HC Deb 28 October 1952 vol 505 cc193-4W
Mr. Turner

asked the President of the Board of Trade when the Monopolies Commission's Report on Insulin will be published; and if he will make a statement about the report.

Mr. P. Thorneycroft

The report was published today. On the factual side of their inquiry, the Commission have found that conditions, to which the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, applies, do prevail.

Virtually, the whole of the insulin supplied in the United Kingdom is produced by four pharmaceutical manufacturers, two of them working on this production in partnership. One of these manufacturers, Burroughs Wellcome and Company, supplies more than one-third of the insulin supplied in the United Kingdom. Further, all four manufacturers collaborate as regards insulin in an organisation known as the "British Insulin Manufacturers" (B.I.M.); and, in the Commission's view, the effect of this collaboration, whilst not destroying competition or even substantially reducing it, is, nevertheless, in the direction of restricting competition.

In assessing the effect of these conditions on the public interest, the Commission explain that, although the position of Burroughs Wellcome is under the Act legally different from that of the other manufacturers, this difference has no practical significance, and the arrangements between all participants in the B.I.M. should be considered as a whole.

The Commission's principal conclusions can be summarised as follow:

  1. (a) There is collaboration between the B.I.M. members on technical matters and the Commission are impressed by its extent and thoroughness. The collaboration has been associated with an increase in insulin yields, improvements in formulation, packing and presentation, and extensive research.
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  3. (b) Supplies of the principal raw material, ox-pancreas, are limited and are shared equally between the manufacturers; there are co-operative arrangements for the purchase of imported ox-pancreas. The Commission regard some system for allocating pancreas supplies among the participants as a corollary to co-operation in gland purchase and technical collaboration; the current system is unobjectionable in present circumstances, although some alteration might be desirable if the gland supply position altered.
  4. (c) The manufacturers charge the same prices and allow the same discounts. They have an understanding that none will alter his prices without informing the others; the Commission consider that this is not unreasonable given the close technical collaboration which exists. The Commission's impression is that the level of British insulin prices is generally lower than that ruling in other countries; they suggest, however, that the Ministry of Health and other purchasing Departments should take note of the prices and profits recorded in the report and should exercise in the future such supervision as may appear to them to be necessary.
  5. (d) Resale prices are fixed by the individual manufacturers; but, since most insulin is supplied under the National Health Service arrangements, the retail price is now charged only on a very small proportion of retail sales. The B.I.M. operate an approved list of wholesalers. The sale of insulin by retail is restricted by law to registered pharmacists. The Commission do not find that the industry's distribution arrangements for insulin are against the public interest.
  6. (e) The fact that there have been no commercial imports of insulin since the war is not the responsibility of the B.I.M. It may well be that the level of their prices has made the market unattractive to overseas suppliers.

In a "Final Conclusion," the Commission point out that expert opinion as to the quality of British insulin and the collaboration of the manufacturers, cited in the Report, is commendatory, almost without qualification. The Commission express their opinion that the B.I.M. members owe their position as sole insulin suppliers principally to their efficiency, enterprise and experience; their position is supported, however by the technical difficulties of insulin production, the legislative requirements for manufacture and import (which are described at some length in the report), and the limited raw material supplies. The Commission find that the existing arrangements made by the insulin manufacturers, individually and collectively, operate in the public interest and do not recommend that any of them should be discontinued.