HEALTH SERVICES AND PUBLIC HEALTH BILL (Hansard, 10 July 1968)

§ The Minister of Health (Mr. Kenneth Robinson)
I beg to move, instead of Clause 25, left out of the Bill, to insert after Clause 58, the following Clause:

§ Mr. Speaker
May I advise the House? I am not calling the new Clause in the names of the hon. Member for Farnham (Mr. Maurice Macmillan) and others of his hon. Friends, entitled "Application of Section 32(3) of the Patents Act, 1949", which they would have inserted in place of Clause 25 and instead of the Minister's new Clause. However, the Opposition Clause may be discussed in this debate.

§ Mr. Robinson
The new Clause reinstates in principle Clause 25 which 652 was inserted in Committee and deleted on Report in another place. The Clause added in Committee, although substantially redrafted, had broadly the same effect as the new Clause which this House added on Report here. The effect of both the Clauses moved in each House and the one which we are now discussing is, therefore, similar, namely, to extend to the general medical and pharmaceutical services the provisions relating to Crown use of patented drugs and medicines which, under Section 46 of the Patents Act, 1949, already exist in respect of the hospital services. There is, however, apart from extensions to cover Northern Ireland and the Isle of Man, one change of substance in the Clause which I have moved compared with the Clause deleted on Report in another place. I will refer to it in a moment or two.
May I first briefly repeat the reasons why I advised the House to accept in principle the Clause as originally moved in this House by my hon. Friend the Member for Walthamstow, East (Mr. W. O. J. Robinson)? First, there is a need for an effective and an expeditious procedure of last resort to deal with the exceptional case in which a pharmaceutical firm insists on unreasonable prices and in which price control is not effective. Secondly, I pointed out to the House that normal competitive conditions do not exist for drugs supplied for what are called Part IV services, because the general practitioner prescribes what he considers to be in the interest of the patient, the patient receives the benefit of the drug and Ministers are responsible through executive councils for paying the chemist for supplying the drug. The duty to ensure that the proper value is obtained for the expenditure of public funds thus rests mainly on the Minister, who must be able to ensure that the prices are not unreasonable. The Clause did not involve any fundamental change in the patent law, since it applied existing provisions, with a technical modification relating to vending to a service which in vital respects is similar to the hospital service, to which those provisions already apply and which is paid for out of the same Exchequer fund.
The Sainsbury Committee considered the matter, and they were in a uniquely strong position to judge the effect of such 653 a change on the industry. They concluded that, unlike the position in other patent issues which they discussed and recommended should be considered by the Banks Committee, this change should be implemented in advance of the review by that Committee.
Perhaps I may also repeat the assurance which I gave on Report and which was repeated on my behalf by Government spokesmen in another place—that there is no intention of using this provision in anyway other than that envisaged by the Sainsbury Committee, namely, as a procedure of last resort in the exceptional case in which, after fair and detailed negotiations, a patentee insists on prices which the Minister cannot possibly accept as reasonable. There is no question that the legitimate interests of the industry would be prejudiced, for all Governments will always have an interest in a strong pharmaceutical industry in this country.
In the course of debates in another place, some pretty extravagant speeches were made, mainly by noble Lords who were good enough to declare their financial interest as chairmen or directors of this or that pharmaceutical manufacturing company. Although the industry quite naturally dislikes any erosion of its patent rights and has always made that clear to me, I find it hard to believe that the industry in general shares the exaggerated fears which were expressed in another place. I believe that the industry sees this Clause, as I do, as one element in a set of proposals which I recently explained to the House and which will, beyond dispute, provide a moderate but comprehensive settlement of these outstanding issues, a settlement which is fair both to the industry and to the taxpayer.
The Amendment standing in the name of the hon. Member for Farnham (Mr. Maurice Macmillan) suggests, as an alternative, that use might be made of Section 32(3) of the Patents Act, which enables a Government Department to apply for revocation of a payment if a product is not made available on reasonable—