Examination of Witnesses (Questions 720
THURSDAY 13 JANUARY 2005
Q720 Chairman: Could I ask you each
to introduce yourselves briefly to the Committee.
Dr Barker: Richard Barker, the
Director General of the ABPI. It is post I have held for only
four months. Before that I was involved in the biotechnology industry,
in the United States principally.
Mr Lawton: I am Vincent Lawton.
I am the current President of the ABPI and managing director of
Merck Sharp and Dohme a pharmaceutical company.
Mr Clark: Simon Clark. I am Chairman
of the British Generic Manufacturers Association. If I could just
clarify a slight difference from the branded sector: the branded
sector is focused on promoting to physicians to influence the
type of medicine that they choose, but as far as the generic sector
is concerned we focus our promotion on pharmacists to influence
which company they may choose to purchase the off-patent product
Dr Chiswell: I am David Chiswell.
I am currently Chairman BioIndustry Association, which is a trade
company for the emerging companies in the sector. Previously I
was founder of CAO (Cambridge Antibody Technology).
Q721 Chairman: Could I ask a brief
overall question along the lines I asked at the start of the previous
sessionand I think you were here, so you heard broadly
the discussion that we hadabout the issue that is at the
core of this inquiry, which is the commercial imperatives versus
the wider public health questions. What is your view on the current
balance of that sort of polarised perspective?
Mr Lawton: The commercial imperatives
are clearly very important for any commercial company, but our
purpose of being, as companies, is to look at the health care
involving the patients. If we consider our priorities, it is to
put the patients first. That has to come before all else, and
then profits certainly come after that. I think the more we have
remembered that, the better the profits have been. Our focus,
I think, is to make sure that the quality and the standards of
development of medicines meet the priorities of the health care
needs of the patients.
Q722 Chairman: Do you think that
the balance is about right now or should it shift in one direction?
Mr Lawton: I think the balance
is about right. I think we need to look constantly to improve
and to make sure we are up-to-date. For example, in our code of
practice of promotional regulation, we have decided over the last
few months to look at it again, and we are going to have a complete
review going to all stakeholders to make sure that we are appropriately
in place for the needs of today.
Dr Chiswell: I think the answers
given in the previous session and also by Vincent are absolutely
appropriate, that it is all with the focus on the patient. We
are all patients, or we all will be, and, if we focus on something
which is good for the patient, that is good for the industry and
it is good for the public health. We also have to recognise that
we, as patients, change. Patients change and, particularly with
reference to the last session, patients are going to know more
about their conditions, real or imagined. I think that is the
world we have to live in as professionals. Wherever you are in
the medical world, the patient should know more. That is going
to be to the benefit of us all in the long run.
Q723 Chairman: Your organisation,
you have said, represents the emerging companies. Are the regulatory
mechanisms that we have now a problem? Do we have the balance
right in terms of those mechanisms from their perspective? Or
are you faced with concerns being expressed by some of these people
you represent over the current arrangements for regulation?
Dr Chiswell: We live in an industry
which needs to be regulated. I think that within the UK generally
it is okay as it is. If we look at the position where in 10 years'
time we have overall an environment which is the same as it is
today, we will be quite happy. I think there are some improvements
we could see. I think there has been a trend over the years for
longer clinical trials, for example, and longer regulatory review
periods. I am not sure that is wholly to the benefit of anyone
and often it is because of bureaucracy rather than real safety
or real efficacy. I think if we could roll that back a little
bit, and find mechanisms, if a new drug comes along which really
meets a pressing medical need, where that can get into the patients
more quickly, that would be to the benefit of everyone.
Mr Clark: If I could build on
the comments that have been made and look at the latter stage
of the lifecycle of a drug, the relationship between the branded
original drug and the generic drug is symbiotic in a lot of respects,
in that, for the first in excess of 10 years, the branded drug
enjoys a period of a monopoly market place. That is imperative
in order that the R&D investment is recuperated. However,
at the end of that period it is also imperative we see a thriving
generic market, because that delivers three principal benefits.
The first benefit is that on the launch of a generic to the market
place we see a reduction in the price of that drug. That is a
direct saving to the NHS to allow investment into other areas.
One of those areas could bewhich is the second benefitinvestment
into new and more innovative medicine. The third benefit that
comes along from that is that then becomes an incentive on the
originator company to invest further into new drugs which deliver
real patient benefits and real clinical benefits to the patients
and the needs of the NHS.
Q724 Mr Bradley: One or two questions
about the maintenance of a successful UK industry, first of all,
to the ABPI. In your evidence you regularly refer to the need
to have the UK industry to be competitive. What should the Committee
understand by that term? How do you think government, regulators,
researchers, prescribers can help in that process of competitiveness
as you describe it?
Mr Lawton: You will recall that
there was a group set up in 1999 which is the Pharmaceutical Industry
Competitiveness Task Force. This was an attempt to look at not
so much the competitiveness of our industry but more the competitiveness
of the UK as a place for our industry to invest. Over a year,
working in conjunction with various departments, the Treasury,
the Department of Trade and Industry, the Department of Health
and so on, we established a series of benchmarks for things like
clinical research, for the economic conditions, whether it was
the tax or incentives or whatever, to do particular types of research
and so forth, the infrastructure available. We update those benchmarks
annually and look at ourselves against them. If I take clinical
research, for example, which is critically important to furthering
health care, the three components were quality, timeliness and
cost. The quality in the UK is extremely high in general. It can
be better and I think the royal Colleges have acknowledged the
need for those who conduct clinical trials in general practice,
for example, to have more training in how to do it, to be skilled
in how to do this properly. In terms of the speed, we had a system
of local and national ethics committees' approval of clinical
trials, which used to run in series and now we have adjusted it
so that they can run in parallel so that we can actually save
time and be more competitive or as competitive as the best countries
in Europe and the rest of the world. Then there is the issue of
cost: How much does it cost to conduct a clinical trial in the
UK compared to anywhere else? I think this is still where we have
a difficulty. There is a lack of transparency as to why a particular
cost is established. The price, for running a trial in one part
of the UK can be significantly different from other parts of the
UK. The UK is in fact the second most expensive place to conduct
clinical trials after the United States in the world.
Q725 Chairman: Could you give me
an example to illustrate that particular point of the costs in
different parts of the UK?
Mr Lawton: I can submit those
to the Committee, Chairman. They are really quite dramatic differences
of 100-200%. Because of no transparency in the way the price structure
is established, it has been very difficult to break that open
to see whether it related to real added value. But, having said
that, the Chemical Clinical Research Group in the NHS, which includes
the industry as participants, is looking at that and I think a
tremendous amount of progress has been made. I am co-Chair of
that particular group with Professor Sally Davis of the NHS.
Dr Barker: May I add a point of
two to that. When we get to the basic skills required to underpin
the industry, we are very worried that there is a reduction in
the number of chemists being trained, and you can say the same
of clinical pharmacology and of animal physiology. So there are
a number of disciplines of critical importance for maintaining
the industry. We think also of the competitiveness of medical
research. One of the factors in competitiveness is the access
to new medicines in the UK: whether the environment is such to
take up those medicines rapidly, to have that early stage experience.
Finally, it is a detailed point but it is one which is under discussion
at the moment: the use of medicines in children and paediatric
clinical research. We would like to see some clear incentives
to increase the volume of paediatric clinical trials happening
in the UK.
Mr Lawton: If I may add another
point, Chairman, the training of general practitioners, undergraduate
training and postgraduate training, has something likeDr
Taylor is probably going to contradict me now but I hope notfive
or six weeks only of clinical pharmacology. When you consider
how long a doctor has to spend evaluating medicines, making decisions
which really should include quite a reasonable in-depth knowledge
of clinical pharmacology, that really is not enough. I think that
should be another recommendation that early on in the education
process of general practitioners this should happen. I have addressed
the deans of the medical colleges about this. I think it is an
extremely important point.
Q726 Mr Bradley: You have touched
on the next question. In your evidence you also say that it is
inevitable that the industry will have a beneficial effect on
the provision of health in the NHS. Would you all agree that that
Mr Lawton: The inevitability is
bound by the quality of the research, the development and the
medicines which we produce, and the relationship of those medicines
to the clinical needs which pertain. Nearly half of the research
and development which takes place in the UK is concentrated on
the top four priorities of the NHS, so, in that sense, with those
caveats of quality and real need, yes, I think it is inevitable.
Dr Chiswell: Whether at the emerging
end of the industry or the more mature end of the industry, if
you do not produce the goods that people want to buy, you are
going to go out of business. Unless your produce something which
is good for patients somewhere, then your business is going to
be limited. So I think there is an inevitability.
Q727 Mr Bradley: How would you describe
good in that sense?
Dr Barker: I think it gets back
a little bit to the point on which the Chairman started: where
is the balance and why has the industry come under criticism?
The phenomenon here is that we tend to consolidate the positives
and focus on the negatives. Over the last five years we have seen
breakthrough therapies on cancer, on age-related blindness, HIV,
hepatitis. Many, many diseases have been successfully addressed,
and in the pipeline we have new therapies on Alzheimer's disease
and other forms of cancer, heart disease, osteoporosis, but we
tend to say, "Thank you very much," and forget rather
quickly when these new medicines come forward. But they really
only will have an inevitable benefit if the medicines are taken
up. Just to reinforce the point that came up in the earlier session,
we still use somewhere between only a quarter and a half the level
of advanced cancer medicines than others countries in Western
Europe. We still have the worse survival rage in breast cancer.
These are not things to be proud of and we will only get the inevitable
benefits that you are talking about if we do in fact create a
culture which is very receptive to new medicines.
Q728 Mr Bradley: Dr Chiswell, in
your evidence you underline the need to ensure that your bioscience
industries are adequately funded and you refer to the inequalities
in the playing field which force companies to go to capital markets
in the US rather than the UK. Could you briefly explain why that
is and what remedies you might want to bring forward that are
realistic to tackle that problem?
Dr Chiswell: Before I do that,
I would support the remedies that we have already talked about
here, about access to medicines, getting them into the market
place, because in the end that pulls everything through. Our companies
are younger, they have no products on the market yet, as some
of them do, we do not have the profitability yet as individual
companies to drive the R&D that is required within this industry,
so we need to fund that stage of the work for quite a long time,
using investors and either private capital markets or venture
capital funds all in the public equity markets. In this country,
and in Europe in general, we have not been as successful in tapping
those markets as they have been in the States. The States got
going a little bit earlier than us: they obviously have a more
entrepreneurial capitalism culture and it has proved easier in
the past for the companies on the US markets, US-based companies,
to raise the very significant amounts of capital required to build
a new generation of pharmaceutical companies. Where we have been
successful here, it has been in building companies like Amersham,
where I used to work. They have built a model of health care but
actually slowly and surely and not acquiring huge capital investments.
So we are lacking some of the systems for pure capital investments
and a lot of our competitive issues come along with, "What
can we do to adjust this?" Obviously what we could do would
be to think more European. If we look at the UK, we have been
talking about the UK as being 3% of the pharmaceutical market.
In our industry, say, the biotech industry, on some measures it
is like San Diego. The number of companies we have, for example,
you would not expect San Diego to succeed in investment of its
own industry if it did not have a sort of US-based view. Here
we seem to think we can build our own UK industry without looking
European. When the day comes that a successful Swiss company can
be used in the London markets as a good model for a UK-based company,
I think we will have turned a big corner. In the meantime, if
we can support setting up a pan-European capital market, we can
do things like the Government are doing by reviewing pre-emption
rightswhich actually is a technical limit on how we can
raise cash on the public markets; we can make sure the research
environment is good, well funded and free of pressure from extremists
in the animal rights' area. I think there is a lot of things that
can be done around the areas where we need it.
Q729 Dr Taylor: Could I pick up on
a point Dr Barker made, because you have suddenly made me realise
that the slow up-take of new medicines really we have to divide
into two groups. There are certain medicines where the slow up-take
would be a jolly good thing (for example, things like Vioxx and
some of the antidepressants) whereas the slow up-take of the real
advances in the anti-cancer drugs is a very bad thing. Can you
comment on that? How could you as an industry, instead of promoting
a new NSAID, for exampleand I do not accuse any of you
of thisas a major breakthrough, you somehow let people
and doctors know that the real advances are these anti-cancer
drugs, for example, which our PCTs probably have a huge amount
of difficulty in affording.
Dr Barker: I think there is something
of a false dichotomy there because some of the COX-2 inhibitors,
for example, address issues that the non-steroidal previous generation
of non-steroidal drugs do not. I was with a friend a few days
ago whose knee pain is only dealt with by a COX-2 inhibitor. If
it is a matter of mobility for individuals, as it is here, these
things can be really quite important. The generations of medicines
that you are talking about, unfortunately you have to get them
out to a significant number of patients before you know that there
are problems, therefore holding back the use of medicines, such
as medicines for arthritis and pain, would not actually do us
any good. We would see the side effects later and only be able
to take action later. It is certainly true, however, that whatever
your recommendations can do to ease the pressure on primary care
trusts, which sometimes results in them putting pressure on doctors
not to use these anti-cancer medicinesand cystic fibrosis
is another example where we are well behind the rest of Europe
in the use of therapieswould be good. The final point I
would make is that NICE was set up to engage with the very issues
you are talking about and has done a lot of very professional
work, but the implementation of NICE recommendations in some of
the areas that you have just mentioned we think lags, so anything
you can come up with to reinforce the implementation of NICE recommendations
we would support.
Mr Clark: I would like to build
on your question but in a slightly different way. You asked a
question about the slow up-take and you referred to it at the
earlier end of the market, and I would like to jump us towards
the importance of a fast up-take of generics within the market
place as well. One of the things we found within the generic market
is that you get the every rapid change in the pharmaceutical market.
You will have a situation where you will have one branded product
being marketed and then the following day the same product could
be marketed by 10 or 20 different companies. That causes quite
a bit of change within the department and the NHS, and one of
the first areas that affects is obviously on the MHRA. It is one
of the reasons why individual submissions come mostly from the
generics' area. One of the areas that they have struggled with
is being able to resource the number of submissions coming through.
We have seen over the last number of years actually the length
of time in terms of approvals lengthening as they have coped with
those submissions coming through. That leads to a delay in a generic
coming on the market and savings being taken by the NHS. One way
of rectifying thatand it is something we have already shared
in a meeting with the MHRAis to give more visibility up
front to the number of generic products that are going off patent
and allowing them to know the number of applicationsbecause
as yet they do not get that visibility. That goes further forward,
and in terms of launching a generic on the market place there
is a number of various departments at the Department of Health
that are affected by this, everything from getting the price for
the PPA, right the way through to the department itself and getting
the reimbursement mechanisms, so a GP knows that when he is prescribing
generically the pharmacist is able to dispense that product. Again,
that visibility has not really been there in the past and is something
I believe we need to improve upon, to get that tighter communication
between departments so that change can be implemented more quickly.
Q730 Dr Taylor: Would the major companies
agree with that or approve of that or support the rapid changeover
Mr Lawton: Where the therapeutic
benefits of a product which is a generic are proven, absolutely.
The appropriate use of generics does allow headroom for use of
more innovative products. I think that should certainly have a
hard endorsement, and it does: the ABPI. If I may go back to the
point about the access to medicines and the therapeutic conservatism
which is traditional in the British physician: it is not just
in cancer treatments, which it is critically important that we
address, but in lots of others as well. If NICE makes the recommendation,
its implementation is patchy. I think anything the Committee can
do to make recommendations in terms of giving that implementation
some real force, then I think that would be most welcome. But
in terms of bringing new medicines on to the market, whichever
therapeutic area they are in, I think it is less a question of
restricting it and it is more a question of finding out the efficacy
and the outcomesthe positive outcomes, and the negative
maybeof particular treatments by very good follow-up and
control mechanisms. General practitioners have 2,000-2,500 patients
and it is really very difficult to follow up every single patient
as rigorously as is needed, particularly during the early stages
of the entry of a new medicine. But it is critical that it happens.
I think it is a question of follow-up and control. Maybe sharing
of databases within PCTs is a way of doing this. I do not think
doing nothing solves a problem. I think it is a question of doing
it rigorously but following up patients very carefully that is
Q731 Dr Taylor: We have been told
that when electronic prescribing really comes in the whole matter
of monitoring will become much easier.
Mr Lawton: Yes, it will facilitate
better progress. But I think the important thing is the time which
the GP is able to give to following up individual patients or
patients who are on particular medicines. The GP contract goes
to some extent to address this by giving the incentive to follow
up to general practice, but I think a lot more needs to be done.
Q732 Chairman: I want to come back
to Dr Barker's point. You said that you felt that young people
were not attracted to chemistry. Did I get the right impression
from the answer you gave?
Dr Barker: I am speaking as a
chemist, so I obviously have a built-in incentive to see people
trained in chemistry. We have seen major universities close their
chemistry departments in recent months. That is a very worrying
trend. It is clearly not the only discipline that is necessary,
and, of course, the closer you get to employment in a pharmaceutical
company the more specialised you would become, so medicinal chemistry,
the ability to recognise and design drugs that will be effective,
is very important, and I mentioned some of the other disciplines
too. But, yes, you understood me correctly.
Q733 Chairman: Is that a problem
for the industry, as such, the fact that youngsters are not as
attracted perhaps as they were when you were at school?
Dr Barker: Chemists go into several
different industries, as you can imagine, but we are going to
be dependent on the broad flow of people trained in these disciplines.
So, yes, it will become a significant problem and we are concerned
Mr Lawton: One of the reasons
for companies, including my own, to invest quite significantly
in the UK was the presence of a very good chemistry base because
it forms part of our basic research as a critically important
part of our science. The closure of Swansea University's chemistry
department is very sad. What is happening at King's College in
London, which is associated with its medical school, is very sad
as well. It is going to make the UK less competitive on one really
critical area of science. That is the concern.
Q734 Dr Naysmith: Before I come to
what I really want to ask, a professor of chemistry once said
to me that he was tired of hearing industry complaining about
there not being enough chemists. He said if industry paid them
better once they graduated there would not be such a shortage
of them. Was there any truth at all in what he said, bearing in
mind, having worked in industry as a scientist, that the scientists
do not always get paid as much as the lawyers and accountants
and senior executives.
Mr Lawton: I do not know quite
when he said that but I think the scientists, the chemists, are
competitively rewarded now. Of the top calibre that we need in
our industry, there are a number of them competing for a post.
That is fine now, but, as they close chemistry departments, it
is going to make them more scarce, and perhaps then, perversely,
the salary will go higher.
Q735 Dr Naysmith: I am not in favour
of getting rid of chemists. All I am saying is if industry regarded
the chemists a bit more highly and paid them on the same scale
as they pay other people. I am not comparing one chemist against
Mr Lawton: It is very competitive
now because we want to avoid a brain drain to other parts of the
world as well.
Q736 Dr Naysmith: Under the Pharmaceutical
Price Regulation Scheme, companies are rewarded in rather a complicated
way for being innovative. I just wonder if you could tell us what
you think innovation means in this context and whether innovation
necessarily translates into improvements in patients' health.
Mr Lawton: The innovation referred
to is essentially the research and development activity which
takes place. It is the search for new molecules, the development
of new molecules into medicines.
Q737 Dr Naysmith: You get an allowance,
do you not?
Mr Lawton: We do, yes.
Q738 Dr Naysmith: Is that the best
way to encourage innovation, particularly in terms of benefits
to the patient?
Mr Lawton: The effect of the PPRS
in encouraging innovation is certainly there but it is not the
only reason that we would spend money on innovation. I think we
would spend money on innovation for the last reasonfor
the benefit of patient careand the allowance we get within
the PPRS, which is a really highly complex system, is welcome
but it is not a critical determinant of whether or not we do research.
Mostly it is the quality of the science and the ability of that
science to be translated into results.
Q739 Dr Naysmith: What I am trying
to get at is what the benefit is of this mechanism to you in terms
of patient care or is it just a little economic industrial encouragement?
Mr Lawton: It is economic and
industrial encouragement. You cannot translate it specifically
into a particular benefit to a patient, I think, but you can translate
the research and development.
Dr Barker: Perhaps I can just
add a comment, as I get the opportunity to look across the world
at the different systems. The PPRS has the benefit of providing
a fair amount of stability for a five-year period and does in
fact create something of a balance between the cost-effectiveness
and sourcing of pharmaceuticals into the NHS and the stimulation
of innovation. It is hard to see the price cut that came in the
last negotiation as encouragement but it is part of the mix and
the stability contrasts really sharply with what we have seen
in some European countries that do not have a similar system,
where they have cut prices and have made changes to their market-places
in an unplanned and, we think, rather negative way.