HC Deb 28 February 1984 vol 55 cc128-9
11. Mr. Meadowcroft

asked the Secretary of State for Social Services whether he will take steps further to encourage the provision of pharmaceutical services in residential areas.

Mr. Kenneth Clarke

In an urban area, any registered pharmacist is free to open a pharmacy and enter into an NHS dispensing contract wherever he chooses to do so. I have no evidence to suggest that present arrangements are resulting in an inadequate NHS pharmaceutical service.

Mr. Meadowcroft

Will the Minister seek to negotiate with the drug companies so that wholesale prices charged to pharmacists are not considerably higher than those charged to the combines, thus avoiding pharmacists being driven out of business and encouraging only the large combines to survive?

Mr. Kenneth Clarke

We cannot get involved in the arrangements between wholesalers and dispensing pharmacists. Our contract is based on the fact that we reimburse the pharmacist for the costs of the drug that he dispenses. We have had to take account recently of the fact that large discounts are available to many pharmacists from some wholesalers, to make sure that the taxpayer does not face paying more than he is obliged to pay under the contract.

Mrs. Jill Knight

Will my right hon. and learned Friend acknowledge that morale—as well as profitability—has a lot to do with the readiness of pharmacists to provide a service, and will he do all that he can—for example by reviewing contracts regularly — to ensure that events like the recent clawback do not recur?

Mr. Kenneth Clarke

The number of pharmacists is increasing again. After a steady decline through the 1970s, the number has been rising in the 1980s. I agree that we must avoid disputes with the profession. We referred the dispute on profit margins to the new arrangements which the Government set up to arbitrate in disputes. As to the other dispute, I think that much of it derives from the unnecessarily complicated and unsatisfactory form of the contract. I am glad to say that we are about to open negotiations with the pharmaceutical services negotiating committee to try to find a more satisfactory and simpler form of contract which both sides will understand, and about which they will therefore argue less.

Mr. Carter-Jones

Is the Minister not aware that the clawback adversely affected small and medium-sized chemists in residential areas?

Mr. Kenneth Clarke

The position is that we are repaying the money which we clawed back in the autumn because it turns out, unfortunately, that we had not proceeded in line with our statutory powers. We are now proposing to legislate to put matters beyond doubt and to restore the contract position which both the pharmacists' negotiators and ourselves thought was operative last summer. We shall then open fresh negotiations with the committee responsible in order to discuss the phasing and burden of clawback next year.

Mr. Nicholas Winterton

While expressing the hope that the new contract that will be negotiated by my right hon. and learned Friend with the pharmacists will be acceptable to all parties, including the patients who require pharmaceutical services, may I ask my right hon. and learned Friend whether he agrees that the arbitrary action taken by the Government penalised the smaller pharmacists, particularly those who were not in receipt of the excessive discounts from wholesalers, which the Government rightly sought to penalise, and that the arbitrary decision to institute a blanket clawback penalised some pharmacists, when they should not have been penalised?

Mr. Clarke

The decision was certainly not arbitrary, because the negotiations that took place last summer were based on an inquiry that had been carried out into the level of discount available to pharmacists during the previous two or three years. The implementation of the recovery of that overpayment was then the result of negotiations between Ministers and the pharmacists' negotiating committee. The problem arose because a large bill was presented to many small pharmacists and many of them did not understand the basis on which it had been arrived at. However, we are looking again at the whole matter. We hope to resolve the dispute and, as I have said, go on to produce a more satisfactory form of contract, which will mean that we never again run the risk of such disputes.

Mr. Couchman

Is my right hon. and learned Friend aware of the concern felt by pharmaceutical manufacturers about the phenomenon of parallel importation and the threat that it poses to our industry?

Mr. Clarke

Of course, our major concern must be for the safety of patients. It is clear that some imported drugs are not subject to the strict licensing controls and quality of home manufactured drugs. Therefore, we are consulting —as we are obliged to by law—on proposals which we hope will close the loophole and protect patients and the legitimate interests of manufacturers.