HL Deb 27 May 1968 vol 292 cc960-95

2.51

LORD BESWICK

My Lords, I beg to move that the Report of Amendments be now received.

Moved, That the Report be now received.—(Lord Beswick.)

On Question, Motion agreed to.

LORD BESWICK

My Lords, the House has been so speedy in its consideration of the items on the Order Paper that my noble friend Lady Phillips is not readily available, but if it is possible for the House to concern itself for a moment or two with a careful study of the Order Paper, I am sure my noble friend will be here. She has been apprised of the situation.

LORD NEWTON

My Lords, I am sure we are all most grateful to the noble Lord for filling the breach so well. Now that the noble Baroness has returned, I wonder whether I could ask if she went to make a directory inquiry?

LORD LEATHERLAND

My Lords, is this not one of the disadvantages of unduly shortening our speeches?

Clause 25:

Extension of power of user by Crown of patented invention to user for certain services provided under Part IV of 1946 Act and 1947 Act 25. The powers exercisable in relation to a patented invention under section 46 of the Patents Act 1949 by a government department Or a person authorised by a government department shall include power to make, use, exercise and vend the invention for the production or supply of drugs and medicines required for the provision of pharmaceutical services under Part IV of the 1946 Act or Part IV of the 1947 Act, general medical services thereunder or general dental services thereunder, and any reference in that section or in sections 47 or 48 of the Patents Act 1949 to the services of the Crown shall be construed accordingly.

BARONESS PHILLIPS moved to leave out from "services", where that word first occurs, to "and", and to insert: general medical services or general dental services".

The noble Baroness said: My Lords, I apologise to the House. With permission, I will speak to Amendments Nos. 1, 2, 4 and 6. The purpose of these Amendments is to extend the provisions of Clause 25 to the Health Service in Northern Ireland and, as a consequential Amendment, to adjust the position of the clause in the Bill. As noble Lords will appreciate, it would no longer be suitable for Part I but should be included in Part IV as a provision applying to the United Kingdom as a whole. The Patent Act 1949 extends to Northern Ireland, and it seems right that as far as application to the health services is concerned there should be uniform provision in the United Kingdom. The Government of Northern Ireland wish this clause to apply equally to the Northern Ireland health services as it would to those in Great Britain, but in view of Section 4(13) of the Government of Ireland Act 1920 they could not legislate for Northern Ireland in this respect. We propose that the necessary provision be made in the clause which is now being considered. I beg to move.

Amendment moved— Page 20, line 10, leave out from ("services") to ("and") in line 12 and insert the said new words.—(Baroness Phillips.)

LORD NEWTON

My Lords, I have no objection to the noble Baroness's proposal, but I must point out to her that the fact that she is seeking to do this now is yet more proof that this clause was never properly considered by the Government and ought never to have been in the Bill at all.

On Question, Amendment agreed to.

BARONESS PHILLIPS

My Lords, I beg to move Amendment No. 2.

Amendment moved—

Page 20, line 15, at end insert— ("() In the foregoing subsection references to pharmaceutical services, general medical services and general dental services shall be construed as referring to services of those respective kinds under Part IV of the 1946 Act, Part IV of the 1947 Act or the corresponding provisions of the law in force in Northern Ireland.").—(Baroness Phillips.)

On Question, Amendment agreed to.

LORD OGMORE moved to leave out Clause 25. The noble Lord said: My Lords, I beg to move Amendment No. 3. Your Lordships will recall that the original Clause 25 was inserted in another place after very scrappy debate. It could not be considered at all on Second Reading, it was not considered in Committee, and it was as a result of a Back Bench Amendment that, after a most reluctant speech, the Minister of Health accepted it. He has since stated that he accepted it on account of the vagaries of the Parliamentary timetable. He obviously did not accept it on account of the merits of the Amendment; indeed it has no merits at all.

The fact that the Government were unprepared for it and, as I think, against it in reality, is shown by the fact that when it came up here we had an intimation from the noble Baroness, Lady Phillips, that she would put down an Amendment to it on Committee stage; and she put down and moved an Amendment on Committee stage which considerably altered its scope and widened it, although she did not feel it necessary to inform the House of this situation. It widened it very considerably, and it was only because of my questions in the course of the discussion that we were informed of that fact. Then the Committee passed it without Division. It has not been allowed to remain in that position, for to-day, on Report stage, yet another Amendment has been put down to this particular clause. So we are in fact in effect considering a clause that neither House of Parliament has ever considered before in its present state, which seems an odd way of conducting business of this type.

I do not want to go through all the factors—many of your Lordships know them and you have heard me state them before—but there are one or two matters I should mention. First of all, I consider it was a breach of faith by the Minister to accept this clause at all, because he promised he would discuss the Sainsbury Report recommendations with the industry before a decision was taken and he did not do so, but just accepted this Amendment. It is highly undesirable, I would suggest, for new patent law to be passed by Parliament before the Banks Committee, which is now considering patent law as a whole, reports.

Then, again, undoubtedly it has had a grave effect on confidence in the pharmaceutical industry, and some effect on confidence in industry as a whole if patents can be seized in this way. There is already a voluntary price-fixing arrangement. Companies cannot charge what they like by any means; they have to go before an experienced official of the Ministry of Health and with him work out a voluntary price which shall be charged for the particular goods in question. At the present moment the Government are not quite satisfied with this arrangement. In fact a discussion is going on between the industry and the Government for a more official system—not so much a voluntary system but a more official system. The Government now come in with this big stick and, as it were, "clobber" the industry on the head during the progress of the discussions, which seems to me quite improper and irregular.

Moreover, there is the effect on the inventor. This clause is not going to encourage inventors to invent. This country has always been very fruitful in invention but very bad in development. So far as inventors of all kinds are concerned, it is not going to encourage them to go in for the considerable work and efforts and also imagination that is needed if a patent is to be successful. Then, unfortunately, there is no doubt that our practice is being followed by other nations, particularly nations of the Commonwealth, and this, I believe, will be greatly to the disadvantage of British industry as a whole. The Amendment that was included on the Committee stage, on the Motion of the Government, means that the pharmaceutical industry will be the only private sector industry which in times of peace is to suffer the sale of its inventions, patented goods, to wholesalers, retailers and consumers. This power will be given to the Government, and by the Government to a third party.

To those of your Lordships who may not have followed this discussion before, I must explain that the object of the clause, as amended, is to enable the Government to seize, or perhaps one should say to disregard, the patents of any particular product which they require for the National Health Service. This has never before been done in this way in legislation related to a particular industry. Previously, under the Patents Act 1949, there was a power in case of need, as in the case of war or the threat of war, or some circumstance of that kind, whereby the Government could take patents where they felt it was necessary for the public good. One quite understands that it is right that this should be done, as, for example, in 1940, or in 1914, if a war is in the offing, and when it might be absolutely necessary to have a particular gun, for instance the Bofors or the 3.7, one of the finest guns in use in the last war. In a case such as that the Government must have power to provide for the manufacture of those weapons, even though sometimes, when it is in the hands of foreigners, the patent has not yet been dealt with. In other words, they should be able to get on with the production, and the matter of the patent can be sorted out later. One quite understands that that is a serious situation and that the Government should have such power.

In 1949, the Labour Government of the day felt that this was a reasonable proposition and they took that power. I believe that it is a reasonable proposition in case of war. But that is quite different from the case of a National Health Service product, in regard to which the Government feel that they want to seize or disregard a patent. They can make arrangements through brokers to obtain the particular product from overseas, perhaps from some country where there is no Patent Law or where the actual processes are nothing like so careful as they are here, and thus can disregard the British patent altogether and bring in large quantities from abroad.

As a result of the Amendment introduced by the noble Baroness on Committee not only is this possible but, although I do not know how they propose to do it, they can proceed to set up a brokerage and wholesale system, and possibly a retail system, to sell large quantities of materials which they bring in. They may well have to make arrangements to sell the materials through chemists' shops.

Again, not only are the Government to be responsible for all this, but they are to be responsible for the security of the particular product. As we know, although a sample product may be up to standard when you inspect one particular part or a small portion of it, it can be quite different when it arrives in bulk. I know this from my experience in a company of which I am a director. There, enormous care is taken not only in regard to research into a product, but even in the packaging of it. If you go into the factory you will find that the product is being packaged in an area which is completely shut off and where you are not allowed to go. This is to ensure that no foreign bodies can get into the product through the air or in some other way. It is sealed off. It must be absolutely inviolate and the product must be of a certain and consistent standard. That is another point: it must be consistent, otherwise when medical practitioners prescribe a particular product they will not have the assurance that it is so.

That is all I wish to say to-day. I hope that your Lordships will feel that a matter like patents, a most technical subject affecting the whole of our trade both at home and abroad, and all sorts of British manufactures, would be much better dealt with by Parliament on the suggestion of the Government when the Banks Committee has reported, when the whole of the evidence that is now being put before that Committee has been considered and the Committee have made a Report, and that Report is presented to Parliament.

If at that time they feel that a provision of this kind is desirable, then no doubt Parliament will take that into consideration. But to put this sort of clause into a Bill which is concerned mainly with providing beds in hospitals, whether certain hospitals shall be teaching hospitals, and who should be the governing body of hospitals, seems to me to be ludicrous. We in this House particularly are trying to clean up the law and to make it more consistent and more "get-at-able". Nobody in his senses will ever look in a Bill of this kind for a complicated provision as to patents. For all those reasons, I ask your Lordships to support me and to agree with my Amendment to leave out Clause 25. I beg to move.

Amendment moved— Leave out Clause 25.—(Lord Ogniore.)

THE LORD CHANCELLOR (LORD GARDINER)

My Lords, I should tell your Lordships that if this Amendment is agreed to, I shall not be able to call Amendment No. 4.

3.7 p.m.

LORD NEWTON

My Lords, I am not going to repeat at any length the objections of my noble friends and myself to Clause 25, partly because the subject has been dealt with by the noble Lord, Lord Ogmore, in terms with which I am largely in agreement, arid also because we have discussed Clause 25 before. Briefly, our reasons arc these: first, that like the noble Lord, Lord Ogmore, we object to the fact that this clause was inserted into the Bill in the way it was in another place, all the more because at that time the Minister of Health knew and admitted that the clause was unsatisfactory. So in Committee the noble Baroness had to move to take out the whole clause. This afternoon she is seeking to amend it yet again. As I said just now, this seems absolutely clear evidence that this matter was never properly considered by the Government and that they never intended it to be in the Bill at all. It seems to me that it is contemptuous of the Government to treat the House in this way.

The second objection is that it is quite obvious, as the noble Lord, Lord Ogmore, has said, that the subject matter of this clause was not discussed in detail with the industry, and that in consequence a clear promise to the industry was broken. The noble Baroness did her best in Committee to explain this away. I do not want her to think that I am blaming her in any way at all. I am not. She is not the Minister of Health; she is just his mouthpiece in this House, and a most charming one, too. But she anticipated that I should not find her explanation convincing, and I am afraid I did not.

Our third objection is that there really was no need whatsoever to rush this clause through Parliament like this. There is not any urgency about this. I agree with the noble Lord, Lord Ogmore, and I said on Committee, that the Government really ought to have waited for the Report of the Banks Committee on the Patent system and Patent Law. Everyone to whom I have talked about this and who knows about patents, accepts, as I believe the Minister does, too, that the Banks Committee will report on the whole question of this use of patents for services of the Crown. So to jump the gun like this, as the Government have done, seems to me not only to be discourteous to Mr. Banks and his Committee but also imprudent—and the Government have been wasting some of their own time, I should have thought.

Finally, my Lords, although, as I said the other day, I agree with the Report of the noble Lord, Lord Sainsbury, that for the protection of the taxpayers there must in the last resort be some procedure to which Ministers have recourse if the dispute between the Government and the industry cannot be resolved, I still think that the procedure laid down under Section 46 of the Patents Act 1949 is too arbitrary to have as a permanent instrument on the Statute Book for use in time of peace. That is why I tried in Committee to move a number of Amendments to remove the arbitrariness of what the Government propose. It offends my sense of justice that when the Government have been party to a dispute with the industry, then at the end of the day the Government come down and are the judge in their own cause. There is no need for it and there ought to be some sort of reference to an independent tribunal or arbitrator before Section 46 is invoked. But unfortunately it is only too apparent, to me at any rate, that when we were discussing this clause in Committee the Government had no sympathy whatever with what I consider to be a most important principle of justice. It is for these reasons and because I cannot see that anything can be gained by trying to move further Amendments, that I must advise my noble friends to support Lord Ogmore if he takes this matter to a Division.

3.13 p.m.

LORD FRASER OF LONSDALE

My Lords, I hope to persuade the Government to withdraw the clause or the House to pass this Amendment, and I propose to argue some reasons why this should be done in the national interest. May I first declare an interest? I have for some thirty years been a director of one of the major pharmaceutical manufacturing companies, and that is why I venture to put forward a view which is of long standing and, I hope, well thought out, and which I shall hope briefly to argue. I must go back very briefly to the time when Mr. Powell was the Minister of Health in 1961. He then took power, and exercised it, to buy drugs in the cheapest European market because those drugs were patented here, and he hoped to, and did, save some of the taxpayers' money in the National Health Service. That, in itself, would be a good aim for any Government—to save money in the National Health Service or in any other service—but of course one has to count the cost, and it is on that question that I want to address myself.

Following upon Mr. Powell's action, a company called Pfizer brought a case which came to the House of Lords in 1965, and by three votes to two their Lordships upheld the Crown. The consequences of this have been bad for the national interest; not only bad for the companies concerned, but bad for the Health Service, bad for the health of the people, and bad for the country. The reason is that it was an encroachment upon the responsibility of boards of directors to direct that research should go on—very expensive research in some cases—in order to find new and most valuable drugs. This encroachment has been bad enough, and now Clause 25 proposes a further encroachment.

I understand, none better, that we are on the horns of a dilemma where, if we do nothing at all, we leave the Patent Law unaffected with its restrictive qualities. On the other hand, if we do what is proposed to be done, we engage in a further encroachment in a most valuable field for the nation's health. I will not shirk the profit issue because I know that that is a matter of urgent interest to many and a significant matter in the politics of to-day. If a company does not make a profit it cannot undertake research, it cannot pay good wages, it cannot pay good taxes, and perhaps it cannot survive. If, therefore, it can be shown that the research is of value, it is wise and well that the company should make a profit. I might also add that if the shareholders receive encouraging dividends they are encouraged to put more money into the company which, in turn, enables it to do even better in its research, its exploitation and its circulation of these valuable drugs when discovered.

My Lords, as in other fields, "many are called but few are chosen". A medicine company, a pharmaceutical manufacturer, has to engage in extremely expensive research employing the finest brains in the country and considerable and high expensive apparatus, and it has to examine literally thousands of chemicals and variations of chemical products with the hope perhaps of finding one valuable drug. Of course, the many explorations and experiments that have to be made must be paid for out of the profits on the one valuable, satisfactory, proven drug. Therefore the profits on the said drug when it comes to be sold in its early stages must be high. If looked at alone, they may appear to some to be so high as to be beyond reason, but if looked at in the light of the whole circumstance I have described they may be utterly reasonable, because if the many experiments that have failed are not paid for by the successful one, which is very rare, then further future experiments will cease, and if noble Lords will put themselves in the position of the member of a board who is required to make the decision in this matter they will see that it is the balance of profit at the end of the year which must be taken into account rather than the particular profit on a particular medicine or range of medicines.

May I examine what a patent is? A patent has two functions. One is to give the owner of the rights declared under the patent some monopoly, some rights which he can exercise exclusively, in order that he may get a profit and a return on the investment which he has made in his experiment. Another consequence of a patent is to lay bare the process, or chemical or idea which underlies any new device or invention so that all the world may know and copies—if not copies which invalidate or offend the patent, then similarities—may be made. In the whole history of the Patent Law there are not more than a handful of master patents which can be said to have held up for any length of time the development of any art or movement in science. Master patents are exceedingly rare. The effect of a patent is first to give a short-term protection; and, secondly, to lay bare what is being done so that others may find ways of doing it by variations, by going round the corner, by producing similar products or products which will have a similar effect and which will not offend the patent. There are therefore two provisions of the patent, both of which are taken into account.

It may be said that, in the short term, the owner of the right may hold the nation up to ransom by asking too high a price or by refusing to work the patent in the national interest. There is existing legislation under the Patent Law which enables the Government to bring pressure to bear in such a case. It should not be beyond the wit of man to provide a method of appeal should the matter be blocked and require resolution. Various suggestions have been made, one of which was emphasised in the excellent letter written to The Times on Friday by the noble Lord, Lord Shaw-cross, and supported by two other letters in The Times to-day.

Clause 25 is a further encroachment on the rights of patent owners or future patent owners. Its effect is not going to be so much that of protecting the public interest as to curtail investigation and research and thereby vilify the public interest. In fact, there is at present an extremely satisfactory arrangement between the trade and the Ministry of Health whereby any dispute about prices can be resolved. If in any particular case it should come to the point that the dispute cannot be resolved, then a suggestion such as that made by my two noble friends might well be adopted. The Government may say, "we want this power as a kind of long-stop. We do not, of course, intend to use it, and we will be most moderate and reasonable in our use of it." But the very existence of it is an inhibition in the board-room to further expenditure on research. I cannot emphasise too strongly the requirement that every incentive should be placed on every board in these matters to spend as much as possible on research in order that Britain may be the owners and possessors, through the individuals and companies concerned, of new medicines of great value in the treatment of various diseases and conditions.

I believe without fear of contra fiction that if we pass Clause 25 it will be bad for a good trade with a very fine reputation, bad for experiment and research, had for the National Health Service and bad for Britain. For those reasons I earnestly hope that the Government will withdraw this clause—a clause which was inserted without consultation, without consideration, and at the very last minute. It is a classic example of the criticism which is now being levelled at Parliament from various quarters as to the way in which encroachments and other handicaps upon business and industry and upon the export trade, which is so badly needed by this country, are being exercised by Her Majesty's Government. Therefore, I hope that the Government will withdraw the clause or that the House will vote for this Amendment.

3.25 p.m.

BARONESS SUMMERSKILL

My Lords, I adopt an entirely contrary attitude to that of the noble Lord. I am asking the House to-day to accept this clause. At least the noble Lord who has just spoken was completely honest. He declared his interest. He said that he had been a director of a pharmaceutical firm for many years. The noble Lord, Lord Ogmore, also declared his interest. Therefore, I would ask the House to consider that the two longest speeches which we have heard on this subject cannot have been objective.

SEVERAL NOBLE LORDS: Nonsense!

BARONESS SUMMERSKILL

Certainly it is true that if one has an interest in a matter, it is very difficult to be objective; one is much more likely to be subjective. This is an important point.

LORD NEWTON

My Lords—

BARONESS SUMMERSKILL

My Lords, the noble Lord and I have discussed this matter before. I am sure there is nothing new that he can say.

LORD NEWTON

My Lords, I should like the noble Baroness to be quite clear that I have no interest whatever in the pharmaceutical industry.

BARONESS SUMMERSKILL

My Lords, if the noble Lord had listened to me with the same attentiveness as he displayed when he suddently jumped to his feet, he would have heard me say that the two longest speeches on this subject had come from noble Lords who have an interest in this matter. I attach great importance to that fact.

I hope that the House will not be diverted on this occasion by some talk of procedure. This is no new matter. It has come up in this House and in another place time after time during the last 20 years. Each successive Minister of Health of whatever Party (I emphasise that this is not a Party question), has found himself frustrated by being unable to reduce the drug bill in the National Health Service, a bill which soars every year in relation to the cost of each item which appears on an E.C.10 prescription form. Chairmen of the Public Accounts Committee, including the present Prime Minister, when he was its Chairman, have brought up this matter. They have asked for officials from the Ministry of Health to go before the Committee to explain why this huge amount of money is being taken out of the public purse and why there is not some restraining influence. Every method has been adopted. It was suggested time and again that the pharmaceutical industry would respond to some voluntary arrangement. So a voluntary scheme was drawn up, and the pharmaceutical industry has pledged itself to honour it. But still the costs soar.

Why is this? If noble Lords look in their medicine cupboards, they will find little boxes, pots and bottles labelled with different names. Every one of the pharmaceutical firms is churning out—"churning out" is the only expression for it—year after year, tablets, powders, mixtures.

LORD FRASER OF LONSDALE

My Lords, will the noble Baroness—

BARONESS SUMMERSKILL

No, my Lords. I have listened quietly to the noble Lord. So many of these mixtures have the same basic elements, but one has only to inject a few perhaps harmless substances for an industry to say, "Now, we can call it by a different name."

LORD FRASER OF LONSDALE

My Lords, will the noble Baroness be so courteous as to give way for one minute? This is not what we are talking about at all. We are not talking about open sellers. We are talking about the rare prescription drug; and she knows that as well as any doctor.

BARONESS SUMMERSKILL

My Lords, I listened to the noble Lord carefully. He knows the question as well as I do, and he himself talked about the huge profits. He was talking about precisely the same thing as I was. I, as a doctor, am perhaps adopting a different attitude, because I know precisely how the pharmaceutical firms in this country bring pressure to bear on the doctors to prescribe dozens and dozens of different proprietary drugs every year. Doctors are persuaded that a certain drug will have a somewhat different effect. They are persuaded by men who call themselves medical representatives—that is a euphemistic term for commercial travellers—of the pharmaceutical industry. In the British Medical Journal this week a doctor has written to other doctors and said, "A good idea is to put up a notice saying, 'No medical representatives seen'." The doctors have now got to that stage, because their time is so wasted by these men who bring in these different drugs with new names, many of which, as your Lordships know, are inadequately tested. Indeed, as we talk here to-day the thalidomide trial is being opened in Germany.

Now, why do doctors prescribe these drugs? My only indictment of my profession is that many doctors are gullible, over-worked and tired. A commercial traveller comes in and says, "This is the latest thing which this firm has produced." The doctor looks at it and looks at the glossy advertisements, which are excellent, and then he quickly writes it down. Your Lordships may say, "Well, he has to, has he not, because there is no alternative?" The alternative, my Lords, is this. Years ago, when we were faced with this problem, the Ministry of Health produced for every doctor a little book called the National Formulary, which gives a simple equivalent of many of these proprietary drugs but costing only a fraction of the amount. Doctors themselves never take these proprietary drugs; they take the National Formulary drug, which is the simple equivalent, because they know that it is equally effective.

The pharmaceutical industry in America is colossal, because for some reason or other the average American is very health conscious. The profits of the pharmaceutical industry there are quite colossal, and every big United States firm has now established a subsidiary in this country. Time after time, there is told the story that we have heard this afternoon, that so much is spent on research. But a disproportionate amount is spent on research, and not every firm spends money on research. Great research is done in this country in the hospitals and the medical schools. Who discovered penicillin? It was one of our wonderful doctors, standing in a simple little laboratory in St. Mary's Hospital, who recognised a mould. A great deal of the research is useful, but compared with the profit it is nothing—a mere drop in the ocean.

If your Lordships really want to hear an indictment of the pharmaceutical industry (because there is little to choose between the Americans and the British) I invite you to read the wonderful report of that great Senator, Senator Estes Kefauver, who unfortunately is now dead. The scandal—and it is a scandal—was so great in the United States that the Government set up a Committee or which he sat as Chairman. His indictment of members of the pharmaceutical profession for exploiting the people was really outstanding.

After many years of trying every other method our Government set up, a little while ago, another Committee of which the Chairman was the noble Lord, Lord Sainsbury. Its terms of reference were to examine the relationship between the pharmaceutical industry and the National Health Service. That Committee sat for a very long time, taking evidence from individuals and from industries, and it examined every aspect of the matter. The Committee finally came to the conclusion that a provision such as your Lordships are being asked to support in Clause 25 is one which would help the Ministry of Health to protect the public purse. Therefore, I ask your Lordships to realise this afternoon that you are not suddenly being asked to do something new. You are being asked to do something which, perhaps in only a small measure, will prevent this gross exploitation of the National Health Service.

VISCOUNT ADDISON

My Lords, I should like strongly to support every word the noble Baroness has said. I myself have an interest in this matter, as chairman of a hospital authority that has a budget amounting to very nearly £50 million every year, of which the drug element is greater and greater every year. Unless something is done to help to curtail it, the increasing size of the drug element will have an effect on the other parts of the hospital authority's budget, such as nursing and so on. I feel that the Government should strongly resist the Amendment, and that anything which can be done to try to curtail the rising drug bill is worth while, even if it may be sometimes a little beyond the ordinary course of practice in some trades. But I think that nobody in the pharmaceutical industry would complain that his profit has been very severely cut, at any rate so far, by the activities of the Ministry of Health.

3.37 p.m.

LORD SEGAL

My Lords, I ask noble Lords on the other side of the House to realise that this is in no sense a Party issue, and I am sorry that those who have some misgivings about the case put forward by those who have declared an interest are all on only one side of the House. Quite frankly, one fully recognises that they are not speaking from personal motives, but because they feel a direct responsibility to the shareholders whose interests they have to protect.

I appeal to noble Lords on the other side of the House to give just a little more careful consideration to the wider issues involved. I know of their interest in research, but I still have some doubt in my mind whether the research always comes first; whether, in some instances, it is not the fact that dividends have to come first, because of responsibility to shareholders. I am afraid that in some cases research may take a second and subsidiary place in the interests of the pharmaceutical manufacturing companies. I should have the greatest sympathy with the case of noble Lords opposite—and we on this side can respect it from every point of view—were it not that in this case the interests of sick people happen to be involved. I have nothing against profits as such. I think that where they encourage initiative, where they encourage research there is a great deal to be said for them; but not at the expense of people who happen to be ill. There one has to have some reserve and exercise some qualification.

My noble friend Lady Summerskill mentioned that penicillin, one of the greatest discoveries in the history of medicine, was not discovered on the initiative of the pharmaceutical companies. No less great is the case of insulin, which has been responsible for saving thousands, if not possibly millions, of lives. That discovery was initiated in the research laboratories of the University of Toronto, and in the early stages no private company, no pharmaceutical manufacturer, had any interest at all and certainly no part in its discovery. I mention these two instances as perhaps the greatest discoveries in the field of medicine, certainly during this present century.

The other point that I should like to make is this. A strong case has been made out for a right of appeal—a right of appeal by the manufacturers and a right of appeal on the part of the Ministry. But I would ask noble Lords: what right of appeal has a patient who is involved in the use of these drugs? He is entirely under the care of his doctor; and I think it is of vital importance that a doctor should be absolutely free to prescribe, according to his own judgment, without any thought of the cost of drugs, what he considers best in the interests of his patient.

What are the facts? Because of the enormous cost of the drug bill to our National Health Service, every doctor today is under a restraint exercised by the Ministry of Health. His quantities of drugs are scrutinised; the frequency with which he prescribes is scrutinised; and his total drug bill is scrutinised. Returns are made by him periodically; all his prescriptions are carefully analysed, and the costs are set against him—and adoctor can be made liable for the cost of drugs which he has himself prescribed, not in his own interests, not because he has some vested interest in what he is doing, but simply because he has served the interests of his patient, in an attempt to get him well as quickly as possible. It is, of course, in the interests of the country as a whole that a doctor should not be restricted in any way in his prescription of drugs. I speak here from a great deal of personal experience, because at one period I had to deal with cases of over-prescribing on the part of doctors who were penalised because they thought, according to their own judgment, they were doing what was best in the interests of their patients.

I should very much like Members opposite to consider that whereas the drug manufacturers have Members of this House who are able to protect their interests, there is really no-one here, except the doctors or those who work on our Hospital Boards, who is able to put forward the interests of the patient. So far from being an encroachment on the rights of patent holders, as was put forward by several Members on the opposite side of the House, I believe that this particular clause, if retained as the Government wish it to be retained, would be directly in the wider interests of the drug manufacturers, because they would feel that, instead of having a vested interest in disease, they would have an opportunity to serve the interests of the sick people of this country. That is why I hope that the whole House will pause, will hesitate, before depriving the Government of the ultimate right, in the interests of the patients, of the sick people of this country, to the final possibility of being able to bring some pressure to bear where costs are known to be excessive, as a restraint upon unduly excessive profits, thereby benefiting the interests of those who stand in greatest need of these drugs, the sick people of this country.

3.44 p.m.

LORD AUCKLAND

My Lords, if it is true that this is developing into a political dog-fight I regret it as much as anyone and I certainly do not intend to increase the political heat, but I would draw your Lordships' attention to paragraph 265 of the Sainsbury Report. In the interests of time, I will not quote the whole paragraph, but the gist of it is that it refers to the fact that the Banks Committee is looking into the problem of patents and urges that the result of those inquiries should be awaited before action is taken. At least, that is how I read the Report; but it is in print for all to see. Therefore, on those grounds alone, leaving aside the merits or otherwise of the subject we are discussing, surely that is one very good reason for not rushing our fences, which is what will happen if this clause goes through.

I would say one word about sales promotion, because I am the associate director of a company which has done a certain amount of training in the pharmaceutical industry. I may say that I have not been concerned in this personally. It may be true that some companies have pushed their sales promotion too far. That happens in every company, whether you are selling brushes or whether you are selling soup. There is a tendency, perhaps, towards over-selling. But I know that in the vast majority of pharmaceutical companies to-clay the training of their sales representatives is every bit as full and as selective as it is in any other company. Therefore, I do not think that criticism of the sales promotion activities of the pharmaceutical companies these days is as justified as many people make out. I have visited a number of pharmaceutical companies, I have seen the research carried out and I have myself posed searching questions. However, solely on the grounds of paragraph 265 of this Report, which seems to sum up the whole argument around which this afternoon's discussion is centred, I urge the Government to have second thoughts.

3.48 p.m.

LORD SAINSBURY

My Lords, during the Committee stage I explained how the Committee of which I was the chairman came to their unanimous recommendation, No. 11, to extend Section 46 of the Patents Act to the general pharmaceutical service, and I have no intention of encroaching upon the patience of your Lordships' House by making the same speech a second time. I would add, however, that it was a unanimous recommendation; that there were people of all Parties and of none on the Committee; and that we had the advice of a very eminent patent lawyer who was also on the Committee.

I listened with the greatest attention to the speeches made on the Committee stage and to those made this afternoon, but I am still brought up against the problem of negotiation between the Departments of Health and the pharmaceutical industry—or, rather, the particular firm. In the past we have been faced with a deadlock. Under the voluntary price regulations scheme, after lengthy negotiations we have been faced with deadlock; and we were convinced that the Ministry needed a weapon of last resort. We were also convinced, after endless discussion and the endless hearing of evidence, that the negotiating weights between the Department, on the one hand, and the industry, on the other, were not evenly balanced, and that is why we made this recommendation.

I think that we on this side of the House are entitled to ask this question of the Conservatives on the Opposition Benches. They have some expectation at least of being in power perhaps one day; whereas the chances of others in opposition are somewhat more remote. Are they saying in fact—because this is the real difference between us—that Section 46 of the Patents Act should never have extended the uses of the Crown to the hospital service in 1961?

LORD NEWTON

My Lords, my response to the challenge of the noble Lord, Lord Sainsbury— for he directly asks me this question—is to say that I would save the time of the House by asking him to read to-morrow in Hansard what I have said this afternoon and what I said on the Committee stage.

LORD SAINSBURY

My Lords, I have the greatest respect for the noble Lord, Lord Newton, and I know that he is very knowledgeable on all matters dealing with health. I know that he did not go into the Department of Health until 1962; but he must have known then the great difficulties that can arise in the matter of negotiation. I never thought that I should live to see it, but on this occasion I agree with Mr. Enoch Powell. I believe that the facts justify his use of the section.

My Lords, I want to move now to a point of logic. If, in the interests of the taxpayer, to safeguard the taxpayers' money, to be fair to both the individual firms and to the public interest, it is right to extend the uses of the Crown to the hospital service, then to my way of thinking it is undoubtedly logical to extend the use to the whole service which was brought into being under the same Acts. Therefore, I strongly recommend your Lordships to leave on one side the question of research. We all know of the very valuable research that is done by certain firms in the industry; we know the contribution that that research has made to the healing and to the saving of life, and in our Report my Committee pay tribute to the industry. But there is ample provision in the voluntary price regulations to cover the question of genuine research costs. This is a power which I believe the Ministers and the Department of Health should have as a last resort. I hope, therefore, that your Lordships will reject Lord Ogmore's Amendment.

3.54 p.m.

LORD FERRIER

My Lords, I had hoped that we should not be going over so much of the old ground as we have done. It is with reluctance that I ask for your Lordships' patience. I am in a peculiar position, in that I am not a chemist; I am an industrialist. It so happened that I was retired from India in 1951 and became chairman of a pharmaceutical company. I think I was invited to become so because of my expertise as an industrialist and as one expert in man management. I was in that position for 12 years, but resigned some years ago, so that I no longer have any executive connection with the industry. It therefore occurs to me that I am in a peculiar position to answer in some measure what has been said opposite in criticism of this remarkable industry which I was proud and thrilled to serve, and in which I found an interest of the deepest emotional sort. The noble Lord, Lord Segal, said that the doctors' main interest is in his patient. Of course, it is! But the main interest of the pharmaceutical manufacturer is in the patient.

BARONESS SUMMERSKILL

Oh!

LORD FERRIER

My Lords, the noble Baroness laughs. But this is the case. It is obvious that what pays is good medicine. That the noble Baroness laughs, justifies my getting on my feet to protest at what has been said opposite. It has been deeply wounding to anybody who, like myself, has served in this splendid industry. Imputations have been made about noble Lords on my right and left because they are interested. Is there any rule against a noble Lord coming to your Lordships' House with the expertise he possesses to lay before your Lordships the facts of the case?

LORD SEGAL

My Lords, would the noble Lord forgive me for interrupting? Would he not agree that research in medicine should be kept entirely free from the question of profit or cost or dividends, in order to achieve satisfactory results?

LORD FERRIER

No, my Lords; I would not agree in any way. The company with which I was concerned had been in Scotland for many years. This group of companies had been in the closest association with the Edinburgh medical school—they made the first chloroform used by Dr. Simpson in the middle of the last century. The question of research is entirely a matter for the manufacturer. The noble Lord, Lord Fraser, touched on a matter not mentioned in the previous exchanges, the question of disclosures of inventions in terms of the patent. This is a very interesting and complex matter. As the noble Lord, Lord Auckland, has explained, the Sainsbury Report pointed out how complex it is.

This matter of research is of such complexity that, whereas pure research from the medical angle can come from the medical school, research on what is possible in terms of pharmaceutical development and chemical compounds can go hand in hand with that in the care of the industry. I hesitate to go over old ground, but as I said previously on Committee stage, Pfizer's expenditure in research is greater than that of all the British pharmaceutical industry put together. What British industry spends is small compared with world expenditure.

But to come to the point made by the noble Lord, Lord Sainsbury, in asking us on this side whether we agree with Mr. Enoch Powell's action in 1961, I roundly say that I do not; that I never did; that I said so then and say so to-day. We were wrong then and we should be wrong to-day. I do not mind saying that if, when my Party are in power, any such proposal were to be put on the Statute Book—because I trust your Lordships will reject it to-day—I should leave the Party and go to the Cross-Benches. This is a political matter. It is no use saying that it should not be regarded as a Party matter. This proposal, admittedly initiated by Mr. Enoch Powell, is a bludgeon with which to drive a wedge into the very foundations of our way of life.

SEVERAL NOBLE LORDS: Oh!

LORD FERRIER

Noble Lords may laugh. But this game has gone on too long. Not only has the clause bee -I slipped in on the quiet; but as it was in the case of Enoch Powell, so it is to-day. If you start interfering with an individual's freedom to patent his invention and to profit thereby; and if, because it makes a profit you say that he must not do that, then that is quite wrong. And for anybody who has read the papers in connection with the Pfizer case to say that they were not justified in challenging the price proposed is also quite wrong. They were entitled to say so.

My Lords, for the benefit of those who were not at the Committee stage, may I say that it is fair to repeat that one of the proposals made by the noble Lord, Lord Newton, was that there shot Id be a system for arbitration. The Government rejected that. If we appeal to logic and to fairness, would it not have been possible to accept this middle course; namely, that there should be a provision—as there is in the French Patent Law—whereby if the State acquires an interest in a patent, compensation is referred to an independent body? This would be fair, and I do not think that any reasonable man would reject it. I believe that the clause, as it stands, is wrong. I believe that it was wrong when Section 46 was used in 1961, and I hope that that we shall carry Lord Ogmore's Amendment. I shall go into the Lobby with him.

4.2 p.m.

LORD PLATT

My Lords, I wonder whether your Lordships' House would accept a little cooling medicine from the Cross-Benches? There are only one or two things which I want to say, briefly, and the first is about research. An enormous amount of modern medical discovery has come from the pharmaceutical industry (in which I have no financial interest whatsoever) and there is no gainsaying this. I am old enough to remember the discovery of insulin by a medical student—against a good deal of or position, may I say. But it had to be developed in collaboration with the industry. The cure of pernicious anemia was worked out by some lucky accidents in an academic department. The discovery of the active principle was worked out in the laboratories of the pharmaceutical industry. We have heard of penicillin which was discovered accidentally by dear Alex Fleming. But penicillin was not developed for ten years, and when Florey and Chain took it over and worked out some better ways of producing it, industry was immediately concerned again before it could be produced. All the later antibiotics, I think without exception, have been discovered in the laboratories of the pharmaceutical industry, to say nothing of modern as well as ancient anesthetics and tranquillisers, and a whole host of other drugs. So we must not get this out of focus.

I think we have got rather far from the issue. For me the issue is not whether the pharmaceutical industry should make the enormous profits which it unquestionably does, but whether putting this clause in this Bill is the right way to deal with it. Speaking from these Benches I am not yet convinced that this is the right way to deal with the situation. I should like to see a great deal more consideration given to it in a different way, perhaps with a view to bringing in some different kind of safeguard in the nature of arbitration or something of that kind.

LORD CONESFORD

My Lords, I should like to support this Amendment. Let me say at once that I neither have nor ever have had any interest whatsoever in the pharmaceutical industry, but I have had some interest in Patent Law and the law of copyright; not from ever having practised in these particular branches of the law but because from 1951 to 1955 I was a Minister in the Board of Trade, the Department concerned with those two aspects of the law.

I was convinced that the Government were unwise to include this clause in the Bill by a letter from the noble and learned Lord, Lord Shawcross, which appeared in The Times a few days ago. I respect the attitude and the arguments put forward with such feeling by the noble Lord, Lord Segal, but I do not regard them as arguments for extending Section 46 of the Patents Act 1949 without any further inquiry. The noble Lord, Lord Sainsbury, asked whether we challenged the very existence of that section. I should certainly not be in a position to do so, because I was a member of a Government which certainly tolerated its existence on the Statute Book for a considerable time; but when the noble Lord says that it is obvious that we ought to extend its application without any further argument or inquiry, he does not convince me at all.

I agree with what was said by the noble Lord, Lord Ogmore, when moving this Amendment. Reference has been made by several noble Lords to the Banks Committee. I think that the Banks Committee are considering a matter very relevant to what we are considering now. It seems to me extraordinary that the Banks Committee should be considering this very subject, and that, before we hear the views of that Committee, and know the effect that evidence may have upon them, we should decide this matter in this way despite all the arguments put forward. The noble Lord, Lord Segal, said that surely we ought to disregard patent rights when we think of the merits. Perhaps I misunderstood him, but I thought that in his view the interests of the patient were so great that any claim that we were unjustly extending interference with patent rights did not carry much conviction.

LORD SEGAL

My Lords, I thank the noble Lord, Lord Conesford, for giving way. I wish to make clear that the interests of the patient must always demand that a doctor should have the unrestricted right to prescribe what he thinks is in the interests of his patient, regardless of the cost of the drugs involved.

LORD CONESFORD

My Lords, I do not see anything in the opposition to or advocacy of this clause that has the slightest bearing on what a doctor should prescribe. I may have misunderstood the point, but I cannot see that there is anything to stop a doctor from prescribing what he wishes.

LORD SEGAL

My Lords, I am exceedingly sorry, and I hope that the noble Lord will forgive me for intervening again. I endeavoured to make clear that the doctor was under severe restraint, severe penalties, for prescribing for a patient just because of the cost of the drugs involved. Surely this is a matter which bears directly on the clause which the Government wish to see retained, enabling them in the last resort to exercise some control over the cost of drugs directly in the interests of the patient.

LORD CONESFORD

Yes, my Lords. In other words, a doctor, while having the legal right to prescribe anything he likes, may find himself prescribing something much too expensive because of the operation of the Patent Law. If the noble Lords says that, that shows that an extension such as is proposed in the clause ought to be further examined. If he says that the case for such a clause ought to be further examined, 1 would not question it. What I do question is disregarding or extending interference with patent rights without inquiry. If I may give a parallel—I do not want to develop it, because I do not want to extend the debate—copyright is not unlike patents in certain respects. Many people who wish to confer a benefit on very poor nations may think that a very good way to cheapen books might be to disregard the copyright of authors. In fact, there has been a recent example where that was attempted. That is extremely undesirable. I do not believe that, in dealing with patents or with copyright, we ought to disregard the legal rights of the copyright-holder or patent-holder, or disregard the latter's objection to an extension of the operation of Section 46 of the 1949 Act without the inquiry which I thought was now taking place.

I understood from the noble Lord, Lord Ogmore, from the noble Lord, Lord Shawcross, in his letter to The Times, and from other speakers that this very subject is now being inquired into by an expert committee. I shall vote for the deletion of this clause, not because I take the view that something may not ultimately be required—on that I have an open mind—but because I think it undesirable to make a questionable and hotly contested extension of the application of this section before we know the views of the Committee inquiring into the subject.

LORD COLERAINE

My Lords, in order to put myself straight with the noble Baroness, Lady Surnmerskill, I must explain that I, too, take a subjective view of this problem—in other words, I have an interest in the pharmaceutical industry. After listening to the noble Lord, Lord Platt, I have no reason to apologise for such an interest. I suppose that most of us, in our views on public questions, are more subjective than we imagine. Certainly, if the speech of the noble Baroness was an example of objectivity, I think that I must get myself a new dictionary.

There are only two points that I want to make now, and both of them arise out of what was said by the noble Lord, Lord Sainsbury. He said that his Committee was absolutely unanimous on this point. That is obviously a factor which should weigh heavily with us, but it is not the only factor. The noble Lord and his Committee were concerned with the pharmaceutical industry alone, and this question of patents and the kind of intrusion which the Government should be able to make into patent rights concerns a far wider field than the pharmaceutical industry; it concerns industry as a whole. Since the Banks Committee is considering these matters in this wider context, it seems absurd that this point should be forced into this Bill at this particular time.

The other point I should like to take up is this. The noble Lord, Lord Sainsbury, said that in his view the negotiations by the Ministry and the industry were apt to come to a deadlock, and it was necessary that the Ministry should have a weapon of last resort.

LORD SAINSBURY

My Lords, I did not want to imply, and I thought I had not, that this was a general occurrence: it was a very rare occurrence, which had happened in the past and could happen again. The majority of agreements between the Health Department arid the industry are settled after due negotiation. But we were thinking in terms of a possible deadlock in a very small minority of cases.

LORD COLERAINE

My Lords, I am grateful to the noble Lord for putting me right if I have expressed wrongly what he was saying. But the point I put to him is this. Clearly, there is the possibility, to put it no higher, that he envisaged. I think that the Ministry, representing the taxpayer—representing, if you like, the patient—should have in reserve some power to resolve that deadlock. But what seems to me to be quite unconscionable is that they should have this particular power, and that they should be, as the noble Lord, Lord Newton, said, Judge in a case in which the Ministry itself is vitally interested. I cannot see why there should not be some tribunal, distinct from the industry and distinct from the Ministry, to which these rare cases should be referrred.

It is all very well to say that this power will not be used, but it is there as a threat, and I suggest that a threat in reserve is always a threat in use. I think that we are giving too much power to the Ministry. In all the public debate that is going on now, the whole tenor of the public voice is not that the Ministers have too little power and Parliament too much, but that the Ministers have too much power and Parliament too little. This clause is still further adding to the power of the Government; and not because it is necessary for the Government to have this power but because it might be necessary in some hypothetical future. And it adds nothing to the power of Parliament. For that reason, I will certainly support the Amendment.

4.17 p.m.

LORD RITCHIE-CALDER

My Lords, since everyone is declaring an interest, I had better declare mine. My interest is that I have written a book about the pharmaceutical industry. The insight which I got then confirms me in going into the Lobby in support of this clause. We have been reminiscing and historicising about this matter, but in point of fact what we are talking about is perfectly straightforward. My noble friend Lady Summerskill emphasised the point. The fact is that drugs which are for the benefit of mankind are being sold at a ransom price. There is no argument about that, and there is no justification whatever in the argument about the totality of the expenditure on research. I know that a lot of money is spent on certain items. But we are talking about an industry which has become fantastically extravagant in terms of recovery of dividends and is intolerably non-extravagant in its attention to the public.

I say this with conviction because not only have I had some insight into the practices of the industry—with a great deal of help from the industry, I hasten to add—but I have also studied the Kefauver Report. I think it is an exaggeration to say that our great dis- coveries have come from the pharmaceutical industry. The refinements of our great discoveries certainly have. I have still to find out the degree of risk which many companies took in exploiting what was a self-evident fact. I would remind your Lordships that the patents for penicillin, discovered by Fleming, Florey and Chain, stand in the British Patents Office in the name of J. A. Moyers, of Peoria, U.S.A. It is a blocking patent, and I should say that that is substantially true of many others.

I should like to ask the noble Lord, Lord Platt, to whom I defer with great respect on this, to tell me how many of the really outstanding discoveries of the post-war world came from the pharmaceutical industry and not from academic research. I can only think of one—and that is, LSD.

LORD PLATT

My Lords, the sulphonamides are a very good example.

LORD RITCHIE-CALDER

My Lords, in point of fact the sulphonamides came from the dyestuff industry. But what are the others? It you think of the tranquiliser and so on, they came derivatively from pure research and not from the industry.

LORD PLATT

My Lords, unquestionably the greatest gains have been from a happy collaboration between academic research and industry; and industry has often come in at a very early stage and made the real discovery—as, for instance, the active principle of vitamin B12, which I gave; and, of course, streptomycin and various others have been largely worked out by industry.

LORD RITCHIE-CALDER

My Lords, the case which the noble Lord cites is an extremely interesting one of the relationship with the industry. Vitamin B12 was discovered by Glaxo and exploited in America with a fortnight's advantage. But what we are talking about is the question of whether or not an industry which is dedicated to the welfare of mankind is entitled to go to the extreme to which the noble Lord, Lord Sainsbury, is trying to prevent them going: that of holding the patients to ransom. My answer is emphatically, No. As the noble Lord, Lord Sainsbury, has pointed out the clause we are discussing to-day is a clause of last resort.

4.22 p.m.

BARONESS PHILLIPS

My Lords, I have listened with great interest, and, if I may say so, a sense of deep humility, to the contributions from noble Lords in all parts of the House. The knowledge which so many of your Lordships have shown must have contributed to clearing the air for those of us who have perhaps not so much knowledge of the industry as others have. I do not intend to speak at great length, but I should like to attempt to reply to the points which have been directly put to me.

The noble Lord, Lord Newton, and also, I think, the noble Lord, Lord Ogmore, made some reference again to the fact that this clause was slipped in. In fact, as those of your Lordships who have studied the Hansard of the other place will know, this clause was discussed on the Floor of the other place. On Second Reading in your Lordships' House I said that I should be submitting an Amendment, and when several noble Lords picked up this point and asked whether the substance would he changed, I quite categorically said that the substance would be unchanged. In other words, I feel that this is a rather unfair debating point, because the clause which we are discussing is substantially the same.

I should like to emphasise what the noble Lord, Lord Sainsbury, has said so eloquently. His Committee said that there must be some procedure to which the Ministry could resort if negotiations on the prices of pharmaceutical products failed. Listening to some of your Lordships, one would get the impression that the Government were to-morrow going to rush out and immediately take up arms against the pharmaceutical industry. Perhaps I may repeat once again that the Minister has a great interest in maintaining a strong pharmaceutical industry; indeed, he has on many occasions paid tribute to the contributions which the industry has made.

Since several noble Lords have quoted Lord Sainsbury's excellent Report, I feel it is wise if I refer to one passage which shows the effect of Section 46, as I feel that there has been occasionally a suggestion that there is an element of doubt about it. When the provisions of Section 46 were used by the Minister in 1961 the evidence available to the Ministry suggested that the prices of some of the widely used patented medicines wire unreasonably high. It was known that some of them were available from Foreign sources at much lower prices. And in May, 1961, the Minister announced in another place that he proposed to use Section 46 for the purpose of obtaining patented drugs for the hospital services, and hospitals were directed to discontinue purchases of such products from unlicensed sources. Tenders were invited by advertisement for certain medicines which were widely used in hospitals and were showing substantial differences of price between patentees and unlicensed suppliers. These medicines, in the Minister's view, had been in use long enough for the patentees to have had a reasonable opportunity to recoup their expenditure on research.

The leading companies tendered only for medicines for which they were the patentees or licensees, and with the exception of one, all of them quoted existing hospital prices. Substantially lower tenders came from small companies relying on Continental sources either for raw material or for the finished article. Samples were tested by the Government chemist. Inquiries were made into the status of the prospective suppliers, and the officers of the Ministry inspected the premises both of the manufacturers' board and of the suppliers in the United Kingdom. Contracts were awarded on the basis of each batch of material imported, and, where appropriate, each batch of final presentation was tested by the Government chemist and a satisfactory declaration was required before the batch was released to hospitals.

In the event, Section 46 was used in relation to five different medicines The differences between the original price and "Section 46" prices were very great, even allowing for any probable level of compensation which the Ministry might be advised to pay to the patentee. They are demonstrated by some of the figures in a table in the Report from which I have extracted the following: For medicine A the original patentee price in 1961 was 153s. 4d.; but the Section 46 supplied price was 33s. 10d. For medicine B the respective prices were 153s. 4d. and 71s.; for medicine C, 153s. 4d. and 51s. 6d; for medicine D, 107s. 2d. and 15s.; and for medicine E, 170s. and 20s. 2d. As the Report says, in this instance the differences were very great. I think your Lordships will agree that it is in circumstances of this kind that the Minister envisages using this clause; and only in such circumstances. We know that the voluntary price-fixing arrangement works well, but the Sainsbury Committee quite categorically stated that the Minister should have the power in the clause as a last resort should negotiations fail.

The noble Lord, Lord Auckland, did not quote all of paragraph 265 from the Sainsbury Report, but referred to a different section when dealing with the question of the patentee's monopoly rights. As the noble Lord, Lord Sainsbury, has said, his Committee excluded from waiting for the Banks Committee Report the question of the clause we are considering to-day. I wonder whether the noble Lord, Lord Auckland, noted that the first sentence of the paragraph to which he referred says: We have noted elsewhere that most of us doubt whether a patent monopoly of 16 years is necessary to induce adequate research and innovation in the pharmaceutical industry. In other words, my Lords, I think the case for this clause has been made out, and I would ask your Lordships to reject this Amendment.

LORD OGMORE

My Lords, I shall be very brief in replying to the debate—as is my right.

SEVERAL NOBLE LORDS: Hear, hear!

LORD OGMORE

Well, my Lords, a good deal was said which I think is quite immaterial. I believe that the noble Lord who really put his finger on this was the noble Lord, Lord Conesford. It is not a question at all of whether the prices of pharmaceutical products are or are not too great, but of whether this clause should be in this Bill. In reply to the noble Lord, Lord Conesford, I should like to assure him that the Banks Committee, which was appointed by the President of the Board of Trade, is reviewing the Patent Law and the patent system, and is expected to report in the not too distant future. I have all the way through admitted my interest, but it is the custom of your Lordships' House that people with an interest can sit and speak here. It does not necessarily follow that, because we have a personal interest, we have no regard for the public wellbeing—and I am certain that noble Lords on all sides of the House spoke with that in mind—although we differ on certain aspects.

In my view it is absolutely absurd—I can think of no other word for it—to put a clause of this kind in a Bill which has nothing at all to do with patents, and nothing to do with pharmaceutical products for that matter, at the very moment when I hope we shall have the whole issue considered and reported on by the Banks Committee. As the noble Lord, Lord Sainsbury, said, in an extreme case there may be difficulty, because the Government are, as it were, the customer as well as being expected to "hold the ring". Of course the Banks Committee may produce a good solution, and therefore I suggest that it would be most undesirable if we were to pass a clause of this kind, only to find, in a fortnight to three weeks' time, that the Banks Committee come up with something far better.

Therefore, I ask your Lordships to put right out of your minds the question of whether the products of the pharmaceutical industry cost too much. That is nothing to do with the matter. The prices of all pharmaceutical products are agreed by voluntary agreement with the Ministry, and at this particular moment the Ministry is in discussion with the industry as to another and, they think, a better system. So there is no question of allowing the industry to make fantastic profits.

I wish to make one other point in fairness to the industry. I should like to repeat what Sir Derrick Dunlop, the Chairman of the Committee on Safety of Drugs—a Government Committee—has said about the pharmaceutical industry. He said: The pharmaceutical industry has made enormous contributions to our society. Professor Chain, of penicillin fame, recently reviewed the 66 most valuable compounds introduced to medicine since aspirin in 1899. His analysis showed that only nine of these came from universities and research institutes, the rest came from scientists in the pharmaceutical industry. I think that absolutely refutes the idea that the pharmaceutical industry is interested only in profits and not in research. That view was in fact corroborated to-day by the noble Lord, Lord Platt, who for many years was Professor of Medicine at university. On Second Reading the noble Lord said: If the noble Lord, Lord Ogmore, has read my Harveian Oration to the Royal College of Physicians, he will know that I support his claim that a very large number of advances in therapeutics which have come in our life

Resolved in the affirmative, and Amendment agreed to accordingly.

time have come not through the medical profession but through the pharmaceutical industry."—[OFFICIAL REPORT, 23/4/68, col. 580.] With those remarks I think I need do no more than ask your Lordships to support me in the Lobby to-day.

4.34 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 93; Not-Contents, 63.

CONTENTS
Aberdeen and Temair, M. Dundonald, E. Milverton, L.
Ailwyn, L. Ebbisham, L. Molson, L.
Albermarle, E. Effingham, E. Monsell, V.
Alport, L. Elliot of Harwood, Bs. Morrison, L.
Amherst, E. Emmet of Amberley, Bs. Mowbray and Stourton, L. [Teller.]
Amulree, L. Falkland, V.
Asquith of Yarnbury, Bs. Ferrier, L. Newton, L.
Atholl, D. Forester, L. Nugent of Guildford, L
Auckland, L. Fraser of Lonsdale, L. Oakshott, L.
Balfour of Inchrye, L. Furness, V. Ogmore, L. [Teller.]
Bannerman of Kildonan, L. Goschen, V. Platt, L.
Beaumont of Whitley, L. Greenway, L. Rankeillour, L.
Berkeley, Bs. Grenfell, L. Rathcavan, L.
Bessborough, E. Grimston of Westbury, L. Rea, L.
Brentford, V. Henley, L. Redesdale, L.
Brooke of Cumnor, L. Howard of Glossop, L. Ruthven of Freeland, Ly.
Brooke of Ystradfellte, Bs. Hunt, L. St. Aldwyn, E.
Buckton, L. Iddesleigh, E. St. Helens, L
Carrington, L. Ilford, L. Sempill, Ly.
Clwyd, L. Inchyra, L. Stamp, L.
Coleraine, L. Inglewood, L. Stonehaven, V.
Conesford, L. Jessel, L. Strathclyde, L.
Craigavon, V. Kilmany, L. Swaythling, L.
Craigmyle, L. Lovat, L. Teviot, L.
Crathorne, L. Lucas of Chilworth, L. Teynham, L.
Croft, L. Luke, L. Thurlow, L.
Daventry, V. MacAndrew, L. Trefgarne, L.
Denham, L. Macpherson of Drumochter, L. Vivian, L.
Derwent, L. Margadale, L. Wade, L.
Dilhorne, V. Merrivale, L. Wakefield of Kendal, L.
Drumalbyn, L. Meston, L. Woolton, E.
Dudley, L.
NOT-CONTENTS
Addison, V. Hilton of Upton, L. [Teller.] Ritchie-Calder, L.
Archibald, L. Hirshfield, L. Rowley, L.
Arwyn, L. Kilbracken, L. Royle, L.
Beswick, L. Kirkwood, L. Rushholme, L.
Birk, Bs. Latham, L. Sainsbury, L.
Blyton, L. Leatherland, L. Samuel, V.
Boothby, L. Listowel, E. Segal, L.
Bowles, L. Llewelyn-Davies of Hastoe, Bs. Serota, Bs. [Teller.]
Boyd-Orr, L. McLeavy, L. Shackleton, L.
Brockway, L. Mais, L. Shepherd, L.
Buckinghamshire, E. Milner of Leeds, L. Silkin, L.
Burden, L. Mitchison, L. Sorensen, L.
Chalfont, L. Morris of Kenwood, L. Southwark, Bp.
Champion, L. Moyle, L. Stonham, L.
Crook, L. Noel-Buxton, L. Strabolgi, L.
Faringdon, L. Pargiter, L. Strang, L.
Gardiner, L. (L. Chancellor.) Peddie, L. Strange, L.
Garnsworthy, L. Phillips, Bs. Summerskill, Bs.
Geddes of Epsom, L. Plummer, Bs. Taylor of Mansfield, L.
Granville-West, L. Popplewell, L. Walston, L.
Henderson, L. Rhodes, L. Wells-Pestell, L.

4.45 p.m.

BARONESS PHILLIPS moved, after subsection (6), to insert: () The power conferred by subsection (1) above to make regulations shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

The noble Baroness said: My Lords, Clause 63(1)(b) enables the Minister to make regulations specifying the classes of persons for whom he can provide instruction in connection with activities in the health and welfare services (other than the hospital services, which are covered by subsection (1)(a) of the clause). This Amendment has the effect of making the Minister's power to make regulations under subsection (1)(b) exercisable by Statutory Instrument subject to annulment in pursuance of a Resolution of either House of Parliament. That simply brings the clause into line with all the other provisions in the Bill which confer on the Minister a power to make regulations, and corrects an unintended omission. I beg to move.

Amendment moved— Page 44, line 33, at end insert the said subsection.—(Baroness Phillips.)

On Question, Amendment agreed to.