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Health Service Medical Supplies (Costs) Bill

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 an amendment 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 NHS 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.

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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 of 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 amendment.