Health Service Medical Supplies (Costs) Bill - Commons Reason

– in the House of Lords at 3:48 pm on 5th April 2017.

Alert me about debates like this

Motion A

Moved by Lord O'Shaughnessy

That this House do not insist on its Amendment 3 to which the Commons have disagreed for their Reason 3A.

Commons Reason

3A: Because it would not always be appropriate to use the powers conferred on the Secretary of State to control the price of medicines and other medical supplies to promote and support the growth of the life sciences sector, and those powers cannot be exercised to ensure that patients have access to medicines and treatments.

Photo of Lord O'Shaughnessy Lord O'Shaughnessy The Parliamentary Under-Secretary of State for Health, Lord in Waiting (HM Household) (Whip)

My Lords, before I address the specifics of the Motion I would like to remind the House of the wider policy context in which this Bill sits. In their approach to medicines and the life sciences industry, the Government have three objectives: to make sure that patients have access to the most effective treatments; to secure value for money for the NHS and for the taxpayer; and to encourage innovations that save lives. That is the overall role of government and, indeed, these are the three objectives that I have to balance in my ministerial portfolio.

We must remember that the Bill is about only that middle objective: securing value for money. It is not the appropriate vehicle for fulfilling the other objectives that government has in this area, as important as they are. That is why we have tabled Motion A and oppose the amendment put forward by the noble Lord, Lord Warner. I do not downplay the importance of patient access to innovative medicines or the importance of a strong life sciences industry in this country—quite the opposite—but achieving these objectives is best done through other means, and I will return to this point a little later.

As noble Lords on all sides of the House have agreed, the Bill plays a vital role in delivering better value for money for the NHS and for taxpayers. NHS spending on medicines is second only to spending on staffing costs, with a spend of over £15 billion during 2015-16. In 2015-16, total spend on medicines grew by 7%, more than twice the growth rate of the overall NHS budget. The Bill helps us to tackle some particular issues which have contributed to this rising spending. It will allow us to align our statutory scheme for the control of prices of branded medicines more closely with our voluntary scheme, it gives us stronger powers to set the prices of unbranded generic medicines if companies charge unwarranted prices in the absence of competition, and it allows us to secure better information with which to operate our pricing schemes, reimburse community pharmacies and make sure that the supply chain is delivering good value for money.

As a result of close and welcome scrutiny by your Lordships, significant improvements have been made to the Bill and 23 government amendments have been proposed. I am grateful to the work of all noble Lords who contributed to those changes. That work has been acknowledged by Members of the other place, who accepted all the amendments put to them, with the exception of Amendment 3, to which we return today.

While the Bill represents an important part of our strategy to deliver value for money, we are engaged in a substantial and transformative programme of work to support the life sciences and improve access to medicines. Following the publication of the industrial strategy Green Paper in January, we are working with industry and the NHS to develop a new strategy for the long-term success of life sciences in the UK. This work is being led by Professor Sir John Bell, and its aim is for the UK to be the global home of clinical research and medical innovation, with huge benefits to the UK economy and NHS patients.

I expect the life sciences industrial strategy to be published by late spring, to be followed by discussions on an ambitious sector deal that we aim to conclude this summer. The emerging strategy is focusing on six pillars: science; growth; skills; regulation; digital and data; and NHS uptake. I want to reflect for a moment on these themes.

On the science base, the UK is a world leader in this area, and the Government are supporting it by investing more than £1 billion a year in health and care research through the National Institute for Health Research, including 20 new biomedical research centres and 23 clinical research facilities for experimental medicine, to help to speed up the translation of scientific advances for the benefit of patients. The 2016 Autumn Statement announced £4 billion additional investment in R&D, specifically targeting industry-academia collaboration, and we expect the life sciences industry to be a substantial beneficiary.

On growth, this Government continue to support innovative businesses through our highly competitive taxation regime, including measures such as the patent box and R&D tax credits. The recent Budget contained a welcome announcement of investment in a new wave of advanced manufacturing centres to support the development of cell and gene therapies. This determined action is reaping rewards. The UK has one of the strongest life sciences industries in the world, generating turnover of more than £60 billion each year. Indeed, it is our most productive industry.

On skills, we know that attracting the most talented individuals to our life sciences industry is essential. As the Prime Minister has made clear, the UK will always remain open to those with the skills, drive and expertise to support our economic growth. The Budget announced that more than £100 million will be invested in global research talent over the next four years to attract the brightest minds to the UK.

The future of medicine regulation after Brexit is a critical issue. Any future regulatory model will need to ensure that patients have timely access to safe, effective medicines and support a flourishing life sciences sector. I am having extensive discussions with the industry and other stakeholders, and our strong desire is to form a constructive new partnership with the EU on medicine licensing.

On digital and data, technology is already helping to improve patient care, and we are investing £4.2 billion over the spending review period in digital and data transformation, including areas such as electronic patient records, apps and wearable devices, telehealth and assistive technologies. Furthermore, the NHS has a unique opportunity to work with the life sciences industry to use data to patients’ benefit, and we expect the life sciences strategy to provide proposals that will accelerate clinical trials and the uptake of medical innovations.

I reiterate our commitment to improving patient access to new medicines and technologies, a subject that we have spoken about many times in the process of going through the Bill. It is a critical objective of our life sciences strategy. The early access to medicines scheme, introduced in 2014, provides a platform from which to provide patients with innovative medicines prior to licensing. The Cancer Drugs Fund has allowed over 100,000 patients to access innovative, life-saving medicines. NHS England’s test beds programme, launched last year, provides an opportunity to link new technologies with new ways of delivering healthcare, and its commissioning through evaluation programme provides an opportunity for promising but experimental treatments to be brought forward for patient use.

There is clear evidence that those actions are having a positive impact. The latest innovation scorecard, published in January, showed that, of the 77 medicines that are measured, over half saw growth in uptake over 10% year on year. Still, there is of course more to do. That is why the Government will be responding shortly to the recommendations of the accelerated access review, with the aim of getting transformative products to patients who need them up to four years earlier than we do now.

In discussing patient access, I am aware of concerns about changes that NHS England and the National Institute for Health and Care Excellence are making to the way in which drugs and other treatments are assessed and adopted in the NHS. I must remind noble Lords that these changes have been made in response to the recommendations of the Public Accounts Committee, which stated that NICE should,

“ensure affordability is considered when making decisions”.

I come to the changes themselves. The first is that NICE is introducing a fast-track appraisal process that will bring forward access for NHS patients by around five months to very cost-effective new treatments. In other words, should pharmaceutical companies offer very good value to the NHS in the pricing of their products, we will see faster patient access—a win for patients, a win for the NHS and a win for industry.

Secondly, NICE and NHS England are introducing a budget impact test for new medicines that are expected to cost more than £20 million in any of the first three years after introduction. I want to take this opportunity to address a number of misconceptions about this policy. The budget impact test is not a cap. It does not represent the maximum that the NHS will spend on any individual drug in a given year. The test is simply intended to provide an opportunity for NHS England to enter into commercial negotiations with companies to bring down the price of medicines that have a significant budget impact on the NHS, and in doing so will allow for the kind of flexibilities—for example, commitments around volume—that companies have been asking for. The proposal will affect only around one in five drugs and, while the proposals are intended to improve affordability, they are not intended to create delay. Most negotiations will be concluded quickly and, where agreement is not reached, a managed access scheme will ensure that those whose clinical need is greatest will be prioritised. Patients will continue to have a right to NICE-recommended drugs, as enshrined in the NHS constitution.

Thirdly, the proposals introduce a sliding cost-benefit threshold for very expensive drugs for rare diseases, evaluated through NICE’s highly specialised technologies programme. It will be possible for transformative treatments that offer significant health gains to be approved up to £300,000 per quality adjusted life year, or QALY. That is 10 times greater than NICE’s threshold for treatments considered by its mainstream technology appraisal process. I do not believe, as some have suggested, that the new threshold will prevent medicines being approved via this route. In fact, with increased commercial capacity within NHS England to strike win-win deals, I am very optimistic that patient access will continue for genuinely transformative medicines.

Lastly, let me also be clear that these arrangements apply to new medicines after 1 April. Any suggestion that a patient receiving a medicine approved under the previous arrangements will have their medicine withdrawn due to these changes is wrong.

I turn to the amendments considered in the other place. The Commons rejected the previous amendment proposed by the noble Lord, Lord Warner, a new version of which he has tabled for discussion today. For reasons I have already explained, I do not believe that the Bill is the right vehicle for promoting the life sciences sector or improving patient access: it is only about providing value for money. Furthermore, there are three specific problems with the amendment.

First, it undermines the Government’s ability to put effective cost controls in place. That is because controlling the prices of medicines cannot be said in itself to promote the interests of the life sciences sector and deliver growth. For example, if the Government were to act to control the price of a generic medicine with a vastly inflated price, it could be argued that that is not promoting the life sciences sector because any generic drugs manufacturer can argue that it is a life sciences company. Nevertheless, this would be the right course of action for the NHS, patients and taxpayers. Approving the amendment would encourage companies to bring legal challenges and seriously impair the Government’s ability to operate cost control schemes. It would lead to rising costs and consequently reduce the funding available for the rest of the NHS.

Secondly, cost is not a factor in patient access to medicines that have been approved by NICE. The NHS constitution is clear that commissioners are legally required to fund drugs and other treatments that have been recommended by NICE technology appraisal guidance. The uptake of medicines is primarily dependent on clinicians’ choices about what is best for their patients, and the cost of a drug is not a factor in clinical prescribing. Indeed, the cost of the drug is not visible at the point of prescription. Improving the uptake of drugs involves working with clinicians to encourage the use of innovative medicines to replace existing treatments, and legislation is not the right way to create such behavioural change.

Finally, there is a fatal contradiction between the two parts of the noble Lord’s amendment. Even if one were to accept the premise that cost is a factor in patient access to NICE-approved medicines, the first part of the amendment, which would make it harder to control costs, would actively reduce, not increase, patient access by making medicines more expensive. The amendment does not, therefore, work on its own terms.

To conclude, I understand the intentions of the noble Lord, Lord Warner, and others who have supported the amendment. Throughout the Bill’s passage, I have been happy to listen to the arguments of noble Lords—and to act on them—in the pursuit of achieving better value for money for the NHS, but I cannot support the amendment because I do not believe that it would be in the interests of either the NHS or patients. The House of Commons was right to reject the predecessor to this amendment, and I strongly urge noble Lords to take the same approach with the amendment before us today. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by Lord Warner

At end insert “and do propose the following amendment in lieu—

3B: Insert the following new Clause—“Duty to take account of the life sciences sector and access to new medicines and treatmentsIn discharging, through the provisions established or amended by this Act, its responsibility to secure best value for the National Health Service in purchasing medicines and medical supplies, the Government must take account of the need to—(a) promote and support a growing life sciences sector within the United Kingdom economy; and(b) ensure that patients have rapid clinical access to new clinically effective and cost-effective medicines and treatments approved by the National Institute for Health and Care Excellence through their technology appraisal process.””

Photo of Lord Warner Lord Warner Labour

My Lords, the amendment removes the requirement on the Government in the original amendment passed by this House to have “full regard” to the considerations relating to life sciences and access to NICE-approved medicines and treatments. Instead, it requires the Government to “take account of” those considerations in discharging its responsibilities under the Act. This responds to the Government’s concerns that the original wording was too inflexible to respond to all the situations with which they might be confronted in controlling the price of medicines and medical supplies. I suggest that the revised wording gives them the flexibility they seek while retaining some requirement to pause to consider the impact and implications of a price cut to NHS-purchased medicines and medical supplies on the UK’s important life sciences sector and on patient access to NICE-approved medicines.

We passed the original amendment and placed it at the front of the Bill because of our central concern that the legislation seemed overpreoccupied with driving down the price of drugs and medical supplies to the NHS and was in serious danger of losing sight of the importance of the life sciences sector to UK plc, despite the Minister’s protestations—and, together with that, the related issue of ensuring that patients have speedy access to the most cost-effective therapies.

Delaying patients’ and NHS access to new proven therapies will only drive life sciences away from the UK at a time when pharmaceutical investment here is already on a downward trajectory, and at the very time when we need this investment to be increasing under the Government’s own industrial strategy post Brexit, as the Minister has rightly said. But the money is going down from big pharma investing in this country and the Bill has not helped reverse that trend. Delaying patients’ and NHS access to new proven therapies will only make things worse.

The danger of this Bill passing without a pausing mechanism of the kind I am suggesting is that the Act will become yet another example of the short-termism that is criticised in this House’s Select Committee report on NHS sustainability, published today. I recommend that noble Lords read that report about the short-term focus of much of the action taking place in the NHS today. I declare an interest as a member of that Committee.

The Bill has made the ABPI and the pharmaceutical industry worried that it signals the end of the voluntary PPRS system for settling the price of research-based medicines in this country. Only this week the ABHI published a report on a strategy for a thriving med-tech industry outside the EU, calling for the NICE technology appraisal programme to be expanded to assist NHS take-up of new technology. Little did it know that it was this very week, as the Minister recognised, that the Government, through the agency of NHS England, had introduced a new “budget impact test” for NICE-assessed products. That is yet another hurdle to be jumped by British science and research and before NHS patients can benefit.

I have been probing this new system which in plain English is a new affordability test grafted on to the NICE appraisal process following discussions between NHS England and NICE, under, I suggest, a good deal of pressure from the Department of Health. I tabled a Question on this on 14 March, to which the Minister answered on 28 March. I still have concerns about that Answer, which I am pursuing through further Questions. But I want briefly to share those concerns with the House because they are relevant to why we should send the Bill back to the Commons with a new amendment.

First, there is the very real issue of how big a part NICE-approved medicines actually played in the 20% rise in the drugs bill between 2010-11 and 2015-16 that the Government are so concerned about. Were these appraisals the villains or were there other explanations for that increase in the drugs bill? We do not know. Nor do we know whether the costs of these appraisals were actually offset by savings derived from the new treatments. The danger is that an unexplained rise in the NHS drugs bill can cause a panic reaction in the department, which will then use this new legislation to curb access to new drugs.

My second concern is over the actual legality of this new system and the damage being done by it to NICE’s reputation for independence. As I understand the 2013 regulations governing NICE functions, they impose a three-month period for NHS implementation of NICE-approved technology appraisals. It is only NICE that can extend the period of implementation, not the Secretary of State and not NHS England. So we are going to see a system being developed under which NICE is regularly put under pressure by the Department of Health or NHS England to extend the three-month implementation period.

I welcome any light that the Minister can throw on these concerns, but it is not just me or this House that he needs to satisfy—or even industry. He also has to convince patient interest groups such as Breast Cancer Now, Prostate Cancer UK and Diabetes UK, which are all very concerned about the budget impact test and what it means for patients’ speedy access to new proven therapies and their rights under the NHS constitution. I am not convinced that what the Minister has said this afternoon will convince them that they should not be suspicious of these changes.

The more events unfold, the more this looks like a piece of legislation originally designed legitimately to tackle a major NHS rip-off from a generic scam which was then rapidly expanded in scope to give the Government more powers to drive down NHS prices for medicines and medical supplies. From our earlier consideration at different stages of the Bill, I suggest that there has been a lack of proper consultation with many interested parties, and the measure provides powers whose exercise could well have some highly undesirable outcomes. The budget impact test could well illustrate what we might expect without some counter-influence; my Amendment A1 strives to do that but without over-restricting the Government’s legitimate freedom of action when there are outrageous increases in drug prices to the NHS. I beg to move.

Photo of Baroness Walmsley Baroness Walmsley Liberal Democrat Lords Spokesperson (Health)

My Lords, I support the noble Lord, Lord Warner, in his amendment. I thank the Minister for how he has worked with your Lordships’ House on all sides to improve this Bill; it is unfortunate that we remain with one point of disagreement. We certainly support the policy objective of the Bill in general and very much welcome the list of actions in the Minister’s introduction to promote research and drug development in this country. But in listening to his outline of his particular responsibilities, it occurred to me that no policy area is ever an island; they always impact on other things. The Minister’s responsibility to achieve best value for the NHS actually impacts on other responsibilities that he and his department have—in particular, in relation to this amendment, on the thriving life sciences sector, on which we all depend, and the access of patients to cutting edge medicines.

Both those things are suffering from particular threats at the moment. One is Brexit, which I shall not go into now; we have discussed it on many occasions. The other is the recent £20 million affordability test that the Government are introducing. Although £20 million sounds like a very large amount of money, if it is applied to medicines where the population of those needing the medicines is very large, such as some of those mentioned by the noble Lord, Lord Warner—diabetes, breast cancer and other things—the individual cost to an individual patient does not need to be very high to be caught up by the affordability test. The Minister used the word “only”; he said that it would affect only one in five of medicines, but I think that that is an awful lot of medicines, and we should be very concerned about it. That is why we feel that it is important to press the Minister on this issue.

I congratulate the noble Lord, Lord Warner, on offering the Government a compromise, which I hope would avoid what the Minister is clearly worried about: being taken to judicial review by a pharmaceutical company about efforts to push down the price of a medicine. I draw the Minister’s attention to the word “sector” in paragraph (a) of the proposed new clause, which asks the Government to take account of the need to,

“promote and support a growing life sciences sector”.

The word “sector” makes it unlikely that any pharmaceutical company trying to take the Government to judicial review would succeed if the Government had, in all other respects, promoted a thriving life sciences sector in this country. It is highly unlikely that they would do so.

I therefore hope that the Minister will think again and not resist this amendment. It is essential, given the current threats to patients in this country—and very large populations of patients too, in particular those coming towards the end of life—to pharmaceuticals, to treatments and access to medicines. I therefore hope that the Minister will reconsider, and, if the noble Lord, Lord Warner, wishes to test the opinion of the House, he will have the support of these Benches.

Photo of Lord Lansley Lord Lansley Conservative 4:15 pm, 5th April 2017

My Lords, I intervene in this instance not to agree with but, I am afraid, to disagree with the amendment in the name of the noble Lord, Lord Warner. However, I will also make some important points that are relevant to the issues raised in this Motion and the amendment.

I am against the amendment to the Motion because I entirely agree with my noble friend the Minister that Lords Amendment 3, which the Commons disagreed to, was flawed in the sense that—in relation to the specific responsibilities under the Act for the PPRS and pricing medicines and supplies—it would have put into legislation a set of statutory requirements to have regard to, or indeed to take account of, that are partial and disjointed. Over many decades we have argued that the Secretary of State’s responsibility under the PPRS is not to create an industrial strategy. If we had said that that was the objective, it would have been regarded as a state aid, and it was never regarded as such.

It is not the job of the Secretary of State, through the PPRS, to deliver a successful industry. There are many ways—my noble friend illustrated them better than I could have—in which the Government can discharge that wider responsibility, and should do so. That responsibility is to secure the best value for the NHS in purchasing medicines and supplies. We should all be in favour of that and not wish to see it abridged.

Photo of Lord Warner Lord Warner Labour

Perhaps I may just ask the Minister to explain how, under the PPRS, incentives are often given through R&D tax allowances. Does he not consider that state aid?

Photo of Lord Lansley Lord Lansley Conservative

I am perfectly happy if the Minister wants to reply but, from my point of view, I do not regard the PPRS as state aid. If R&D tax credits are available, they should be made available. When the Office of Fair Trading reviewed the PPRS back in 2008-09, I think, it concluded that it was neither a state aid nor a spur to innovation but was actually all about managing the drugs budget. That is what this legislation is all about: managing the drugs budget.

It is, however, important to recognise that the statutory duties in Lords Amendment 3 do not include the one which the Secretary of State should have specific regard to: affordability. It is deficient in not providing for that. Noble Lords will recall that, at an earlier stage, I tabled an amendment the purpose of which was to insert a more complete set of statutory duties for the Secretary of State to have regard to. Affordability must form part of that, but it is not present in this amendment. I am therefore against the amendment.

In the course of this legislation we have discussed other important issues which are still coming to a head. It is absolutely right, as my noble friend said, that the Government are setting out to promote innovation and the life sciences sector, and there are many ways of doing that. The Conservative Party manifesto of 2015 stated:

“We will increase the use of cost-effective new medicines and technologies”.

It also stated:

“We will speed up your access to new medicines”.

It is important that we do that as it is in the interests of patients, our life sciences industry and ourselves as a world leader in science in this area. However, we have on the stocks the accelerated access review—which, ironically, took too long to be produced, was delayed in its publication and has not yet been replied to. We also have a life sciences strategy. The many positives in that run the risk of being negated by the way in which NHS England and NICE have gone about the consultation.

As I said at an earlier stage, it is possible to see how NICE and NHS England can work together in ways that would give industry greater confidence as it would mean that it could get early engagement with NHS England about the managed entry of new medicines into the NHS, including, as my noble friend said, on issues of importance to industry, such as the volume of purchasing of new medicines in the early stages of access. However, the budget impact test, at £20 million, is probably not one-fifth of all new medicines; it is one-fifth of all new medicines regarded as cost effective by NICE. Therefore, this is not a case of any old medicine that might be very expensive; it just happens to be medicines which are cost effective but have relatively high volumes, which is exactly the point to which the noble Baroness, Lady Walmsley, referred.

However, the issue for NHS England should not be the cost of introducing new medicines that are cost effective and in the voluntary PPRS, as the purpose of the pharmaceutical price regulation scheme, as currently designed, is—through the clawback—to give government assurance about the overall increase in the drugs budget. As a consequence, that money is made available as part of the overall funding provided to NHS England. Therefore, NHS England should in theory have in its budget the money that is necessary to meet the drugs bill, including new medicines as they come on stream, because there is clawback for that.

We have this Bill in front of us partly, but not entirely, because the drugs budget was rising much faster than anticipated, and much of that growth was outside the voluntary PPRS. This Bill plugs that gap and sorts that out. However, in doing so—and here we are at the beginning of April—once this Bill is on the stocks and secures Royal Assent and the Secretary of State is able to align the statutory PPRS with the voluntary PPRS, there is no reason why NICE and NHS England should continue to apply an overall budgetary impact test. I say to my noble friend that I think the Government should step in at that point and say, “Where this product has come through a PPRS where a clawback is applied and we have a budgetary mechanism in place—redress—for any extra cost to the drugs bill in the course of this PPRS through to the end of 2018, NHS England should not interpose any extra delay, or seek any extra delay, through NICE in introducing that medicine to the NHS”. I am afraid that if it continues to do so in the way that it is at the moment, that will have a severe negative impact on the view held by the boards of major corporations in relation to the take-up of new medicines by the NHS.

I am sorry to say to the noble Lord, Lord Warner, and other noble Lords that the remedy is not contained in this amendment. The remedy is in the Government’s hands if they choose to make that point very clearly to NHS England in relation to what this legislation enables us to achieve in controlling the drugs budget.

Photo of Baroness Finlay of Llandaff Baroness Finlay of Llandaff Crossbench

My Lords, I thank the Minister for the way in which he has conducted all the previous stages of the Bill, the amount of discussion and negotiation that he has had with all of us, and for accepting many of the amendments. It might be helpful to the House, if, when he sums up, he could clarify how much of the 7% increase is due to new NICE-approved drugs coming through into the system.

It would also be helpful to know whether NICE has the ability to refuse to go along with the budget impact test on this estimated one-fifth of medication that it deems to be cost effective if it feels that a new medicine coming on line is extremely cost effective and that its cost efficacy will have a major impact on those with life-limiting or life-altering conditions. I am talking about people with a disease that will progress at quite a rate, meaning that over a 90-day period they will be likely to experience a significant decline without the intervention of whatever the new medication might be.

It would also be helpful if the Minister could tell us how the independence of NICE will be assured with this budget impact test. In many parts of the world NICE has been viewed as exemplary in deciding how a medication is approved to come on line, but there are problems with it. If it were viewed as having its independence eroded, that would seriously undermine public confidence in the whole process, particularly among those who have serious and life-limiting or life-altering illnesses.

Photo of Baroness Masham of Ilton Baroness Masham of Ilton Crossbench

My Lords, I am all in favour of bringing down the price of drugs where possible, but patients’ access to new drugs is very important. For a long time, NICE has been very slow to approve drugs and that has caused great frustration for patients and the industry. What can the Minister do about orphan drugs? Not having them can be life-threatening for patients, but NICE has taken some of these drugs off the list. That is really serious for patients for whom they are a lifeline. Does Scotland not have a better system?

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

Well, that’s a question, my Lords. First, I declare an interest as president of the Health Care Supply Association and of GS1, the barcoding organisation.

I support the Motion in the name of the noble Lord, Lord Warner. I note what the noble Lord, Lord Lansley, says—that it is not a remedy for the problem being described—but it would send a powerful message to the Government. It is a message which, judging by the debate in the Commons on this matter, I am afraid Ministers in the Commons have not really heard, although I acknowledge that in his opening remarks today the Minister certainly turned to the crux of the issue.

Essentially, with a Bill that gives the Government huge power over drug prices—indeed, it gives them absolute power—the real concern is that NHS patients will not get access to new medicines as they would in other countries. This in turn puts at risk investment in R&D by the pharmaceutical industry in this country, which in turn threatens to undermine the life sciences sector. It is one of the most crucial sectors in this country and in our economy, and post Brexit must become even more important. Essentially, we are seeking to turn this into a virtuous circle whereby the NHS is seen to want to invest in new medicines and treatments, industry feels that the UK is therefore a good place in which to invest, and our life sciences sector grows and becomes even more important.

The problem is that over the last few years we have seen increasing rationing or restrictions on access to these new and effective drugs. We have had a short debate on NICE. I was the Minister first in charge of NICE, going back some years now. When it was set up, it was, first, deemed to be wholly independent of the NHS in its judgments, and secondly, designed to speed up access to new technologies and medicines. However, in the past few years the remit has changed. It seems to have been pushed almost into part of NHS management and budgetary control. The noble Lord, Lord Lansley, put his finger on it when he said that after NICE has reached a judgment that a medicine is both clinically and cost effective, NHS England has, in a number of ways, sought to put in additional controls. That is why there is concern about the new proposal: that if a NICE-approved treatment exceeds or is expected to exceed a cost of £20 million in any of the first three years, NHS England could ask for a longer period for its introduction. The Minister said that the budget impact test, as it has come to be known, is not a cap but a negotiating tactic. I understand that, but I put it to him that in the past few years NHS England has shown neither the willingness nor the capacity to do anything but reduce access for patients. It is very difficult not to see this as another hurdle.

We have all had correspondence from various charities. The Specialised Healthcare Alliance says its members are concerned because they think these proposals will put patients at risk by impeding access to new treatments. I have also received a letter from a large number of charities concerned that the proposals will delay access, with no limits on how long this can last. As they say, this would effectively mean that officials have the power to put the brakes on a new treatment at the last minute and hold it just out of reach of patients because they cannot afford to give it to all the patients who need it, after they have been told by the experts in NICE that the medicine represents a good use of resources.

Keir Woods, head of oncology at the major pharmaceutical company Merck, points to that company’s investing 20% of its global venture capital in the UK. He celebrates the UK’s position as a global power in health and its world-class universities, centres of excellence in clinical research and top medical journals. All that has a positive impact on investment. We are home to 4,800 life sciences companies, with the largest pipeline of new discoveries in Europe. That is something to celebrate, but the point he makes is that this is at risk unless we increase the uptake of these new innovations in the UK.

Currently, the UK has developed around 14% of the top 100 global medicines. That is something to be pleased about. However, 20 years ago, we were responsible for one quarter of the top 100 global medicines. The noble Lord, Lord Warner, referred to the £4 billion being invested by pharma in R&D. However, six or seven years ago, it was £5 billion. The risk is that it will go down, billion by billion, because the NHS is, frankly, hopeless at adopting these new medicines. Patients are at risk; the industry is at risk; the life sciences sector is at risk.

The Minister listed the six headings of the life sciences strategy, including science-based support for innovation, business and skills, medicine regulation, digital and data, and improving patient access to medicines. I applaud that. But the fact is that patients are not getting access to new medicines. The initiatives the noble Lord has announced are, so far, having very little impact on the generality of that access.

The Minister says that the Bill is concerned only with value for money and not with patient access and investment in life sciences. However, this is the Bill before us and this is our opportunity to say to the Government that they have got to do something about speeding up access to medicines, not only for patients but in order to strengthen and support a key element in our economy. For that reason, I support the amendment.

Photo of Lord O'Shaughnessy Lord O'Shaughnessy The Parliamentary Under-Secretary of State for Health, Lord in Waiting (HM Household) (Whip) 4:30 pm, 5th April 2017

My Lords, I am grateful to all noble Lords for the points they have made in the discussion we have just had. I will try to deal with as many of them as I can in my response.

I am afraid that we do not agree with the first point of the noble Lord, Lord Warner, about the change of wording to make it more flexible. Such wording as exists in the current amendment would increase the risk of judicial review. As my noble friend Lord Lansley pointed out, it would impair our ability to crack down on those companies that are abusing the NHS by raising prices in a completely unwarranted way. I cannot believe that this is what noble Lords want.

The noble Lord, Lord Warner, referred to the Bill providing a pausing mechanism. It is important to point out and remind noble Lords that the Bill requires a consultation before the beginning of any new statutory scheme. One of the key amendments that we made—indeed, I accepted proposals from others in Committee and on Report—was to introduce an affirmative resolution on extending price controls into the devices realm. So those consultations and pauses already exist—and they do so in a way that is appropriate to the core purpose of this Bill, which is to control costs.

The noble Baroness, Lady Walmsley, referred to the balance that is being struck. She is quite right that there is a balance to be struck, but that does not mean that the balance needs to be struck in each and every item of government policy. As my noble friend Lord Lansley pointed out, this Bill is not the right vehicle to achieve support for the life sciences and industry and to improve patient access. These aims are achieved through other routes, as I have outlined, and the Government are doing a huge amount of work on them.

I wholeheartedly agree with all noble Lords on the importance of the life sciences sector and of improving patient access. The noble Lord, Lord Hunt, was right to point out that, post Brexit, it will be more important than ever. The noble Baroness, Lady Masham, said that this is not just a macroeconomic point; it is about the lives of humans, often in great suffering, who need to have access to medicines. I thank her for bringing that out. It is precisely why the Government are developing an ambitious strategy and a sector deal; and it is precisely why I have been keen to ensure that the NHS is seen as a partner and beneficiary of that deal. Rather than this being seen as something that is done to it, it has to be a counterparty, as it were. I disagree with the noble Lord, Lord Hunt, because we are seeing improvements in uptake for the reasons that I have outlined.

In the course of dealing with the Bill, while I have had complaints from the life sciences sector about certain things that we have done—I will touch on those in a moment—it is fair to say that I have not received any complaints from the industry that this Bill will affect it negatively. It understands that the Bill is about providing equality between the statutory and voluntary schemes, cracking down on those who seek to abuse the system and making sure that there is proper information to inform the price control schemes that we have.

Looking further ahead, from 2019 onwards we will need to look at the medicine and pricing regulation system in the round—and we will be doing so from a position of being outside the European Union. It is therefore absolutely essential that we have a world-leading price and regulatory environment. I am looking at all aspects of that now and talking to industry and others. As my noble friend Lord Lansley pointed out, it is only right to consider the changes introduced by NICE and NHS England as we look to a comprehensive solution from 2019 onwards.

While we are talking about the outcome of that consultation, I should point out that it was provided in response to the Public Accounts Committee and that there is no threat to the independence of those organisations. I completely agree with the noble Baroness, Lady Finlay, in applauding the reputation that NICE has around the world and the fact that the life sciences industry values getting NICE technology approvals.

The changes being made are consistent with the NHS constitution. I explained in my opening statement how this will work and I have addressed the misconceptions. This is not about delay or reducing uptake, it is about costs, and indeed the changes bring about a variety of positive and welcome benefits to commercial agreements and to a fast-track appraisal process.

The noble Baroness, Lady Finlay, asked what proportion of the growth in the drugs bill has been driven by branded drugs. She will know that that is quite difficult to define because of the issue of what are known as parallel imports. These are branded drugs that are outside the schemes which come in, but of course they make a contribution to the bill. As a country we are one of the best, if not the best, in the OECD in terms of the use of generic drugs, which of course is one way of holding down the bill and creating headroom for innovative drugs. There is a good story to be told about that.

The noble Baroness also mentioned orphan drugs and she is quite right to highlight them. There is the highly specialised technology route. I should also point out that there are routes and specialised commissioning within NHS England, including the commissioning through evaluation programme. These routes have been invented by NHS England to facilitate access to drugs, not to delay it.

To conclude, I want to return to the amendment itself. I should stress to noble Lords that this is not a cost-free amendment and it is not simply a declaratory piece of legislation. It would increase costs to the NHS for drugs for no benefit. No more drugs would be bought and no more people would take them up. Indeed, it would take money away from other care settings. The Government cannot agree with an amendment that would put the NHS at such a disadvantage. I do not believe that it would be in the interests of either patients or the health service. The House of Commons was right to reject the first version of the amendment and this version does not substantively change the intent. I hope and trust that noble Lords will take the same approach in rejecting it, but before that I would like to ask the noble Lord, Lord Warner, on the basis of the arguments that I have made in response to his key points, to withdraw it.

Photo of Lord Warner Lord Warner Labour

My Lords, this has been an interesting debate and I thank noble Lords for their contributions. I do not interpret this amendment in the same way as the Minister and I am slightly surprised that he thinks there is a happy mood in the industry about all this because that certainly does not square with my contacts. I would also like to draw his attention to a comment made during a pink ribbon conference recently by the oncologist who heads chemotherapy commissioning for NHS England. He was talking about the budget impact test: “That is why we expect the £20 million figure to hit cancer drugs much more than other drugs”. I think that that is quite an interesting revelation which suggests that some of those who are closer to this than perhaps the Minister and me take a different view about how the budget impact test actually works in practice.

The Minister would have had plenty of time, if he had accepted the principle behind the amendment, to negotiate with us a form of wording that would deliver its intent. He has spent his time trying to get us to take it out of the Bill. He has more access to draftspeople than I do. If he had accepted the principle, we could have come up with wording that is more to his taste. Neither he nor his officials have co-operated with that kind of approach. I believe that this amendment as it stands would be of benefit to patients, to UK plc and to the industry. I wish to test the opinion of the House.

Ayes 245, Noes 208.

Division number 1

See full list of votes (From The Public Whip)

Content

Not-content

Motion A1 agreed.