HC Deb 17 April 1986 vol 95 cc447-8W
Mr. Cohen

asked the Secretary of State for Social Services what assessment he makes of the effect of the licence of right provisions on the availability of lower priced generic drugs to the National Health Service; what representations he has received on the terms on which such licences are granted to manufacturers independent of the patent holder; if there are any plans to abolish the licence of right provisions; and if he will make a statement.

Mr. Hayhoe

The endorsement of pharmaceutical patents, "licence of right", has in some cases enabled other suppliers to enter the market and compete with the patent holder at a lower price level. Loss of sales revenue to the patent holder encourages him to seek increases in prices elsewhere in his product range, inter alia to maintain his research capability.

Policy on patents is for my right hon. Friend the Secretary of State for Trade and Industry. I am aware that individual generic and research based pharmaceutical companies and the Association of the British Pharmaceutical Industry have made representations to the Government on the terms for the settlement of licences of right.

The ABPI has also produced evidence to show that since the introduction of the Patents Act 1977, which extended the term of existing patents by four years subject to licences of right, there has been a significant lengthening of the period between the grant of a patent and a product licence for pharmaceuticals for human treatment. As announced by my noble Friend the Parliamentary Under-Secretary of State for Trade and Industry on 14 April, the Government intend to introduce legislation to provide that such pharmaceuticals should be exempt from the licence of right provisions contained in schedule 1, paragraph 4(2)(c) of the Patents Act 1977.

Mr. Haynes

asked the Secretary of State for Social Services when the next pharmaceutical price regulation scheme will come into effect; and if he will make a statement outlining the changes it contains in profitability and promotion targets for the pharmaceutical industry from the present scheme.

Mr. Hayhoe

Renegotiation of the pharmaceutical price regulation scheme has not been completed. I am not therefore able to predict what changes might be made.

Mr. Haynes

asked the Secretary of State for Social Services what is the percentage of turnover used by the pharmaceutical industry as a whole on research and development.

Mr. Hayhoe

Annual financial returns submitted under the pharmaceutical price regulation scheme for 1983 (the latest year for which full details are available) show that the percentage of turnover, on prescription medicines for the National Health Service and for export, spent on research and development was 15 per cent.

Mr. Cohen

asked the Secretary of State for Social Services if he has any plans to introduce legislation to regulate the terms on which licences of right for pharmaceutical products are granted; and if he will make a statement.

Mr. Pattie

I have been asked to reply.

There are no plans to introduce legislation to regulate the terms on which licences of right for pharmaceutical patents are granted. When parties to such licences cannot agree, the matter can be referred to the Comptroller-General of the Patent Office who will settle terms having regard to the particular circumstances. This process is a judicial, not an administrative, one and as such is subject to appeal to the High Court.