§ Mr. Haynesasked the Secretary of State for Social Services from the latest annual financial returns submitted by pharmaceutical companies, what the profitability level of the industry as a whole is; and how this compares with the target set for the pharmaceutical industry by his Department.
§ Mr. HayhoeIn 1983, the latest year for which information is readily available, the declared profit for companies submitting annual financial returns was about 75W 14½ per cent. on (historic) capital employed. The Department's assessment, after disallowing certain costs and making other adjustments, was higher and in line with the target set for the industry by the Department.
§ Mr. Haynesasked the Secretary of State for Social Services what is the deadline for pharmaceutical companies to make their annual financial returns to his Department each year.
§ Mr. HayhoeCompanies are asked to submit their annual financial returns not later than six months after the end of their accounting year. This time limit may be extended by agreement between the Department and a company.
§ Mr. Haynesasked the Secretary of State for Social Services how many pharmaceutical companies exceeded their promotional targets for the last year for which figures are available; how many of these companies were required to pay a penalty rate for exceeding those targets; and whether, without naming the companies concerned, he will state the amounts of excess for each company concerned.
§ Mr. HayhoeThe requirement to repay excess expenditure incurred on sales promotion was introduced
Drugs Expenditure: (£ million) Family Practitioner Services Hospital and Community Health Services Total (a) Inclusive of dispensing costs 1,553 * * (b) Exclusive of dispensing costs 1,194 279 1,473 * Information on dispensing costs in the Health and Community Health Services is not available centrally. The pharmaceutical companies' annual financial returns are used in conjunction with the Department's various estimates of drug expenditure, although no direct arithmetic comparison is possible. Individual company annual financial returns are based on total sales to the National Health Service in the United Kingdom and their financial years all differ from each other and our financial year.
§ Mr. Haynesasked the Secretary of State for Social Services how many pharmaceutical companies received more than £75 million from the National Health Service for medicines for the last year for which figures are available; and if he will name them.
§ Mr. HayhoeIn 1984, three pharmaceutical companies had sales in excess of £75 million to the National Health Service for medicines. For reasons of commercial confidence individual companies results are not identified.
§ Mr. Haynesasked the Secretary of State for Social Services (1) what schemes are run by his Department to seek to encourage pharmaceutical companies to undertake research in therapeutic areas which are unlikely to have high profit potential;
(2) what steps he has taken to seek to ensure that innovation and research within the pharmaceutical industry is directed towards identified therapeutic need.
76Wonly from 1 April 1984. A full year's figures since then are not yet available. To date, however, four companies have been required to repay excess sales promotion expenditure of £453,000, £135,000, £53,000 and £15,000.
§ Mr. Haynesasked the Secretary of State for Social Services what is the value of applications by pharmaceutical companies disallowed for price increases under the pharmaceutical price regulation scheme for each of the last five years for which figures are available.
§ Mr. HayhoeInformation on the value of price increase applications disallowed is not routinely collected. However, for the fiscal year 1985–86 it is estimated that price increases disallowed exceeded £55 million.
§ Mr. Haynesasked the Secretary of State for Social Services what is the total expenditure on pharmaceuticals (a) including dispensing costs and (b) excluding dispensing costs made by his Department for the last year in which figures are available; and by how the Department's own estimates compare with figures supplied by pharmaceutical companies in their annual financial returns.
§ Mr. HayhoeThe information for England in the financial year 1984–85 is:
§ Mr. Charles Morrisonasked the Secretary of State for Social Services what action Her Majesty's Government are taking to promote more pharmaceutical research by British and foreign companies in the United Kingdom.
§ Mr. HayhoeBecause of favourable conditions, a relatively high proportion of world pharmaceutical research and development is carried out in the United Kingdom. Under the pharmaceutical price regulation scheme companies are allowed, within reasonable limits, to reflect their current research and development costs in the prices of National Health Service medicines. In common with other industrial sectors, pharmaceutical companies may also qualify for specific assistance under schemes administered by my right hon. Friend the Secretary of State for Trade and Industry. My Department does not intervene in the companies' choice of therapeutic areas in which to research.
§ Mr. Haynesasked the Secretary of State for Social Services what criteria his Department uses when deciding to prosecute a pharmaceutical company under the terms of the Medicines Act 1968 and 1978 in relation to alleged promotional malpractice.
§ Mr. HayhoeThere is a wide-ranging spectrum of possible offences under the terms of the Medicines Act relating to promotional activity and these controls are enforced in whichever way seems most appropriate, including prosecution where necessary. Some offences may be purely technical, others may amount to deliberate 77W misrepresentation. Each individual case is therefore considered on its merits taking account of such factors as potential danger for patients, and the conduct of the company concerned, as well as the strength of the evidence. Regard may also be had to any action taken under the pharmaceutical industry's own regulatory procedures, since these may provide a very effective and speedy means of control in certain types of case.
§ Mr. Haynesasked the Secretary of State for Social Services whether he still operates a grey area policy for profitability for pharmaceutical companies in the National Health Service business; how many companies recorded profits falling within the grey area as last defined; how many companies exceeded the grey area as last defined and by how much; and whether he will name the companies falling, within or exceeding, the grey area.
§ Mr. HayhoeUnder the pharmaceutical price regulation scheme companies may be allowed to retain, within prescribed limits (grey area), profits earned in excess of their target. In 1983, the latest year for which information is available, nine companies recorded profits in excess of target and all fell within the grey area. For reason of commercial confidence individual company results are not revealed.
§ Dr. Godmanasked the Secretary of State for Social Services what assessment he has made of the implications for employment in the pharmaceutical industry of (a) the introduction of the limited list of drugs and (b) the new pharmaceutical price agreement; what representations he has received on this subject; and if he will make a statement.
§ Mr. HayhoeI refer the hon. Member to my reply to my hon. Friend the Member for Ealing, North (Mr. Greenway) on 10 March at column377. Negotiations are
78W
Year Magistrates court Fine £ Costs £ Sections of the Medicines Act and Regulations 1980 Cleethorpes Company 25 50 Section 7(3) Director 25 1980 Cheshunt Businessman 200 75 Section 8(2) 1981 Leeds Company 50 n/a Section 8(3) Director 50 1981 Ealing Person 300 50 Section 121(1) and (4) SI 1978/41 1982 Sevenoaks Company 1,000 500 Section 7(2) Director 750 Section 52 1982 Billericay Person 650 250 Section 7(2) SI 1978/41 1982 Norwich Company 4,230 250 Section 7(2) Director 2,130 250 Section 7(3) Director* 120 †500 1983 Bromley Person 200 75 Section 7(2) 1983 Norwich Company 2,250 500 Section 7(2) 1985 Godstone Company 1,400 350 Section 7(2) 1985 Medway Company 500 200 Section 64(1) still proceeding with the Association of British Pharmaceutical Industry on the renewal of the pharmaceutical price regulation scheme.