' (1) As from the commencement of this Act the Secretary of State shall set up a body to be known as the Pharmacists Review Body consisting of a chairman and four other members with experience of professional and commercial life and a knowledge of industrial relations with power to send for persons and papers and the initial period of service of such persons to be three years.
(2) The terms of reference of the Pharmacists Review Body shall be to consider annually the terms and conditions of service of those pharmacists providing pharmaceutical services under Part IV of the National Health Services Act 1977 and to make recommendations to the Secretary of State.'.—[Mr. Moyle.]
§ Brought up, and read the First time.5.30 pm
§ Mr. Deputy Speaker
Before we begin discussing the clause, I must remind the House that we are on the Report stage, not the Committee stage. That means only one speech per Member.
§ Mr. Moyle
We propose the clause in no spirit of political recrimination because we believe that we must look anew at the problems of the remuneration of pharmacists. I became aware of the basic insecurity of pharmacists when I was a Minister. I remember being particularly exposed to that feeling of insecurity during a debate on 29 June 1978. As a result of that debate, I personally felt that we ought to have a system of arbitration for the remuneration of pharmacists. Consequently, over a period—and the Government machine on that occasion moved far too slowly—we came up with the Franks committee, which examined 69 the problem. It eventually produced a number of recommendations, one of which was that there should be a permanent body for the review of pharmacists' remuneration. It also made a number of individual representations on the subject.
Unfortunately, when the Conservatives came to power, they were unable to accept the Franks committee recommendations in their entirety. I concluded at that time that ad hoc arbitration was not the way to deal with this matter. Basically, the contract under which independent contracting pharmacists under part II of the appropriate Act operate is so complex that no group of professional people faced with a one-off ad hoc arbitration could possibly do the job competently. It is much too difficult. There must be a permanent body.
I understand that the Government asked the Review Body on Doctors' and Dentists' Remuneration to look at the problem, but it replied that, much as it would like to help, it was overloaded. I can understand that. Anyone who became a member of the body we propose for reviewing pharmacists' pay would have to accept references on a complex series of matters which would have to be studied and which would be a considerable burden even for those who handled them on a regular basis.
I think therefore that we should set up a pharmacists' body along the lines spelt out in new clause 11. I am not saying that the Opposition stand by every dot and comma of the proposal. If the Government come up with other suggestions which are a slight modification of our proposals, we will be prepared to look at them with an open mind. However, we think broadly that there should be some machinery for independent review, either at first hand or as a reference, from initial negotiations, from the Government It should be composed of people with the relevant commercial, industrial relations and professional experience.
Perhaps initial service on the body should be for three years to give the Government a chance to review the idea in the light of experience. The body should consider the terms and conditions of service of pharmacists, make recommendations to the Secretary of State, and be empowered to take evidence from where-ever it wishes.
70 The clause is aimed at the implementation of early-day motion No. 548 which has been on the Order Paper for some time and which has been signed by a substantial number of hon. Members from both sides of the House.
§ Dr. Vaughan
It might be helpful if I spoke now.
I am glad to be able to tell the House that in asking for an independent review body for pharmacists the Opposition are knocking at an open door. I have been negotiating with the Pharmaceutical Services Negotiating Committee a package based on the Franks panel recommendations. I met the committee's representatives again this morning and we agreed the terms of reference of an independent review panel. Our agreement is still to be ratified by the full committee when it meets on Wednesday. However, I understand that the negotiating team will be recommending acceptance.
I hope that this development will mark the end of a dispute which all agree has gone on for far too long, and that we shall now be able to go forward together in a spirit of constructive co-operation.
We have agreed that the panel will be able to advise on any aspect of retail pharmacists' gross remuneration, and that it should be available to help resolve any disputes at the invitation of either party. I trust that now that we appear to have secured the substance of what the right hon. Gentleman is seeking he will be prepared to withdraw the motion.
§ Mr. Lewis Carter-Jones (Eccles)
I welcome the observations of the Minister. He will be aware that the number of registered pharmacists in this country has fallen substantially. There are two possible advantages to the Health Service from what he has told us. First, the pharmacy service may improve. Second, it is possible that the NHS will save a considerable amount of money.
At present pharmacists have on their shelves substantial quantities of duplicated drugs. A wide variety of those drugs are identical in type. The only difference is in the price. The fact that chemists have to keep these stocks presents them with a severe cash flow problem. Part of the representation they have been making has concerned the substantial sums required to maintain their stocks of drugs. 71 For example, one anti-depressant called Tofranil costs £3.25 per 100 tablets. An identical product under the generic title costs 34p. However, such is the situation facing chemists that they have to carry stocks of the two drugs. Substantial sums of money are tied up in the stockroom and, understandably, when pharmacists negotiate with the NHS they expect substantially higher remuneration because of the level of stocks that they have to maintain.
The numbers of chemists particularly in rural areas, but also in the towns have declined because of the low level of remuneration aggravated by the high level of stocks that they have to maintain. The latest number of pharmacists is 31,718.
The problem is highlighted by the medicines review committee which is considering the 35,000 drugs which were available on the National Health Service nine years ago, and which number has now been reduced to 20,000 to be reduced even further in the next 10 years. But many chemists believe that their task would be made a lot easier if the DHSS accepted the recommendation of the Merrison report on the National Health Service and the recommendations of the Medicines Commission in its 1978 annual report.
Acceptance of generic prescribing would lead to substantial savings for the National Health Service. I have with me a list of drugs. I am astounded at the difference between generic prescribing and proprietary brands. The general practitioner practises his art more skillfully when he goes in for generic prescribing because he prescribes the medicine, not the proprietary brand. For example, for the hypertension range of drugs the price of proprietary brand drugs is double that of generic drugs. For rheumatic diseases, generic prescribing is a third of the price of the best selling proprietary brand. An anti-depressant generic drug is one-tenth the price of a proprietary brand.
The reason that I am advancing this argument in favour of the review body that the Minister is considering setting up is that, according to the terms of the new clause, the people on the review body must indicate that they have commercial skills and judgment. Anyone with commercial skill and judgment will 72 realise that if a product is being charged 10 times its normal price, to say the least, someone is being a bit crooked. That is the kindest word that I can use. At the same time, a reduction in the number of drugs prescribed and the extended use of generic prescribing will lead to considerable saving in the demand on the Health Service.
§ Mr. W. R. Rees-Davies (Thanet, West)
I congratulate my hon. Friend the Minister on the announcement that he has made about setting up a review body. I believe that it will be valuable in a narrow way in dealing with some of the problems that arise for pharmacists.
How wide will be the scope of the review body? Will it be able to review not only remuneration but the duplication of drugs and the points made by the hon. Member for Eccles (Mr. Carter-Jones)? Alternatively, will it be limited to the terms and services of pharmacists? I imagine that it will go wider. If so, what will be its nature and scope? Great savings can still be made in this area by advising on the types and classes of drugs which can best be prescribed without annulling the individual power of the doctor to prescribe.
§ Mr. Andrew F. Bennett (Stockport, North)
I welcome the setting up of the review body. The Minister seemed to imply that, having agreed to set up the review body, everything would be sweetness and light and that he could sit down at that point. It seems to me that setting up the review body can at best be only a mechanism to get improvements. The key point is how much money the Government are prepared to put up. The follow-up to that is how much money the community is prepared to spend on a good pharmacist service. All that the review body can do is to try to share out the available money. The crucial point is how much money will be available.
From my experience in my constituency I have the feeling that there is some unease. Chemists who work in small shopping areas feel that their livelihood has been threatened in recent years not necessarily by the treatment that they have had from the Government but by the general climate of shopping patterns which has developed. They are more than a little concerned about the future of their service.
73 Many of my constituents feel that they do not have a chemist's shop near enough. The old traditional areas still have chemists' shops within reasonable walking distance for the elderly or those in poor health or within the distance that they can happily ask a neighbour to go for prescriptions for them. On one of the new council estates in my constituency people have to walk three-quarters of a mile to a chemist's shop. People who are sick have the problem of getting someone else to go for them and they feel that that is a serious imposition.
One of the newest blocks of deck access flats in the neighbourhood has lost its chemist's shop. The pharmacist did not feel that it was sufficiently remunerative to continue in business in direct competition with town centre shops which are just sufficiently far away that the elderly and the sick feel that the extra journey to get prescriptions is unreasonable.
I wonder to what extent the new review body will be able to solve the problems. Pharmacists have told me that in practice their pharmacies are in part subsidised by sales of other medicines or other goods and that they cannot survive on the pharmacy side alone. They now find the other side of their business threatened by the supermarkets. Some of them feel aggrieved that people use their shops merely for prescriptions and choose to go to other shops where sometimes prices are a little cheaper—probably because of bulk purchasing—for other goods that traditionally they bought from the chemist's shop.
The chemists therefore feel concerned, as do many other small shops, at the way in which they are threatened. People with cars or those who find getting about easy find it attractive to go to the supermarket or the super store where prices are cheaper. But for those who do not have cars—the elderly and those on limited means—the corner shop and the local chemist are still extremely important. I hope that in any review the social and community aspects of the chemists' work will be fully taken into account and recognised.
There is another danger that we have to face. Many chemists feel that by opening 74 fairly long hours, and often putting on a service in the evening, they are tied to their shops. There is evidence that newly trained pharmacists prefer to work for large multiples in town centres where they have a shift system or regular hours than for a small shop with longer hours. I hope that the review body will ensure that the small chemist's shop is retained as a feature of smaller shopping centres and as an effective help to the elderly and the sick who need to get their prescriptions with the minimum cost.
Finally, I wish that we could get more pharmacists established in conjunction with health centres. Many health centres fail to attract pharmacists. It seems unfortunate that people should have to go one way to get prescriptions and in a different direction to get them made up. I hope that the review body will seek progress. However, I warn the Government that the key point is how much they and the community are prepared to make available for the provision of a prescription dispensing service.
§ Mr. Ennals
I am delighted that the Minister has accepted the basis of the new clause. Many of us know that pharmacists who have been in negotiation with the Department felt that they were going to be part of a package much of which they found distasteful. After all, it is eight months since the Franks report recommended that there should be a review body. It has taken the Department a long time to reach its conclusion. While congratulating the Minister and his colleagues on their decision, I must also congratulate my right hon. Friend the Member for Lewisham, East (Mr. Moyle) and my hon. Friends on having pressed for the review body and on having ensured that it has been established.
I think that we all recognise the important role of the pharmacist in our society. My hon. Friend the Member for Stockport, North (Mr. Bennett) has referred to it. The pharmacist's role may become even more important when the cost of prescriptions is increased to £1. The pharmacist will be asked increasingly which is the most important of the three or four prescriptions that the individual is presenting. Members of the public will seek increasingly the advice of the pharmacist. I deplore the fact that they will have to do so, but that is an example of 75 the important role that the pharmacist undertakes.
I agree with my hon. Friend the Member for Stockport, North that there is great concern about the reduction in the number of pharmacists, especially in rural area. The problem came before me when I was Secretary of State. The Department negotiated a new system of payments so that those in small pharmacies were able to obtain a higher rate to enable them to keep in business. That system operated inevitably at the expense of larger pharmacists who were making profits that were unnecessary. That system decreased greatly the rate of reduction of the number of pharmacists.
I agree with my hon. Friend the Member for Eccles (Mr. Carter-Jones) that the Department should be considering carefully what savings can be made when prescribing. It is not appropriate to consider the Royal Commission's proposals at this stage, but the Department should be considering them carefully. A limited list drawn up by the professions could well lead to savings of £30 million, £40 million or even £50 million. It will not be easy to negotiate with the professions, but I have no doubt that the pharmacists will be willing to take part in such negotiations.
I am delighted that the decision has been taken. It will be warmly welcomed by the pharmaceutical services' negotiating committee, with which I had dealings over many years. I congratulate my right hon. Friend the Member for Lewisham, East on having pressed the Minister and I congratulate the Minister on having responded to the pressure imposed upon him.
§ Mr. Pavitt
I join my right hon. Friend the Member for Norwich, North (Mr. Ennals) welcoming the way in which the Minister has acceded to our request. I congratulate the Minister on making the announcement with much less waffle around the edges than on previous occasions.
As the hon. and learned Member for Thanet, West (Mr. Rees-Davies) and some of my hon. Friends have said, the immediate question that arises is the length to which the review body will be able to go. Its establishment is a long overdue measure because the way in which phar- 76 macists' remuneration has been set has been about the greatest dog's dinner of any negotiating machinery. The highly differentiating ingredients that form the machinery are more in number than the greatest polytablet that the pharmaceutical industry can produce. The fact that the review body will be able to consider the problem of remuneration is a giant step forward.
The Minister has made it clear that this decision will have an effect on retail dispensing chemists. Will hospital dispensing doctors and the way in which they work come within the purview of the review body? The Minister will know that when there is a shortage of hospital dispensers the dispensing has to be done by outside dispensers. The review body will be considering one sector whole the other sector may be part and parcel of its considerations.
One of the issues that has been holding up negotiations is the objection that pharmacists have had to dispensing doctors in rural areas. It is a longstanding problem. The review body may have within its remit the ability to do something to overcome the rather acrominious speeches of the past 10 years on pharmacists' objections to the role of rural dispensing doctors.
I pay tribute to my right hon. Friend the Member for Norwich, North and his predecessors on account of the increase in the number of health centres over the past 15 to 20 years. The problem of the way in which medicines are dispensed is one that has caused pharmacists to have real doubts. I believe that the pharmacist should be a member of the general medical services team. The pharmacist dispenses medicine, but he has to give advice. The closer the relationship between pharmacists and doctors, the more likely it is that we shall be able to provide the service that patients require.
Problems will arise when prescription charges are increased to £1. The tax collecting problems of the pharmacist will be much greater and his advice will be sought increasingly. Increased prescription charges will hit most hard middle-aged ladies at the time of the change of life. I am surprised that there has not been far more of an outcry from ladies. It is a tax on illness that will hit ladies more than men. Ladies who visit 77 the pharmacist will be seeking advice. They will be given one, two or three prescriptions at a time. It will be necessary for the pharmacist to have his remuneration adjusted to take account of the service that he is giving.
The Minister will recall that one of the most iniquitous acts against the consumer took place at the beginning of the Conservative Government's administration 10 years ago. In 1970–71 bodies such as the Consumer Council were axed. That Government axed one of the most important bodies on medicines and pharmacy—namely, the McGregor committee, which had the responsibilty of considering the efficacy of drugs. It dealt with the problem that has been mentioned by my hon. Friend the Member for Eccles (Mr. Carter-Jones), that of deciding which of 10 different but similar drugs should be used for a particular purpose. When the McGregor committee was axed there was no way of embodying it in the Medicines Commission. There was no way of bringing it within the Medicines Act 1968.
When my hon. Friend the Member for Eccles was talking about what are known as "Me too" drugs I was reminded of a reply made by the Minister in response to one of my questions on Beta Blockers. The reply spread over five foolscap pages. It set out drugs that did the same thing. The prices of the drugs varied tremendously. There were enormous discrepancies between the lowest priced and the highest priced. It may be possible for the review body to make inroads into the tremendous waste that takes place.
I know that Ministers of all parties have always tried to implement the national formulary and to get prescriptions made up rather than to use brand names. The responsibility is a heavy one and I do not think that the review body will be able to go too far. It will be interesting to know whether it will be allowed to go into the question at all. The case for the extension of the provision of drugs through the pharmacist is heightened by the fact that for every nine general practitioners there is one commercial traveller calling upon them on behalf of the drug companies, in an endeavour to sell more drugs. That is part of the prob- 78 lem of remuneration. If a large amount is being spent on the ingredients of drugs, the amount of money available for the pharmacist is reduced.
I pay tribute to the Pharmaceutical Society of Great Britain. Since the National Health Service came into existence the society has done a tremendous job for the pharmacist and on the way in which medicine should be provided. It acts more or less as a university. I am sure that it will be delighted, as the whole House is delighted, by the fact that the Minister has reacted to the pressure put upon him and has been prepared to accept the principle set out in the new clause.
§ 6 pm
§ Mrs. Sheila Faith (Belper)
I agree with the hon. Member for Brent, South (Mr. Pavitt) that the House is delighted with the Minister's decision. Many hon. Members have been pressing for the setting up of just such a review body and have signed an early-day motion to that effect. Up to now pharmacists were members of the only profession receiving a large proportion of their income from the National Health Service who did not have such a review body. I am very glad that this state of affairs will no longer continue.
§ Mr. Moyle
Having listened to the Minister of State, I am very much minded to seek to withdraw the new clause. However, in order that my hon. Friends can be fully informed, before I do so I shall put a few questions to the Minister.
Will the pharmacy review panel consist of an accountant, a lawyer, an economist, an industrial relations expert and someone with experience in retailing? Will the Department and the pharmacists continue to negotiate their pay problems in the first instance, and will the matter go to the prarmacy review panel only if there is a dispute? Will that panel be primarily concerned with settling the net profit margin? Will the Franks profit formula apply from 1 July 1980, and will pharmaceutical contractors be paid £2,000 a year for the advice that they will give on drugs to members of the public? If this is so, we welcome the principle as a move in the right direction.
79 Am I right in believing that there will be a discount inquiry in the autumn, conducted between the pharmaceutical negotiating committee and the DHSS? Until then, will the discount be maintained at the rate of 1.54 per cent.? Also, is it true that there will be a panel to deal with technical and statistical disputes ; and will this panel comprise an independent chairman and others, that independent chairman being a member of the pharmacy review panel?
Finally, is it correct that all the disputes that have been raging in the pharmaceutical area up to now will be wiped out and that both sides will start from 1 July 1980? I am sure that my hon. Friends will be interested to hear the Minister say "snap" and confirm that this is the situation.
§ Dr. Vaughan
I do not know how often I shall find myself in the happy position of being able to answer questions of the kind that have just been put to me. I have not yet discussed in detail with the PSNC the composition of the panel, but we have agreed in principle that it will follow very closely the lines that have been suggested in the new clause—a chairman plus four members with experience of the kind that the right hon. Member for Lewisham, East (Mr. Moyle) suggested. It will include a lawyer, an accountant, someone with knowledge of industrial relations, someone with knowledge of professional activities and someone with knowledge of commerce. The panel will be free to answer any matters concerning remuneration which arise within the existing contract. It will not be free to go into matters of medical products and issues of that kind. I confirm that the date set is 1 July, and that £2,000 a year will be paid as a basic practice allowance which has been agreed in principle.
There will be a discount inquiry this autumn. Meanwhile, the rate will be kept at 1.54 per cent. There will be a technical disputes panel, and the chairman of that will be a member of the overall pharmacists' panel. There will be continuing discussions between the Department and the pharmacists—that will be the basic forum in which disputes will be looked at. Only if they cannot agree will the matter go to the new panel.
80 On the right hon. Member's final point, this clears all outstanding disputes. It wipes the slate absolutely clean. It is with some pride and satisfaction that, after five years of disquiet in this area, I can tell the House that we have reached such an agreement.
§ Mr. Ennals
I just wish to make quite certain that one of the proposals that the Department had made has also been withdrawn—the clawback of the £2.3 million included in the 1978 remuneration, as part of the £5 million which the Department has injected into the new system of payment, and to which I referred in my speech? Will the Minister confirm that the attempt to claw that back has been withdrawn?
§ Dr. Vaughan
I do not think that I can go any further today than the statement that I have already made. There are a number of matters that we are still considering. We must await the outcome of the meeting tomorrow.
§ Mr. Carter-Jones
I have played too much rugby to be taken in by the dummy now and then. The question of finance and drugs was raised. One of the problems faced by the chemists and pharmacists is that they must stock and pay for extra drugs on their shelves because there is no generic prescribing. Therefore, this review body must look at the question of the additional cost of stocking the shelves of a dispensary with drugs which would not be needed if we had generic prescribing.
§ Dr. Vaughan
I really do not think that I can go any further. However, I can tell the right hon. Member for Norwich, North (Mr. Ennals) that the answer to his question which he put a few moments ago is "Yes".
§ Motion and clause, by leave, withdrawn.