the rules and regulations of their primary care trusts. Because the process is speedier in Scotland, drugs are available far more quickly there.

I have come across two examples of such difficulties in my three years as an MP. First, Tarceva was prescribed for lung cancer by consultants in my local hospital during the limbo period between licensing and the issuing of NICE guidance. Cases were referred to the PCT for approval and an experienced consultant, who had the trust of the patients and families concerned, sometimes decided that benefit could accrue to a particular patient if the drug were used. In some cases the PCT agreed, but in others it did not. To the consultant, it seemed that those decisions were not always made for the same reasons.

So where did that leave the patients and their families? In the case of one of my constituents, the request for funding was rejected, and they were left in a very difficult situation. Was that because the finances of the PCT were too tight, or was it because the medic got the assessment wrong? I am aware that, in at least one case where the PCT rejected a request for funding, the family of the patient felt that they had no alternative but to pay for the drug privately. Where does that leave us with regard to the concept of a universal NHS?

I will briefly give another example. About four years ago, a drug to deal with the problems caused by mesothelioma was launched by a pharmaceutical company in my constituency, Eli Lilly. Although that drug was approved by the Scottish Medicines Consortium in July 2005, it took 1,000 days of NICE appraisal to get NICE approval, which eventually came through in January this year. Even now, more than three months later, there is evidence that one or two PCTs are still not providing funding for that critical medicine. In the meantime, people who are suffering from a truly dreadful disease are simply dying. We should continue to reflect on the slowness of the evaluation process, because it causes anguish, anger and other problems for families.

First, does the hon. Lady think that fastness is not always associated with accuracy of information, and that a slow and steady approach, getting there with all the data, is better than a political knee-jerk reaction? Secondly, with Herceptin, which the hon. Lady has not mentioned, there was plenty of good scientific evidence that some individuals benefited from it because of a certain gene expression while other individuals did not. How can we get that information over to the public, when newspapers are running campaigns, saying that, “In Scotland, they get it, but down here you don’t get it and everybody should get it, because it makes you better.”?

I thank the hon. Gentleman for raising those points. I will discuss the length of time that should be taken for examining drugs, and he is absolutely right that it is not a question of rushing the process. Surely, however, there are ways in which we can try to truncate the existing process to benefit patients. He is absolutely right to raise the role of the media. However, the examples that I have given today were about situations in which the judgment of highly qualified medics was, I suppose, challenged and questioned by PCTs, rather than about the inaccuracies or misinterpretations that can sometimes come through media reports. Having said that, he is right to express caution about those instances of media inaccuracy.

The hon. Lady is touching on an important wider point for the health service, and perhaps she will share her thoughts on it. There is a difference between a clinician deciding for an individual patient and a PCT looking at the health assessment for its entire population and reaching a conclusion about the best health investment for the moneys that it has. Clearly, mismatches—to put it politely—occur. How does she see the gap between an individual assessment for a patient and an assessment for an entire population by a PCT being closed?

The Minister has raised an important point. Presumably, what she as a Minister in the Department of Health wants to see is some consistency in the way in which our health care system deals with people. Many of the problems involve PCTs being put in a position where they have to make choices, and different PCTs obviously have very different financial arrangements, depending on the way in which the budgeting process hits them. I fear that many people in my constituency, and indeed in other parts of the country, feel that that situation does not always result in an equitable response, which is my response to the Minister’s question.

On obtaining a shorter period of evaluation, the Committee’s report suggests adopting shorter and less in-depth evaluation at an earlier point, followed by a larger-scale appraisal, perhaps similar to the approach of the SMC. I have some concerns about that approach, although I applaud the Committee’s desire to try to truncate the all-too-lengthy process.

Using a lower cost-effectiveness threshold, as proposed in the report, could result in medicines being rejected by NICE at launch, which would leave no clinical practice on which to develop cost-effectiveness evidence, with patients also perhaps being denied new treatments altogether. I do not know whether the Select Committee Chairman has any thoughts about that, but it would certainly concern me that, if we were to follow that approach, we might be in a perverse situation in which the uptake of new medicines would be slower than it is today rather than quicker.

My hon. Friend the Member for South Cambridgeshire (Mr. Lansley), the shadow Secretary of State for Health, has put forward another possible approach, which is that NICE should conduct its appraisal of new drugs and treatments at the same time as such drugs and treatments are licensed by the Medicines and Healthcare products Regulatory Agency. That approach would help to speed up the assessment process without undermining in any way the quality of that process, which the hon. Member for Norwich, North expressed reservations about when he intervened on me earlier. As the Committee also suggested, there could perhaps be more collaboration between the SMC and NICE. That would seem to make common sense, in terms of the work that both bodies do.

It is difficult to believe that the current situation is what was intended when the system was set up. I am sure that the Minister, in her response today, will pick up on that point, because I am also sure that it cannot be her intention that families, such as those whom I have met in my constituency, should be in a state of distress because of the present situation.

My second point concerns the implementation of non-statutory guidelines. The Select Committee report noted widespread dissatisfaction with the sometimes limited implementation of some clinical guidelines and that health care authorities respond to guidance at different rates. Indeed, the Audit Commission has highlighted the problems of financial planning around NICE guidelines, and the Government response highlights the point that additional support is in place to help local authorities with implementation.

I am grappling with the realities of the way in which the system works on the ground in my constituency. Taking the issue of in vitro fertilisation, the Government made a proud statement just before the last general election that everybody in the country would be allowed to have three cycles of IVF treatment within a certain age period. I must say that many people in my constituency were glad to hear that announcement. However, they were less glad to hear how it was to be implemented in our part of the world by what was then North Hampshire PCT and what is now Hampshire PCT. People were only able to get one cycle of IVF treatment, and that was only when they reached the age of 35, which, as anyone who has been in that situation knows, is obviously not an ideal way to go forward.

Although the Government have clearly put a lot of thought into the issue and procedures and processes have been put in place, when it comes to the practical realities for constituents on the ground, those constituents are still finding it difficult to get the non-statutory guidelines realised in practice. Again, I would be interested if the Minister were to clarify how the situation will improve in the future.

My third and final point concerns NICE and the pharmaceutical industry. The report refers to involving NICE in developing the new system of “value-based pricing” for medicine. In the evidence that it received, the Committee uncovered concerns about how the new system, which will replace the pharmaceutical price regulation scheme, will work.

Obviously, we need to keep pressure on costs in the sector—I fully endorse that—and the evidence suggests that the Government have been successful in driving down costs. However, the pharmaceutical industry is a complex and international industry, and by its very nature it requires long-term stability. It also keeps a keen eye on the broader international situation.

The Select Committee Chairman raised the issue, which the media recently covered, about the decision to scrap the current pricing agreements halfway through the five-year period. I fear that that decision did little to foster good relations between the Government and the pharmaceutical industry. I was interested in the Minister’s intervention on the right hon. Gentleman, when she tried to imply that that decision was some kind of negotiation technique. I want to highlight to the Minister the fact that the pharmaceutical industry can choose to locate in many different countries in the world. We must foster a good relationship with it, if it is to continue to invest in research and development, as well as manufacturing, in this country.

There is already evidence of a brain drain from this country in respect of pharmaceuticals. The Minister will be aware of recent research undertaken by the Confederation of British Industry, which suggests that the UK is becoming an unfavourable place for the pharmaceutical industry to do business. If she has not seen the research, I would be happy to forward it to her. I hope that she will comment on the implications for employment and the future of that important sector in the UK.

I was at the annual dinner of the Association of the British Pharmaceutical Industry only last week. A slide was put up that showed how important the UK is and will be to the international pharmaceutical industry now and in the future. The UK represents 40 per cent. of its members’ world trade and sets the price for their products worldwide.

I thank the Minister for that. I am sure that what she has said is right, but when UK pharmaceutical industry people were asked how confident they felt about doing business in the UK, 58 per cent. of them said they were not very confident at all. Perhaps she needs to take note of that research.

I hope that the Minister will respond to some of those points, which are incredibly pressing for people in my constituency. Again, I commend the Select Committee Chairman on the report and applaud his work in that area.

It is fair to point out in my opening remarks that the Committee has looked at the National Institute for Health and Clinical Excellence in the past. We first looked at it in 2001-02, and the atmosphere of this inquiry was very different. Going back six or seven years, Mr. David Hinchliffe, the then Chairman of the Select Committee, commented that there had never been so much positive interest in an inquiry, or so many stakeholders writing to say how wonderful an organisation was. To be fair, many of the recommendations that we made then have been acted on, so this inquiry was set against a much more positive background.

The simple truth is that any organisation that is perceived as denying treatment to patients will be controversial. The other general simple truth, which has been alluded to, is that there is not an unlimited pot of money. Politicians need a trusted body to make decisions on cost-effectiveness.

The hon. Member for Basingstoke (Mrs. Miller) said that it was right that such decisions were made by clinicians. I would not want to rearrange her diary, but she might find it interesting to sit in on a NICE appraisal. When I did—I am not allowed to say too much about it—one thing that surprised me was that many of the people sitting around the committee were not clinicians. They were finance people from primary care trusts and chief executives of strategic health authorities—that sort of person. The balance is more heavily weighted than many people think towards financial considerations. There are, of course, clinical considerations, and experts give evidence, but the background of the speakers was obvious because of the nature of the questions that were asked. The exercise was fascinating. I understand that NICE might open up to the public even more, and that would be only to the greater benefit.

The Committee’s inquiry was prompted by issues surrounding Herceptin, and Alzheimer’s drugs had received a great deal of public and political attention. The only unfortunate aspect of our inquiry was that we were not allowed to raise any issues relating to the Alzheimer’s drugs, which were involved in an ongoing court case.

The Chairman highlighted the fact that social care costs are perceived as not being fully factored in. That was very much the argument that was raised at length when beta interferon was making its somewhat rocky passage through the process in the early days of NICE. The Committee made certain recommendations about quality adjusted life years, or QALYs, and suggested that perhaps the wider cost to society should be factored in. The Government’s response to that was interesting. They stated:

“The suggestion that NICE take into account wider costs and benefits has instinctive appeal, but closer examination reveals a number of complexities and potential perverse effects which warrant further exploration.”

Nobody would suggest that we rush headlong into that without more analysis. The response goes on:

“For example, attaching a greater weight to impacts on economic productivity would have the effect of prioritising interventions for adults of working age, effectively deprioritising interventions for older people or for people who are too ill to return to work even with treatment. The impact on the consistency, manageability and timeliness of NICE’s appraisal process also needs to be considered.”

Deprioritising interventions for older people was precisely what those who were lobbying for the take-up of the Alzheimer’s drugs were suggesting was happening. One problem was that there was not complete clarity about the model. It is good that there will be discussions to explore the matter further, but the fundamental problem appears to be the lack of complete clarity.

NICE could complain that it is transparent, and that the information that it provides would give a company, or whoever was looking into the costings, the ability to work out how it arrived at its figures, but many people have commented that they do not have access to the precise financial model. Conspiracy theories abound as to why that could be the case. The most popular seems to be that if drug companies understood the system completely, they would learn how to manipulate it.

That might be a little unfair, but many patient groups feel that they are treated unfairly and that wider benefits are not fully taken into account. It would help the public accept some of the decisions more readily if they were reassured that such factors had been taken into account. The then Minister of State, Department of Health, who is now Secretary of State for Culture, Media and Sport, came before us at the time and said that he was satisfied with the situation. Sadly, such is the reputation of politicians that the public do not regard that as quite enough evidence.

That aspect came up again yesterday when I was at a reception that was hosted partly by the Royal National Institute for Deaf People. NICE is looking into cochlear implants. One of the concerns raised—it might be a false concern—was that while there would be savings for the education system because children with cochlear implants could engage in mainstream schooling, that might not be fully factored into the equation. It is clear that a one-size-fits-all solution is difficult to arrive at when examining wider impacts.

The calculation of QALYs appears, to some eyes at least, to be an art rather than a science. A practical example is that when we visited the Scottish Medicines Consortium, we were presented with a list of recently approved drugs, each of which had a cost per QALY at the side. At that time, I was interested in Lucentis, which is used to treat age-related macular degeneration. The cost per QALY that the SMC had arrived at was considerably less than the figure that NICE was bandying around in its appraisals at that time. The good news is that many of the costings have been reviewed and the drug has now been approved, but why was the SMC able to come up with a figure that was about a third of the price that NICE arrived at? Unfortunately, when such examples get into the public domain, they undermine confidence in what is generally a good process.

Scotland has been mentioned a few times. It is worth saying that although we always read stories about drugs being available in Scotland but not here in England, the SMC told us that it had occasionally turned down drugs that were available in England. Surprisingly, we do not read about such cases the Daily Mail. Perhaps it would help to have more clarity on that issue, but I am not sure whose job it is to provide such clarity.

There seems to be a slightly more collaborative approach in Scotland. If there is disagreement about a company’s figures, the parties get together to discuss it. NICE’s procedures seem to be rather more formal and a little distant. If NICE disagrees with a company, it is up to the company to come back to it, so there does not seem to be such an active dialogue. There is a place for such discussions in the process of reaching understanding and agreement.

I agree with the hon. Member for Dartford (Dr. Stoate) that baseline QALYs have not changed much in eight years, as they have not been inflation-proofed. Seven years ago, we were talking about a threshold of about £30,000, and we are still talking about the same amount.

We made strong recommendations on the thorny issue of implementation in our report. Some improvements have been made, but there is still a problem. Let me give a local example. I received letters from a number of patients at the same time about a drug that benefits arthritis sufferers. They had been put up to writing the letters by their consultant, and they told me that they could not get the drug, which had been approved by NICE and should have been available. I did what any MP would do and wrote to the PCT, which told me that it was funding the drug. However, it was funding only six of that consultant’s patients, and the consultant had a dozen patients who could benefit from it.

In despair, I wrote to the Department, which said, “It’s nothing to do with us. It is up to the PCT, but the SHA is supposed to be performance-managing them.” It was only after I wrote to Sir Ian Carruthers, who was quite good at working out such matters, and pointed out that the PCT could not possibly be providing enough funding to meet full demands for the drug, and that it was disingenuous of it to say that it was, that more funding suddenly became available. Similar games are being played with patients’ lives all over the country. Not every patient will write to their MP, and not every consultant will encourage a number of their patients to write to their MP.

There is a need for proper investigation of whether recommendations are being implemented. Recommendation 27 of the report was that the Healthcare Commission should

“conduct more in-depth inspections”.

I was disappointed that the Government’s response kicked that recommendation into the long grass. It said that it would ask the Care Quality Commission to reflect on the Committee’s recommendation, but the commission is only just getting around to appointing its chair and will have other priorities. It is not set up yet. In the first year of its operation it will have a hard job melding the Commission for Social Care Inspection, the Healthcare Commission and the Mental Health Act Commission together. The implementation of NICE guidance will not be foremost on its list of priorities. I am concerned that the recommendation will be kicked into the long grass and that it will be three or four years before there is any action. In the meantime, patients are being deprived of drugs.

When we took evidence from the would-be chair of the CQC in this morning’s public session, we heard that people in the Healthcare Commission are likely to be doing the same jobs for years to come.

Yes, but the matter is not being dealt with at the moment. The CQC will have enough problems trying to meld organisations together and to carry on with its day job without taking on any new responsibilities. The formation of the new body will effectively mean that the recommendation dies. That is a shame, because NICE supported the recommendation in its response to the Committee. It must be frustrating to work for an organisation that does the work and makes the recommendations but does not see patients benefiting from that. It then gets all the flak when it makes a recommendation that is a bit more controversial. We should help with that.

I completely support the comments of the hon. Member for Wyre Forest (Dr. Taylor) about disinvestment. However, we have heard evidence that the matter is not as straightforward as might be assumed and that not so many issues can be considered. He made a good point, but what he suggested would not be easy to achieve.

Risk sharing has not been mentioned and the issue is fairly opaque. We took evidence from Professor Nicholl, from the University of Sheffield, who was involved in writing a report on assessing the multiple sclerosis risk-sharing scheme. The Sheffield researchers wrote the report over three years, and it was submitted last year. Interestingly, the next seven years of the contract then went to tender, and Sheffield decided not to bid. More worryingly, details of the scheme have not been publicised. The report is still not in the public domain and there are indications that the study will not yield reliable information about the beneficial effects of the drugs involved. Will the Minister tell us when the report will be available and how the Government intend to move forward on various risk-sharing schemes?

In conclusion, we all signed up in the report to the idea that NICE does a good job in difficult circumstances, but what we have heard today indicates that it could probably do so quicker and that implementation could be better. Those problems are not necessarily with NICE, however, and might be with the systems that surround it.

First, may I say what a pleasure it is to have you in the Chair, Mr. Gale? I thank hon. Members, the Clerk and the advisers to the Select Committee who were involved in this extremely good and detailed report. I congratulate the right hon. Member for Rother Valley (Mr. Barron) on his detailed and eloquent introduction to the debate and summary of the issues. Every time I hear him discuss the NHS, I am more impressed by his detailed knowledge of the topics that he is elucidating and by the articulate way in which he states his forthright and frank views.

The right hon. Gentleman was right to highlight the three key areas of the report—the evaluation process, affordability and the pharmaceutical price regulation scheme. I shall return to the first two areas later. I was interested by the Minister’s intervention on the right hon. Gentleman. I am sure that she will acknowledge that the pharmaceutical industry plays a significant role in the UK economy. It should be the view of every Member of the House, irrespective of party political persuasion, that it should continue to play that role. The right hon. Lady will be aware of the industry’s concern about the way in which the Government have handled the renegotiation of the PPRS—although I use the word “negotiation” loosely. The industry is nervous about a future in which the Government can be seen to break what industry believes was an initial five-year contract. The Conservatives support the move to value-based pricing, but believe that it should be done over a period of time and in consultation with the pharmaceutical industry. In the discussions that I have had, the industry has supported that approach. Page 3 of the Government’s response to recommendations 15 and 16 of the report states:

“The Government is currently seeking to renegotiate the PPRS and those discussions may have relevance to NICE’s appraisal process.”

It would be helpful, particularly in the light of press speculation, if the Minister told us exactly what point that process has reached and when it might reach a conclusion.

The right hon. Member for Rother Valley was absolutely right to highlight NICE’s significant international reputation. I was interested to hear that NICE representatives visited Scotland, France and Canada—I am not sure whether it was in that order. He may be aware—if he is not, I am sure that he will be interested to hear it—that both main Democrat candidates in the United States are examining NICE with a view to introducing a similar structure if either of them is elected President in November.

We then heard from the hon. Member for Wyre Forest (Dr. Taylor), who made another engaging and informed contribution. He rightly highlighted the key element in the use of experts. We agree with the Government that that is a matter for NICE rather than central Government, but there is a great deal of concern among patient groups, clinicians and the pharmaceutical industry that the appropriate and necessary expert advice is not available when the appraisal committees are under way.

The hon. Gentleman was right to highlight the confusion between the various guidance categories. There is confusion, not only in the public domain, although that is important, but sometimes in the clinical domain, and there is a job for NICE to ensure that everyone concerned with the process understands the different guidance categories. I am, however, not sure about his assertion that NICE should override clinical decisions on the ground and clinical freedom. He was also right to highlight the optimal practice reviews and to tackle inappropriate prescribing, which is a debate in itself.

The hon. Member for Dartford (Dr. Stoate) rightly stated that we must strive to improve the national health service, particularly and most importantly patient care. He was right to highlight the complexity of resource allocation, which I think can be done only through a much more transparent and accountable structure and system that we have now. I was fascinated to hear his detailed analysis of the mechanisms behind QALYs, which I am sure he and all other hon. Members acknowledge are extremely complicated. They work well in some circumstances but, unfortunately, they do not work well in too many instances at present.

As the House knows, my hon. Friend the Member for Basingstoke (Mrs. Miller) is an assiduous constituency Member of Parliament. She rightly highlighted the importance of evaluation, the non-statutory guidelines, and the future of the pharmaceutical industry, which has particular pertinence to employment in her constituency.

My hon. Friend’s points about slow take-up by primary care trusts in her constituency resonate with my experience in my constituency, not only in comparison with other primary care trusts, but in the disparities and inconsistencies within primary care trusts. The matter is difficult to explain to patients and constituents who clearly do not understand why one patient should have access to a particular drug or technology when another does not. There must be much closer examination of consistency of criteria in primary care trusts. There is little transparency in the decision-making process, and that creates enormous angst, particularly in sensitive areas such as IVF treatment.

I agree wholeheartedly with the hon. Gentleman, but does he agree that one aspect of the inconsistency is that the small committees on the PCT that deal with each case on a case-by-case basis often comprise different people, so there is not the consistency that, after I intervened, he claimed was needed? I would be interested to know whether he has any solutions for providing more transparency and consistency. The subject hits every hon. Member’s postbag.

I agree with the first part of the hon. Lady’s intervention that this is an extremely important matter which should be examined, but I am afraid that today I do not have a simplistic solution to improve the situation. There is tension for all main political parties in wanting to provide consistent provision of healthcare while ensuring that decisions are made locally if they are relevant to the local communities which the primary care trusts and clinicians serve. That tension is difficult to resolve.

The hon. Lady was right to highlight in her speech the QALY threshold and constituency concerns. She made a good point about the new social care body that will be set up. I suspect that the Government are using that as a way of kicking into the very long grass the other complex issues that she eloquently articulated.

Conservative Members support NICE and believe that it plays a vital role in assessing the cost-effectiveness and clinical effectiveness of treatments, as well as producing clinical and public health guidance. Rising patient expectations, an ageing population, and the development of more costly procedures, drugs and technologies will make the context in which the NHS and NICE must operate far more challenging in future. It is absolutely right, as other hon. Members have said, that the body that analyses the cost-effectiveness of treatment is made up of clinicians, rather than politicians. We agree with the Committee that it was unwise of the previous Secretary of State to become involved in the debate about Herceptin.

The Committee was right to highlight and praise NICE’s work nationally and its international reputation. It was also right to shine a light into those areas where there are problems in NICE’s existing structures and procedures. I know from discussions with executives and people working at NICE that they are the first to acknowledge that the situation is not perfect.

The Committee made a large number of recommendations. I do not want to go through all of them—there is not the time to do so—but I want to highlight three or four key areas that deserve further discussion, including topic selection, QALYs, disinvestment, clinical trials, societal costs, the membership of the appraisal committee, consultation and implementation.

The Committee was correct to highlight public concern about the speed of assessment, which can take up to two years. That results in enormous uncertainty and a period of variation that is often euphemistically called “NICE blight”, during which primary care trusts set their own prescribing criteria almost at will, without transparency or consistency. All hon. Members know from their postbags that that leads to anger among patients and their families, and reinforces concern about postcode lottery and the public’s view that NICE is a hinderer and not an enabler of access to drugs and technologies. Somehow, we must turn that perception round. Hon. Members rightly highlighted the swifter procedures in Scotland and France, but it is clear that the processes there are less rigorous as there is no scoping phase, and public consultation is limited, which would create issues if we tried to replicate that in England through the NICE procedure. I will come to that in a moment. We welcome single technology appraisals, which are obviously quicker, but we also believe that there is a role for multiple technology appraisals, particularly when there is more than one drug or technology in a particular area of health care.

The Committee recommended that drugs should begin their NICE assessment concurrently with the Medicines and Healthcare products Regulatory Agency’s licensing procedure. The Chairman and members of the Committee know that Conservative Members have been saying that for a considerable time, so I was pleased to read that the Committee agrees with the our recommendations. I was also pleased to see that in the cancer reform strategy, the Government, too, now agree with that policy in that all new cancer drugs will begin NICE and MRHA assessments simultaneously.

The Committee also recommended that NICE develop a shorter, less in-depth evaluation of medicines at an early stage. That would obviously have benefits, but I suspect that there are also drawbacks, which must be highlighted. It is widely accepted that a faster process will just result in a faster yes decision for drugs. That seems unlikely. The NICE appraisal that I observed ended in refusal because there was no clinical evidence to support approval. If NICE simply goes through the process faster without other things being put in place, there are likely to be more judicial reviews of decisions. There will also be a potential public backlash if the initial assessment of a drug or technology says yes, but a later more rigorous one changes the guidance and deems a drug not to be cost-effective. That would lead to the drug being withdrawn from patients already using it, so there would be serious problems in relation to that.

We welcome the pilot of the national public health commissioning network, which has the potential to offer quicker assessments of newly licensed drugs while also taking account of the wider benefits to the community. I certainly urge primary care trusts to engage with that pilot. I look forward to hearing whether that is effective. The Committee criticised NICE for its topic selection, which tends to focus on a small number of new and often expensive products. However, the majority of medicines in routine use in the NHS have never been assessed by NICE. I certainly would not suggest that all drugs and technologies should be assessed by NICE, as that would be a bureaucratic nightmare. However, there must be a system whereby drugs and technologies historically prevalent in the NHS that have been overtaken by other drugs and technologies can be looked at through the eyes of the QALY threshold. I have had numerous conversations with the executive and others at NICE and I understand that it would be difficult to do that without massive bureaucracy and a significant increase in the burden on NICE. However, that still needs to be borne in mind.

I would like to say a few words about the QALY. I do not want to repeat what other hon. Members have said, but criticism of the QALY is not new. Most people recognise that the system has flaws. For example, QALY does not take into account that a change in quality of life from—if I may use fractions—0.2 to 0.4 may be more valuable for a patient than a change from 0.8 to 1. Those things are difficult to assess consistently over a range of clinical requirements. A comparable system of measurement is needed. The Committee was concerned that the QALY threshold had never been debated or approved by Parliament. There is no reason why it should not be debated in Parliament—indeed, we have had such a debate today—but Parliament is not the right place to set the QALY threshold. That should be done by an independent NHS board in consultation with clinicians, Parliament and NICE itself. The QALY threshold needs to be continuously reviewed.

On socio-economic costs and benefits, when NICE was first established, the Department made it clear that it should not take into account economic benefits, the treatment of carers, savings related to benefits, tax allowances, or productivity, as the right hon. Member for Rother Valley rightly said. However, we must make sure that we do not create perverse incentives to focus on treatments that would be beneficial to adults of working age as that would be to the detriment of drugs to treat diseases more commonly found in older people. Of course, we recognise that any change would have to be made through Parliament via a statutory instrument, but that issue still needs to be looked at. In our policy papers, we have said that we should allow NICE to take account of wider societal costs where it is appropriate for it to do so.

I made a point about the pharmaceutical industry and experts, which was mentioned by the hon. Member for Wyre Forest. There are issues that need to be considered in relation to that. I do not agree with the hon. Member for Romsey (Sandra Gidley), who seemed to suggest that the appraisal committees were primarily full of people who only had financial considerations in mind. That certainly was not my experience when I went to watch the process. Detailed presentations were made and there were debates about the clinical effectiveness of drugs. It is inevitable that if there is a financial threshold, which the QALY ultimately is, there must be financial input into the decisions.

I apologise to the hon. Gentleman for giving the impression that the appraisal committee was dominated by financial people. In response to the remarks made by the hon. Member for Basingstoke (Mrs. Miller), who said that decisions should be made by clinicians, I felt it was only right to put on record that the decision is made by a much wider range of people than some people suspect.

I am grateful to the hon. Lady for clarifying that. The final point I shall make is about the implementation, to which other hon. Members have referred. It is widely acknowledged that primary care trusts often struggle to finance NICE appraisals and guidance. It has been estimated that the cost of funding NICE technology appraisals is up to £1.2 billion a year. In our capacity as Members of Parliament, we regularly hear reports of patchy implementation of NICE appraisals, and about the disparity of speed in the uptake of NICE appraisals. The best example is the one that my hon. Friend the Member for Basingstoke gave about IVF treatments. There is a risk that treatments that NICE has not examined or other areas of health care could be crowded out as primary care trusts are forced to prioritise NICE-evaluated appraisals. Patients with conditions not yet covered by NICE may therefore receive cheaper and less up to date therapies then patients who receive treatments that have been the subject of NICE appraisals.

In addition to the comments that I have made supporting some of the Committee’s recommendations, there are three or four other areas that we in the Conservative party think that NICE needs to consider to improve its current service provision. We want to use the NHS autonomy and accountability Bill to enshrine NICE’s duties and responsibilities on a statutory basis, rather than as a special health authority, as is currently the case. Such a change would provide NICE with a transparent structure for its duties and responsibilities. We also want to give NICE the power to develop evidence-based commissioning guidelines, which would encourage best practice and the achievement of outcome objectives. That would be particularly beneficial in developing a gold standard in areas such as elderly care and long-term conditions.

Other matters to which hon. Members have alluded also need to be considered. The hon. Member for Norwich, North (Dr. Gibson) quite correctly mentioned orphan drugs, which need to be considered in more detail. There is also the matter of post-approval appraisal effectiveness and analysis, and of ensuring that once a drug has been improved, it meets the quality threshold, as was originally envisaged. Again, with the exception of some pharmaceutical companies who analyse the impact and effect of their own drugs, there is little done in that area at the moment.

There is also the problem of “NICE blight”—the inconsistency of primary care trust decisions and take-up. There needs to be greater transparency and greater consistency in decision-making criteria issued by primary care trusts and a larger role for NICE in the evaluation of public health services around the country. Such services are not fulfilling their role or functioning as well as they should. Finally, the public perception of NICE is that it hinders rather than enables access to treatments, and all hon. Members need to work together alongside NICE and everyone in the national health service to turn around that perception.

From 1998 to 1999, NICE has done a good job and it is here to stay. However, we must ensure that it is as effective as possible. The Committee report is a significant contribution to that debate and aims to improve the effectiveness of NICE for the benefit of patients.

This has been an interesting and thoughtful debate, and I congratulate my right hon. Friend the Member for Rother Valley (Mr. Barron) on opening it. I want to make it clear that I welcome the Committee’s broad support for NICE and the important work that it undertakes, and I certainly want to add to the compliments about the excellent work that NICE does.

I want to take us back to the time before NICE, when there was a lack of transparency and accountability and a variable local health service. For most of the time, patients were lucky if they could find anything out in the first place. NICE is about providing guidance to the national health service and clinicians on the clinical and cost-effectiveness of new treatments. It helps to minimise inequity in access to health care by addressing variations in practice, and it is a source of robust clinical guidance. As NICE develops its critical mass of expertise and is more widely known about and appreciated in the health service and beyond, many of the points that have been made can be addressed—I am thinking in particular about the role of PCTs.

I am sure that the hon. Member for Boston and Skegness (Mark Simmonds) would not want people to run away with the thought that, before NICE, everything was fine in the health service. The important points that he has identified as needing to be grappled with applied then, but they were not transparent and many people did not know about them.

Of course, a number of the Select Committee’s recommendations were discussed very fully today, and I welcome this opportunity to provide an update on progress, but before I touch on those points, it is important to recognise the caveat that the Government set out in the response to the Committee’s report, which remains pertinent to certain of the Committee’s recommendations. I am referring to the current renegotiations with regard to an agreement on the PPRS. A number of the recommendations are relevant to those ongoing negotiations. I am sure that all hon. Members taking part in the debate will understand, therefore, that it would not be appropriate for me to comment on those issues at this point. However, I will give a reminder of the background to the negotiations. In 2006, the OFT produced a report specifically with regard to the PPRS. It made a number of recommendations, to which the Government partially responded. That relates to the process of renegotiation of the PPRS.

As the agreement involves not only the Government, through the Department of Health, but the Association of the British Pharmaceutical Industry, both parties want to clarify—I shall read my words precisely—that although negotiations on a potential new PPRS agreement have begun, neither party is commencing on any speculation on the content of those negotiations. With regard to the six months’ notice that has been given as part of the negotiations, part of the agreement that has to be renegotiated is the provision of six months’ notice. The industry is fully aware of that. My right hon. Friend the Member for Rother Valley touched on it and said that it may be a negotiating ploy. It is a requirement of the agreement as we progress that that notice is given.

Several hon. Members discussed risk-sharing schemes and the importance of obtaining maximum value for money in the NHS. The Government will continue to consider specific schemes proposed. We note the recommendations on that in the OFT report and we will respond fully at the appropriate time after concluding negotiations on the PPRS.

Will the Minister give way?

If the hon. Lady will let me reassure her on one further point, I will happily give way. The basis for the negotiations agreed by both the industry and the Government is that the new agreement must deliver value for money, encourage and reward innovation, assist the uptake of new medicines and provide stability, sustainability and predictability for both the NHS and the industry.

I completely endorse the Minister’s remarks about value for money. Does she share my concern that the actions taken may not have been interpreted in the way in which she believes that they should have been in the industry in terms of breaking the important agreements on the PPRS? Now, almost three quarters of the pharmaceutical industry feels that there is a level of uncertainty in the pharmaceutical market that is not helping their business. That industry contributes £7 billion a year net to our economy, and it employs 70,000 people, so it is important that we have a good relationship with it.

I agree that a constructive, productive working relationship with the pharmaceutical industry is vital. I will be happy to send the hon. Lady a copy of the speech that I made at the annual dinner last week, which detailed at some length the co-operation that is already going on and which continues across a much broader field. That co-operation concerns innovation, science and research and development—the present Government introduced the R and D tax credit to assist developments in the pharmaceutical industry. I am somewhat hampered in relation to the propositions that the hon. Lady is making from one side of the argument when I have agreed, as part of the negotiations, not to comment while the negotiations are going on. I ask her to reflect on this question: is her party saying that it rejects out of hand the OFT report on the operation of the PPRS? If it does reject that, which is not what it said at the time, it is difficult to see how it could take forward the propositions advanced by the hon. Member for Boston and Skegness.

rose—

rose—

I will give way to the hon. Lady and come back to the hon. Gentleman.

I have two quick questions. First, with the PPRS, am I correct in thinking that either side can ask for a break after six months? The contract is not weighted on the side of the Government. If the industry was unhappy, it could have made exactly the same move. Secondly, will the Minister clarify when the Sheffield report will be published?

On the first point, the agreement was between the Government and the industry. The points with regard to renegotiating or issues relating to the agreement are equally accessible by both partners in the agreement. On the second point, I do not have an answer at this stage—I did not have it when the hon. Lady first raised the point, but I will ensure that I get the response to her. I realise that this issue is not part of the debate, but with your agreement, Mr. Gale, I will give way to take the last few questions on the PPRS.

I am grateful to the Minister for giving way. I just want to clarify a point that she has raised. Of course we are not against the potential recommendations in the OFT report, and, as I said in my speech, of course we want to move to a value-based pricing structure. However, she will be aware that the concern of the pharmaceutical industry is not that the negotiation or a move to value-based pricing is taking place, but the way in which the Government are doing that and the fact that they have seemingly broken a five-year contract right in the middle.

I do not agree with the one-sided view that the hon. Gentleman is giving with regard to the negotiations, but I am not in a position at this stage fully to engage him in discussion about the breadth of the negotiations and the possible outcomes. If I can do that at a later stage, I will be more than happy to do so. The matter that we are discussing is an important part of establishing an agreement with the industry that delivers innovation and investment, rewards developments, assists and speeds up the uptake of new medicines and provides stability. Perhaps I should end my remarks at that point.

Order. I have allowed the debate to continue because the future of the PPRS is clearly an important subject that Members want to consider. Strictly speaking, however, it is not included in the Select Committee report that we are debating. If she wishes, the Minister may return to the subject in another debate.

Thank you, Mr. Gale. The Select Committee has raised these issues with me, and some of its recommendations are pertinent to the outcomes of the negotiations. Although I strayed a little, I thought it only right to be as direct as possible with members of the Committee, because they put great store by the matter.

The Committee’s main recommendation is that NICE should adopt a shorter and faster provisional appraisal process to enable it to publish guidance on all new treatments at the time of launch, proceeding to a more detailed appraisal once more evidence is available. As hon. Members have said, NICE has established an international reputation for the thoroughness of its appraisal process and for the consultative approach that it takes in the development of guidance, which includes an opportunity for anyone registered as a stakeholder to appeal against the appraisal committee’s decisions.

A slight difference of view was reflected in some contributions to today’s debate on the difficulty of achieving that recommendation. I have told the Committee that I want to reflect further on those specific recommendations, following the renegotiation of the PPRS. However, it is important to highlight the fact that the provisional appraisal process recommended by the Committee would reduce NICE’s consultation and remove stakeholder rights of appeal. We must carefully consider whether that would be an acceptable sacrifice. Although I accept what my right hon. Friend the Member for Rother Valley said about the thoroughness of the Committee’s report and about the opportunities to return to the matter, I need to ensure that we can respond on outstanding matters more clearly once the negotiations allow it. I hope that my right hon. Friend, as Chairman of the Committee, will be prepared to assist us in finding ways to do that.

The Government have already taken a number of steps to ensure the timely availability of NICE guidance, as we heard during the debate. In 2005, the Department of Health and NICE introduced the single technology appraisal process to appraise a single drug for a single indication against the standard treatment. That allows NICE to appraise drugs to a faster timetable without reducing the quality of the appraisal. It is important that we continue to reflect on how effective that is.

We also introduced new topic selection arrangements in 2006, which give NICE a greater role in the early stages of topic selection. They are intended to ensure that important new drugs and other technologies are more consistently identified at an early stage. Every Member who has spoken today pressed me on the importance of achieving that.

Even more recently, as we heard from my right hon. Friend the Member for Rother Valley, the cancer reform strategy, published in December 2007, proposed the default position that all new cancer drugs should be referred to NICE for appraisal, if there is sufficient evidence and a large enough patient population. Although the principal aim of that measure is to improve equity of access to cancer treatments, I have recently agreed a change to the topic selection process for cancer topics, which should have the additional benefit of speeding up the referral process.

There was considerable debate, both today and in the Committee’s report, on the use of the QALY—the quality adjusted life year. A number of recommendations were made in the Committee’s report relating to the NICE process, covering issues such as its use of the QALY and the economic perspective to which it works. It is widely acknowledged, as we heard today, that the QALY is the best available tool to assess cost-effectiveness. However, there is little consensus on the threshold or range that should be adopted. It is precisely for that reason that NICE does not operate a fixed threshold for the approval of a treatment, but uses a range to enable its appraisal committees to consider the cost per QALY among a broad range of evidence. Indeed, the chair of NICE often refers to its use of the quality adjusted life year as a “tool not a rule”.

NICE and the Government agree that NICE’s use of the QALY should be as robust as possible. NICE has commissioned research, through the National Institute for Health Research, to consider public opinion on the QALY, and the Government will consider the need for further research in the light of those findings. The chair of NICE said that he is prepared to hold a workshop with a range of stakeholders to discuss the threshold to allow us to move forward.

The Committee made the attractive recommendation that NICE should consider wider economic costs and benefits, such as those to carers and other public sectors, in its appraisals. I remember discussing the matter when appearing before the Committee. In our response to the Committee’s report, we agreed to look at this recommendation in more depth. Since then, we have held three focus groups with key stakeholders, including academics and industry and patient groups, to explore the matter further and to assess the range of opinion on the issue. Not surprisingly, the focus groups have generated a most interesting debate, and we will pull together the conclusions before considering how to proceed. Again, I will do my best to keep the Select Committee informed of our progress.

NICE recognises that its methods must continue to evolve to in order meet the needs of the NHS and other stakeholders. That is why it is carrying out a scheduled review of two of its key documents, which provide a framework for its technology appraisals. Those documents cover many of the important issues, and draft documents were recently the subject of full public consultation. NICE is considering all the comments that it has received.

Another key theme in the Committee’s report, which was rightly touched upon today, was the implementation of NICE guidance. When NICE issues guidance, it is vital that it should be implemented consistently across the country, and the Government have a role in facilitating that implementation. To that end, provision for NICE guidance is made in funding allocations to PCTs, and NICE’s technology appraisal guidance is supported by a funding direction, which requires the national health service to make funding available for NICE-recommended drugs within three months of guidance being issued.

Compliance with NICE’s technology appraisals is a core standard for the national health service. NHS organisations are required to demonstrate, through the annual health checks, that they are providing funding for NICE-recommended treatments within three months of the guidance being issued. The latest annual health checks, for 2006-07, show that 89 per cent. of NHS organisations are compliant with NICE technology appraisal guidance, which is a 5 per cent. increase on the previous year.

Of course, we still need to make progress. The hon. Member for Romsey (Sandra Gidley) mentioned going to the chief executive of an SHA. When an NHS organisation fails to comply with the technology appraisal guidance, it is the responsibility of the SHA, in the first instance, to support any of its organisations—I put this politely—to achieve the necessary improvement.

There was an interesting discussion on terminology and the Government’s response to the recommendation that we combat public confusion about the status of technology appraisals and other guidance, to which my right hon. Friend the Member for Rother Valley referred, and to consider further whether more helpful terminology could be used to describe the recommendations. The recommendations in NICE guidance are based on the best available evidence, and we expect clinicians to take them fully into account. I heard what the hon. Member for Wyre Forest (Dr. Taylor) said and reflected on the interesting debates that I have with clinicians who take contrary views to one another, let alone NICE or the Government, on how best to take decisions about treating their individual patients. I shall continue to consider that point and to take NICE advice. However, I am still of the view, as was borne out in exchanges in the debate, that a word such as “directive” might be taken to imply—often things are taken literally rather than interpreted—that it is intended to override clinical decision making. Everything that we do must be balanced by that.

I believe that the guidelines on IVF that said that the NHS should move to offering three cycles were issued by NICE in around 2003. The then Secretary of State for Health, my right hon. Friend the Member for Airdrie and Shotts (John Reid), made it clear that because a lot of areas did not offer one cycle, they must offer that as a minimum and move to offering three cycles over time. In my time as a Health Minister, I have argued for, and commissioned research on, both the availability of IVF treatment in primary care trusts and the criteria, which are decided locally, for who has access to IVF and who does not. I am mightily encouraged by the support from Members on both sides of the House on the issue. I hope that I will have the support of all political parties when I am able to bring forward suggestions on how to accelerate the achievement of the three-cycle offer.

I welcome the Minister’s sentiment, but one of the problems in Hampshire, which the hon. Member for Basingstoke (Mrs. Miller) will have noticed, is that as well as the rather strange age criteria, there are a number of social, value-based judgments that differ from area to area. Interestingly, there is a new consultation at SHA level that is supposed to involve people locally. However, one of the local experts in the field was not aware of it. Will the Minister assure us that the consultations will give stakeholders and MPs a real chance to contribute to the debate, because that is not happening?

There are two steps in the discussion and several processes are involved. The first is to assess what each PCT provides and to seek explanations of how they will move to three cycles. The second issue is the criteria that are used for access to the treatment. There is inconsistency, so we must ascertain exactly what types of criteria are used for accessing treatment. The consultation will also need to consider—I am not sure that we are at this point, but I will let the hon. Lady know when we are—what acceptable criteria are and ask what are the correct clinical criteria to guide those decisions.

That is a complex issue because, for instance, some PCTs take the view that if it is a second partnership and there are children from the husband’s first, IVF could not be given. There needs to be a wider discussion of whether such a criterion should be used, which requires exactly the sort of debate on the transparency of such decisions and local choices that the hon. Lady and the hon. Member for Boston and Skegness say that we need to have.

I was taken aback to be told that the rethink of the IVF policy in Hampshire was going to be conducted at SHA level. Will the Minister enlighten me as to why?

The hon. Lady is, I believe, referring to the collection of information and to ensuring that PCTs tell us precisely what criteria they have been using and why. SHAs are being used to achieve that. The balance needs to be struck carefully. It is my recollection that all political parties in the House supported devolving decision making to local health communities and primary care trusts so that assessments of the health need in local areas could be made, with resources spent accordingly. We must balance that carefully—it needs finessing—with the full range of treatments and access to care that individuals have because of national requirements.

I assure the hon. Lady that local debates are necessary, and I would implore all Members of Parliament to conduct such debates in their constituencies. I will be interested to find out what her constituents think about the criteria for access to IVF in parallel with the independent research that the Department has commissioned—it is being conducted by not the Department, but independent experts. I am sure that we will return to that subject because I sense that all Members share my concern about the future provision of those services.

The Committee was concerned about the implementation of NICE’s clinical guidelines. They cover a pathway of care and make a number of recommendations that span all stages of care from the diagnosis of a condition to treatment and rehabilitation. They are more difficult to implement than NICE’s technology appraisals and there are often different states of readiness in the NHS. In recognition of that, compliance with clinical guidance is incorporated into the developmental standards, as is compliance with public health guidance. That is where IVF sits in terms of recognising training, facilities, access and planning, and perhaps work force planning as well.

In 2006-07, NHS trusts were asked for the first time to assess themselves against the developmental standard on clinical and cost-effectiveness, which takes account of NICE’s clinical guidelines. The results of the pilot assessment of clinical guidelines in health checks are encouraging. The self-assessments showed that 36 per cent. of trusts were making good or excellent progress towards implementing NICE clinical guidance, with a further 55 per cent. making fair progress. Of course, there is more to do and improvement must continue. We recognise that we have a role in supporting NHS organisations to plan for the guidance. The need to plan for NICE guidance is highlighted in the world-class commissioning competencies, which were developed by the Department with the NHS. The Department, in close partnership with the NHS, is taking forward work to design a supportive and developmental framework to underpin the competencies.

NICE recognises its role in supporting the NHS to implement its guidance. In 2004, it established the implementation directorate. The directorate has improved the support available for the implementation of NICE guidance in a number of ways, such as by employing implementation consultants who work with NHS organisations to advise on and share best practice on implementing guidance. I am pleased to see that their work is welcomed in the Committee’s report. Implementation consultants have also been welcomed widely by NHS organisations.

In considering the important work of NICE and the Select Committee report, I take a great deal of encouragement from the clear view that NICE is an important institution that will continue to develop and meet the needs of the NHS, and that other stakeholders will be involved. I thank the Committee again for a helpful and stimulating report. I take absolutely the point made by the Chairman in his opening remarks that, having invested a great deal of time and thought in the inquiry, the Committee expects to be kept informed of developments on outstanding matters. I look forward to future discussions with the Committee on those matters.

I shall be brief. I congratulate the Minister on speaking for 35 minutes and not mentioning the R-word. I thought it magnificent that rationing did not come into her speech for one second.

The hon. Member for Basingstoke (Mrs. Miller) is quite right: NICE’s original decision was three cycles of IVF. At the time, I was the chair of the all-party group on infertility, and I raised the matter on the day that it was announced—I think that it was in October 2004 or 2003—at Prime Minister’s Question Time. It was suggested that it would not be long before a policy of three cycles was in place, but two years later, in one part of the United Kingdom at least, not even a policy of one cycle was in place. Progress is now being made, and I thank the Minister for that. That said, the reason why the SHAs are considering the matter is that it has always been done by a specialised commissioner and not normally by individual PCTs. In my experience, where individual PCTs have had control, little has been done. My area, south Yorkshire, used specialised commissioning by NORCOM with north Derbyshire and north Nottinghamshire for that type of commission. That is probably why it is being done at that level, but I am pleased that it is being done.

I have three points to make. One relates to implementation, which the hon. Member for Wyre Forest (Dr. Taylor) mentioned. I did not like his saying that once NICE has come to a decision, it should limit clinical freedom. I think that the buzz words are that it should inform clinical decisions. I notice that my hon. Friend the Member for Dartford (Dr. Stoate) did not intervene and get involved, and that he missed it out in his speech a few minutes later. NICE should influence clinical decision making. That is what it is there for: to improve best practice in the NHS, something that has been going on for 59 and a half years. NICE has a great hand in doing that.

On QALYs, I am happy that my right hon. Friend the Minister is holding workshops and discussions. I hope that she will keep not only the Health Committee but Parliament informed about what happens. As my hon. Friend the Member for Dartford said, clinicians say openly that QALYs are a mechanism to base decisions on made-up stuff. We need to combat the idea that it is made up and that all that needs to be done is to re-jig the formula here and there. It makes no sense to clinicians or to patients. It is important that it should be brought out into the open. The more that is done and the more we understand exactly how the decisions are made, the more we can criticise whatever lack of base those decisions have, but at least it will be with some knowledge and not the idea that it is made up.

My other point concerns the cost of the QALY. The hon. Member for Romsey (Sandra Gidley) said that the threshold is still what it was four years ago: about £30,000. NICE does not admit that it is £30,000, but we know that it is between £20,000 and £30,000. Nobody admits it, but that is the case. That figure has not changed in relation to inflation in the past four years, nor has it changed in relation to the NHS budget, which has increased dramatically in that time. That is the issue: has it had such an influence, given that this Government have made such large increases to the national health service budget? We need to consider that, and I hope that my right hon. Friend will. It should be recognised.

My last point concerns the issue of a faster process for NICE. The hon. Member for Boston and Skegness (Mark Simmonds) said that a faster process could lead to a yes, but later a no. That is absolutely true. In the present situation, after something is licensed, a clinician can prescribe it whether NICE has assessed it or not, and the decision can turn out to be a no at some stage.

The hon. Member for Basingstoke said that NICE could slow down or stop the use of newer drugs as well. Potentially, it could. Our visit to the Scottish Medicines Consortium was interesting. We saw a presentation that I wish I had kept. Two things came up. One was a graph showing the rate of prescribing of licensed drugs that had not yet been assessed by the SMC. The SMC uses a much faster system than ours. Before it takes a decision, the prescribing of drugs increases. If the SMC says no, it tails off very slowly. That is very much like what happens in England, as I understand it. Drugs can be prescribed after they are licensed. If the decision is a no, the rate tails off, because clinicians will still say that that is their drug of choice for the individual patient. I had a similar debate recently about wet age-related macular degeneration, as the decision on it will be made next month. That is the type of debate that we are having in the health service at the moment. It is true that it is an issue.

We also looked at the SMC’s output. It is true to say that there could be a yes in England and a no in Scotland, and vice versa, but the output of the two organisations in terms of the decisions that they make is very similar. However, NICE takes a great deal of time to come to its decisions. I remember seeing another graph at the SMC. I will have to choose my words carefully. The graph showed that 85 per cent. of the worth of a drug is known quickly—I think within four or five weeks. It then takes another couple of months for that figure to rise by between 5 and 10 per cent. of that, so within its period of consideration, the SMC can see as much as 90 per cent. of the worth of a drug. I am not a clinician or a chemist, so I do not understand the matter completely, but it was shown to be an issue. It is very important to keep those things in mind. I have reread what the Government said, which was that because of the current renegotiations on the PPRS, they cannot say in any detail exactly how they will respond. Let us wait and see and hope that they will give it some consideration.

Some pharmaceutical companies are not against the idea—certainly not in principle. I have before me a brief from the pharmaceutical company, Lilly, dealing with the recommendation for a brief evaluation of all medicines. It is unhappy with what we said about having a lower QALY threshold, although more than anything else we had in mind the protection of the public purse. Some new drugs are expensive and could consume large amounts of a PCT’s budget—even increased budgets. When the decision was made on the use of Herceptin at early stages, my PCT said that it could cost it £1 million, which is a lot for any organisation to lose every year. We must recognise that.

I understand why the industry takes the view that it does, and we realise that QALYs are complex. Lilly went on to say that NICE would need to demonstrate flexibility along the same lines as the SMC in the timing of the initial assessment—that is true—and that there is no right of appeal, as there is with the SMC, where there is a right to re-submit. We actually met some people—I do not know whether they sat on the board of the trade organisation, the Association of the British Pharmaceutical Industry, or were from individual pharmaceutical companies—who actually sit in with the SMC. If they think that the evidence in front of them could be better—I am saying this, not them—they would ask for it, as opposed to simply saying, “This does not go ahead.”

No matter what the pharmaceutical companies or we think about it, the SMC model is worth considering. I was told anecdotally that drugs can be obtained through the SMC quickly, but that it takes a long time to get to prescription, so any delays in the system would need to be looked at as well. If a long time elapses before people start prescribing a drug, that is a delay in itself. However, we need to do the comparison. We are constantly being told in our mail bags and the media that people get new drugs quicker in Scotland.

I thank everyone involved in our report and my right hon. Friend the Minister for responding to the debate. She said that she would keep us informed about the workshop on QALYs and respond further when the renegotiations on the PPRS are out of the way. I thank all Members who have taken part in this debate. Reference has been made to reports in years gone by; this report too will be around for many years. This is not the end for many of the points in the report, and for some of them, it might be just the beginning.

Question put and agreed to.

Adjourned accordingly at three minutes past Five o’clock.