All Ministry of Defence (MOD) business cases undergo rigorous assessment in accordance with Joint Service Publication 655, which includes assessments of both cost and deliverability. An outline business case to replace the existing capability delivered by the E-3D Sentry fleet was submitted to the MOD Investment Approval Committee in December 2018. This was subject to approval by MOD Head Office and HM Treasury.

The prime contract with Boeing Defence UK for the E-7 Wedgetail is assessed as a qualifying defence contract (QDC) in accordance with the Single Source Contract Regulations (SSCR) and is subject to oversight by the Single Source Regulations Office as any QDC would be. The profit rate for the contract has been agreed in accordance with the SSCR six-step calculation process which begins with the baseline profit rate applicable at the time of contract placement.

It remains the Ministry of Defence's intention to contract for five ships at an average price of £250 million per ship.

In July 2017, the Ministry of Defence (MOD) announced the award of a contract valued at £3.7 billion to manufacture the first batch of three Type 26 Frigates. The manufacture contract covers the build of the first three Type 26 Frigates through to sea trials and vessel acceptance by the Royal Navy, as well as the remaining development costs for the class. The contract also includes the procurement of the medium calibre gun for the first three ships and the modifications needed to the Clyde shipyards at Govan and Scotstoun to enable the manufacture of the Type 26. The detailed pricing of the contract is a commercial matter between the MOD and BAE Systems and I am withholding the cost per ship, as its publication would be prejudicial to commercial interests.

HMS OCEAN was sold to the Brazilian Navy for £84 million. The potential cost of the Littoral Strike Ship will be established during the initial concept phase that my right hon. Friend, the Secretary of State for Defence announced on 11 February 2019.

The Ministry of Defence (MOD) undertakes substantial purchases of fuel commodities, the price of which will be influenced by oil prices. The Department secures a degree of protection against changes in price by purchasing hedging contracts that are equivalent to buying a proportion of forecast demand at agreed prices in advance.

The MOD hedges up to three years in advance and usually trades quarterly to further spread price risk. This approach has been used for fuel hedging since 2010.

On behalf of all the F-35 partner nations, the United States Joint Program Office negotiates the price and delivery targets for all F-35 aircraft with its suppliers. The UK, in turn, discusses its own F-35 delivery dates with the Joint Program Office.

We do not recognise the stock number that my noble Friend has quoted. We believe he is referring to NATO Stock Number (NSN) 6210 99 881 5622 which is a light holder fitted to the driver's control panel in the Bulldog FV430 armoured troop carrier. The maximum wattage bulb that is cleared for use with this item is 2.5W.

The Defence Equipment & Support Stock Control System contains an indicative price of £70.11 (VAT Ex) for this NSN and as at 7 December 2015 there were 175 in stock. Over the previous 36 months a total of 216 of these items have been issued.

The group to explore how to address interim issues pending the independent Review on Antimicrobial Resistance’s conclusion has not yet been established. Departmental officials have been working with relevant industry trade bodies, which will nominate industry participants in the group. Any discussion of the pricing and reimbursement of newly launched antibiotics or soon-to-be launched antibiotics will need to be framed in a way which does not pre-empt the conclusions of the Review, which is now underway.

The Department is in the process of convening a group involving industry to explore how to address interim issues pending the conclusion of the review on antimicrobial resistance. Among these will be the pricing and reimbursement of new antimicrobial products.

The current edition of the British National Formulary lists the price of Lariam (mefloquine) as £14.53 for a pack of 8 tablets and the price of Malarone (proguanil hydrochloride with atovaquone) as £25.21 for a pack of 12 tablets.

Companies with sales of less than £5 million a year of branded medicines to the health service (i.e. excluding their global sales) are exempted from making Pharmaceutical Price Regulation Scheme (PPRS) payments to the Department. All companies in the Scheme with £5 million or more a year of such sales are covered by the provisions of the scheme. The level of sales threshold for the exemption was agreed with the Association of the British Pharmaceutical Industry as part of the 2014 PPRS negotiations. Small companies were represented in the negotiations.

Companies that choose not to join the PPRS are covered by the Statutory Scheme for controlling branded medicine prices. Companies in the statutory scheme with branded medicine sales of less than £5 million to the health service (i.e. excluding global sales) are exempted from the limit on maximum price and the information requirements.

The Government has consulted on a further limit to the maximum price of branded health service medicines in the statutory scheme. This is available at:

www.gov.uk/government/consultations/branded-medicines-controlling-prices.

As stated in the consultation document, Amendments to the Statutory Scheme to Control the Prices of Branded Health Service Medicines, published on 10 October 2014, the Government is aware of the need to broadly align the effect of the two schemes while taking account of the differences between them. As the consultation document says that the Government is particularly interested in the impact of an additional price cut might have on small companies, the Government has asked for views on the impact of any price adjustment on companies that are close to the £5 million exemption threshold.

The consultation document discusses strengthening information requirements. Companies would only be asked to provide this information on the rare occasions when the Department suspected a possible breach of the regulations.

The Government will take account of a range of factors set out in the consultation document and the consultation impact assessment when reaching a decision on its consultation proposals, as well as responses to the consultation, including responses from small and medium-sized companies.

Companies with sales of less than £5 million a year of branded medicines to the health service (i.e. excluding their global sales) are exempted from making Pharmaceutical Price Regulation Scheme (PPRS) payments to the Department. All companies in the Scheme with £5 million or more a year of such sales are covered by the provisions of the scheme. The level of sales threshold for the exemption was agreed with the Association of the British Pharmaceutical Industry as part of the 2014 PPRS negotiations. Small companies were represented in the negotiations.

Companies that choose not to join the PPRS are covered by the Statutory Scheme for controlling branded medicine prices. Companies in the statutory scheme with branded medicine sales of less than £5 million to the health service (i.e. excluding global sales) are exempted from the limit on maximum price and the information requirements.

The Government has consulted on a further limit to the maximum price of branded health service medicines in the statutory scheme. This is available at:

www.gov.uk/government/consultations/branded-medicines-controlling-prices.

As stated in the consultation document, Amendments to the Statutory Scheme to Control the Prices of Branded Health Service Medicines, published on 10 October 2014, the Government is aware of the need to broadly align the effect of the two schemes while taking account of the differences between them. As the consultation document says that the Government is particularly interested in the impact of an additional price cut might have on small companies, the Government has asked for views on the impact of any price adjustment on companies that are close to the £5 million exemption threshold.

The consultation document discusses strengthening information requirements. Companies would only be asked to provide this information on the rare occasions when the Department suspected a possible breach of the regulations.

The Government will take account of a range of factors set out in the consultation document and the consultation impact assessment when reaching a decision on its consultation proposals, as well as responses to the consultation, including responses from small and medium-sized companies.

The Drug Tariff sets out what National Health Service dispensing contractors will be paid for the products supplied as part of providing pharmaceutical services and the fees for providing those services in primary care.

The current arrangements in the Drug Tariff for paying for specials were introduced in 2011. The Drug Tariff sets the price that the NHS pays to dispensing contractors for dispensing some of the most popular specials. Setting a reimbursement price encourages dispensing contractors to obtain best value for the NHS while also ensuring patients received the medicines they need, when they need them. The products listed and their reimbursement prices are agreed with the Pharmaceutical Services Negotiating Committee and reviewed regularly. However, due to the number of specials that can potentially be prescribed, it is not possible to list a reimbursement price for all available specials.

Where the reimbursement price of a product has not been set, dispensing contractors are paid according to how the product is sourced. Where a dispensing contractor buys the product from a specials manufacturer or an importer, they must claim the invoice price of the pack size used to dispense the product minus any discounts or rebates received.

NHS England is responsible for commissioning pharmaceutical services in primary care and it is for NHS England to consider whether dispensing contractors have acted appropriately. In addition, the General Pharmaceutical Council is responsible for regulating the pharmacy professions should there be any concerns of professional misconduct.

Many hospital pharmacies manufacture their own specials on the premises. Any procurement of unlicensed medicines via framework agreements for the use of NHS secondary care establishments in England is undertaken through tenders governed by the Public Contracts Regulations (2006), as amended, which require the procurement to be conducted in a transparent and equitable manner.

The 2014 The Pharmaceutical Price Regulation Scheme (PPRS), agreed between the Department and the Association of the British Pharmaceutical Industry, introduced a limit on growth in the overall cost of the branded medicines purchased by the National Health Service from members of the scheme. This growth limit applies to the great majority of medicines and details are clearly set out in the scheme.

Within the scheme, scheme members may offer discounts or other arrangements to the NHS as long as these do not contravene any aspect of the scheme. Decisions on whether to participate in such arrangements and the terms on which they are offered are matters for the relevant scheme member and the NHS. The Allowed Growth Rates and PPRS Payments are calculated

based on NHS expenditure on relevant medicines net of any discounts. The Government has not, therefore, made an assessment of the impact of the scheme on pharmaceutical companies which have agreed particular arrangements with NHS organisations in relation to specific products.

The PPRS is a voluntary scheme, and pharmaceutical companies have the choice whether to join the PPRS or to be covered by the alternative statutory scheme.

The Pharmaceutical Price Regulation Scheme, 2014 PPRS: Heads of Agreement, a copy of which has already been placed in the Library, sets out the headline terms of the negotiated agreement reached between the Department and the Association of the British Pharmaceutical Industry (ABPI).

The new Scheme provides stability and predictability for the United Kingdom branded medicines pricing environment both to the Government and to all companies who choose to join it, supporting the industry's global competitiveness.

The new Scheme exempts companies with sales of less than £5 million in branded medicines covered by the Scheme in the previous calendar year, from making payments to the Department. The exemption threshold forms part of the negotiated agreement with the ABPI.

The UK Life Sciences sector is one of the strongest and most productive in the world and the Strategy for UK Life Sciences sets out how Government is supporting this sector. The Government's assessment is that pricing does not materially affect investment in the UK. The global biotechnology and pharmaceutical industry remains a valued partner in the UK Government's plans for a vibrant economy and an National Health Service that is fit for the future. We value the industry’s current investment in the UK and will continue to support the sector through the Strategy.

The Government is committed to introducing a broader value assessment for new medicines covered by value-based pricing, through the National Institute for Health and Clinical Excellence (NICE) technology appraisal programme.

As set out in my written statement on the Pharmaceutical Price Regulation Scheme on 6 November, Official Report, columns WS19-20, NICE will carry out a full public consultation before implementing its methods for broader value assessment in autumn 2014

The Medicines and Healthcare products Regulatory Agency (MHRA) published on its website an impact assessment (IA) on the regulation of nicotine containing products (NCPs), including electronic cigarettes, on 12 June 2013 which provided estimates of the costs associated with medicinal regulation of NCPs. A copy has been placed in the Library and is available at:

www.mhra.gov.uk/NCPs.

The IA was prepared by the MHRA and the cost of its production has not been calculated.

The IA does not estimate the cost of achieving Good Manufacturing Practice (GMP). Manufacturing in this sector is almost exclusively conducted outside the European Union and the IA makes the assumption that in the first instance, the foreign manufacturers would bear the costs of achieving GMP. The IA also makes the assumption that any production that might be established within the EU in the future would bear similar costs of achieving relevant manufacturing standards regardless of whether the unlicensed NCPs come into the scope of medicines regulations or not.

The IA makes the assumption that it is likely that manufacturers, EU marketing authorisation holders, and all other participants in the supply chain would seek to pass their incremental costs onto their buyers, and ultimately to consumers. The extent to which United Kingdom consumers would bear the incremental costs is unclear. Pricing of NCPs seems to be constrained at the upper bound by the pricing of tobacco products. The IA suggests that NCP consumers would be unlikely to suffer from substantial price increases if these products were regulated as medicines.

The intention of regulating NCPs under the medicines framework is to ensure that products which meet appropriate standards of safety, quality and efficacy are available to support reducing the harms of smoking to smokers and those around them. The value of the health gains associated with a single successful quit attempt is very substantial — the Department estimates it to be £74,000. The orders of magnitude of estimated compliance costs suggests that a policy of licensing e-cigarettes would have to create very few additional successful quit attempts for the benefits to justify its costs. It is estimated that implementing policies to reduce smoking prevalence by 1% per year for 10 years in the UK would prevent over 57,000 deaths in that period.

The Medicines and Healthcare products Regulatory Agency (MHRA) published on its website an impact assessment (IA) on the regulation of nicotine containing products (NCPs), including electronic cigarettes, on 12 June 2013 which provided estimates of the costs associated with medicinal regulation of NCPs. A copy has been placed in the Library and is available at:

www.mhra.gov.uk/NCPs.

The IA was prepared by the MHRA and the cost of its production has not been calculated.

The IA does not estimate the cost of achieving Good Manufacturing Practice (GMP). Manufacturing in this sector is almost exclusively conducted outside the European Union and the IA makes the assumption that in the first instance, the foreign manufacturers would bear the costs of achieving GMP. The IA also makes the assumption that any production that might be established within the EU in the future would bear similar costs of achieving relevant manufacturing standards regardless of whether the unlicensed NCPs come into the scope of medicines regulations or not.

The IA makes the assumption that it is likely that manufacturers, EU marketing authorisation holders, and all other participants in the supply chain would seek to pass their incremental costs onto their buyers, and ultimately to consumers. The extent to which United Kingdom consumers would bear the incremental costs is unclear. Pricing of NCPs seems to be constrained at the upper bound by the pricing of tobacco products. The IA suggests that NCP consumers would be unlikely to suffer from substantial price increases if these products were regulated as medicines.

The intention of regulating NCPs under the medicines framework is to ensure that products which meet appropriate standards of safety, quality and efficacy are available to support reducing the harms of smoking to smokers and those around them. The value of the health gains associated with a single successful quit attempt is very substantial — the Department estimates it to be £74,000. The orders of magnitude of estimated compliance costs suggests that a policy of licensing e-cigarettes would have to create very few additional successful quit attempts for the benefits to justify its costs. It is estimated that implementing policies to reduce smoking prevalence by 1% per year for 10 years in the UK would prevent over 57,000 deaths in that period.

The Chair of NHS Property Services Limited (NHS PS) has resigned after successfully steering the company through its setting up, launch and transition. He was appointed on 1 August 2012, on a two year contract.

The decision as to whether a property in the portfolio of NHS PS is surplus to National Health Service operational requirements resides with the commissioners, i.e. NHS England or a clinical commissioning group. NHS PS will only take forward a property according to the needs of commissioners, and a property will be released for disposal once commissioners have confirmed that it is no longer required for the delivery of NHS services.

NHS PS’s assets which are to be sold are marketed through an arm’s length open market process, which ensures that the market value is achieved in a sale. Where necessary the sale price is supported by the

District Valuer or other third party independent valuations. All disposals are handled in line with NHS Estatecode and Cabinet Office and HM Treasury guidelines.

Property to be disposed of is first listed on the Electronic Property Information Mapping Service website, which allows other public sector bodies to purchase it. Properties are listed on this website for 40 working days and if no other public sector organisation expresses an interest then they will be marketed.

Since the establishment of NHS PS on 1 April 2013, the company has disposed of 16 freehold properties, generating £13.1 million of receipts for the public purse. Information about the sales of surplus NHS land and buildings disposed of by NHS PS are published in their board papers.

The following table lists the property and date it was sold, the amount it was sold for and the market value.

Note:

These properties were based on a market value range

The sale of these properties made a total profit of £495,500, above estimated market value.

The identity of purchasers cannot be released to protect their confidentiality.