§ 4. Mr. Lidington
To ask the Secretary of State for Health what plans he has to encourage research by British pharmaceutical companies into new drugs. 
§ Mr. Malone
The pharmaceutical price regulation scheme encourages pharmaceutical companies to conduct research in Britain by allowing them to offset a significant part of research and development costs against the profits that they may make from sales to the national health service. The scheme is structured to balance fair prices for the NHS with reasonable returns for companies so that they can continue to develop new and improved drugs.
§ Mr. Lidington
Does my hon. Friend agree that the United Kingdom not only has a world-leading pharmaceutical industry but is acting as a magnet for investment by international pharmaceutical companies—an example of which he recently saw in my constituency? Will he assure the House that the Government will continue to pursue both pricing policies and general economic policies that will enable the pharmaceutical industry to continue to be a world leader, create new jobs and attract investment?
§ Mr. Malone
My hon. Friend is right that both factors encourage the pharmaceutical industry to expand and to achieve a great record of success. As he said, I was delighted to attend the opening of the refurbished headquarters and research base of Janssen-Cilag in his constituency. It is exactly the point that such a company is locating its facilities in Britain. We have an excellent record in the pharmaceutical industry, which is underpinned by the Government's policies.
§ Mr. Beggs
When the Minister next meets representatives of the British pharmaceutical companies, will he encourage them to locate research facilities in Northern Ireland, where the availability of highly qualified graduates has already contributed to the success of Ivex Pharmaceuticals, Norbrook Laboratories and, most recently, Randox Laboratories?
§ Mr. Malone
I shall certainly pass that on to my right hon. and learned Friend the Secretary of State for Northern Ireland, who has direct responsibility for such matters. I would not be at all surprised if the pharmaceutical companies were already aware of exactly the hon. Gentleman's point. As part of the United Kingdom, I expect Northern Ireland to participate in our excellent environment for investment by pharmaceutical companies.
§ Mr. Nicholas Winterton
Does my hon. Friend agree that Zeneca plc pharmaceuticals company, which is based in my constituency on two main sites that employ about 5,000 people, has the most outstanding record in research, development and marketing of drugs that greatly benefit the people of this country? Will he ensure that he continues to emphasise the importance of proprietary drugs, which enable such companies to conduct research and development, and will he discourage the merger and takeover mania that, at the end of the day, creates no benefits either for the companies or the thousands of people who are laid off and put out of work as a result?
§ Mr. Malone
I cannot give my hon. Friend a satisfactory answer to his last point. I certainly acknowledge Zeneca's contribution. I am pleased to be able to confirm that the pharmaceutical industry makes a remarkable contribution not only in his constituency, but in the constituencies of many hon. Members, and that pharmaceutical companies contribute to the excellent record in Britain. The UK represents only 3.5 per cent. of the world market, but accounts for 6 per cent. of world production and 8 per cent. of world research and development. That has not happened by accident; such success has been achieved by the sustained application of the Government's policies.