Pharmaceutical Industry (Hansard, 16 November 1976)

§ Mr. Moyle

The following is a summary of the main recommendations in the report of the Pharmaceuticals Sector Working Party submitted in July, against the general background of an overall objective of achieving a £500 million balance of payment surplus in 1980, at 1975 prices, mainly by an increase in exports. This would represent an improvement of some 20 per cent. above what the working party thought likely in existing circumstances.

1. The price of drugs purchased for the National Health Service should be regulated in the light of the need to encourage investment in Research and Development and in addition productive capacity and to boost foreign earnings. (The trade union members had some reservation on the means by which these aims might be achieved.)
2. Companies should be encouraged by the DHSS to focus attention on investment aimed at import-substitution.
3. The Industry members recommended that Section 41 of the Patents Act 1949 should 501 be repealed or at least amended. (Trade union members reserved their position.)

All the working party's recommendations are for action by Government, rather than the other two parties. The position on the three main recommendations is:

1. The Government accept the principle that in its operation of the Voluntary Price Regulation Scheme for ethical medicines my Department should have regard in appropriate circumstances to requirements of industrial strategy. The extent to which this could be done and the means of achieving this aim are being urgently examined.
2. At the working party's latest meeting on 26th October my Department's first proposals for identifying import substitution possibilities were considered.
3. The question of Section 41 of the Patents Act 1949 is one of those at present under discussion with the trade association representing the industry.

COMPARISON OF INCOMES OF FAMILIES WITH THE HEAD UNDER PENSIONABLE AGE
			Families with Head in Full-Time work^*	Families with Head not in Full-Time work and receiving benefits†
			(A) Average net weekly income‡	(B) Average weekly income from benefits†	(C) Average net weekly income‡	(D) Average weekly income from benefits†	Percentage by which (A) exceeds (C)	Percentage by which (A) exceeds (D)
Year	£	£	£	£
1974	…	…	43.74	0.75	23.70	15.03	85.0	191.0
1975	…	…	50.59	0.99	29.99	21.03	69.0	141.0
^* This category includes both the self-employed and employees.
† Benefits = any cash social security benefits. Benefits in kind such as free school meals and welfare milk are not included, neither are housing rebates or student grants.
‡ Net income is all gross cash income of the family (whether from earnings, benefits or other sources) less tax, national insurance contributions and work expenses.
It is clear from the above table that there is no prospect of these benefits equalling average family income of those in work.
The estimate is subject to sampling error.