§ "I will, with permission, Mr. Speaker, make a Statement about a settlement which has been reached between the Government and the Hoffman-La Roche Group concerning its ethical pharmaceutical products, including librium and valium, the prices of which have since April 1973 been controlled by Order.
1878§ "The House will recall that following a report by the Monopolies and Mergers Commission, which was a landmark in the history of Monopoly policy, the then Minister for Trade and Consumer Affairs, the right honourable and learned Member for East Surrey, made a Statement on 12th April 1973 accepting the Commission's recommendations and announcing the making of an Order reducing the price of Librium to 40 per cent. of the 1970 price and the price of valium to 25 per cent. of the 1970 price.
§ "Under the procedures of another place the Roche Company applied to the Special Orders Committee for the appointment of a Select Committee to inquire into the Order. This application was rejected and the Order was approved by Parliament. Subsequently the company started proceedings in the High Court against the Government and the Commission, alleging unfairness and breach of natural justice and applying to have the Order declared void.
§ "In April 1974 out-of-court negotiations began about the price of the drugs in question to see whether a settlement could be reached. It was desirable to bring Roche back into the Voluntary Price Regulation Scheme of the DHSS as early as possible. During the course of the negotiations we obtained from the company a great deal more information than they had given to the Monopolies Commission. I am glad to inform the House that agreement has now been reached as a result of which:
§ one, the company will repay to the Government the sum of approximately £3¾ million, in addition to the payments made earlier in respect of the years 1967–69; the figure of £3¾ million is an overall settlement which takes account of excessive profits over the period 1st January 1970 to 23rd April 1973, the date of the coming into force of the Order. In respect of that period the sum is £12 million, but we for our part have accepted that since the Monopolies Commission reported the Order prices have become unduly low and that under normal VPRS guidelines an offset of £8.25 million is due to the company. The figures on both sides include interest payments;
§ two, the company will come back into the VPRS for all its ethical pharmaceutical products;
§ three, the company have accepted that the new prices of librium and valium will be put at approximately half the 1970 level, which was the baseline from which the Monopolies Commission inquiry started, and they will settle with the DHSS price changes for their other medicines within the provisions of the VPRS; the new prices of librium and valium will still be less than half those ruling in therest of the world;
§ four, the company have informed us that they intend to continue their research and investment in the United Kingdom and that they plan to spend several million pounds on improved research, production and administration facilities both at Welwyn Garden City and at Dalry, Ayrshire and thus continuing their valuable contribution to medicine. They are also considering a further major expansion at 1879 Dalry of their vitamin and chemical production facilities for Europe and other world markets. five, the company has undertaken to withdraw its legal action against the Crown and the Monopolies Commission together with any allegations of impropriety.
§ "This Agreement is clearly incompatible with the continuance in force of the Order and consequently is subject to its effective revocation.
§ "I believe this to be a satisfactory resolution of our differences with the Hoffman-La Roche Group of Companies and under the provisions of the Fair Trading Act I am publishing the statutory notice of my intention to make an Order to revoke the 1973 Order.
§ "In conclusion I wish to pay a particular tribute to the Monopolies and Mergers Commission for the important work which they have done in this case. I believe the solution will be in the interests of the public both here and abroad."