With permission, Mr. Speaker, I should like to make a statement about Professor Mike Richards’s review of current policy concerning NHS patients who wish to pay for additional private drugs.

I start by paying tribute to Professor Richards and his review team for the diligence with which they have conducted this review. The report is informed by evidence from thousands of patients, carers and clinicians across the country, and it was completed with necessary urgency but without in any way compromising its thoroughness. The time scales that I set were deliberately challenging, because this issue is causing great concern and distress to a number of patients and their families.

The review’s terms of reference were to examine current policy relating to patients who choose to pay privately for drugs that are recommended by their clinician but not funded by the NHS and who, as a result, are required to pay for the NHS care that they would otherwise have received free of charge. I also asked Professor Richards to make recommendations on whether policy or guidance could be clarified or improved.

Professor Richards quickly identified the underlying causes of the problem. His review starts from the fundamental principle that the NHS provides a universal and comprehensive service to all its patients, free at the point of need. During the Second Reading of the NHS Bill in 1946, Nye Bevan described the financial anxiety endured by people seeking medical help as the “first evil” that the NHS must vanquish. Yet Professor Richards’s report shows that access to certain treatments on the NHS, particularly drugs for the terminally ill, is inconsistent, and as a result a very small number of patients feel that they have to pay for additional treatment and are worried that in doing so they will jeopardise their entitlement to NHS care. His report makes recommendations not only to revise the guidance for those exceptional and rare circumstances, but to improve access to certain drugs on the NHS, reducing the need for such patients to resort to private care. His recommendations are accompanied by proposals put forward by Professor Sir Michael Rawlins, chair of the National Institute for Health and Clinical Excellence, to employ greater flexibility in the appraisal of certain treatments, specifically those relating to drugs for the terminally ill. I accept Professor Richards’s recommendations in full and today I can announce two immediate developments to make drugs more available on the NHS to those who could benefit from them.

Since it was established in 1999, NICE has ensured not only that many thousands of patients benefit from access to the latest treatments, but that the taxpayer gets value for money. NICE provides wholly independent and scientifically rigorous assessments of the latest medicines and treatments and is widely admired across the world for its work. Its guidance on drugs and treatments is internationally respected, and many other countries are adopting similar models.

The price of the drugs that NICE assesses is a matter for the manufacturers, but I can confirm that I am working closely with the pharmaceutical industry on new and more flexible pricing arrangements that will increase patients’ access to new drugs. Those arrangements will include enabling drug companies to supply drugs to the NHS at lower initial prices, with the option of higher prices if value is proven at a later date. The new arrangements will also build on patient access schemes already developed for particular drugs. That will help to ensure that patients can access medicines that would not otherwise have been deemed cost-effective by NICE. I expect to be able to say more about that soon.

In addition, NICE has for some time been concerned about its ability to take into account the premium that society places on helping those with terminal illnesses. Professor Sir Michael Rawlins has written to me to outline a new, more flexible approach to the appraisal process in order to address those concerns. NICE proposes to introduce more flexibility in the evaluation of higher-cost drugs, which have been shown to extend the lives of terminally ill patients, and where the less common nature of a particular condition may mean that the more flexible pricing arrangements we are discussing with the industry are not in themselves sufficient. The proposal will be implemented immediately while NICE holds a full consultation

Those two measures will ensure that more treatments, which in the past patients may only have been able to access privately, will be available free on the NHS. The work of NICE is necessarily complex, but as we highlighted in the cancer reform strategy, it sometimes takes too long. Its appraisal guidance has often not been available for two years or more after a drug has been licensed. Steps have already been taken to address that, with, for example, fast-track procedures to appraise automatically significant new cancer drugs, but the time it takes NICE to publish guidance can lead to significant local variation.

In response to Professor Richards’s report, I am today setting out a new timetable to speed up the appraisal process for all drugs evaluated by NICE. In 2009, draft or final guidance will be available within six months of licensing for about half of the drugs that are being appraised through the fast-track single technology appraisal programme. In 2010, draft or final guidance for all new cancer drugs will be available within six months, on average, of a drug being licensed. We will work with NICE to explore further ways of speeding up the appraisal process with the intention of announcing the outcome of our work early in the new year.

All of those measures will dramatically reduce the instances where a drug is available on the market but primary care trusts have no guidance from NICE on which to base their decisions about funding. However, we cannot totally eliminate instances of primary care trusts having to make decisions in the absence of NICE guidance.

Professor Richards has found that patients and professionals are often unclear about who takes such decisions or how they make them. Patients and their families are often left bewildered about why a particular treatment has been denied, despite what they see as a clear clinical need. As we highlighted in the NHS constitution, we need to do more to improve the quality and consistency of the decisions, especially in any interim period before NICE’s guidance is released.

We will therefore publish a set of core principles to inform the way in which primary care trusts make decisions about funding new drugs. It is essential that the process, as well as the decisions, is clear and accessible to patients and the public so that, if a patient is denied access to a particular treatment, the reasoning behind the decision is transparent and consistent. We will publish detailed good practice guidance for primary care trusts about the processes that they should have in place to make decisions about funding new drugs and handling exceptional cases.

Better local decision making, a faster appraisal process, fairer pricing and greater flexibility in evaluating certain treatments will address the main issues that have fuelled the demand from some patients for additional private treatment. However, it would be unreasonable to expect the NHS to fund every single new treatment, and we cannot guarantee that we will completely eradicate the circumstances in which a small minority of patients wish to pay for a drug that the NHS does not provide.

The vast majority of people to whom Professor Richards spoke during his review thought that, in such circumstances, it would be wrong to take away a patient’s entitlement to NHS care because they had purchased additional treatment privately. Professor Richards recommends that that practice should end and I agree. It will end with immediate effect.

However, Professor Richards is also clear that there must be tight controls to prevent the NHS from becoming a two-tier system. Today, we will publish draft revised guidance, to take immediate effect, to ensure that the NHS is clear about how to deal with the rare occasions—which, with the implementation of the proposals already mentioned will be even rarer—when patients opt to fund additional drugs privately. The guidance will make it clear that NHS care should never be withdrawn and that administering private care should take place separately from NHS care to ensure that NHS funds are never used to subsidise private care. In short, there is no question of patients who can pay more being able to access a different and higher level of NHS treatment, but neither should any patient who has at some point paid for private treatment lose their entitlement to NHS care.

Today’s draft guidance sets out that, in such circumstances, private treatment should be provided in a private facility so that it is always clear whether a particular treatment is NHS or private. That removes any confusion about what constitutes a single visit or single episode of care. It will also remove any question of a two-tier system, whereby those who pay for additional care have their private care subsidised by the NHS.

The NHS must, by definition, continually evolve and improve to fulfil rising expectations and offer the latest advances in medical care to all our citizens, irrespective of wealth, class, ethnicity or disability. The debate has been critically important to the NHS and the values that underpin it. I believe that the measures that I outlined today will, in enabling the NHS to exercise its natural compassion, help secure those values for the future.

We are fortunate in Britain to have a health system that provides a comprehensive service for all patients, based on clinical need, with public funds for health care devoted solely to the benefit of the people it serves. The report by Professor Richards enhances those principles and I commend the statement to the House.

I am grateful to the Secretary of State for advance sight of his statement. I am sure, too, that the House will wish to thank Professor Mike Richards for his report.

I regret, however, that the Secretary of State’s statement, far from clarifying the issues, leaves them as unsatisfactory as ever. Professor Richards’s report says on page 6:

“I believe that the option of NHS top-ups should be rejected”.

However, the Secretary of State says that if patients are denied access to new cancer drugs by the NHS, they can pay for them without losing their entitlement to NHS care. So, contrary to past guidance and in a U-turn on policy, patients will be able to be both private patients and NHS patients in relation to the same course of treatment, even if the Government dress it up as separate care, with patients being wheeled to another ward in the hospital to have their cancer drug administered and then a bill sent to them by the NHS.

I refer Government Members to page 6 of the report, where the Secretary of State requires strategic health authorities to say where private drugs are going to be administered, which includes designating an area of an NHS hospital for the delivery of privately funded treatments, and to page 51, where the proposed option for separate care says that patients will receive different care from the NHS and the private provider, although this will often be the NHS, so the NHS will be the private provider.

The Secretary of State has not really answered the question: is he in favour of top-ups or is he against them? In reality, the Government have jumped out of the frying pan and into the fire, from, on the one hand, denying cancer patients their entitlement to NHS care, which has rightly been abandoned, to, on the other, requiring patients to pay for their cancer drugs and thereby creating two-tier access to NHS care.

That has happened because the Secretary of State, after we have asked him time and again, has not answered the key question: why are NHS patients in England not receiving clinically effective life-extending cancer treatments that are routinely available in other European countries? An OECD report published last week on pharmaceutical pricing said that UK spending on medicines per capita is below the OECD average.

The Government admitted last year in the ministerial industry strategy group that the uptake of new cancer drugs in this country was slower than across Europe. We know from the Minister’s reply that we spend 5.6 per cent. of our NHS budget on cancer services, whereas France spends 7.7 per cent. Why does the Secretary of State not understand that the heart of the issue is about enabling clinicians in this country to provide the cancer treatments that they believe are necessary for their patients?

There are many steps that we could take on that. Why has the Secretary of State not followed the advice that we have published on NICE and taken ministerial referral out of the system? That would take six months out straight away and speed up NICE appraisals.

Despite the talk from the Secretary of State about more flexible pricing—frankly, for two years I have been urging this on Ministers—why did he not implement a fully value-based pricing system for new medicines in the review of the pharmaceutical price regulation scheme this year, so that patients can access the treatments through the NHS and the price paid will reflect the therapeutic and innovative value? Instead, the Secretary of State still seems to be prepared to contemplate cancer patients paying thousands of pounds for their medicines, just as long as they are administered by the NHS in another ward, as separate care. If so, is he planning new primary legislation to introduce a new power for NHS trusts to charge for treatment?

Is the Secretary of State preparing legislation to remove the private income cap on foundation trusts, which specialist cancer hospitals such as the Royal Marsden or the Christie would otherwise breach? How will he stop the new rules from becoming a bureaucratic nightmare? How can his rules be applied if patients exercise choice and go to an independent hospital or even go abroad in future, using the cross-border health care directive?

How will the Secretary of State prevent the NHS from becoming a core service, with increasing numbers of top-up treatments or patients being pressurised to buy more treatments and services privately? Will he confirm to the House that separate care will often mean private health care provided by NHS trusts?

Based on the Secretary of State’s proposals today, how can he still argue that treatment through the NHS would be available based on need rather than on the ability to pay? Let us take the case of a patient with bowel cancer, whose hospital consultant recommends Erbitux, a life-extending treatment. At the moment, some primary care trusts provide that treatment, while others do not. Some hospitals pay for it themselves, while others require it to be administered at home with the patient paying. Still others require it to be administered wholly privately, with all the associated treatment costs being paid for.

In today’s statement, only that last case has been ruled out, and rightly so. It has always been morally repugnant to make cancer patients pay for their continuing NHS care. We made that clear months ago, and the Secretary of State could have made this decision months ago. It is equally unacceptable for cancer patients still to be put through months of delay—whether as a result of NICE appraisals or exceptional case panels—while not knowing whether their treatment will be provided by the NHS, even if their consultant says that it is the best, and sometimes the only, option for them.

Those patients might also be aware that Erbitux will be provided for bowel cancer treatment in every other country across Europe, but not here. Indeed, it was Erbitux to treat bowel cancer that Linda O’Boyle needed to pay for. Hers was one of the central cases that gave rise to the review. I pay tribute to my hon. Friend the Member for Billericay (Mr. Baron), who represented Linda O’Boyle, her family and her interests assiduously in the House.

The Government are planning to stop cancer patients having to pay £7.10 for a prescription, yet they are still prepared for those patients to pay £11,500 to acquire Erbitux for their bowel cancer treatment. The Rarer Cancers Forum estimates the cost of extending access to new cancer drugs at £175 million a year. The NHS surplus last year was 10 times that amount. This summer, the Secretary of State imposed a price cut on the pharmaceutical price regulation scheme, saying that that would save £300 million a year. Where is this money going? Why is the money voted by Parliament to provide care for patients not providing the cancer services that our constituents need, and which they know other countries provide?

Let us be clear about this. There are two principles involved: if a patient has cancer, they expect the NHS to provide the treatments that they need and that are recommended for them, including those that will extend their life; if they want something different, and pay for it privately, the NHS should not penalise them for doing so. Those are two simple principles. Why could not the Secretary of State have made it that simple today? Why could he not have got up and said that those would be the principles that we would work to, while respecting the values of the NHS?

I am very surprised by the hon. Gentleman’s response, not least because, if he has read the report, he will know that Mike Richards looked at a spectrum of alternatives. The first point—the important point—is that we will no longer withdraw NHS treatment from people who have to pay for a drug that has been recommended by their clinician but which is not available on the NHS. The hon. Gentleman says that he raised this issue months ago, but I never heard a single word about it from Conservative Front Benchers until the Conservative party conference, three months after we had announced the review. Yes, there was a question a year ago from the Opposition Back Benches, but it was not followed up at all by those on the Front Bench. Yet, suddenly, the Mr. Know-alls have always been aware of this problem and always been determined to resolve it.

Why has Professor Richards, after talking to all his colleagues, come up with this proposal? At one end of the spectrum, there is the current, rather cruel, practice. Incidentally, I too pay tribute to the hon. Member for Billericay (Mr. Baron) for the work that he has done on behalf of Linda O’Boyle’s family. At the other end of the spectrum, there is something that Mike Richards calls top-ups. I do not want to get bogged down in the terminology, but the understanding of people in the profession was that some people were concerned about the change in practice, and a thorough debate took place on the issue. The understanding was that a top-up system would involve an NHS patient being offered a range of choices, one of which would involve the patient in bed No. 1 being offered a drug that was not available on the NHS and paying the NHS for it, while the patient in bed No. 2 could not afford to pay for the same drug. However, Mike Richards points out that the only people who were vehemently proposing that option were the people who felt that a tax-funded system could not survive and that, at some stage, we would need to move to an insurance-based system. They are the only people, Mike Richards says, who put forward that view. That is top-up.

What Mike Richards has said, of course, is that we should not withdraw this treatment; we should ensure that NHS treatment continues; we should allow the patient to pay for that treatment; but we should not under any circumstances—to reiterate a point put to me in a consultation by the hon. Member for Billericay—endanger the principles of the NHS. The system of top-ups would, however, endanger that principle. [Interruption.] This is a serious issue, so let us not have barracking from the gallery; let us rather try to understand what Professor Richards has done in a very important report over a short period. We will deal with Europe and all the other peripheral issues, but what Professor Richards has said is that we cannot carry on with this cruel system, but neither can we allow the NHS to be used to subsidise private care.

I do not know the current position of Conservative Front Benchers on this issue. It has been all kinds of things over the last 10 years and I am not sure what it is today on this particular Wednesday; it might well have changed again—[Interruption.] Sorry, it is Tuesday today, so it will no doubt change again tomorrow. The real issue is this: what Mike Richards says is that we should have separate care, perhaps provided in a private facility in an NHS hospital; that is fine, because we allow private care in NHS hospitals. If such care is not available in an NHS hospital, the patient can get the drug from a private practitioner and have it administered at home, which is what happens in Birmingham. However, NHS care will not be withdrawn from such patients and they will be allowed to buy those drugs.

The final point made by the hon. Member for South Cambridgeshire (Mr. Lansley) was about flexible and value-based pricing, which was in the Office of Fair Trading review of the pharmaceutical industry a while ago. The hon. Gentleman and the Conservative party need to understand this: either we keep the current system, which Labour Members value, of reaching a voluntary agreement with the pharmaceutical industry through the PPRS or we move to reference pricing—the European model. I believe that we would lose out from that system. [Interruption.] The hon. Member for South Cambridgeshire asks why we did not introduce value-based pricing earlier. The answer is that we need to negotiate it with the pharmaceutical industry. If we do not negotiate it, we will have to introduce it through legislation, which is not the route we want to take. The negotiating route has led us to a patient-access scheme, which is being used for some drugs, and we will soon, I hope, conclude our negotiations and have a flexible pricing scheme.

The worst scheme would be the Conservative policy launched a couple of days ago, which amounts to a huge bureaucracy with every drug having to be evaluated through the system. We would lose the voluntary agreement with the pharmaceutical industry and probably lose some major research and development in pharmaceuticals. I think that Conservative Members need to get their act together; as far as I can see, the policy seems to be put forward by “Confused of Conservative central office”.

rose—

Order. By any test, this is slow moving and we have other business to complete. I want to allow all Members seeking to catch my eye to make their contributions, but I need brevity from now on—brevity in both questions and answers.

I welcome the announcement that the timetable for the NICE evaluation process is going to be speeded up, which the Health Select Committee recommended in our last report. Professor Richards says that tight controls will be needed to avoid a two-tier NHS. Does that mean that NICE will need to be more flexible so that drugs presently not available on the NHS become available?

Yes, indeed it does. NICE has seen that people are concerned about this aspect of end-of-life care and believe that as people approach the last years of their lives, society should put a premium on that, which is not reflected in the current system. The supplementary system announced today will indeed mean more of these drugs being made available.

I thank the Secretary of State for early sight of the statement and join hon. Members in thanking Professor Mike Richards for his work in producing the report.

The statement—albeit it a remarkable U-turn, albeit that it comes after pressure of a threatened judicial review and albeit that the Government seem to be fudging or drawing a distinction between what is proposed and the principle of top-ups—is none the less a welcome step. It is a complex area. There are understandable anxieties about the implications of moving in the direction outlined, but the bottom line is that we cannot justify a cruel and pernicious system that threatens to withdraw NHS care if a patient chooses to follow a clinician’s advice in paying for a drug that is not available under the NHS. However, allowing top-ups must go hand in hand with reforms to ensure that access under the NHS is available to drugs that are routinely accessible in Europe but are not currently available in this country.

On proposals to extend access, the Secretary of State’s ambition is to achieve draft or final guidance within six months, but he will only achieve that for all drugs by 2010. Surely if it is only draft guidance within six months, there could be a further long delay in producing the final guidance. Why will it take so long to get to the six-month point, given that there is already a much faster system in Scotland? I know that the process there is different, but it usually ends up achieving the same verdict as we do in England only it does so much quicker. That the system is taking so long results in a great sense of unfairness in England.

The Secretary of State said nothing about the need to reform the requirement of ministerial referral. Surely we should scrap that and allow NICE to make its own decisions. Surely, also, we should ensure that there is complete transparency of the modelling that NICE undertakes in reaching its decisions.

The Secretary of State referred to the need for more flexibility in the evaluation of high-cost drugs. Will he consider widening the factors that NICE takes into account—the impact on carers and the potential to get an individual back to work—in assessing whether a drug is cost-effective? There is a key question for him: under the reforms, which drugs that have been rejected does he expect will become available? What analysis has he undertaken of that? He must have done some. Will appraisals be reopened on drugs that have recently been rejected by NICE? He said that the current rules would come to an end with immediate effect, but at the same time he announced a consultation on how those new rules will apply. What will happen in the meantime?

The right hon. Gentleman said that treatment must be in a separate facility, but is that not inconsistent with good quality patient care and patient safety? Will he address that specific concern?

With regard to the importance of local transparency in the decision-making process by primary care trusts, when will the Secretary of State announce those core principles, and will they take into account social factors—family circumstances—in determining whether a drug should be available?

The statement contained nothing about the absolute importance of independent advice to patients on whether it is right to pay for an additional drug. It also said nothing about the potential need to regulate any market that might develop in dealing with very vulnerable people at a critical stage in their life. Finally, the right hon. Gentleman said nothing about addressing the potential conflict of interest for clinicians and the NHS in making these difficult judgments. Will he address those concerns as well in his response?

I thank the hon. Gentleman for his welcome for the statement. He says that it is a remarkable U-turn, but this guidance has been around for many years. We can track it back to the early ’80s, under the Thatcher Government, and it was there before that. [Interruption.] He says from a sedentary position that it is a U-turn from what I said, but I said that if we allowed NHS care and private care to be given together—I talked about an episode of treatment, to introduce a new variation into all the descriptions, back in December last year—that could be the end of the founding principles of the NHS. It could be, and Mike Richards has accepted that it could be, which is why separate care is an important part of his proposals. [Interruption.] Everyone in the House apart from those on the Conservative Front Bench understands that Mike Richards’ terms of reference were to defend the principles of the NHS, and that combining private and NHS care would be the route to an insurance-based system and the end of a taxpayer-funded system.

The hon. Gentleman said that the proposal would have to go hand in hand with greater availability. That is what Mike Richards recognised, and that is why a large part of my statement was concerned with that. The hon. Gentleman asked the reason for the delay in NICE’s appraisal of the drugs. I understand that it is due to the tail in the system. We committed ourselves to a more rapid appraisal a year ago in our cancer strategy, and as new drugs come in we can move quickly, but the old drugs are still being appraised under the old system. It will take us some time to work our way through the backlog, but NICE has already announced that it is increasing the number of appraisal teams and standing committees and starting more appraisals earlier, so I think that the time scale is realistic.

The hon. Gentleman mentioned ministerial referral, which was also mentioned by the hon. Member for South Cambridgeshire. We are not handing the whole process over to NICE and taking politicians out of it completely, but once a drug has been referred to NICE, the process becomes a NICE process, independently run. NICE also has an enormous role in the earlier process of selecting drugs to be referred. It is responsible for the consideration panels of experts before the matter is sent to the referral oversight group, which consists of clinicians. The ministerial sign-off for which my right hon. Friend the Minister of State is responsible is a very short part of that process.

It takes 12 months.

It does not take 12 months. Here is £13 billion of taxpayers’ money, and once again the Conservatives want to remove Government completely from the process and allow a giant unelected quango to deal with it.

The hon. Member for North Norfolk (Norman Lamb) referred to the consultation that NICE has undertaken. NICE has said that the new procedures will apply while its consultation takes place. Those new procedures start today. I believe that members of NICE are the best people to say which drugs are likely to come through the process, and I believe that NICE will reappraise drugs through the process as well if they are referred.

The core principles put forward by the PCTs should be ready early in January.

I welcome the measures proposed in the statement, which will go a long way towards speeding up the process and making more drugs available. However, I have some concerns about what my right hon. Friend has said. One of the founding principles of the NHS is that it is based on medical need rather than ability to pay. If a drug is medically necessary, how can it be right to make it accessible only to those who can afford it? If a drug is needed it should be available, and it should be available to all.

The drugs that come through the NICE process will be available, thanks to the NHS constitution which will make it absolutely clear that patients have a right to access the drugs. There will be more of those drugs coming through. The PCT exceptional circumstances committees will have a far more transparent way of considering drugs that have not come to NICE for appraisal, have been refused by NICE or are off-label, so there will be a better system.

I would previously have shared my hon. Friend’s fear that there is no way of ending the previous co-payment advice without jeopardising the basic principles of the NHS, but I think that Mike Richards has found a way of doing that. Even when drugs come through the new system which are not available on the NHS—and there will be fewer of them—we will no longer withdraw treatment, but will ensure that it is administered privately.

Today’s announcement is very welcome. I thank the Secretary of State and Professor Richards for our constructive meetings. Let me also briefly pay tribute to my constituent Mr. Brian O’Boyle. He had the courage to speak openly about the death of his wife, which helped to spark off the process and the review.

The announcement is positive for two reasons. First, it ends the obscene threat that NHS care could be withdrawn from patients simply because they wished to access care that was not available on the NHS. Secondly, it will, I hope, act as a catalyst to widen access to beneficial treatment for cancer patients. May I, however, press the Secretary of State on the issue of continuity of care? Can he put my mind at rest by assuring me that the separate care to which he referred will not involve sending patients halfway across town to have their private care administered? I am sure he will agree that continuity of care is important, given that some drugs need to be administered concurrently, and given the condition of many patients.

I welcome the hon. Gentleman’s remarks, and I, too, pay tribute to Brian O’Boyle. The hon. Gentleman eloquently described that case of a woman who had spent her whole life in the NHS being charged for the cost of her treatment or having that treatment withdrawn, and any politician who came across the case would have felt that if there had not previously been the time to review the guidance, the time had certainly come now.

The hon. Gentleman raised an important question—which the Liberal Democrat spokesman, the hon. Member for North Norfolk, also raised, but which I did not get around to addressing in my reply to him. Professor Richards says in his report that there may be circumstances in which one would need to give such care to a patient in an NHS environment for clinical safety reasons; he expects such situations to arise very rarely, but they may do so because patient safety comes first.

In terms of where patients would have to go, there is currently no difference: they would have to access the medicine from the private sector. What we are saying in the report, as one of Mike Richards’ recommendations, is that strategic health authorities should look at this, to make sure that patients know exactly where they need to go to access the drugs in a private setting—it may be in an NHS hospital, a private clinic or at home. Professor Richards and his colleagues think this is entirely appropriate, and that it will work well and will not cause any concerns, and it is certainly far better than the current system in which, as the hon. Member for Billericay pointed out, the cruelty of withdrawing such treatment is beyond anything we in this House would want to cause.

I welcome the Secretary of State’s statement and his recognition that some health economies, such as Birmingham’s, have already successfully worked out a way of dealing with the private sector and the NHS. However, I did not quite get a sense of whether there is any distinction in the primary care trust drugs guidance for situations where the pharmaceutical company has, for its own reasons, never applied to NICE for recognition. Does this apply to all of them, irrespective of whether they applied?

If the drug company has not applied for this, the same circumstances will apply: the drug has not been NICE-approved, because the company has not applied to have it NICE-approved. However, that does not stop a PCT allowing that drug to be prescribed, which is why the transparent and clear process around PCT exceptional circumstances committees—which is where such matters would rest—is an important part of the Richards review.

I welcome the Secretary of State’s statement, but I would be grateful for clarification on one point. The Richards review was about those who are required to pay for their NHS care because they have opted to pay for drugs privately. Can the Secretary of State confirm that, from today, none of those patients will receive an invoice from the NHS for their NHS care?

In terms of what has gone on before today, I can assure the right hon. Gentleman and the House that the old guidance has gone and the new guidance replaces it with immediate effect. What has happened before will be for PCTs to deal with. In the Linda O’Boyle case, the PCT refunded the money. I would not like to make those decisions for them because all kinds of circumstances could be involved, but I think the PCT in Southend set a good example.

I very much welcome the Secretary of State’s statement, particularly his comments on the speeding up of NICE decisions, the more realistic pricing of drugs in the future, and the ending of the cruel withdrawal of treatment from the terminally ill who want to buy drugs privately. However, many people will be worried that this is the thin end of the wedge, undermining NHS principles of treatment free at the point of need. Also, I have concerns—

Order. I do not think we need an “also”, as the hon. Lady has made her point.

I understand my hon. Friend’s concerns. This has been a difficult process because of the very strongly held views, as anyone will know who heard the debates on the radio or in this House, or the debates organised by the British Medical Association or the King’s Fund. There are strong opinions on both sides of the argument. The evidence submitted by the Royal College of Nursing sticks in my mind. It made the point that the NHS is about providing services, not withdrawing them, and it made the cruelty case—it said there was a lack of clarity and a lack of charity in how the current arrangements applied. My hon. Friend the Member for Sunderland, South (Mr. Mullin) was the first person to raise this issue with me. He said to me a while ago, “Look, we need to rethink this.”

I do not believe this is the thin end of the wedge for the NHS. I think carrying on with the previous system is what would endanger the principles of the NHS, because people saw it as dogmatic and ideological, and not in any way related to the person’s individual needs. So I think this strengthens the NHS, rather than weakens it.

But does the Secretary of State accept that two patients can have an identical operation carried out in the same hospital by the same consultant, but because they live in different PCT areas one will have that operation paid for whereas the other will have to pay for it himself or herself? Does he understand the resentment that that provokes? What can be done to remedy the problem?

I understand that. The NHS constitution, when we finally get it launched, will help in some ways. Mike Richards makes a recommendation pointing out that in the north-east of England an overview of this issue is taken, so that PCTs do not make different decisions. Not only is there work to be done with the PCTs, but, as he recommends, we should examine how they deal with this on a regional basis. The right hon. Gentleman correctly says that this causes huge resentment and great upset.

I usually find eulogistic questioning awkward and it is always counter-productive, but may I compliment the Secretary of State on his statement? In comparison with the arguments put forward by Conservative Members, it was clear, concise, coherent, fair and based on sound common sense, and it will be very much welcomed in my constituency. Does he believe that NICE will need additional resources to be able to carry out its reviews more speedily?

I preferred my hon. Friend’s description of my statement to the Conservative party’s one. I can confirm that this is all eminently doable within NICE’s current budget. Medical science moves on; end-of-life treatments and the drugs available to treat rare diseases, such as melanoma and so on, were not an issue five or 10 years ago. NICE has been keen to keep pace with those changes, and there is nothing to prevent it from introducing this immediately and taking note of the consultation in five weeks’ time. We will then make a further announcement in January.

Does the Secretary of State accept that there are lots of unanswered questions? For example, how does he deal with the situation of an NHS consultant referring and recommending a private treatment given by himself in an NHS pay bed with the income going to that trust? How does he deal with the problem faced by someone who responds to a private treatment that keeps them alive but then runs out of money and finds that the drug is not allowed on the NHS because it worked for only a few people? Surely that treatment should then become payable by the NHS. Does he accept that more work needs to be done on those questions?

I accept that, as does Mike Richards. He has done a thorough piece of work in a short space of time; he needed to do so, given the urgency that the public attach to this. He says in his recommendations that measures need to be in place to prevent what the hon. Gentleman described. I think that the ethos and the integrity of doctors, their contract, the fact that they are not allowed to raise the issue of private drugs—it must be raised by the patient, rather than by the practitioner—and perhaps some other measures that we could introduce would resolve those problems. If we stick to the current system, what the hon. Gentleman describes could happen just as well, except that tied on to it would be this withdrawal of NHS treatment.

I welcome the statement. Some PCTs need money to pay for these drugs, and some PCTS, such as Wolverhampton’s, still do not receive full funding as per the Government’s own formula. By what date will all PCTs receive full formula funding?

I cannot give a date for that. All I can say to my hon. Friend is that, as he will know, we started off with many PCTs being about 15, 16 or 20 per cent. away from having their proper funding formula; no PCT, not even the one in Northamptonshire, is now more than 3 per cent. away from that target. This is the way we must go if we accept that we do not want to take money away from more affluent areas. We do not want to reduce the health spend; we want to increase it for everyone, but we want to increase it most for those areas with the most deprivation. We need a gradualist approach. As a good Fabian, he will recognise that that is the way to go.

I have not read the report, and I regret that I am now rather more confused than I was. I still cannot see a fair way of allowing extra payments from those who can afford them. To avoid the need for that, will the Secretary of State revisit better care, better value indicators, which alone would save the NHS £2 billion per year? That could be added to the money available to NICE so that it could pass many more drugs.

I respect the hon. Gentleman’s judgment on this matter, and perhaps we should have a meeting with Mike Richards to talk this through. The primary point is not about what we will do—we will do many things, including make more drugs available—but about what we will not do: we will no longer withdraw that NHS treatment.

There is a second point: no party, not even the Conservative party, which has its weird and wonderful moments, is arguing that the NHS must pay for every drug that comes on the market. We could never do that. Despite making more drugs available, in some circumstances a few people—even fewer after we have implemented the proposal before us—will face the dilemma of having to pay for a drug that is not available on the NHS. We believe, therefore, that the principle of separate care, as proposed by Professor Richards, is the right way to proceed.

First, does this mean that a patient being successfully treated by a traditional Chinese medicine practitioner, using herbs and acupuncture, will have their costs paid by the NHS? Secondly—

Order. I am trying to ration time, so hon. Members may ask one question only, I am afraid.

I am afraid not.

Can the Secretary of State reassure me that the NHS will use its procurement muscle when negotiating, especially in regard to what he described as the new and more flexible pricing arrangements, which will enable “drug companies to supply drugs to the NHS at lower initial prices, with the option of higher prices if value is proven at a later date?” Will that be a one-way street? In other words, if the value is not proven, or if more drugs are purchased than anticipated, will the price go down?

That is a question for NICE in deciding how to operate the system. Currently, drugs companies come in with a price at the beginning and cannot alter it, but under a value-based system they could come in with a lower price and then argue for a higher price later.

But can it go down?

I shall take advice from NICE on that, but I doubt it. The whole point is to have a voluntary, rigorous agreement. Drug companies have agreed to a 5 per cent. reduction in drug prices with a further 2 per cent. reduction in prospect. It is a great tribute to them that they have entered negotiations and that they are proceeding so successfully. I reassure the hon. Gentleman that a robust negotiating system will be put in place, but at the end of the day it is up to drugs companies to seek to make a drug available and to put it through the NICE process. It must be voluntary. We cannot proceed otherwise.

The Secretary of State said in his statement that only a small number of people have had to pay privately for these top-end drugs. Will he indicate how many people have had the NHS entitlement withdrawn and can he think again—

Order. I appeal to the House. We have other important business to reach. The Secretary of State’s answers are lengthy, in an attempt—I am sure—to help the House, but if I am to get everybody else in we must move more quickly.

Mike Richards says that not enough evidence or information is available—one of his recommendation is that my Department gets more. He quotes the Joint Collegiate Council on Clinical Oncology, which carried out an online assessment and concluded that about half of those patients refused a drug go on to pay for it. Incidentally, 15,000 people a year go through the process and two thirds have the drugs approved by their PCT. However, not even Professor Richards thinks that that is very robust. We need to do more work to get an accurate picture.

I commend this positive step and remind the House of the heroic Jane Tomlinson, who did so much for charity but could not access the drugs that she needed.

May I ask the Secretary of State a practical question about the ever-changing medicines available for people who are terminally ill? NICE often takes time to make decisions and decisions on what the NHS will fund often change, so will the Secretary of State say whether, if someone starts to pay for treatment straight away—clearly, if they medically need to do so, they should—they will get their treatment refunded, if, at the end of the process, it is recommended that the NHS should fund it?

The decisions do not apply retrospectively. A NICE decision applies from the time at which it takes effect. In terms of the additional care that we are talking about, when NHS care is withdrawn from a patient in those circumstances that comes into effect immediately.

The Labour party of Nye Bevan is gone and there are few Labour MPs to mourn its passing. Why will my constituents have to pay thousands of pounds to receive cancer drugs that are routinely available elsewhere? Why will they be wheeled down the corridor to a designated private room in an NHS hospital? Is it because of the Labour Government’s failure to manage budgets properly?

I shall take that question as an audition for the Royal Shakespeare Company and treat it with the contempt it deserves.

Speedier NICE appraisal decisions are essential but they are not sufficient. We also need more transparency and accountability in NICE decisions. In the light of the Law Lords’ decision to refuse permission to NICE to go to appeal on the dementia drug case decision, will the Secretary of State now put it beyond doubt that he expects NICE to place all the models it uses in respect of decisions on appraisals into the public domain?

That is an issue for NICE. It needs to comply with the court judgment. This is not the end of the story about NICE, as I hope to make fresh announcements early in the new year. Perhaps we will return to the subject then.