Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 720 - 739)



  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 from.

  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 session—and I think you were here, so you heard broadly the discussion that we had—about 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 be—which is the second benefit—investment 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 like—Dr Taylor is probably going to contradict me now but I hope not—five 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 is inevitable?

  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 rights—which 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 example—and I do not accuse any of you of this—as 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 medicines—and cystic fibrosis is another example where we are well behind the rest of Europe in the use of therapies—would 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 that—and it is something we have already shared in a meeting with the MHRA—is 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 applications—because 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 to generics?

  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 outcomes—the positive outcomes, and the negative maybe—of 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 important.

  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 about it.

  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 another.

  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 reason—for the benefit of patient care—and 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.

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