§ Mr. James Couchman (Gillingham)
I declare an interest in the pharmaceutical industry, and it is contained in the Register of Members' Interests. The hon. Member for Makerfield (Mr. McCartney), who is on the Opposition Front Bench, would remind me if I did not make such a declaration. I am an adviser to the Kent company and major pharmaceutical manufacturer Pfizer Ltd., and I have been a friend of the industry since coming to the House.
I have no regrets about inviting the Minister to join me at this early hour in the morning to debate this important topic. However, I greatly regret that it should be left to me to bring this topic to the House on the last morning before the House rises for the summer recess, so that we may discuss a proposal made as long ago as 12 November last year, the day of the autumn statement, by my right hon. Friend the Secretary of State for Health.
Since that time, apart from an Adjournment debate initiated by my hon. Friend the Member for Basingstoke (Mr. Hunter), the Government have contrived to keep the issue out of the House. I regret that the debate is not taking place in prime time when the House is packed with hon. Members who are outraged by the Government's proposals.
In her statement on 12 November last year, my right hon. Friend made much of the fact that the drugs bill was at its highest ever in 1991–92, that in England it was £2.317 billion, and the increase in 1991–92 was 11.5 per cent. She also made much of the fact that that growth could not be sustained, and she said that she would take measures to restrain the increase in the drugs bill. Those measures would include renegotiation of the voluntary pharmaceutical price regulation scheme by which the Government and the industry have decided price for many years, and she said that the negotiations would be with the aim of restraining companies' profits from sales to the national health service.
My right hon. Friend also said that the selected list scheme was to be extended. Under that scheme, particular drugs in specified therapeutic categories may not be prescribed under the NHS where effective alternatives are available at lower cost. In making regulations, Ministers act on the advice of the Advisory Committee on NHS Drugs and rely for their legal base on schedules 10 and 11 of the General Medical Services Regulations 1992, which list banned drugs.
Implementation is based on the advice of the advisory committee, the chairman of which is hardly independent as he is none other than the deputy chief medical officer in the Department of Health. The terms of reference have been amended for the new round of restrictions, and membership has been extended to take account of the new categories. It would not be of great advantage to list the terms of reference in detail, but they are quoted asto advise the UK Health Ministers about the composition of schedules 10 and 11 to the NHS (General Medical Services) Regulations 1992, and the corresponding schedules in the Regulations in Scotland and Northern Ireland (except those items which are in Schedule 10 because the Advisory Committee on Borderline Substances has advised that they are not considered drugs in the circumstances of general practice) in order that drugs to meet all real clinical needs at the lowest possible cost to the NHS are available in the 949 following categories: mild to moderate pain-killers, indigestion remedies, laxatives, cough and cold remedies, vitamins, tonics and benzodiazepine sedatives and tranquillisers.That list of seven categories arose from the original institution of the limited-list process in 1985, at the behest of the then Secretary of State for Social Services, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), ably assisted by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), then Minister for Health.
I well remember the row provoked by the original proposal to limit the number of drugs that might be prescribed in those categories on the NHS. A doomsday scenario of sorts was set up by the British Medical Association, the royal colleges, the pharmaceutical industry, various patient groups and so forth. We were visited by the godfathers of the American pharmaceutical industry, who came over to intimidate us into accepting that this was a very bad idea; however, the intimidation backfired. It was just the sort of thing that my right hon. and learned Friend the Member for Rushcliffe enjoys in his usual adversarial manner.
What really stiffened the resistance of those of us who were inclined to take the industry's part at that time was a disgraceful campaign by the United Kingdom subsidiary of Hoffmann La Roche, which was busy trying to defend its high-priced tranquillisers.
The year 1985 was about tranquillisers, and about remedies—frequently quack remedies—for minor ailments with self-limiting symptoms: coughs and colds, and mild and moderate pain. Eventually, the original list that the Government put up—involving some 30 drugs in those seven categories—was increased, as a result of the hastily contrived advisory committee, to 129 products. I believe that some 150 products are now included in the seven categories. The position relating to minor ailments has persisted to this day.
We were originally told that there would be savings of £100 million; that was later revised downwards to £75 million. Somewhat evasive answers were given to questions within a year of the institution of the limited list, and since then it has been impossible to find out whether any savings have been made. However, one thing definitely has happened as a result of the seven categories: in those categories, no new chemical entity—no new significant product—has been produced since 1985. I shall say more about that later, because it is very important.
My right hon. Friend the Secretary of State intends to develop 10 new categories of ailment for which there will be limitation. I think we should list them for the record, because this is effectively the first debate that we have had on the issue. My right hon. Friend proposed that the 10 new categories should be anti-diarrhoeal treatments, appetite suppressants, treatments for allergic disorders, hypnotics and anxioytics, treatments for vaginal and vulval conditions, contraceptives, treatments for anaemia, topical anti-rheumatics, treatments for ear and nose conditions and skin treatments. Perhaps three of those areas are more significant than the others. I think that the areas that are particularly worrying are skin treatments, contraceptives and treatments for vaginal and vulval conditions, which include quite serious illness.
There has been an outcry from patients' organisations, individual patients, doctors and, predictably, the industry.
950 I should like to remind my hon. Friend the Minister just how important the pharmaceutical industry is. It is one of our most successful industries. It has £7 billion-worth of sales a year. Almost 50 per cent. of that produce is exported. A trade surplus of £1.3 billion is produced by the industry.
The industry is also good at reinvesting its profits into research and development. It searches for new and better products. About 18 per cent. of its United Kingdom turnover—£1.4 billion—is invested in research. That compares favourably with other areas of manufacturing industry, which spends an estimated 2 to 4 per cent. of its turnover on research. The pharamaceutical industry employs 100,000 people in high-grade jobs. It does much to improve the esteem of British science throughout the world. We have some extremely good research workers in the industry, and we should cherish it for them.
Medicines produce an economic remedy for many ailments. The House will not be surprised to hear that the industry contrasts pharmaceutical remedies with invasive techniques such as surgery and other advanced technological treatment of patients. Five of the world's 20 most prescribed medicines were discovered in the United Kingdom. That includes the No. 1 product in the world. That gives an impression—I am sure that my hon. Friend the Minister does not need reminding of it—of just how important the pharmaceutical industry is.
I now wish to deal with the effect that the proposal of my right hon. Friend the Secretary of State will have on patients. It is worth saying that the reason why the drugs bill continues to increase is not simply because pharmaceutical companies put their prices up. Rather, it is because many more people are living to a much greater age. It is without doubt that the elderly, particularly those between 75 and 85, are substantial consumers of pharmaceutical products. The Government have encouraged doctors to hold screening clinics, which have identified many hundreds of additional patients who require medicines—for example, for high blood pressure, late onset diabetes and asthma.
The other fact that has increased the prescribing costs of general practitioners is the increasing tendency for hospitals to prescribe the minimum quantity of products to patients who are being discharged from hospital. The Government themselves have suggested that pharmaceutical treatment can be cost-effective. I pray in aid Lady Hooper when she was junior Minister for Health in 1989. She said:High-cost medicines can be very cost-effective in raising the quality of patients' lives and are under no threat from this Government.In 1989, when the National Health Service and Community Care Bill was going through the House, my right hon. Friend who was then the Minister for Health and is now Secretary of State for Health said:Our interest lies in cost-effective prescribing, not cheap prescribing. We are quite prepared to pay the price for innovative new medicines which will significantly improve the quality of patients' lives.The much-quoted former Secretary of State for Health, my right hon. and learned Friend the Member for Rushcliffe, said:we have repeatedly made it clear that every patient will be entitled to the drugs which, in the general practitioner's opinion, the patient requires."—[Official Report, 23 January 1990; Vol. 165, c. 732.]In the working paper "Promoting Better Health", the Government outlined their commitment to increasing the 951 emphasis on preventive care, recognised that that might result in increased expenditure on drugs in general practice, and said that they are committed to meeting such an increase—should it occur.
During the progress of the Bill which became the National Health Service and Community Care Act 1990, there was much debate about the effectiveness of high-cost drugs as opposed to low-cost drugs. The Oxford region was particularly prone to high-cost prescribing, but in terms of the overall cost of health care, it was seen as very beneficial.
Of particular concern is the fact that 85 per cent. of prescriptions are dispensed free of charge to those on low incomes, the elderly, the chronically sick, pregnant women and children. They will, in the main, be directly affected by the Government's proposals. Doctors are already told by their family health services authorities how much they may spend through their indicative prescribing scheme—a scheme which costs the taxpayer a good deal of money to administer.
One aspect of the debate on pharmaceutical products is that we pay little regard to the fact that pharmaceutical products can be an effective and cost-effective form of treatment for many patients.
Later, I shall return to the recent report on sufferers from heart disease. It is extremely worrying that many people suffering from undiagnosed heart conditions are taking no medication—and even those who are now face limitations on their drugs.
Substantial concern has also been expressed by the Family Planning Association, which points out that, of the 35 brands of contraceptive pills, 22 have different formulations. It is a matter of general knowledge that the best pill for one woman may be the worst for another. There is general concern in family planning circles that, because the newest formulations—which might be the best for younger women—may be more expensive, some women will be forced to accept a less satisfactory treatment or method of contraception. That seems to fly in the face of the Government's "Health of the Nation" strategy, which the FPA strongly supports in giving priority to reducing the number of unplanned pregnancies.
The director of the National Eczema Society, Tina Funnell, highlights the concerns of patients with skin diseases, some of which can be extremely debilitating and very unpleasant. She states:Extending the selected list will increase demand for expensive hospital treatment. One in five of the population suffers from skin disease at some time, and responses to treatment are enormously variable. Our concern is that to reduce patient choice to two or three products in each therapeutic area will mean poor compliance with treatment. Exacerbations can quickly become acute, and these will require far more expensive in-patient care.That is a worrying comment from a society dedicated to those who suffer from eczema. Similar concerns have been expressed by the Psoriasis Association, the Acne Support Group, the National Kidney Foundation, Help the Aged, Age Concern, the National Association of Women's Organisations and the Osteoporosis Society.
All these important consumer groups have expressed their worries about my right hon. Friend's proposals for two basic reasons. First, they say that it will lead to a limitation of existing medicines currently supplied by doctors. Secondly, and more importantly. they say that it 952 will lead to a blight on further advances and improvements in treatments that are desperately needed in all the therapeutic areas, but particularly for skin complaints.
Patient groups realise and recognise—better, it seems, than my right hon. and hon. Friends the Ministers and their civil servants—that companies simply will not risk investing up to £200 million and 12 years of time in developing a new treatment that wins the approval of the Committee on Safety of Medicines, only to have the product blacklisted by the Advisory Committee on NHS Drugs, which is now known, I believe, within the industry as the price control committee for NHS drugs.
Innovative companies based in this country will go on developing new treatments, but many of them will not necessarily seek to make them available in this country. New British-made medicines will continue to treat millions of patients throughout the rest of the world, but NHS patients may be denied access to those advances simply because they will not be licensed or marketed here.
There will be an important knock-on effect on clinical trials, which currently are carried out by our good scientists in this country. Traditionally, companies carry out clinical trials in the countries where they aim to seek licensing approval. If companies cease to seek licences for new products in this country, it is bound to lead to a curtailment of clinical trials carried out by clinicians in our major teaching and university hospitals. That brings me back to the 1.4 billion worth of research moneys that are put in each year by the companies for research into new products.
The medical profession has expressed profound disquiet about the proposal to extend the selected list. Surveys show that 70 per cent. of general practitioners want these proposals to be withdrawn. They follow Dr. Alistair Donald, president of the Royal College of General Practitioners, who recently told a meeting of my colleagues in this House that he and the college are opposed in principle to the limited list concept and a resolution condemning the proposals was carried at a recent meeting of British Medical Association local medical committee representatives.
Doctors are worried about it; patients are worried about it; and the doctors find other senior representatives to express these concerns for them. For example, Mr David Bromham, consultant gynaecologist at St. James's University hospital, Leeds, and chairman of the National Association of Family Planning Doctors, has expressed his concern quite vividly, as have dermatologists at the Hammersmith hospital and gynaecologists at the John Radcliffe maternity hospital, Oxford.
According to the industry, it would appear that the Government want to renegotiate the pharmaceutical price regulation scheme as though the limited list did not exist, and that they want to extend the limited list as though the PPRS did not exist. That seems to fly in the face of reality. Companies believe that if the Government expect them to come to terms with reality, the Government should be expected to do the same.
Health Ministers have repeatedly justified extending the limited list by pointing to the 12 to 14 per cent. annual increase in the drugs bill over the past two years. That increase, they say, is unacceptable. But why is it unacceptable? As I said earlier, the growth is due in the main to the ageing population and to the Government's 953 encouragement of doctors to identify new patients who require treatment for high blood pressure, the late onset of diabetes and asthma.
The Government's "The Health of the Nation" survey, published just two weeks ago, shows that almost 75 per cent. of over 7 million United Kingdom adults who are suffering from raised blood pressure, at levels that expose them to the risk of premature death from a heart attack or a stroke, are not receiving any medication. For those patients, and their families, it could be argued that the growth in the drugs bill is unacceptably low, not unacceptably high. By spending money now on medicines to prevent or delay heart attacks and strokes, the Government will save millions of pounds in the longer term in hospital and disability costs associated with those two conditions.
No doubt when my hon. Friend the Minister replies he will claim that the price control committee—or the Advisory Committee on NHS Drugs if he prefers it—will always look favourably on advances in treatment that may emerge in future. Sadly, the industry has lost all faith in Government assurances because only last July my hon. Friend the Minister for Health assured three large companies that the Government had no plans to extend the limited list. That assurance proved worthless within a very few weeks.
In the 10 new therapeutic categories to be covered by the limited list, there are currently 200 projects in research and development, no fewer than 56 of which are for skin complaints like psoriasis and eczema and 14 of which are aimed at bringing about improvements in contraception. There is a real prospect that some of those projects will be abandoned. Perhaps more significantly, if they do reach fruition, they may not necessarily be submitted for licensing in this country. As I have said, patients in other parts of the world will benefit from advances and advantages from which NHS patients will not. That is entirely unacceptable.
At a recent public meeting in London, a senior Department of Health official, Mr. Melvyn Jeremiah, said that it is the Government's intention to ensure that new products do not elbow out tried and trusted products. I do not believe that that remedy is acceptable to this House or to patients. We might sum that up as, "Long live leeches." It will not give any reassurance to the innovative companies that the Government will, in future, look favourably on newer, more expensive products.
The implementation of the limited list this time is vastly different from what happened in 1985. The Advisory Committee on Drugs—the price control committee—comprising expert consultants, doctors and pharmacists, is using most peculiar tactics. It is telling companies that they must agree to bring their prices down to a reference which the committee will determine arbitrarily, or it will recommend to Ministers that their products should be blacklisted.
That seems to be stretching United Kingdom and EC law to the very limits. I suspect that it may be challenged at some stage. It is no better and no worse than blackmail. Companies may not be screaming "blackmail" in public, but they are certainly communicating that message back to their parent companies in various parts of the world and that is having a disastrous effect on investment decisions.
954 I will not weary the House with too many quotations. However, Mr. Michael Bailey, a director of Glaxo, our largest national pharmaceutical manufacturer, said thatcurbs could mean companies scrapping research rather than invent new products which never make it on to the limited list.What is the point of me spending millions of pounds researching a product that the Government will just blow away?"'Mr. Bailey asked that question at the annual meeting of the Welsh executive of the Royal Pharmaceutical Society. That is an authoritative voice from within the industry to which we should pay some heed.
There is also some doubt about how precisely the committee is determining its reference prices. Reference prices are viewed with grave suspicion throughout Europe because they can be quite arbitrary. For instance, I am told that for some topical skin products the committee is fixing a reference price for a 100 g tube of ointment, irrespective of the potency of that ointment. Potency can vary by a factor of 1:3. That means that a tube of 100 g of one product is really equivalent to a 33 g tube of another product. That is extremely worrying. The matter is summed up by Mr. Paul Mason, another official at the Department, who, at a recent meeting, was heard to say that the committeedoes give some indication where it can or'what might be a reasonable price reduction, basing its calculation on "comparative average prices". When asked to define more clearly the criteria it used to determine acceptable prices for reimbursement, he conceded that the committee found the pricing issue "very difficult to handle", noting thatit is not an exact science by any means".That gives Mr. Behrendt, director of the United Kingdom pharmaceutical subsidiary of Bayer, according to a recent article, every good reason to say, as he did recently, thatThe Government has, in effect, introduced a system of reference pricing [paying for a drug at the price of the cheapest product in its areal"—that is his definition—through the back-door. This is very unfair. If innovative products can no longer create a premium, there is little point launching new products on the market.My hon. Friend the Minister and his colleagues at the Department would do well to heed those warnings. Any savings that the Government hope to achieve by the proposed measures will be vastly outstripped by the costs of lost inward investment and the consequential losses of employment and export opportunities. It is economic madness. A senior executive who has worked in the industry for nearly 30 years recently told me:I have never known companies in the industry so angry with what is currently happening in the UK. They cannot understand why an industry that has contributed so much to patient care and to the UK economy over so many years is being treated in this way.In a recent letter to a chief executive of a major German-owned company, I believe that my hon. Friend the Minister wrote:We do not believe that the PPRS and the Selected List Scheme are inimical. The Selected List Scheme covers only a small proportion of the total pharmaceutical market".A small proportion? The categories in the extension to the limited list alone cover almost 25 per cent. of all NHS prescriptions, not to mention those seven categories in the original list that must account for at least another 5 to 10 per cent. We are probably talking about a third of all NHS prescriptions, and that blows out of the water the claim that the PPRS and the selected list scheme are not inimical.
955 It seems to me that, if we are talking about that as a small proportion—it is about 150 million prescriptions a year —there seems to be a very odd sense of proportion prevailing at the Department.
Will my hon. Friend explain why three major foreign-owned companies were told in June or July last year by my hon. Friend the Minister for Health that the Government had no plans to extend the limited list scheme? I pray in aid also the question that was asked by my hon. Friend the Member for Newark (Mr. Alexander) about that aspect. Unfortunately, that question has gone adrift, but I hope to refer to it shortly.
Will my hon. Friend also state why the Government are not prepared to wait for the report of the joint strategic working party which they set up and which comprises representatives from the Department of Health, the Treasury, the Department of Trade and Industry and the Association of the British Pharmaceutical Industry, but interestingly omitting anyone from the Office of Science and Technology? Why does he not wait for that working party to report before implementing those controversial measures?
My hon. Friend the Member for Newark and I, together with several of our hon. Friends on the Back Benches, have signed an important early-day motion that also asks the Government to wait before introducing the proposals.
I should like to express the industry's belief that, on this issue, it has won the support of patient and consumer groups, the family doctors and hon. Members. It deserves, at the very least, for its case to be fully debated before the proposals are implemented or final decisions are taken to implement them. Today's debate does not represent a proper debate in prime time.
If the Government seek to introduce the proposals through the back door and without a proper debate and a vote at the end of it, the industry will feel demoralised and betrayed by the British Government. If the Government are so convinced that they are acting in the best interests of patients and taxpayers, they should have no fear of such a debate. They should be prepared to put their case to the test by seeking the democratic approval of the House.
§ Mr. Roger Gale (Thanet, North)
First, I apologise to my hon. Friend the Member for Gillingham (Mr. Couchman) and to my hon. Friend the Minister for missing the opening remarks of my hon. Friend's speech. I must also declare an interest as a consultant to the pharmaceutical industry. Above and beyond that, I have a constituency interest because Pfizers at Sandwich employs many of my constituents.
I do not believe that anyone on the Conservative Benches, and possibly very few Members on the Opposition Benches, would question the need to control public sector borrowing and public spending. In that context, the Department of Health must consider its budget as much as any other Department. We all appreciate that. That also means that, within the Department of Health, as much consideration must be given to the control of the drugs budget as to the control of any other expenditure, either on primary or secondary health care.
Following on precisely from the speech of my hon. Friend the Member for Gillingham, I wish to question the 956 efficacy and validity of seeking to use the blunt instrument of the limited list to achieve those necessary budget controls.
My right hon. Friend the Secretary of State for Health has expressed concern about the fact that, in the past year, the drugs bill rose by 11 per cent. The first question that must be asked is: 11 per cent. of what? The implication has always been that that increase represents an 11 per cent. increase in drug company profits and that, therefore, those massive multinational companies are making money out of the sick. It is felt that that money is badly spent and that we should control that expenditure.
We must, of course, review the expenditure to ensure that we are getting value for money, but we need to understand what that 11 per cent. buys before we say that that increase is too great. We need to consider that expenditure in the broader context of health care and general provision. If 11 per cent. spent on drugs is keeping people out of hospitals—and, of course, it is—that money is not only well spent but it means that, in the end, less money is spent. That money is better spent than money spent on hospital beds.
When the first limited list was introduced it was suggested that it would result in savings to the health service of, let us be generous, £80 million per year. That is not an insignificant sum of money, but no evidence suggests that any real savings have been effected on behalf of the health service as a result. It is possible to argue that about £80 million has been saved on the category of drugs in the limited list. It would he more accurate to say that £80 million has not been spent on those particular drugs.
Any general practitioner would reveal that he has often found himself in the ludicrous position of having to prescribe two drugs, at greater expense, to do the same job as that performed by one drug on the limited list. It is abundantly clear to any primary school mathematician that, far from saving money, the real effect of the first limited list was to cost the NHS more—although I concede at once that the money spent on certain drugs was reduced.
Today, I ask my hon. Friend the Minister again a question that I have been asking for a long time and to which I have not yet had an answer: can he tell us of any real saving to the health service or the nation resulting from the first limited list? Does he seriously believe that the introduction of a further limitation will have any helpful effect on the health service budget?
My hon. Friend the Member for Gillingham rightly referred to the effect on investment in the pharmaceutical industry that the first limited list had—an effect from which the industry and its investment programme are only just recovering. He also mentioned the effect on investment of the current proposals. The industry has advanced various plans to assist the Department in controlling costs. My hon. Friend mentioned that a review committee has been set up, and that it comprises Government representatives, medical experts, and representatives of the industry, for which we are grateful. Indeed, the Secretary of State quickly conceded that it was necessary to put representatives of the industry on the committee, and I do not doubt that that representation will be invaluable. It is sad, however, that the committee is not to be allowed to deliver its findings before at least some of the effects of the limited list are introduced and then felt.
Until now, it has been generally accepted that the United Kingdom has offered the best research and development base for this valuable industry—the best in 957 Europe, and probably in the world. The quality of our research scientists, the way we go about the job, and the results that we have delivered to the health services of the world have all been second to none. The value of the industry to UK Limited has been colossal, but it is clear that that value will diminish because of the pressures being brought to bear on the industry.
No one suggests that the industry should be given carte blanche to spend and charge as it likes, subject to no controls of any kind. But we must seriously consider the European option. There is considerable over-capacity in pharmaceutical manufacturing throughout the EC, so companies are having to pay heed to what they do and where they do it, and the United Kingdom is no longer their first choice. That is very sad.
In the longer term, it cannot be helpful to public spending to drive away an industry which, for many years, has produced so much tax revenue for the Treasury. We have not paid enough attention to the European option hitherto. The Minister may say that in the short term it is possible to demonstrate falls in drug prices resulting from the mere threat of the imposition of a limited list. And it is true that some companies will have to reduce their prices to marginal costs just to keep their products on sale, once they have recouped the costs of investment, research and development and production.
Where will the seed corn investment for tomorrow come from, however? It is blandly assumed that the profits of these companies go to the shareholders. Of course, some of the profits do, and I do not suppose that the Minister would wish to deny shareholders a due return on their investment. In this industry, however, probably more than any other in the country, or the world, an enormous proportion of the money made after many years developing a drug goes back as seed corn for the development of tomorrow's drugs. It is an industry which cannot stand still unless, as my hon. Friend the Member for Gillingham wryly said, we go back to the days of the leeches.
What evidence do I have for my alarmist suggestion? A company in Scotland was offered regional aid to extend its premises. It was a modest extension, requiring about £3 million of investment. The European headquarters said that, in the current climate, it does not regard the United Kingdom as a favourable country for investment so it will not build the extension as a direct result of the limited list. It is not a case of "may not" build it; it has already been decided.
Pfizers at Sandwich, the company so properly and honourably represented by my hon. Friend and which employs my constituents, has invested massively in new research and development facilities. They are extremely impressive, being some of the finest in the world, and they are on the doorstep of my constituency, located in that of my hon. Friend the Member for Thanet, South (Mr. Aitken). It has a large vacant site, awaiting the rebuilding of part of its plant. It is not being rebuilt and, in the present climate, it is difficult to believe that it will be rebuilt. That will mean that further investment will have been denied to the United Kingdom as a direct result of what is to some extent a knee-jerk reaction to a short-term problem.
It is important that we consider the national interest. If I am right, and if the expenditure on drugs is very largely 958 justified to curtail the expenditure on people being treated in hospital rather than at home, the social effects are not inconsiderable. If mum or dad is in hospital, he or she cannot work. If a child is in hospital, mum or dad still cannot work because he or she has to visit the child. The same could apply to grannie or grandpa. The cost to the family in travel and time, and the cost to business and industry in terms of productivity, will rise. We shall end up paying more in unemployment benefit, income support and housing benefit because more people will be in hospital.
We have a proud record, largely due to the reforms implemented by my right hon. Friend the Secretary of State and her colleagues. The Government have made great progress in hospital and primary health care, and we can and should be proud of that fact. It would be tragic if a short-term decision, taken without due attention to the national interest across the board, and which affected one section of one Department, were to damage the United Kingdom's interest.
I hope that the Minister will be able to go some way to reassure an industry that is very worried about its future.
§ Mr. Ian McCartney (Makerfield)
Good morning, Madam Deputy Speaker. I also wish a good morning to the Under-Secretary of State for Health, the hon. Member for Bolton, West (Mr. Sackville), and the hon. Members for Gillingham (Mr. Couchman) and for Thanet, North (Mr. Gale).
I listened with interest to the hon. Member for Gillingham. I congratulate him on securing this debate. For many months, he and I have clashed on issues relating to the pharmaceutical industry, but this morning there was much common ground between us, especially on the efficacy and effectiveness of the Government's proposals. I cannot, however, go along with his doomsday scenario for the industry. I sometimes think that the industry is its own worst enemy. In putting a strong case to the Government, it sometimes over-eggs the pudding with allegations about the loss of jobs and investment, although I take seriously what the hon. Member for Thanet, North said about the need to ensure that we have a financially sound arrangement in terms of the Government's own monetary targets. It must be sound to ensure the effectiveness of the range of products that is available to NHS patients and a return on capital for the industry and new jobs for the NHS and for the world market.
Before dealing with some of the problems that are associated with the Government's proposals, I should like to tease out from the Minister the Government's policy on the price regulation scheme. On the Second Reading of the Medicines Information Bill, I told the Minister that the industry would come back to him about this issue and I asked whether the Government had an effective policy on the price regulation scheme. The scheme does not work satisfactorily for the industry and does not offer public accountability. Secrecy abounds on the price regulation scheme; it is even more secret than the defence contractors' debate. In general, there is more openness in debates on defence contracts than on price regulation, which surely cannot be sustainable. I look to the Minister to say how he will remove the secrecy that surrounds these discussions and negotiations.
959 For some years, the industry has had a reasonably good deal out of the national health service. It is a matter not of us and them but of a joint arrangement that has ensured a flow of income and profits for the industry which have been reinvested. The price regulation scheme has allowed the industry profit ceilings on the capital employed, which has provided a method of ensuring that it has an adequate return on research and development. Sufficient leverage is built into the price mechanism to ensure that the money deployed on research and development is returned to companies through the bill that they hand to the national health service.
The industry has been able to extend the parameters of its research and development bill by considering what it provides in post-marketing surveillance. The Government have allowed the industry to develop this area to the point where it is no more than promotion masquerading as research. We must consider the limits on advertising and promotion to see how effective they are and whether this method of securing the support of GPs is the best for the health service and patients.
Such campaigns encourage doctors to switch patients from current drugs to new ones. We should ensure that the monitoring of the performance of drugs is effective, and adverse reactions should be recorded to ensure that meaningful data are available to the Department and the industry. If monitoring is poor, the Government must take steps to ensure that the system is strengthened and developed. If necessary, the industry may have to change post-marketing surveillance.
The hon. Member for Thanet, North mentioned the need to deploy profits. It is true to say that in the past the industry has got away with murder in terms of some of its activities. It has, through the Department, been able to increase prices for new products to compensate for delisted medicines. It got around the original limited list proposals.
The Government introduced the limited list as a method of curtailing the cost of drugs to the NHS, but the industry was able to transfer that limited cost reduction to other products. What steps is the Minister taking in the current price regulation scheme to prevent that from happening, or, if it happens, to ensure that the companies concerned give a more than adequate reason for price increases on new products? Will the Government be publishing the National Audit Office report on the price regulation scheme? That report has been available for some time, but, so far, the Government have chosen not to publish it.
The hon. Member for Gillingham, in his thoughtful contribution, set out in graphic detail what is of most concern. The issue of the limited list has come a close second to the issue of sub-post offices in the postbags of hon. Members. The interest has not been engineered by the industry, although it has rightly made its view clear, for the most part in a balanced way. In the main, it has come from individuals affected by the proposals, particularly those who suffer from skin disorders and women who use the contraceptive pill.
It is vital that, when the Government come to their conclusions, before they make announcements, they come first to the House for an open and frank debate. We do not need—we hope that this will not happen—the Government to use the summer recess to make announcements, thereby preventing hon. Members from commenting on the proposals. A significant amount of lobbying has been going on, trying to get the Government 960 to change their mind. Therefore, it is important that the Government make a statement in the House on how they will respond to the requests for a fresh look at their proposals. I hope that the Minister takes that into account.
I shall deal with skin diseases and contraceptives. Some 15 per cent. of GPs' time and 6 per cent. of all new out-patient referrals result from skin diseases, and 20 per cent. of the population will at some time contract a skin problem. From September 1991 to September 1992, GP consultants in that sector were as follows. For eczema and dermatitis, 11.6 million GP consultations; for psoriasis, 1.9 million; and for acne, 3.3 million. We are not talking about a minor area of NHS activity. We are talking about a significant proportion of the time spent by GPs and of referrals to local district general hospitals. Nor is it an insignificant proportion of prescriptions for treatments. Many of those treatments are required for the long term, as the complaints are painful.
I should like to quote Dr. Michael Beck, a consultant dermatologist. I have chosen his from the many letters that I have received, because he is a constituent of the Under-Secretary, whose constituency of Bolton, West is a marginal one. Perhaps the letter will help him to concentrate on the issue. Dr. Beck is chairman of the British contact dermatitis group, affiliated to the British Association of Dermatologists, and serves on the medical advisory panel of the National Eczema Society. He covers many of the hospitals in my area—which is cheek by jowl with that of the Under-Secretary—and in that represented by the hon. Gentleman.
In a letter to the Under-Secretary, Dr. Beck says:the implications of a reduction of prescribable items for skin disease is causing grave concern to our patients. Those of us responsible for their care are equally perturbed by the potential consequences. I don't wish to land you with the huge range of arguments against this significant restriction in prescribable dermatological preparations at this time. Suffice it to say there are very strong grounds for suspecting that patients' health will be affected and livelihoods will be lost with what I believe ironically will be an eventual financial loss to the Government. Doubtless you will be aware of the huge numbers of persons affected by significant skin disease [eg prior to the introduction of Statutory Sick Pay, when we had relevant statistics available, dermatitis accounted for more days lost from compensated occupational disorders than all others put together].It is my view that the political consequence to the Conservative Party may also be significant, bearing in mind the numbers of persons who are likely to be adversely affected.It is not usual for a consultant to write in such language. He is clearly saying that it is not just a matter of efficacy in health terms; it is a bad financial deal for the Government. The Government will quickly find that it will cost more to withdraw products than it would to introduce the limited categories, as suggested. There will be no net savings from the proposals.
Choice is very important. Skin is highly variable, so responses to treatment vary enormously. The appropriate treatment can be found only by trial and error. Many patients develop an intolerance to the medication, resulting in the need to switch to another treatment. Patients can also develop contact dermatitis, an allergic reaction to one or more of the ingredients in a medication. The current range of branded products usually means that a suitable alternative can be found.
Unlike tablets, a topical formulation can be regularly compared with, or substituted for, another. Differences between topical formulations are fundamental to patient 961 compliance. The patient has to accept the texture, colour, odour and absorbency of the medication. Irritation, staining potential, presentation and general ease of use of the product are what the doctors want to continue. With the loss of choice and a limited list, potentially a significant number of people might have their treatment withdrawn. That is unacceptable.
Doctors have submitted detailed information to the Department of Health about why the limited list will not save money. If the Government cannot listen to the industry, but instead believe that it has an axe to grind, they should at least listen to those who write the prescriptions. They are clearly and starkly telling the Government that their proposals are a false economy.
I cannot understand why the Government are putting forward such proposals on contraception. During the last few months the Minister has become known within the Government as the Minister of conscience and family morals. He has had a great deal to say about that, as has his hon. Friend the Member for Bolton, North-East (Mr. Thurnham). It is a pity that the Minister has not had much to say over the past decade while many district health authorities have slashed expenditure on family planning clinics. The Department of Health has done nothing to prevent the withdrawal of that core service. A decade on, we see the consequences of that in what the Minister, through "The Health of the Nation', is trying to do to reduce the unacceptably high levels of unwanted pregnancies and abortions.
Recently, one-parent families have been targeted as scapegoats—and, indeed, over the weekend grandparents were also targeted. At the same time as the Government are making a moral attack on one-parent families, they are making the unbelievable proposal to withdraw oral contraceptives or put them on to the limited list. There will be no net savings from the Government's proposal, but there will be an increase in unplanned pregnancies and abortions. That is unacceptable to all hon. Members. Whether or not one is in favour of abortion legislation, it is a defeat in any circumstances when a woman has to seek termination. It is a personal tragedy, but it is also a tragedy for the Community and for society as a whole. If there is anything that we can do to prevent unplanned pregnancies and abortions, we should do it.
Oral contraception in the United Kingdom is already the cheapest in Europe. We get a very good deal on the price of contraceptives. Family planning is a good investment—for every £100 invested, we can expect a return of more than £500 in saved benefits and other costs to the state.
We should not limit women's choice; it is unacceptable for women to have their choice of contraception products for family planning limited. Not only is a woman's individual choice limited, but the efficacy and safety of many of the products is also reduced. A woman who starts to use contraceptives at an early age will use them over a period of more than two decades. She must ensure that the product which she uses does not have undesirable side effects.
The industry has done a tremendous job in developing and improving oral contraceptives in the past two decades. A huge investment has been made into research into oral contraception, which is still improving and will continue to 962 do so. Just when that investment is being made, the Government announce proposals which find no support from the Royal College of Obstetricians and Gynaecologists, the Birth Control Trust, the Family Planning Association, women's organisations, general practitioners or the British Medical Association. During the current debate, I have not found anyone who supports the proposals. When the Minister winds up the debate, will he tell us who supports the proposals? Is the Treasury simply looking for an easy way to make immediate, short-term cuts in the drugs bill at the expense of state spending over a longer period and women's health in general?
At present, between one quarter and one third of sexually active women in the United Kingdom use oral contraceptives. Of women under 30, up to 48 per cent. use oral contraceptives. Of those aged between 31 and 40, 19 per cent. use them, and of those aged over 40, 7 per cent. use them. Its use among younger women is widespread because it is the most effective and appropriate form of contraception for most women. It also provides the best value for money, in terms both of preventing pregnancy and of cost to the national health service. Barrier methods, intrauterine devices, the sheath, the diaphragm and injectables are all less effective, and provide a worse deal for both women and the NHS than oral contraceptives.
Why have the Government made the proposals? It cannot be to save money as the proposals clearly show that it would take only two additional pregnancies for every 100 women currently using oral contraceptives for the small net saving on one woman's drugs' budget for one year to be wiped out. I do not believe that the calculation of two out of every 100 women is an overestimate—I believe that there will be an increase in unwanted pregnancies. That is historically what happens, and it will happen again.
During 1984, when there was the scare involving the pill and breast cancer, the number of terminations in the United Kingdom rose dramatically. In 1988, during the publicity about AIDS and the advice to men to use condoms, there was a further ratcheting up of the numbers of terminations as women came off the pill and relied on men to use condoms. The proposals constitute an ineffective way of implementing family planning in the United Kingdom, and we should not pursue such policies now—indeed, ever. If the Government are serious about achieving the targets contained in "The Health of the Nation" White Paper, they must make an early announcement stating that the proposals for oral contraception will be abandoned as quickly as possible.
The termination of a pregnancy costs, on average, £200. It costs £270 for an overnight stay, and £140 for a day case. The average cost to the NHS of deliveries is £1,217. That includes GP costs and the care of any infant who must go into a special unit because of difficulties as a result of premature birth or other difficulties which, unfortunately, may occasionally arise.
On the grounds of efficacy, and in terms of what the medical profession is saying, it is much better to use the pill than rely on males or females to use alternative methods that prove to be less effective than oral contraception. I want the Minister to set out his position clearly.
A letter I received from a constituent GP summed up the matter as follows: 963For the sake of saving a few pence a week in the drugs bill, women will experience unpleasant and worrying side effects which will send them back to their GPs time and time again.It is even possible that the development of new contraceptive pills will grind to a halt as drug companies pull out of the market. The consequences of this will be to reduce further the pool of available contraceptives at precisely the time when specialists say its needs expanding.That puts the matter into perspective.
I will conclude not simply because the hon. Member for Gillingham is giving me a sign—I usually take signs from my Deputy Chief Whip on such matters. The hon. Members for Thanet, North and for Gillingham and I have managed to put a constructive case to the Minister and I hope that he will respond. It is a pity that the two-man rebellion that we saw this morning did not happen on Thursday or we might not have been on opposite sides of the ring. I hope that the Minister will respond in a much more positive way.
§ The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville)
Madam Speaker, I will follow the hon. Member for Makerfield (Mr. McCartney) and wish you a good morning. He forgot to greet the Government Whip. I hope that I do not clash with the hon. Gentleman at this time of the day. He has been more constructive than he sometimes is about the drug industry. In a previous debate about pharmaceutical matters, I remember him talking about the pharmaceutical industry ripping off the national health service. I am glad that he has not resorted to such language today.
I congratulate my hon. Friend the Member for Gillingham (Mr. Couchman) on securing this debate. He is a great friend of the industry. In the time that I have been in this job, no hon. Member has sought to speak for the whole industry in the way that my hon. Friend does.
Having been through the Medicines Information Bill with my hon. Friend and the hon. Member for Makerfield, I can attest that my hon. Friend put in a sterling performance. I shall say a few words about his regret that there has been a lack of parliamentary discussion on this matter to date, without lecturing him about how things work—he has been in the House for a long time—but for a more general audience. He will realise that the Government's priority is to propose legislation in any Session. It is not necessarily our first duty to introduce debates on such matters. That is the prime duty of the Opposition and any Back-Bench Member who wishes to raise an important matter on behalf of constituents, constituency interests, industries or whatever. Obviously, the Opposition have the opportunity to raise such matters at any time.
My hon. Friend the Member for Thanet, North (Mr. Gale) has a strong interest in this subject. He made a powerful case, to which I will refer later.
My hon. Friend the Member for Gillingham and the hon. Member for Makerfield spoke about savings resulting from the limited list exercise. Those are hard to compute, because it is impossible to say what would have happened if some other event had not taken place. However, it is self-evident that an exercise that depresses consumption of certain products is likely to save money. It is argued that alternative products are dispensed and that that diminishes the savings. That may be true in some 964 instances, but to say that a preparation that is not dispensed is always replaced by another is probably fanciful.
The hon. Member for Makerfield spoke about the price regulation scheme and about opening discussions on it. He also spoke about publishing the National Audit Office report. I shall write to the hon. Gentleman about that, and I note what he said about the need for discussion and announcements on these matters.
Drugs are a powerful weapon in the war against illness, but, of course, they cost the NHS a great deal. The biggest element of NHS expenditure is pay, which accounts for about 70 per cent. of total spending, but the drugs bill accounts for about a third of the remainder. As my hon. Friend the Member for Gillingham said, the NHS drugs bill reached its highest level in 1991–92 at £2.3 billion in England. Last year, it rose by a further 14 per cent. We cannot ignore that and must analyse the matter to determine whether we are getting value for the whole of that increase. We must keep the issue under close scrutiny. Against that background, we need to be alert to ensure maximum cost effectiveness.
§ Mr. Couchman
I spoke at length in the debate and I hesitate to intervene. When my hon. Friend analyses the reasons for that increase, will he undertake to separate the portions that are due to Government policy in seeking to prevent illness and the portion that is purely an increase in the cost of pharmaceutical products?
§ Mr. Sackville
It would be foolish of us to suppose that the drugs bill would not continue to rise. We have to make sure that the rate of rise is kept under review, because all health resources are precious. I have no doubt that in the years ahead we shall experience continuing pressure on NHS expenditure.
One important development of prescribing behaviour is to be seen in the GP fund-holding scheme. We have already seen the difference in the rate of rise in prescribing costs between fund holders and other GPs. General practitioners with funds have shown that they have a direct interest in improving the cost effectiveness of prescribing. That is welcome, and they can retain any saving on drugs to reduce demand on the hospital referral element of the budget. That is not just theory: it has happened in practice. The prescribing costs of fund holders in 1991–92 increased, on average, by 3 per cent. less than those of other GPs, and we are confident that that was done without any loss of quality in prescribing.
§ Mr. McCartney
Is it not also true that, where family health services authorities have introduced extensive generic prescribing policies and encouraged general practitioners—whether or not they are fund holders—there has been a significant budget saving?
§ Mr. Sackville
That is true. There are all sorts of ways of trying to improve the quality of prescribing, and I do not think that some of the earlier references to indicative prescribing schemes are appropriate. I seem to remember that, when some of these schemes were announced, there were cries of alarm from the medical profession; I think it fair to point out that some proved to be unfounded.
The selected list scheme should be seen as only one element in a wider strategy to control the rise in the NHS drugs bill. As has been said, a group of products was announced in 1985, including seven therapeutic categories. 965 Despite initial scepticism, it has not proved difficult or costly to administer; nor—I stress this—has it prevented patients from receiving the drugs and services that they need. I know of no case that has been made to attempt to prove that that has happened, although it was widely predicted by the industry and others at the time. Experience of the scheme has demonstrated that downward pressure can be exerted on the drugs bill without detriment to patients; that must be the key to any action that we take in this regard.
We now propose to extend the scheme to include 10 further categories. They cover a range of products at varying price levels, and offer scope for savings while enabling all clinical needs to be met. Let me emphasise some important aspects of the scheme. Decisions on which drugs may no longer be available will be made on the advice of the advisory committee. Despite what was said by my hon. Friend the Member for Gillingham about the chairmanship of the committee, it is an independent body consisting of experienced doctors, dentists and pharmacists, appointed following nomination by relevant professional organisations.
The committee's membership has been increased to ensure that it has the necessary expertise to review new categories of drugs. For example, it now includes a consultant dermatologist, a consultant gynaecologist and a family planning doctor. It is free to take whatever outside expert advice it deems necessary.
The committee's remit is to ensure that drugs to meet all real clinical needs can be provided as economically as possible. That is central to the argument.
The hon. Member for Makerfield mentioned contraception. It is entirely untrue to say that the removal or review of constituents of the list will force women into abortion or off the pill, and impose contraceptive duties on men. As the hon. Gentleman may know, many oral contraceptives are currently available on prescription. Some duplicate others; I will not go into detail, as that would prejudge consideration of the list. However, if we thought—and if the advisory committee feared—that women would be forced off the pill, we would take no action that would lead to such a result.
Let me repeat that it is a priority of our NHS policy to ensure that the appalling rate of teenage conceptions—which is five or six times the rate in neighbouring countries in northern Europe—is contained. That is an appalling national record and we shall not take any action that will cause further deterioration.
The exercise cannot be characterised as a limitation in responding to patients' needs. If that was the case and if women were forced off the pill, the committee would not have done its job properly. I have no hesitation in saying that. Obviously, the Family Planning Association and family planning doctors are worried. They do not know the outcome of the review. They may fear the worst. But I am bound to give the hon. Member for Makerfield that reassurance.
966 A huge number of dermatological products are available. The committee will have to decide how many of them are efficacious. If it finds that some are being prescribed at NHS expense which are not efficacious, it will have to look hard at whether those drugs should be prescribed at NHS expense or at the price at which they are currently sold. It would be irresponsible of us not to consider that. All the doomsday predictions about the effects and outcome of the review are premature.
All sorts of medical groups have made it plain that they are worried. I stress that the expert committee is there to ensure that there is a full range of drugs to meet all clinical needs. That is its remit. It does not have a Treasury remit or any other remit.
The committee will ensure that manufacturers are informed as soon as possible if their products are not to be considered. Companies will be given an opportunity to make representations against any provisional view that a product should not be prescribable. In the past few months, many individuals and organisations have made representations to the Government about the selected list scheme. They have argued that they should be given an opportunity to make their views known. We have listened to all those representations. I have met several delegations. We have considered how we might respond to them.
We have decided that, with immediate effect, we shall announce approximately a month before an order is laid the likely coverage of an order to add products to the selected list. That will give hon. Members and the public and any other bodies or individuals an early opportunity to make their views known about what is proposed.
In addition to anxieties about patient welfare, it has been claimed that extension of the selected list scheme threatens Britain's successful pharmaceutical companies. I do not accept that view for several reasons. I do not need reminding about the value of the pharmaceutical industry to the United Kingdom. It is one of the few great research-based, exporting, manufacturing industries left.
The United Kingdom represents 3 per cent. of the world market in consumption of pharmaceutical products. The new categories of drugs being considered by the advisory committee represents a small proportion of that. In the context of a single market, it is fanciful to assume that some restrictions on sales here, or some restriction on the list of products available for dispensing, would control decisions on investment, research and licensing here. If there are reasons for a company to move its manufacturing, research or licensing abroad, in a single market context, it is free to do so and should do so. To suggest that the introduction of some measure of control —matched by controls elsewhere in Europe—will result in companies moving overseas could, in some instances, be an empty threat. We must place that in context. We enormously value this country's pharmaceutical industry.
I am sure that the business managers noted the requests to debate those matters, which are of enormous importance. However, there has been a great deal of doomsday prediction. This country has a strong and vibrant pharmaceutical industry. To say that we are going back to the age of leeches is dangerously premature.