Medicines Control Agency (Hansard, 23 July 1990)

§ Mr. Rost
To ask the Secretary of State for Health on what basis the Medicines Control Agency is obliged to recover all its running costs.

§ Mrs. Virginia Bottomley
The Evans Cunliffe report, a copy of which is available in the Library, on the control of medicines recommended inter alia that the full cost of the regulation of medicines should be recovered from industry.
This was one of the recommendations which Ministers accepted and the effect of this on fees was explained in the Department's consultative letter of 22 December 1988 (MLX 175) a copy of which is available in the Library.
I also refer my hon. Friend to the reply I gave him on 6 June at column 629.

§ Mr. Rost
To ask the Secretary of State for Health what activity study of the Medicines Control Agency has recently been carried out; and if he will publish the results.

§ Mrs. Virginia Bottomley
A confidential activity analysis of the Medicines Control Agency was recently74W carried out by independent consultants. The information is being used in the current review of the Medicines Control Agency's fee structure.

§ Mr. Rost
To ask the Secretary of State for Health whether the Medicines Control Agency is presently subject to exemption from gross running costs control.

§ Mrs. Virginia Bottomley
The Medicines Control Agency—MCA—was approved for exemption from 1989–90 on the basis that the necessary information systems would be introduced that year. However, the MCA has experienced greater difficulty than anticipated in putting those systems into effect, and therefore the operation of the exemption attributes relating to its expenditure has been suspended temporarily, pending review in the current public expenditure survey. Under these temporary arrangements any increase in the MCA's gross expenditure as well as the funding of such an increase is required to be discussed and agreed with Treasury. In the meantime, the MCA has been working to meet the requirements for restoration of full exemption from gross running cost control and has continued to plan the restructuring of its fee income on the basis that the full exemption will be restored.

§ Mr. Rost
To ask the Secretary of State for Health what are the reasons for the difference between the figure given in the supply estimates for 1990–91 for the expenditure of the Medicines Control Agency and that quoted in his Department's letter to the hon. Member for Erew ash of 6 April.

§ Mrs. Virginia Bottomley
The expenditure and income figures given in the supply estimates for 1990–91 represent payments and estimated receipts of cash voted and required for the operational costs of the Medicines Control Agency during the financial year 1990–91. Voted provision includes capital expenditure but excludes payments to the civil superannuation vote. The figures quoted in the Department's letter of 6 April are derived from accrual accounting and take into account depreciation, notional staff insurance, superannuation costs as well as interest on capital employed, and so on.

§ Mr. Rost
To ask the Secretary of State for Health whether it is open to the Medicines Control Agency to charge fees based on turnover.

§ Mrs. Virginia Bottomley
I have nothing to add to the reply I gave my hon. Friend on 6 June at column629.

§ Mr. Rost
To ask the Secretary of State for Health in what circumstances he envisages using the powers granted under the Health and Medicines Act 1988 to charge fees based on turnover through the Medicines Control Agency.

§ Mrs. Virginia Bottomley
I refer my hon. Friend to the reply I gave him on 21 May 1990 at column630. Section 21 of the Health and Medicines Act clarified the basis under which regulations could be made in relation to an annual fee and also validated the basis on which previous annual fees had been charged. Any such proposals would be preceded by full consultation as is required under Section 129(6) of the Medicines Act 1968.

§ Mr. Rost
To ask the Secretary of State for Health whether Treasury guidelines cover the inclusion of work connected with the European Communities in those activities of the Medicines Control Agency of which the costs are to be met by licence fees.
75W

§ Mrs. Virginia Bottomley
No Treasury guidelines have been issued specifically referring to EC work and the Medicines Control Agency. The rules which govern the factors to be taken into account in fixing fees under the Medicines Act 1971 are set out in the Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Order 1989 (SI 1989 No. 684) a copy of which is available in the Library.
Schedule 1 to that order sets out the functions which are to be taken into account in fixing fees under the 1971 Act, and schedule 2 details the matters to be taken into account in determining the cost of those functions. In relation to EC work I refer my hon. Friend to paragraphs 5 and 10(b) of schedule 1 and paragraph 1 of schedule 2.