Health Service Medical Supplies (Costs) Bill

Baroness Walmsley Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Wednesday 25th January 2017 Grand Committee

[Lord Warner]

In response to the noble Baroness’s point, I would not claim to have actually considered the detail of what level of pricing we will use. My point in this amendment is to try to establish the principle of a trigger mechanism, and I am happy to be advised on ways of improving it.

[Baroness Walmsley (LD)]

My Lords, the noble Lord, Lord Warner, is right that we need to have a trigger mechanism. This is gold-plating, and not very effective gold-plating. As the noble Baroness, Lady Finlay, just said, it will produce an absolute mass of information. The question is how to find, among that mass of information, situations where there is malpractice, abuse or unwarranted price rises. It is the same sort of argument as we had when the police wanted to collect everybody’s internet information. Really, it is like looking for a needle in a haystack. It is much better to have it targeted, where there is a reason to believe that there is something going on.

How will the department identify from this mass of information those situations that it needs to investigate further? Will it apply some sort of algorithm to the information at any point along the production or distribution line when there is an increase of more than a certain percentage or a certain percentage related to the average—or what? How is it going to be done? These companies have quite enough to tackle with Brexit coming along the track and do not need a further burden such as this.

[Lord Young of Norwood Green (Lab)]

I am not an expert in this area, but I am puzzled. If it is that difficult to identify, how come the Times managed it in its expose? It did not seem very difficult or complex. The Times found drugs that had come out of patent and were available on a generic basis and for which the company that bought the patent increased the cost by staggering amounts. You do not have to be Sherlock Holmes to alight upon that. I do not know which way to go on this debate. My noble friend worries about fishing expeditions, and he is right, but I am even more worried about the NHS being ripped off for inordinate amounts of money by people whose corporate responsibility polices omit the word “ethics”. I asked once before why none of the current audit processes inside the health service exposed this until the Times brought it to public attention. There may be a mass of information, but I would have thought that these things could quite easily be identified. I may be wrong because, as I said, I am not an expert in this very complex area, but those points need to be answered. The problem was identified. We have this Bill because we know that the current system is not working. Even though people in the various systems in the NHS were reporting their concerns, no action was taken for quite a long time. It certainly justifies the legislation. The Delegated Powers Committee expressed its concerns about whether the legislation is right, and I do not profess to be qualified to rule on that, but my major concern is about the ability of some companies to rip off the NHS.

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Moved by

[Baroness Walmsley]

49: Clause 6, page 7, leave out line 9

[Baroness Walmsley]

My Lords, the next two groups of amendments relate to the concerns expressed by the Delegated Powers and Regulatory Reform Committee in its 12th report of the 2016-17 Session. Amendments 49 and 51 refer to Clause 6, which inserts a series of new sections into the NHS Act 2006 authorising the Secretary of State to disclose information provided by suppliers of health service products. New Section 264B(1) lists the bodies to which information may be disclosed. It also allows the Secretary of State to prescribe in regulations further persons to whom information may be disclosed. We have already heard from the noble Lord, Lord Hunt, about Parliament’s inability to have much effect on that.

There are two powers: a specific power to prescribe bodies which appear to represent manufacturers, distributers and suppliers of health service products and a general power to prescribe any other person. In his Amendment 50 the noble Lord, Lord Hunt of Kings Heath, has attempted to place in the Bill the specific organisations that represent UK producers. This is reasonable enough, although I know that Ministers hate having lists in Bills. However, it is the general power that the Delegated Powers Committee objects to. As the noble Lord, Lord Lansley, said a few minutes ago when talking about Amendment 32, disclosure under new Section 264B may involve confidential and commercially sensitive information, even though the purposes for the disclosure are limited by subsections (2) and (3). The committee felt the general power to be inappropriate. No explanation of the need for this power was provided to the committee in the memorandum.

Amendment 49 therefore seeks to delete the general power in subsection (1)(l) of new Section 264B to enable the Minister to justify why the Secretary of State would need such a broad and wide-ranging power. Amendment 51 is consequential. Can the Minister say why it is not feasible to specify in the Bill the further bodies to which information may be disclosed, or even the groups of people or organisations? After all, in subsection (1)(k)—in lines 7 and 8—the Government specify representative bodies of producers. Why not specify other groups at the end of the subsection? This appears to me to represent a power too far, and the committee feels the same. What is this power for and how is it to be used? I beg to move.

[Lord Hunt of Kings Heath]

My Lords, I have a little list, which is a bit bigger than the Minister’s list.

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[Lord O'Shaughnessy]

I thank the noble Baroness, Lady Walmsley, and the noble Lord, Lord Hunt, for these amendments. As both have set out, it is clear that they have been tabled in response to the report of the Delegated Powers and Regulatory Reform Committee. I am very grateful to the committee for its consideration of the Bill and for providing its report. The committee has concluded that the general power in new Section 264B(1)(l) to describe in regulations any other persons to whom information may be supplied is too wide and not justified at present. I assure noble Lords that I am considering these comments very carefully, and the views expressed by the noble Baroness, Lady Walmsley, and the noble Lord, Lord Hunt, have been helpful in explaining the issues.

The amendment in the name of the noble Lord, Lord Hunt, would put in the Bill the industry representative bodies to which the Secretary of State can disclose information. The Government would prefer to prescribe these bodies in regulations and have done so in the illustrative regulations—albeit the current version includes only a limited number of such bodies and they are given purely as examples rather than as an attempt to be exhaustive. By prescribing a large number of representative bodies in primary legislation we would, as I think the noble Lord, Lord Hunt, admits, lose the flexibility to be able to add new representative bodies, if needed, in regulations.

In its report, the DPRRC was satisfied with the way the Bill was drafted in this area, and it considered the power to prescribe bodies that appear to the Secretary of State to represent manufacturers, distributers or suppliers to be a specific power. The committee thought, however, that the general power to prescribe any other person was too general and suggested that the Government limit the kinds of bodies to which disclosure may be made, as is done with the power to prescribe representative bodies. Like the DPRRC, I believe that the power to prescribe representative bodies is sufficiently specific, while still allowing some flexibility. However, we are giving serious consideration to the general power.

As noble Lords are aware, there is a balance to be struck between ensuring clarity in primary legislation and, at the same time, giving sufficient flexibility to enable arrangements to change in response to external changes to ensure that, in the future, we have flexibility to work with the right stakeholders without requiring primary legislation to do so. I once again reassure the Committee that I am considering these recommendations very carefully and will respond to the DPRRC shortly. I expect, subject to the appropriate procedures, to bring forward proposals on Report. On that basis, I ask the noble Baroness to withdraw her amendment.

[Baroness Walmsley]

My Lords, I am most grateful to the Minister, and I look forward to, I hope, being copied in to his reply to the committee. I certainly understand what he said about the representative bodies being in regulations and that it is just an illustrative list that we have before us. If the list is in regulations, it is much easier to add a new representative body. It is reasonable to assume that, some day, perhaps one or more new bodies may be set up. However, the general power is another animal altogether. I look forward to hearing from the Minister after he has considered the matter. I beg leave to withdraw the amendment.

Amendment 49 withdrawn.

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Moved by

[Baroness Walmsley]

58: Clause 7, page 9, line 18, at end insert—
“(5A) Any penalty provided for under subsection (5) may be—(a) a single penalty not exceeding £100,000, or(b) a daily penalty not exceeding £10,000 for every day on which the contravention occurs.(5B) Welsh Ministers may by regulations increase (or further increase) either of the sums mentioned in subsection (5A).”

[Baroness Walmsley]

My Lords, I will speak to Amendment 58 and to the other amendments in the group. This group also reflects concerns expressed by the DPRRC in relation to Clause 7, which deals with information to Welsh Ministers. The substantive amendments are 58, 61 and 66; the others in the group are consequential.

New Section 201A of the NHS Wales Act 2006 will enable Welsh Ministers to require information from producers of health service products to be used in Wales. Subsection (5) of the new section allows regulations to be made for the payment of a penalty if a person contravenes these regulations. Noble Lords may have noticed that there are no equivalent provisions in Clause 6, which inserts new sections into the NHS Act 2006. There is no need, because the original Act already enables regulations to provide for the payment of penalties. However, if we look back at these provisions in the NHS Act 2006, we notice that there are some differences between the penalty sections there and those in the Bill. Specifically, under the NHS Act 2006, there is a limit on the penalty that can be imposed—I think that that is what we have been given in the illustrative regulations. Secondly, any increase in the penalty must be done by affirmative order. In Wales, we have no limit and no affirmative order.

Amendment 58 puts limits on the penalties in this Bill in line with those in the NHS Act 2006, and Amendment 66 changes the relevant bit of the NHS (Wales) Act 2006 so that regulations under new subsection 5B in Amendment 58 would have to be made by the affirmative order procedure. This provides us with consistency, because the provisions in the two pieces of legislation would be similar. I am not wedded to the actual penalty limits that I have laid down, but they are the same as those specified in Section 265 of the NHS Act 2006, so they would be consistent. However, as in this case they would apply to a narrower range of people, it may be appropriate to have a different limit. The main point is that there should be a limit.

Amendment 61 deals with a different issue but reflects what I was trying to do in Clause 6 with my Amendment 49 in the last group. It relates to new Section 201B of the NHS (Wales) Act 2006 on disclosure of information. As with Clause 6, the bodies to whom information can be disclosed are not specified in the Bill. Instead, these can be prescribed by Welsh Ministers. Since there has been no information as to why it is not feasible to specify these further bodies to whom confidential, commercially sensitive information can be disclosed, can the Minister explain why not? Surely it should be possible at least to limit the kinds of bodies to whom disclosure may be made. It seems to me to be a flexibility too far and beyond what is really necessary to ensure the purposes of the Bill. The Delegated Powers Committee regards it as “inappropriate”. Can the Minister convince us of the need for this very broad power?

[Lord O'Shaughnessy]

My Lords, I am grateful to the noble Baroness, Lady Walmsley, for her sharp eyes and even sharper suggestions with regard to these amendments, which are again in response to the report of the Delegated Powers and Regulatory Reform Committee. The committee concluded that the power in Clause 7, which enables Welsh Ministers to make regulations that make provision for payment of a penalty if a provider of pharmaceutical or primary medical services contravenes regulations requiring them to record and provide information about health service products that are required for the health service in Wales, should be consistent with similar provisions in the 2006 Act.

In particular, the committee recommends that the maximum penalty that may be imposed under what would be Section 201 of the NHS (Wales) Act 2006 should be set out in the Bill and that there should be a power to increase this maximum by regulations made subject to the affirmative procedure, as the noble Baroness set out. I assure noble Lords that, as with the previous set of amendments, I am considering these comments very carefully; the views expressed by the noble Baroness have been very helpful in highlighting the issue, for which I am grateful.

Noble Lords will understand that these provisions relate to the powers of the Welsh Ministers, and it is therefore necessary for me to seek the views of Ministers in Wales on this matter. However, I acknowledge the concern that, as drafted, the Bill does not impose a limit on the penalty which may be imposed by Welsh Ministers. Noble Lords will appreciate that, in the case of penalties, the powers in relation to Wales are different from those in relation to the UK as a whole, in so far as Welsh Ministers will be able to impose penalties only on providers of pharmaceutical and primary medical services. In contrast, the 2006 Act allows for penalties to be imposed on manufacturers and distributers, and the size of any penalty should reflect this. It would therefore be disproportionate if the level of maximum fine allowed for in the 2006 Act were to be replicated in the NHS (Wales) Act. I accept, however, that the framework governing the maximum size of any penalty and increasing that maximum should be the same.

Turning to the amendment which would remove the provisions allowing Welsh Ministers to disclose information to persons prescribed in regulations, this is a matter which I understand Welsh Ministers are content to reconsider in light of the DPRRC’s recommendations. I reassure the Committee that I accept the recommendations of the DPRRC regarding limits being placed on the penalties that can be imposed by Welsh Ministers and the need to specify in the Bill the further bodies to which Welsh Ministers may disclose information. I will respond to the DPRRC in due course with proposals once I have discussed them with Ministers in Wales. I intend, subject to the appropriate procedures, to bring forward proposals on Report.

As these will be my final remarks in Committee, I thank all noble Lords for a constructive and informative debate. It has been important to be able to draw on the wisdom of so many former Ministers in making sure that the Bill is properly scrutinised and best equipped to carry out the purposes we have set for it. I have committed to consider many of the issues raised before Report on 7 February, not that far away, and I will be holding as many meetings as I can in the short time available to aid that process. My officials and I are available to noble Lords should they have any other questions or concerns about the Bill, and I look forward to bringing forward any necessary proposals on Report. To conclude on this group, I ask the noble Baroness to withdraw her amendment.

[Baroness Walmsley]

My Lords, I am most grateful to the Minister for his assurance that these matters will be considered before Report. I look forward to hearing the result of his considerations. I am very happy to beg leave to withdraw the amendment.

Amendment 58 withdrawn.