§ Mr. Hickmetasked the Secretary of State for Social Services, pursuant to the reply of 25 February, Official Report, columns 71–2, where and how companies within the pharmaceutical price regulation scheme advertise National Health Service medicines.
§ Mr. Kenneth ClarkeWe do not collect this detailed information. Advertisements for medicines prescribed under the National Health Service are placed mainly in medical journals and professional magazines. Literature is also sent to doctors by post and through sales representatives.
§ Mr. Hickmetasked the Secretary of State for Social Services, whether he has any information as to the manner in which representatives of companies within the pharmaceutical price regulation scheme are remunerated in respect of the sales of National Health Service medicines.
§ Mr. Kenneth ClarkeNo.
§ Mr. Hickmetasked the Secretary of State for Social Services, whether he has received any representations at any time from companies within the pharmaceutical price regulation scheme that expenditure on gifts or similar inducements should be an admissible expense under the scheme.
§ Mr. Kenneth ClarkeNo.
§ Mr. Hickmetasked the Secretary of State for Social Services if he will make a statement about the operation of the pharmaceutical price regulation scheme.
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§ Mr. Kenneth ClarkeThe non-statutory agreement embodied in the pharmaceutical price regulation scheme is designed to control the prices and profits, and the costs incurred in production and distribution, of National Health Service medicines. The scheme is reviewed from time to time as necessary.
§ Mr. Hickmetasked the Secretary of State for Social Services what expenses are admissible expenses in the pricing of National Health Service medicines by companies within the pharmaceutical price regulation scheme; and if he will itemise the same giving the value of the expense in each case for the last full year in which figures are available.
§ Mr. Kenneth ClarkeSubject to our Department being satisfied as to their reasonableness, all the usual costs of manufacture, research, distribution, and so on are treated as admissible expenses in the pricing of medicines under the pharmaceutical price regulation scheme. In 1982, expenses as returned by the large companies (with sales exceeding £2 million to the National Health Service) before adjustments made by our Department were:
£ million Manufacturing 510.0 Distribution 42.7 Information 12.0 Sales Promotion 155.8 Royalties 23.0 Administration 153.9 Research and Development 218.3
§ Mr. Hickmetasked the Secretary of State for Social Services what percentage of the National Health Service drugs bill is represented by sales promotion by companies within the pharmaceutical price regulation scheme; and if he will make a statement.
§ Mr. Kenneth ClarkeSales promotion expenditure is controlled by an ad hoc formula the purpose of which is to limit admissible expenses to 10 per cent. of the value of the industry's sales to the National Health Service. From 1 April this limit will be reduced to 9 per cent.
§ Mr. Hickmetasked the Secretary of State for Social Services whether he has information that companies within the pharmaceutical price regulation scheme offered gifts or similar inducements to general practitioners to persuade them to prescribe particular drugs; and if he will make a statement.
§ Mr. Kenneth ClarkeWe have no specific information on the gifts or other inducements offered by pharmaceutical companies to general practitioners.
On the general matter of inducements and gifts I refer my hon. Friend to my reply to my hon. Friend the Member for Penrith and the Border (Mr. Maclean) on 9 January at column 497.
§ Mr. Hickmetasked the Secretary of State for Social Services what was the National Health Service drugs bill for 1982; and what proportion of that was represented by sales promotion expenditure expended by companies within the pharmaceutical price regulation scheme; and what are the anticipated figures for 1985.
§ Mr. Kenneth ClarkeThe annual financial returns for 1982 from companies within the pharmaceutical price regulation scheme having individual sales to the National Health Service of £2 million or more showed total sales272W (United Kingdom) of £1,269 million. While actual expenditure on sales promotion as declared by the companies was £155.8 million, the amount allowed as an admissible expense was reduced to some 10 per cent. of the sales total. We cannot at this stage estimate the corresponding figures for the 1985 returns. However, we are reducing the sales promotion allowance to 9 per cent. from 1 April.