The Parliamentary Under-Secretary of State for Health (George Freeman)
It is a pleasure to respond to this debate and to follow the hon. Member for Copeland (Mr Reed) and my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). It is a shame that there are not more Members present, because I know that the debate has been warmly welcomed across the House. I congratulate the Backbench Business Committee on granting it and my right hon. Friend on securing it.
I would like to take this opportunity to pay tribute to my right hon. Friend for all his work in this field, both as the Member for South Cambridgeshire—I do not think there is a constituency that more represents this cluster—and as the former Secretary of State for Health, because he led many of the initiatives that he spoke about so eloquently this afternoon. He is as well placed as anybody to describe the evolution of policy in that space, and it is my great privilege, as the first Minister for life sciences, to inherit that baton of leadership.
I also want to acknowledge the very helpful comments and questions from my hon. Friend the Member for North Herefordshire (Bill Wiggin) on whether there is more of an opportunity for the NHS to become more of a partner in the development of novel medicines. He is absolutely right, and I will come to that in a moment. He also raised the question of off-label drugs, as did the hon. Member for Copeland, and I will also address that shortly. The hon. Gentleman also requested an update on progress in this field and some detail on the review of innovative medicines that I announced two weeks ago. I am grateful for his support for that and for his recognition of NICE’s work on value-based assessment.
My right hon. Friend the Member for South Cambridgeshire set out eloquently, and incredibly helpfully for the House, the challenge we face and the evolution of policy in this area. He talked fluently about the challenge facing the Government, and indeed all mature western democracies, with an ageing population, a demographic time bomb and the rise of chronic diseases. As the Chancellor reminded us in yesterday’s autumn statement, we inherited a very serious structural deficit in the public finances and huge pressure on our budgets. We have to balance the requirement to spend our drugs budget as effectively as we can for patient benefit, but in a way that supports our leadership in medical research for the benefit of patients. That goes to the heart of my mission as the new Minister for life sciences: how do we embrace science, research and innovation so that we spend every health pound more effectively? It is about embracing precision medicines, cutting out waste and ensuring that we deliver maximum health benefit for patients through our health budget, but in a way that attracts inward investment to our economy to equip us better to pay for the modern medicines that we will all need.
My right hon. Friend highlighted that NICE has led the world in health economics on the 20th century model, which is really based on an averaging of health economic benefits, as he explained, and that is under increasing pressure from some of the breakthroughs in science that are bringing us a new generation of stratified and personalised—in some cases, literally—medicines, which do not fit well with the model of averaged, whole-population health economic assessments.
My right hon. Friend made the point fluently that it is ironic that we are a leading centre for research, but unless we also become a leading centre for adopting these new medicines, we will struggle to retain that. We set that out very clearly three years ago in the life sciences strategy. The Prime Minister was very clear about that. We do not believe that we can rest on our laurels simply as a 20th economy with a strong pharmaceutical footprint; in the 21st century we have to use all our resources, including our NHS, to accelerate the discovery of new medicines and their adoption into the system.
Mr Jamie Reed
I wish the Minister every success in that mission and offer the fulsome support of the Opposition in ensuring its success, but does he agree—I do not wish to divert him too much—that critical to that success is that Britain remains in the European Union?
George Freeman
I thank the hon. Gentleman for that warm support for this mission. We are ambitious for this country in life sciences research, and ambitious for Europe too. One of the things I am exercised by is the danger of the European Union putting in place a regulatory framework that does not support 21st-century leadership in regenerative medicine, in stem cells, and in the use of data. In the new year, I will lead a delegation to the European Commission to highlight the fact that this new landscape requires a new regulatory framework. I very much hope that we can persuade the European Union to embrace that so that Britain can lead in a Europe that leads in a global sector.
My right hon. Friend talked about institutional and cultural barriers to rapid adoption of new medicines and the need for a new system. I strongly agree with the tenor of his thinking. It must be a system in which we put patients right at the heart of the assessment of need and in which clinicians are empowered and supported to make decisions based on what their patient needs. The new model of 21st-century research and medicine is about accelerating a much more patient-centred model of research, not just so that we design drugs around patients and their genetics and data, but so that the patient voice is stronger in the allocation of resources. That is a challenging but important agenda that we need to embrace.
My right hon. Friend reminded us that this formed a lot of the thinking behind the original concept of value-based pricing and the need for us to move towards a new mechanism for reimbursing innovations on the basis of the impact that they have in populations. I strongly support all that. He highlighted the cancer drugs fund—a really important measure that seeks to make sure that, in cancer, the therapeutic area that has most challenged the traditional method of health economics, we do not allow patients to suffer from lack of access given the increasing stratification of new drugs that do not fit well with the NICE model. I pay tribute to his leadership on this. I am very proud that we have managed to increase the funding of the cancer drugs fund at a very difficult time for the public finances, with another £160 million this year bringing the total to £280 million. More than 60,000 patients have benefited from that.
My right hon. Friend is right, however, to signal that the cancer drugs fund is, in essence, a stop-gap mechanism to make sure that we are able to update the systems, protocols and procedures within NICE for adopting and procuring innovative medicines. We do not intend to have a specific fund for every therapeutic area or, indeed, additional assessment measures within NHS England on top of those already faced by the industry through NICE. It is crucial that we use this window of opportunity to put in place the new system to adapt NICE’s mechanisms and procedures to the new landscape. That is precisely what the review that I announced a couple of weeks ago is about.
My right hon. Friend made a number of comments about the pharmaceutical price regulation scheme. His overall message that price should reflect the value of new medicines and that we should, as far as we can, pay on results, paying a premium to innovations that have particularly high impacts and patient benefits. I suggest that that should apply equally to med tech as to pharmaceuticals. That is part of what was originally conceived of in the value-based pricing proposals that he brought forward. I agree with all that, and I think it is the direction of travel. In a moment, I will explain how the review and the work we are pursuing in the Department of Health is intended to pick up that thinking and drive it forward.
I welcome my right hon. Friend’s reference to the importance of new methodologies. I have discussed this with NICE. He will not be surprised to hear, as it is an organisation that is constantly looking to update its procedures, that it is actively looking at these challenges and welcomed my review as creating a forum for it to share things with industry and charities. I particularly welcomed his mentioning the role of charities. Increasingly, we will see charities as sponsors of drugs alongside big pharma and small companies. As he said, the system is very heavily geared around big pharma as the main developer of new drugs, but that is increasingly not the case. We need a policy and reimbursement landscape that reflects the needs of not-for-profit and smaller company sponsors.
Clinical validation of whether an innovative drug or device is going to work in patients is key, and I know that that is the most valuable moment of all for organisations, because I used to work with them. We should not forget that there is also value in the developers of an innovation being told that it will not work in patients. The “slow no” is the death knell for so many innovative companies and charities. We should look to embrace a model in which we can add value by helping the developers of innovations not to pursue those that will not work well and to target those that can be channelled towards those patients who will benefit most.
I hear loud and clear my right hon. Friend’s call for us to urge NICE to develop a more value-based assessment and to explore all mechanisms in the PPRS for innovative medicines. I am very happy to agree with those two things and take up the challenge to support them. I agree with my right hon. Friend’s analysis that we have a window of opportunity in which it is important that we set out a new framework so that, beyond the cancer drugs fund, NICE is able to provide a holistic, comprehensive model for assessing the new range of medicines that come on stream, and that we do not have to set up additional funds for different types of medicines with additional burdens of assessment both within and outside NICE. That is precisely what the review I have announced is about and I will deal with some of those specific points.
My right hon. Friend made an excellent speech that captured and set the scene and the challenge we face. I will summarise in my own words the problem. We are moving from a 20th-century model of drug discovery and pharmaceutical innovation whereby typically a new drug takes 10 to 15 years to come to market and costs $1 billion to $1.5 billion. It follows a linear process that starts with deep university biological research and then, if we are lucky, it gets spun out into a company or licensed and sent to industry. If we are lucky, it will then get financed through various stages and taken through phases 1, 2, 3 and 4 of trials, with hugely costly international studies. Then it is approved as safe by the Medicines and Healthcare products Regulatory Agency or the European Agency for the Evaluation of Medicinal Products. Then it is approved by NICE as being of suitable cost-benefit for recommended use in the NHS, and then it has to be taken up by clinicians in the service.
The truth is that that model is not working well enough for anyone, but most importantly, as my right hon. Friend has pointed out, it is not working for patients. It is coming under pressure for a series of reasons, partly because the industry is struggling with the time cost of a 10 to 15-year development pipeline, leaving it with innovations it needs premium pricing for to justify the huge sunk costs at a time when we are facing a demographic time bomb. Given the rising cost of disease, we need to get maximum value out of every pound. We cannot afford to pay premium prices for every new innovation, so we need a new model.
The great challenge that that represents is also a great opportunity for this country, because the new model will be about designing innovations around particular patient groups. Yesterday, we believed that what we thought were blockbuster diseases required blockbuster drugs, but today, the more we know about disease, patient data and genomics, the more we know that certain patients respond to the same disease—and, indeed, the same drug—in different ways. If we can use that insight with industrial partners, a new generation of treatments can be designed around patient groups and introduced to them dramatically earlier, which is a completely new value proposition, principally for patients, but also for the NHS. That will allow us to become something of a partner in innovation and unlock the basis of a new model of reimbursement.
I do not pretend that that is easy, or we would be able to do it overnight. We will certainly not be able to do it by Christmas, by the election or even within a year or two. It might involve a 10-year programme of deep and long-term change, but we are definitely committed to embracing it and to laying a policy foundation for it.
I want to say something about the PPRS, because it plays a very important role in this landscape. We negotiated and agreed this important deal with the industry. It contains mechanisms for supporting innovative medicines, not least the exclusion for small companies—those with a turnover of less than £5 million—and the exclusion of new medicines brought on stream from January this year. The review we have announced—