HL Deb 08 April 1987 vol 486 cc1078-83

6.23 p.m.

Lord Northfield

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time.—(Lord Northfield.)

Lord Williams of Elvel

My Lords, since this Bill has given rise to a certain amount of controversy, I do not think that it would be right to let it leave your Lordships' House without making one or two comments. I do not intend to detain your Lordships for very long.

Our view from these Benches is that this Bill should have been a Government Bill. Indeed, my noble friend Lord Northfield, when he introduced the Bill in his Second Reading speech on 12th January (Official Report, 12/1/87: col. 447), said: "this is effectively a Government Bill". I believe that it would have been perfectly normal for the Government to introduce this measure as a public Bill because, as I understand it, it was originally intended to be included in the Intellectual Property Bill, which never saw the light of day.

We now know that we have plenty of time in your Lordships' House, and I do not think that even the business managers, who have had their day today, could have objected had the Bill been introduced in government time and with full government responsibility. The fact that the Government did not do that has given rise to a certain amount of confusion and perhaps allowed controversy to take place that otherwise would not have done. For instance, there has been debate about the future estimated cost to the National Health Service. I accept—as I accepted on the second day of Committee—that there were difficulties in making such estimates. Nevertheless, if the Bill had been a public Bill introduced by the Government, the Government would have had to produce a considered estimate at the outset and not, if I may say so, one that was dragged out of the noble Lord, Lord Lucas, on the second day of the Committee stage, when I asked him—and I had given notice of the question—what would be the Government's estimate of the future cost to the NHS. The estimate—and he admitted it—was made rather hurriedly and I found his reply, interesting though it was, somewhat incomplete.

We could have debated this estimate and indeed other estimates that were around and the Government would have had to accept or reject the various figures that were put forward from different private sources. They would have had to explain their position and make it perfectly clear and we should have had the opportunity to decide whether they were going about matters the right way.

Next there was the controversy over the interests of various noble Lords, a controversy that has been widely aired in the press. I believe that the press comment has been extremely unfortunate. There is a perfectly clear convention in this House that noble Lords are on their honour to declare their interests and, as I understand it, this system has worked extremely well hitherto. It may be that wiser heads than mine will decide in the future that there should be a register of the interests of Members of this House just as there is in another place. Certainly wiser heads than mine—and maybe there is already a committee even now doing this—will be advising the noble Viscount the Leader of the House on this matter. But I do regret that these matters have become a subject of public comment and, if I may say so, a matter for rather cynical discussion in the press. I believe that that could have been avoided if this Bill had been introduced by the Government as a public Bill.

There has also been controversy over the conduct of the debate during the various stages of the Bill. I believe that some remarks were made which would not have been made on mature reflection and which we must all regret. Nevertheless, I believe that the debate would have been conducted in a perfectly orderly manner if the Government, as was appropriate, had taken their full responsibility for the Bill.

I felt it my duty to raise these matters because they caused difficulty and on occasions showed your Lordships' House in a somewhat unhappy light. Nevertheless I do not want to dwell on them because I want to come to the main point of what I have to say.

I must speak in my capacity as Opposition spokesman on these matters and not simply as another noble Lord speaking on a Private Member's Bill. Our view was stated quite clearly at Second Reading by my noble friend Lord McIntosh of Haringey, when he said that, unless it could be clearly shown that there was no significant cost to the National Health Service as a result of the enactment of the Bill, we should oppose it.

The only rider that I add to that remark—and I am sure that my noble friend will agree with me—is that our attitude might be somewhat softened if we were convinced that the extra revenues to pharmaceutical companies resulting from the application of the Bill would be applied to research and development, which, as all parts of the House agree, needs every encouragement. My noble friend Lord Northfield rightly emphasised that point.

However, I must confess that both I personally, and your Lordships generally, I believe, are still in some confusion about some points, such as the cost to the National Health Service, and the question of how much will be devoted to research and development and what the eventual result is likely to be. So I have to say again to the Government that, if they want the Bill, they must take full and open responsibility for it. They must prepare their position properly and in detail so that the issues that I and my noble friend Lord McIntosh of Haringey have raised may be fully and properly examined and indeed probed when this Bill arrives in another place.

6.30 p.m.

Lord Beaverbrook

My Lords, as I and my noble friend Lord Lucas of Chilworth said in previous debates, the Government support this Bill. The Government have made it plain that we see it as providing encouragement to the United Kingdom pharmaceutical industry. We have accepted that as research for new drugs becomes more complicated and expensive something needs to be done about the products whose patents will be affected by the transitional licence of right provisions of the Patents Act 1977.

It has been argued that companies should be able to afford to fund research without this measure and that they already profit enough from the sale of drugs to the National Health Service. But we must all remember that this is a risk industry where today's best selling drug can swiftly be knocked off its pedestal by a new entrant to the market. We should also be proud that many new drugs owe their discovery to our scientists and that as a result the pharmaceutical industry provides a balance of payments surplus of about £800 million per annum. I believe that the Bill has been improved by the amendments effected in Committee. It is now fairer to the makers of generic drugs who are not patentees.

I turn now to the question of the cost of this measure to the National Health Service. Perhaps I may remind your Lordships of what my noble friend Lord Lucas of Chilworth said in Committee on 19th March. He said that the Department of Health and Social Security had examined the position and was satisfied that the additional cost to the service would not be significant. He went on to refer to an analysis conducted by the DHSS which indicated that in 1985 and 1986 there were estimated cost savings to the NHS of less than £1 million in the first year and about £1.5 million in the second year due to licences of right. He also pointed out that that should be measured against the total NHS drugs bill of £1,800 million per annum.

I need hardly remind your Lordships of the way in which the DHSS controls the drug companies' profits through the pharmaceutical price regulation scheme. That acts as a moderating force and ensures that the NHS pays a reasonable price for its medicines and that the companies can achieve a reasonable target profit level. Your Lordships have also been told that the unions in the pharmaceutical industry support this measure, as do the generic drug companies within the Association of the British pharmaceutical industry.

I come now to the noble Lord's point that this should have been a Government Bill. If the Government had been able to bring forward legislation on licences of right, it would have contained provisions similar to those contained in this Bill. As your Lordships will be aware, there was no opportunity in this year's legislative programme for the Government to do so. I commend the Bill to your Lordships' House.

Lord Northfield

My Lords, I thank all noble Lords who have been involved with this Bill. I apologise to the noble Lords, Lord Stallard and Lord Kilmarnock, and the noble Viscount, Lord Craigavon, for the fact that on one occasion I was able to reply to them only in a hoarse whisper as a result of a heavy cold. My answers were also brief. I am also grateful to my noble friend Lord Williams for helping calm things down when stridency was threatening to mar our proceedings.

I am grateful for the concern and almost solicitude for the Bill shown by my noble friend. After the further assurances we have received this evening, I hope it means that he will help the Bill obtain a fair wind when it reaches the other Chamber. He may be wrong for criticising the Government for asking me to take this issue through as a Private Member's Bill. As he knows, and as he has said, the measure was expected to be included in the intellectual property legislation which, alas, did not get into this Session's programme. When the noble Viscount the Leader of the House realised that a promise had been made in April 1986, almost a year ago today, he sought the best way of honouring that promise.

It is doubtful whether the noble Viscount could have persuaded his colleagues to introduce a government measure because that would have opened the way for many others, disappointed by the postponement of the intellectual property legislation, to ask for similar treatment.

In an effort to be helpful, the noble Viscount wrote to me and suggested that I should introduce this small Bill. My interest as an adviser to a pharmaceutical company had been clearly declared; for example, on 22nd April 1986, the same day, I think, on which the promise was made, and repeatedly before and after that date. It is known to the noble Viscount and to the House. Of course, the promise of repeal of licences of right had been made to me in the debate of April 1986. I therefore expressed my thanks to the noble Viscount. I have persevered with the Bill through some difficult days. I hope that will enable him to prevail upon his colleagues to take it up in another place if it is unexpectedly obstructed there. I also thank Ministers who have quietly and firmly backed the measure from the Government Front Bench and put parliamentary draftsmen at my disposal.

May I be permitted to make two final comments? It is helpful to see the funny side of things. These Bills can provide some hilarious experiences. The two companies which oppose the Bill were misled by their public relations and legal advisers into making such extravagant attacks that they hanged themselves in public, and all but the most gullible were laughing at them. I do not think that my noble friend was right when he said that the Bill's progress had been rather bitter. I thought it had been rather funny. The public relations man invented a spurious story about what had happened on the day of Second Reading. He had to withdraw the story when it was found to be so obviously a lie and defamatory. I notice that the companies have gone strangely silent in recent weeks.

This is perhaps the most hilarious piece of all, but after I had failed to answer media calls day and night from journalists hoping to obtain a sensational story, one reporter, notebook in hand, hit on the idea of accosting me for a sensational story about the Bill in part of this building which is private and reserved for Members. All I can say is that I have not seen the young lady since. Perhaps Black Rod has consigned her to the Tower!

Journalists prophesied the Bill's demise at every stage. Even in The Times important facts about the Bill and its costs were concealed, presumably in order to provoke me once again into an extravagant response. The Bill is still on course. It is a small but significant measure with no real cost—the figures have been given today—to the National Health Service.

The Bill removes a handicap that exists on research-based industry and researchers which exist in no other country, a handicap that is made doubly hard by the erosion of patent life which we must all soon face. The Bill, as the Minister pointed out, is supported by the country's four biggest trade unions as well as by the employers. I hope that if I can now get it into law I shall have the last laugh on those who have consistently prophesied its death. I commend the Bill to your Lordships.

Lord Stallard

My Lords, it was not my intention to intervene, but before the noble Lord sits down I should remind him that he should not appear to gloat in any way over the passage of this Bill. There are some doubts in the minds of many people and some questions which remain unanswered. They may well be answered in another place when the Bill is discussed there. With all due deference to the noble Lord, he was not correct when he said that the companies were fraudulent or have gone suddenly silent. Many doubts remain. They would undoubtedly have been expressed had there been more time to discuss the Bill in your Lordships' House.

I am far from satisfied about the Bill's effects on the National Health Service even though the Minister has replied. I am not convinced that the PPRS is the perfect instrument or mechanism for controlling the profits of the multinational drug companies. As my noble friend Lord Williams said, those and many other questions might well have been asked had it been a Government Bill. I hope that the Bill will not be thought of as a joke. My noble friend said that he hoped he would get the last laugh. No one is laughing about the Bill's imperfections or the questions that remain unanswered. I shall follow the Bill with interest in another place and I hope that some of the questions will be answered.

Lord Northfield

My Lords, I should like to say that before I sat down I was not gloating at all. I was trying to see the funny side of what has been a tortuous path in getting this Bill through. If my noble friend's telephone had been ringing day and night in connection with this Bill, as has mine, I think that in the end he would be quite happy to say that it is good that we can see the amusing side of the serious operation of getting a Bill through Parliament. My attempt was to lighten the proceedings a little by seeing the funny side of a very serious operation.

On Question, Bill read a third time, and passed, and sent to Commons.