§ Mr. BurstowTo ask the Secretary of State for Health what assessment he has made of the(a) financial and (b) other effects of the VAT order on the supply of certain renal and cancer drugs and on pharmaceutical products by retail pharmacists to residents of nursing homes. [61939]
§ Mr. Milburn[holding answer 1 December 1998]: The financial effect of the Value Added Tax Order on the supply of certain renal and cancer drugs was estimated at £3.5 million per annum. The Order is not being implemented for these items until 1 April 1999, when the increased funding available to the NHS will be in place.
The effect of the VAT Order on the supply of prescribed items by retail pharmacists to residents of nursing homes would be to make such items subject to VAT at the standard rate. However, there would be significant problems in altering NHS systems to comply with the Order and, as a result, Her Majesty's Treasury has decided not to implement this aspect of the Order.
There are no other effects of the VAT Order on the supply of certain renal and cancer drugs and on pharmaceutical products by retail pharmacists to residents of nursing homes.