Health Service Medical Supplies (Costs) Bill

John Glen Excerpts

2nd reading: House of Commons & Programme motion: House of Commons
Monday 24th October 2016 Commons Chamber

[Mr Hunt]

It will deal with some of those concerns, and we will listen to all the concerns raised by hon. Members during the progress of the Bill. On the particular issue the hon. Gentleman raises, the CMA is already investigating the behaviour of pharmaceutical companies in certain situations, but it has become clear to us that there is a particularly unethical and unacceptable practice of drugs companies getting control of generic drugs for which they command a monopoly position and then hiking the prices. There was one product whose price increased by 12,000% between 2008 and 2016, and if the price had stayed the same as before the increase, the NHS would have spent £58 million less. The Government’s conclusion is that the simplest and quickest way to sort this out is through new legislation, but I will happily take the hon. Gentleman’s other concerns offline and look into them further.

[John Glen (Salisbury) (Con)]

I welcome the provisions of the Bill that will close a loophole and deal with terrible examples of where the NHS is in effect exploited, but can my right hon. Friend point to the future in light of the suggestion that the drugs bill will increase to £20 billion by 2020—a much more significant increase than can be afforded under the projected expenditure in the NHS? What bigger measures need to be put in place for us to deal substantively with that bigger problem?

[Mr Hunt]

My hon. Friend is right in that we see demand for NHS services, which includes treatment and drugs, increasing by a total of around £30 billion over the next five-year period, which is a huge amount and certainly more than we as a country can afford without changing practice. That is why we are implementing a very challenging series of efficiency reforms designed to make sure that we can afford to continue current levels of NHS service on the £10 billion increase this Government are putting in. Part of that is indeed measures such as those in this Bill to control the drugs bill. My hon. Friend is also right that going forward over the next 25, rather than five, years we will be seeing the bigger issue of the accelerating pace of innovation in science. That provides great opportunities for the NHS, but potentially great pressures for the budget, and I am sure we will continue to discuss those issues extensively in this House.

Health Service Medical Supplies (Costs) Bill (First sitting)

John Glen Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 8th November 2016 Public Bill Committees

[Rob Marris]

Q Or the other way round—what the market will bear. That is our concern.

Philip Kennedy: Or what the market will bear. Of course, in recent years, with the funding concerns, the price is only really going in one direction and that is putting a huge squeeze on niche product manufacturers. The other thing about the medical device sector, which goes back to the point about definition, is that there are some very specialised small businesses that work only within a certain sector. It is difficult to ask them to produce swathes of data to the same extent as a larger generic manufacturer or, indeed, large ostomy company that is quite accustomed to producing data for drug tariff.

[John Glen (Salisbury) (Con)]

Q This question is to Mr Kennedy and to Mr Ridge. With the data on the cost of medicines going up by over 7.5% in the last year—at a time when we have aggressive efficiency savings of £21 billion, or whatever it is, over the next few years—something needs to be done. To Mr Ridge, I am concerned that this is not radical enough. If we are really going to deal with the expected increases in medicine costs, we have got to do something more about innovation and the way that the NHS embraces innovation, so that we do not rely on Mr Kennedy’s members to provide what the NHS needs, which is wholly necessary at the moment, but the NHS could take more ownership of that. I would like you to reflect on that.

Mr Kennedy, in terms of the distribution of sales between what goes into the NHS and what goes into exports, surely one of the big justifications for the Government moving this forward is the fact that the rigour of the challenge, and the regulatory challenge, in the NHS—before medicines and devices that apply to the NHS—validates a considerable volume of export sales. I understand your difficulty in quantifying where your fixed costs are distributed over your NHS sales and exports, but nonetheless there is a massive advantage to supplying the NHS in terms of validating markets outside. How do you respond to that?

Dr Ridge: I am glad you asked that question, because the contribution of a particular component of the Bill is guesstimated at £88 million.

[John Glen]

Quite modest.

Dr Ridge: Quite. There is a bit more to it than that. Some of the things are worth my referring to. You may be aware that NHS England and the National Institute for Health and Care Excellence are currently consulting on fast-track proposals around access to innovative medicines where the evidence is clear that they are particularly clinically and cost-effective and, in technical language, cost less than £10,000 per quality adjusted life year. Alongside that are budget impact and affordability proposals, in that if the medicine adds an extra £20 million or more in terms of impact on the NHS, then NHS England—which is strengthening its commercial capability, and rightly so, including bringing the commercial medicines unit into NHS England, as well as strengthening staff who have commercial capabilities—will enter into a commercial discussion about access to and payment for that particular medicine.

Clearly, we want access as widely as possible. The fast-track procedure will mean that, for example, NICE will produce final guidance much more quickly—I think that 10 to 11 weeks more quickly is the figure—and that funding for medicine will be made available from NHS England in 30 rather than 90 days. However, there is an affordability issue in all that, so there is a balance to be struck between supporting UK plc and the economy more broadly and guaranteeing access to new and innovative medicines in a way that is as affordable as possible, in the context that I described earlier and that everybody is familiar with.

There are other things that are less high-profile. For example, how do we make the best use of chemotherapy; can we manufacture it? Injectable chemotherapy has to be prepared in hospital pharmacies. Traditionally, it has been prepared in a way where it is a milligram per kilogram dose, so every dose is tailored for individual patients. There are ways to make dose bands of chemotherapy available. That way, we can rationalise manufacturing it at local level and making it more efficient.

On the primary care side, 25% of the current drugs bill is around specialised commissioning and 75% is primary care and medicines that CCGs commission that are used in hospitals. One thing we are in the process of establishing is something called regional medicines optimisation committees. Those regional committees will have two main tasks. One will be around standardisation and optimisation of medicines use and supporting CCGs to do that. They will also be looking at how evaluation of medicines can be lifted from the local level to at least the regional level, so that we can refocus staff who are currently doing evaluation tasks at a local level on to other things, such as optimisation and producing better outcomes. There has been a long-held issue about the duplication of effort at a local level, which can undoubtedly affect access to medicine. So there is a range of things in addition.

[The Chair]

Dr Ridge, I do not wish to go too far away from the scope of the Bill.

[John Glen]

That’s my fault.

[The Chair]

I was very tolerant, but I would be grateful if questions and answers focused on the Bill, rather than general problems of funding in the NHS. I think you had a second question, John.

[John Glen]

Yes. My question to Mr Kennedy was directly relevant to the Bill.

Philip Kennedy: To clarify, in your scenario, this will enable companies to export more effectively, because of the rigour that would be needed.

[John Glen]

Q One justification for the Bill and the Government intervening to deal with access costs in the NHS is the understanding that, as a consequence of supplying the NHS, there is a boost to the export potential of some of your members. I wanted you to clarify whether you perceive that to be the case.

Philip Kennedy: It is extremely important that there is a healthy domestic competitive market in the UK, to help SMEs export. I was in the States last week—the largest single export market for medical devices—with colleagues from the Department for International Trade, and the week of conversations and dialogue was around innovation: “What are you doing in the NHS that is effectively adopting innovation?” They were not asking us, “What is your rigour of data collection on current supplies of medical devices?” They want to know how a system that is spending 8% of GDP is getting better outcomes than a system that is extremely fragmented, spending something like 17% of GDP and getting worse outcomes: “What are you guys doing that’s better than what we’re doing? What is so innovative in your sector?” We took 15 companies that were showcasing technologies and products that have been adopted and are working in the NHS. It was not about the rigour of data at all. I do not think that was relevant to the conversation.

[The Chair]

Thank you. We really should get back to focusing on the Bill.

[John Glen]

My question did, with respect; I just did not get an answer to it.

[The Chair]

If you wish to add something very briefly, do, but I am conscious that other people want to come in and we are running out of time.

Philip Kennedy: I am happy to answer your question differently.

--- Later in debate ---

[John Glen]

Q It is quite simple. The Bill will allow us to intervene to reduce the cost to the NHS. The way in which that is justified by the Government is that an export potential is derived from the validation of supplying the NHS. Is that justified, in your opinion?

Philip Kennedy: The validation of supplying the NHS helps companies to export.

[John Glen]

Right. Thank you.

[The Chair]

Can we move on?