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Health Service Medical Supplies (Costs) Bill

Volume 624: debated on Tuesday 25 April 2017

Consideration of Lords Message

Before Clause 1

Duty to take account of the life sciences sector and access to new medicines and treatments

When we last debated the Bill, I reminded the House of its importance. I do not intend to go over all that ground again, save to note the three primary purposes of the Bill: first, to give powers to align broadly our statutory scheme for the control of prices of branded medicines with our voluntary scheme, by introducing the possibility of a payment percentage for the statutory scheme, which could deliver £90 million of funding for the NHS every year; secondly, to give us stronger powers to set prices of unbranded generic medicines where companies charge unjustifiably high prices in the absence of competition; and, thirdly, to give us stronger powers to require companies in the supply chain for medicines, medical supplies and other related products to provide us with information. We intend to use that information to operate our pricing schemes, to reimburse community pharmacies for the products they dispense and to assure ourselves that the supply chain or specific products provide good value for money for the NHS and the taxpayer.

We agreed with 23 amendments made by their lordships during the passage of the Bill through the other place. Those, we accept, have made this a better Bill. We rejected just a single amendment. Despite the strength of our arguments, the other place has now made amendment 3B, which to all intents and purposes has the same effect as the original Lords amendment 3. It would introduce a duty on the Government, in exercising their functions to control costs, to take into account the need to promote and support a growing life sciences sector and to ensure that patients have access to new medicines. As I explained previously to this House, the amendment, which is no different in its effect from previously, would undermine one of the core purposes of this Bill: to enable the Government to put effective cost controls in place.

In our view, the amendment could encourage companies to bring legal challenges where the cost controls have not in themselves promoted growth in the life sciences industry. That could significantly hinder the Government’s ability to exercise their powers effectively to control costs. That would have a particularly detrimental effect if the Government were to take action to control the price of an unbranded generic medicine where it was clear that the company was exploiting the NHS—a point on which there was cross-party agreement when we debated the matter. That is because the Government might be challenged, not on the basis that the action was inappropriate, but on the basis that it did not promote the life sciences sector. Nevertheless, as I am sure all Members would agree, such action could be the right thing to do for the NHS, patients and taxpayers. The powers in the Bill that enable such action have received universal, cross-party support in both Houses.

Through debate on the issue in the other place, we have clarified that their lordships did not intend to undermine the core purposes of the Bill. Rather, the intent was to ensure a mechanism, laid out on the face of the Bill, to ensure that the Government pause to reflect on the impact of any proposed price control scheme on the life sciences industry and access to cost-effective medicines. With this clarity, the Government are now proposing amendments in lieu of Lords amendment 3B that will achieve that intent without undermining the core purpose of the Bill.

Consultation requirements prior to the implementation of any new statutory price control scheme for medicines are already set out in section 263 of the National Health Service Act 2006. Our amendment (b) in lieu would amend the 2006 Act to include particular factors that must be consulted on before proceeding with a new statutory scheme. They are:

“(a) the economic consequences for the life sciences industry in the United Kingdom;

(b) the consequences for the economy of the United Kingdom;

(c) the consequences for patients to whom any health service medicines are to be supplied and for other health service patients.”

The requirements are framed in that way to allow us not only to consider the economic consequences for the life sciences industry and for patients who may benefit from new medicines, but to balance those factors against wider considerations. I am sure the whole House can agree that while a thriving life sciences industry and access to new medicines are highly desirable, they must not come at any cost. It is the Government’s responsibility to achieve the right balance, and, indeed, to be held to account for it.

As with any consultations, the Government must give all responses due consideration before finalising policy. Including those requirements in the Bill does not limit the scope of the consultation, but offers both Government and consultees an opportunity to give proper consideration to all relevant issues. The amendment relates specifically to section 263 of the National Health Service Act, which deals with the powers to put a statutory scheme in place for medicines. When action is being taken against a specific instance of high prices for an individual medicine, it would not be appropriate for it to be subject to such a wide-ranging consultation. In such cases, the Act already requires consultation with the appropriate industry body or bodies prior to exercise of the powers.

We believe that our amendment addresses the substance of the concerns raised by the hon. Member for Ellesmere Port and Neston (Justin Madders) at each stage of the Bill—I give him credit for consistency—and by Members in the other place. I therefore hope that the hon. Gentleman will welcome the amendments.

I thank the Minister for approaching the outstanding areas of concern in a constructive and conciliatory manner that has allowed us to support the Government’s proposal, and hence to support the Bill as a whole. We too are keen for the NHS to gain better control of the cost of medicines. We are anxious to close loopholes in the system which have been the subject of blatant abuses over the last few years, and which we have discussed during the Bill’s passage. The negotiations on the amendments were, by their nature, speedy, but they were no less effective for that. I doubt that we will be so fortunate with the Brexit discussions in the future.

During the passage of the Bill, we have heard very clearly that the current state of affairs is not serving patients or the taxpayer as well as it could. As we have heard, expenditure on medicines has constituted a significant and growing proportion of the NHS budget, standing at £15.2 billion in England in 2015-16. That is an increase of over 20% since 2010-11. Had that been applied to health spending across the board, many of our exchanges across the Dispatch Box during the last 12 months or so might have been a little less lively.

The Minister will be aware, however, that despite that increase in spending, serious concerns are still being raised about the availability of new treatments. I should like to take a few moments to raise some of the specific concerns expressed by patients about the introduction by the National Institute for Health and Care Excellence and NHS England of a “budget impact test”, which could cause the introduction of new treatments costing more than £20 million a year to be delayed by up to three years. We fear that some patients with particular conditions will be disproportionately affected. Let us take just one condition: type 2 diabetes. There are several drugs for that condition that already cost the NHS more than £20 million a year owing to the patient numbers involved, including Exenatide, which costs £21 million, Liraglutide, which costs £41 million, Sitagliptin, which costs £77 million, and human analogue insulins, which cost £70 million.

Can the Minister tell us what estimate has been made of the number of patients in England who could be affected by delays in accessing treatments owing to the introduction of the budget impact test? Can he also comment on what impact that might have on patients’ right to treatment under the NHS constitution? We have already seen the 18-week commitment effectively abandoned; does the Minister now consider the constitution to be an optional extra? It is also of particular concern that the test could apply to important end-of-life drugs: in the case of those patients there is, of course, no time to waste. What can the Minister do to ensure that valuable time is not wasted when drugs hit the impact test for that group of patients?

Returning to the Government amendments, we are content that they take us to more or less the place that our previous amendments did, without binding the Government’s hands totally. We welcome the concessions made, which enable us to support this proposal, because by requiring the Secretary of State to consult, in particular on the consequences of enacting any powers on the life sciences sector and, most importantly, patients, we now have an extra safeguard that we hope will ensure that the right balance is struck between controlling cost, promoting our life sciences industry and making sure patients get access to new treatments as quickly as possible. The Bill has always addressed the first of those three areas, but we consider it just as important for the other two areas to be clearly factors to be taken into account when new rules are developed. We believe this is important because we have significant concerns about the current system denying patients access to new treatments and stifling investment. As we have said previously, the imminent departure of the European Medicines Agency from our shores should be set against the worrying backdrop of investment in research and development in the sector falling by 20% in just over three years.

The reduction in investment does not just impact on growth and jobs in the country; it also has a profound impact on patients. The “International Comparisons of Health Technology Assessment” report published in August by Breast Cancer Now and Prostate Cancer UK shows that NHS cancer patients in the UK are missing out on innovative treatments that are becoming available. For every 100 European patients who can access new medicines in the first year that they are available, just 15 UK patients have the same access; we must reverse that. We hope that this amendment will go some way to reversing that trend, as a consultation process that requires the Secretary of State to specifically consider these issues will mean that if the consultation is genuine, open-minded and involves a complete, conscientious and considered examination of the responses to it, we will hopefully see a system that protects and supports our industry, and, most importantly, reaffirms one of the founding principles of the NHS: that treatment should be available to all and be free at the point of use. That is a principle that we on the Labour Benches are very keen to defend.

In conclusion, we will support this amendment and keep a close eye on the many issues raised today, which are not going to go away just because there is now a general election.

On that point, I hope that you will allow me a small indulgence, Madam Deputy Speaker: this will be my last appearance in the Chamber before the Dissolution of Parliament and I want to thank you and your Clerks for the time and courtesy you have afforded both me and other new Members as we have learned the intricacies of this place. A lot goes on behind the scenes to ensure that these debates have a coherence and fluency; that might appear effortless to the outside world, but we can assure people that that certainly is not the case. I have found everyone who works behind the scenes here to be very helpful and welcoming, which has made it easy for me to do my job.

This has been much more than a job to me; it has been an absolute privilege of my life to be here and represent the people of Ellesmere Port and Neston. I hope that after the election I have the opportunity to continue to do that.

Order. I thank the hon. Gentleman for his extremely kind words, and for his courtesy, which he always shows at the Dispatch Box and in the Chamber.

Like the hon. Member for Ellesmere Port and Neston (Justin Madders), this will be my last time speaking in the Chamber before Dissolution, and as a newbie I also want to pay tribute to the staff of the House, who made coming here much easier than we had expected it to be. I am also glad that my final speech before Dissolution is on a Bill that, despite some of our disagreements, we have worked on on a cross-party basis to produce a piece of work that we all agreed needed to be done.

I, too, welcome Government amendment (b), although I would have laid out the three paragraphs the other way around, because the whole point of the NHS, and the whole reason we are discussing this, is patient access: that is the No. 1 concern. I would have put patients first, not third. The fear of not getting access to drugs is a great issue for patients. As the hon. Gentleman mentioned, we have a significant delay that is measurable in comparison with other countries. For certain types of cancer, our performance in relation to patients with early disease is as good as anywhere, but we fall down in dealing with people with difficult or advanced disease. That is because of the delay.

I want briefly to mention the interaction of the budget impact assessment with our no longer being part of the European Medicines Agency. I am not talking about the United Kingdom losing the agency itself; I am talking about our no longer being part of the scheme. We know that there is a danger that drugs are presented for licensing in the United Kingdom at a later date than in the United States and the European Union, which are major markets. It is likely that we could also be behind Japan. I am not suggesting that we should simply hand over any amount of money, but if we were also seen as a hostile market in which there was an expected delay of three years for expensive drugs, there would be a danger that international pharma would simply say, “You know what? We’ll license everywhere else, then we’ll come back to the UK in a few years.” That could result in significant delayed access for our patients.

We need to think about how all this feeds into trials and research, and into the life sciences system. If we are not using what is considered to be the gold standard drug at the time of a new international trial, we will not be able to take part in the comparison of the gold standard with the new drug. The UK has led the EU research network, which is the biggest research network in the world. We have been a major player in that, and it is important to realise how building in this delay from NHS England could undermine that. Surely this should be part of the NICE process. It should be clear to pharma, when it comes with a drug at a price, what process it will have to go through, what evidence it will have to bring forward and how it will have to negotiate a price. I fear that there will be delays in drugs being licensed.

This will affect us in Scotland even though NICE decisions do not apply to us. If a drug were simply not licensed here, it would be irrelevant that the Scottish Medicines Consortium chose to fund it—as it did the other week with Kadcyla—because it would still be an unlicensed medicine. We need to look at how the loss of the European Medicines Agency will work in this regard. There should not be a separate procedure after NICE that could suddenly hit pharma with another barrier to jump over. This will hit new cancer drugs, because they are expensive. It will particularly hit drugs for rare diseases, which the EMA has led on, because they are bespoke and therefore inevitably expensive. The £20 million limit would mean that if someone came up with a fabulous cure for dementia, for example, a budget impact assessment would be triggered.

I agree with what the hon. Lady says about the European Medicines Agency. I have had a lot of letters from people who are very concerned about that issue. There is another factor involved in the delays that can occur in the Government agreeing a price. I think that the drugs companies often take the Government to the cleaners.

I thank the hon. Gentleman for his intervention. That is obviously why the Government are introducing the Bill. They are trying to achieve a degree of control and to prevent runaway drugs costs. Of course we agree with that objective, which is visible in the Bill. The Government are trying to establish a predictable system of licensing in the UK, so that a pharmaceutical company knows what it has to bring to the table. That might mean a bit more flexibility during the NICE process, because we could appear hostile if a drug goes through that process and is defined as cost- effective, only to be hit with another, less predictable, barrier. The danger is that that will affect Scotland just as much as England, regardless of our drug funding decisions, because licensing is a reserved matter. The Government need to take that into account, because patients come third in the order set out in the amendment, and I believe that they should come first.

I had not intended to make a significant response in the light of this debate, but other colleagues have taken advantage of this being their final appearance at the Dispatch Box or speaking for their party in this Parliament and I cannot resist the opportunity to join the club.

I follow the hon. Member for Ellesmere Port and Neston (Justin Madders) in thanking Members for their work both in Committee and on the Floor of the House during the passage of this Bill. He gave us a valedictory, perhaps hinting that he may not be returning to this House, which in some respects I would welcome and in other respects I would regret because he has been a co-operative colleague on this Bill.

Again, I place on record my thanks to the hon. Member for Central Ayrshire (Dr Whitford) for her contribution to the passage of the Bill. I also briefly thank my Parliamentary Private Secretary, my hon. Friend the Member for Kingston and Surbiton (James Berry), who has been a stalwart supporter throughout the Bill. I also thank the departmental Whip, my hon. Friend the Member for Beverley and Holderness (Graham Stuart), who has also joined us today, for his efforts in this Parliament to help the work of the Department of Health, which is not always the smoothest ride for Government Whips.

The hon. Member for Ellesmere Port and Neston spoke about the budget impact test, and he challenged me to identify whether certain specific drugs will be caught by it, which is a nice try. The test applies for new drugs, of course, so drugs that are already licensed and on the list will not be caught because they are already licensed and in use. The intent, which came through in the consultation that concluded in January, is that this should not be seen as a threshold that will have a direct impact on the applicability of these drugs; it was designed to provide an opportunity for the NHS to have negotiating scope to try to get a better price on prospective drugs that will have a significant cost.

Although the hon. Member for Central Ayrshire is concerned about the delay resulting from the Bill and the delay from the potential loss of the EMA, we do not necessarily see it impacting in quite that way. We think it will have on impact on one in five new medicines that are brought forward for use in this country. As we have said repeatedly, we have a strong desire to see a vibrant life sciences industry in this country. There have been some significant investments by life sciences companies in this country since the referendum on 23 June, with this Bill in prospect, so we do not share the fears expressed today.

Finally, the hon. Member for Wolverhampton South West (Rob Marris) was here for the previous debate, but he served on the Health Service Medical Supplies (Costs) Public Bill Committee. He has had a distinguished career in this House and served on Finance Bill Committees with me ad nauseam. I was therefore pleased but somewhat trepidatious to see him put himself forward to serve on the Health Service Medical Supplies (Costs) Public Bill Committee. He lived up to all expectations, and I wish him well.

Lords amendment 3B disagreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 3B.