HC Deb 26 July 1983 vol 46 cc1026-7
2. Mr. Knox

asked the Secretary of State for Social Services what was the percentage change in the cost of drugs dispensed under the National Health Service in each of the past three years.

13. Mr. Sean Hughes

asked the Secretary of State for Social Services by how much he expects to reduce the National Health Service drugs bill following the statement by the Chancellor of the Exchequer on 7 July.

15. Mr. Lofthouse

asked the Secretary of State for Social Services whether he will immediately reduce the rate for Government non-competitive contracts in the pharmaceutical industry to 17 per cent. or less following the recommendation of the Public Accounts Committee in its tenth report of Session 1982–83.

The Secretary of State for Social Services (Mr. Norman Fowler)

The cost of NHS drugs dispensed in the three years to 1981–82 increased by approximately 15, 21 and 14 per cent. respectively. Pharmaceutical industry profits from the Health Service are being examined in the current review of the pharmaceutical price regulation scheme. Meanwhile, as one of the measures to contain public expenditure, I have secured the industry's agreement to a reduction of £25 million in the United Kingdom Health Service drugs bill in the current financial year.

Mr. Knox

Is my right hon. Friend satisfied that the cost of drugs is now tightly under control?

Mr. Fowler

We want to do more with the family practioner service to be completely satisfied about that matter. As I explained to my hon. Friend, the pharmaceutical price regulation scheme is now being examined. We are making progress with it, and we expect to have savings from it.

Mr. Hughes

Is not the £25 million which the Secretary of State mentioned less than the total amount of excess profis made by the drug companies since the right hon. Gentleman became Secretary of State?

Mr. Fowler

No, Sir. The £25 million that we are seeking from the drugs industry is a six-months total. It follows from that that the annual total will be £50 million. If other industries had been asked to make such a contribution no one here would be seriously suggesting that it was an unnecessarily small contribution.

Mrs. Currie

I welcome the Secretary of State's determination to obtain value for money from the pharmaceutical industry, but does he nevertheless recognise that the current arrangements for August and September will cause the main brunt to fall on dispensing chemists, that it will take them six to eight weeks to clear high-price stocks and that, meanwhile, they will be paid at the lower prices?

Mr. Fowler

No, it will not cause the main brunt of the economies to fall upon retail chemists, although it will have some impact on them. We shall be considering that with representatives of the pharmacists and I hope that one of my ministerial team will be meeting them in the next few days.

Mr. Willie W. Hamilton

Is the Minister aware that confidential information given to the Select Committee on Public Accounts about the profits of the drug firms showed a disgraceful state of affairs of, in some cases, more than 100 per cent. profit? Will he take much more robust action against that exploitation of the NHS?

Mr. Fowler

There is no question of exploitation of the NHS. It comes ill from a Labour Member to make such foolish generalisations about an industry which employs about 67,000 people in Britain and makes a contribution to the balance of payments of £600 million.

Mr. Pavitt

Will the right hon. Gentleman revise the voluntary price regulation scheme, as the Select Committee has shown it to be a complete shambles? Will he now implement the Greenfield report on generic prescribing? If not, when a company has been holding the Health Service to ransom on a patented drug, will he use his powers under the patent legislation to make a purchase for the Crown?

Mr. Fowler

The pharmaceutical price regulation scheme and the scheme that is now in operation between the Government and the industry were agreed by the Labour Government in 1978. The Government are reviewing that scheme and we shall be reviewing the return on capital, the Greenfield report and promotional expenses. It is this Government who have taken action.