I have previously undertaken to update the House on the negotiations concerning the orders placed by the Government for H1Nl vaccine, at their conclusion. I am pleased to be able to inform the House that we have now reached a mutually satisfactory agreement with GlaxoSmithKline (GSK) to limit the Department’s orders of swine flu vaccine, and that this settlement will result in savings of around a third of the original value of the total orders with GSK.

I am confident that the negotiated settlement both protects the public purse by obtaining full value for payments made without incurring a cancellation fee and ensures that the United Kingdom remains at the forefront of pandemic preparedness worldwide. The agreement involves the Department taking total deliveries of 34,838,500 doses of Pandemrix, including vaccine received so far. This will allow us to continue with ongoing vaccination programmes and keep a sizeable strategic reserve of vaccine in case the virus mutates. We are also planning to donate 3.8 million doses to the World Health Organisation to boost immunity in Africa before the rainy season.

In addition, the Department will purchase H5N1 “bird flu” vaccine and courses of the antiviral Relenza (to replace the amount of Relenza made available during the response to the swine flu pandemic) as part of the agreement. The probability of a more severe influenza pandemic has not diminished following the swine flu pandemic, and taking measures such as these now will help protect the population in the event of a future pandemic. However, as with other contracts, further details of the agreement are commercially confidential.

This negotiated settlement with GSK follows the decision to cancel the remaining orders with Baxter on 28 February 2010, utilising our break clause in the contract. We entered into more detailed negotiations with GSK because our contract with them did not contain a break clause, in line with their agreements with other countries. These discussions regarding limiting vaccine orders were necessary as our increased understanding of the virus demonstrated that less swine flu vaccines were required. This was partly because the virus has proved mild in most people (although more severe and, tragically, fatal in some instances), but also as scientists established that one dose of the vaccine was sufficient to confer immunity.