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Dr. Iddon: Does the hon. Gentleman agree that the take-up of cancer drugs would be even slower if we did not benefit from translational research, where the clinicians work side by side with the scientists in wonderful institutes such as the Christie hospital and the Paterson laboratories in Manchester?

Mr. Lansley: Indeed. I have had the benefit of visiting the Christie hospital to see how translational research allows the whole range of cancer treatments to be provided in the same place, which is why, earlier this year, it was important to me to support the hospital in its argument that cancer surgery should not be transferred to another institution.

I agree with the hon. Member for Bolton, South-East, not least because in the new year Cancer Research UK will open its largest UK research facility at Addenbrookes hospital on the Cambridge biomedical campus. There will be 600 dedicated cancer researchers in my constituency, who will be operating alongside clinical teams. That will not be just translational research. As time goes on it will be the closest that Europe gets to the National Institutes of Health.

I know that the Government are proposing to create a virtual national institute for health research, but at the Cambridge biomedical campus we have everything from the laboratory of molecular biology doing world-leading blue-skies research at molecular level through to teams doing translational work. Professor Bruce Ponder at Addenbrookes hospital will lead the oncology teams for the Cambridge University Hospitals NHS Trust while also being director of the new Cancer Research UK unit, combining responsibility for clinical work with responsibility for academic work.

We will not debate the availability of clinical academics, but if we do not reverse the recent decline in the number of clinical academics following the recommendations of Mark Walport's committee, it will be difficult for us to sustain the benefits of research. We talk about drug research, but if we are to translate that into benefits in clinical practice, we will need clinical academics, and the more of them we have, the more likely we are to retain the drug companies' commitment to drug development in the UK.

Dr. Iddon: That is the very reason for the controversial move of the National Institute for Medical Research from Mill Hill into central London so that the excellent work on, for example, stem cell research that is done there can be brought closer to the clinics in central London.

Mr. Lansley: The hon. Gentleman keeps touching a raw nerve. I have corresponded with the Medical Research Council for some time on that matter. The working group that decided that the National Institute for Medical Research should be in central London
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rather than Cambridge because of the institute's international obligations was deluding itself. The work of the National Institute for Medical Research relates to the work of the institute of stem cell biology, which will be in Cambridge, and of the laboratory of molecular biology, which is in Cambridge, and I could go on.

Although Cambridge university was not that fussed—plenty of candidates want to be on the Cambridge biomedical campus—it would have been justified in objecting, and I certainly felt that a peculiarly blinkered view was taken on where medical research can be carried out. However, University college and University college London will provide a fine home, and I will have nothing said against them. [Interruption.] I had to get there eventually. I also want to echo the remarks by the right hon. Member for Rother Valley about the importance of safety.

We must decide whether we believe in the process that NICE undertakes. We cannot believe in NICE and the independent evidence-based analysis of what is clinically effective and cost-effective, and then simply throw the results out of the window. The right hon. Member for Rother Valley and I share that view on infertility treatments, because if one asks NICE to produce guidelines, one cannot suddenly pop up and say, "Let's do something different."

I acknowledge that Herceptin raises a completely different question. The matter does not rest with NICE, because the licence has not been applied for. That prompts the question on what basis is Herceptin being prescribed. I know the answer, because Cambridge university oncologists, who are convinced of its effectiveness, have written to me. Across the country, there are instances in which clinicians can prescribe drugs before licensing on the basis of their own judgment of emerging clinical evidence. However, that is a judgment by clinicians rather than by the Secretary of State or by a professional executive committee. Individual clinicians examine the data and take responsibility for such prescription.

Before 2001, my predecessor, my hon. Friend the Member for Woodspring (Dr. Fox), suggested the creation of an exceptional medicines fund to help to accelerate the take-up of novel but potentially effective medicines in the NHS. I am not advocating that route—if we are devolving responsibility in the NHS, it is probably not appropriate—but it is one way to think about the problem. Even if we are devolving responsibility, we must examine, for example, the French system and understand more explicitly the circumstances in which such prescription should take place through the NHS. Perhaps we should involve NICE at an early stage in considering emerging evidence through clinical trials, even if the licensing process has not been completed. However, we should be aware that Herceptin, by its very nature, cannot be regarded as a precedent, and my party will not seek to use it in that way.

The rest of the debate has concerned how we can support the industry while achieving effective self-regulation. Hon. Members disparaged the new code of practice promulgated through the ABPI, but we have to view these things with a bit of discretion. Frankly, if one sends a senior consultant who might be earning £150,000 to Kuala Lumpur, one can try to put him in a three-star hotel but I am not sure that he will stay there.
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Nobody has been expelled from the ABPI. However, I wonder whether we would conclude that the new standards and privileges arrangements brought into this House in recent years must be defective because nobody has yet been expelled. I am not sure if that is the right basis on which to judge such matters. [Interruption.] I am probably tempting the hon. Member for Newport, West again. Self-regulation is a better way to proceed. Let us ensure that we work with the industry. If we can see reasonable enhancements to the code of practice that are likely to have an impact, let us by all means propose them, but I heard no such substantive proposals today.

We should think hard about how we support the pharmaceutical industry. We put an enormous burden on it as regards deciding where resources should go. An immense amount rests on its shoulders in terms of our futures. What would happen if those companies were to leave the UK? The disaster scenario would be GlaxoSmithKline deciding that it would be better off locating all its research and development activity in the United States. I do not suppose that it will happen—I fondly hope not, touching wood. That would have enormous consequences for this country, not only economically but in terms of our whole research base.

I want to mention two areas: first, NHS research and development activity; and secondly, the role of the pharmaceutical price regulation scheme. The Government's document, "Best research for best health: A new National Health Research Strategy", confidently asserts:

As it is now some time after that, this is an excellent opportunity for the Minister to tell us what conclusions have been drawn from the consultation so far. Since 1991, when a director was first appointed, NHS research and development has grown in its scope and ambitions. I am pleased about that.

The additional five areas of clinical research networks will be terribly important, but we wait to see what scale of resources will flow into them. The clinical research network on stroke requires there to be corresponding levels of NHS research funding, because in comparison with cancer a very small amount of money is spent on supporting stroke research, notwithstanding that stroke is the third largest killer in this country and the major cause of adult disability.

Creating a network therefore needs the resources to support it. I hope that NHS research and development will take seriously the possibility of accepting more responsibility for the costs of clinical trials so that the NHS is in a position to undertake a higher proportion of such trials with patients.

The Under-Secretary knows that one of the major factors that differentiate five-year survival rates in Britain from those in, for example, France is the extent to which patients take part in clinical trials. The National Cancer Research Network was established in 2001 and the number of patients in clinical trials doubled but we remain some way behind France. Of course, we have only one national clinical research network. Clinical trials with patients should be conducted in the NHS. However, the costs of clinical
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trials in this country have doubled and the regulation has increased dramatically. I cannot dissociate myself from some of the responsibility for that because, when we considered the Human Tissue Bill, we added to the regulatory burdens. After many discussions with the Department of Health, we managed to reduce them, but they remain. The clinical trials directive and the Mental Capacity Act 2005 also added to them.

Many people who work on clinical trials and try to set them up tell horror stories about the number of bodies that they have to approach to set up a clinical trial. They include funding bodies, local hospital research approval bodies, distant research and ethics committees, and data protection committees. The list appears endless. Approaching all those bodies is not only expensive but can provide a major disincentive to clinicians, whose time is valuable to them and to the hospital when deciding whether to devote time to clinical trials. We need more patients in clinical trials.

Let me consider the pharmaceutical price regulation scheme. I made it clear before the election that, if we had the chance to do so, we would consider the range of matters that support a strong biomedical research capacity in this country. That includes the NHS research and development strategy and I am pleased that the Government have published a document about that. However, we should also consider the cost of clinical trials, which I have just mentioned, and the action that we can take against animal rights terrorists. The further legislation that the Government have proposed is right but the industry will tell them that it is important to ensure that there is a drive behind enforcement.

We should consider the economic framework through the PPRS. Although the report is excellent, the Committee described the PPRS and made a passing reference to reform in the context of marketing allowance, which, in the grand scale of things, is trivial, but did not tackle the central question of the purpose of the PPRS and whether it is a fit-for-purpose scheme. I do not suggest that it is not fit for purpose and no one in their right mind would suggest simply abandoning it and letting the industry charge what it liked for drugs that have intellectual property protection.

However, many other countries have alternative mechanisms and we need to consider carefully what happens on a European-wide basis. Too many other countries buy in a centralised system but benchmark themselves on an international basis and increasingly choose to benchmark their prices below the average. If that continues, one or two major markets—the US and Japan—will overwhelmingly provide the profit to the pharmaceutical industry while Europe progressively reaches a point where it pays much less. That will not be a sustainable basis on which the industry can regard Europe as its second home for drug research and development. We must understand how to incentivise the conduct of research and development in this country in circumstances whereby we increasingly expose the industry to competition.

I personally do not regard rate-of-return regulation as the right long-term solution, because it does not deliver genuine competitive pressures. The Government imposed a 7 per cent. cut, and no doubt that will deliver a reduction in the drugs bill. However, there is a lack of participation in the negotiations of the scheme by small drug companies and biotechnology companies, and this
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last review of the PPRS has exposed the way in which small companies, often those bringing just one product to the market, are severely disadvantaged. The big companies that negotiate the PPRS are able to change their prices between branded products; there is no real constraint in that regard. So if they have a competing product in a particular treatment area, they can respond through their price structures in ways that a small company with one product simply cannot.

I still think that the PPRS provides an export disincentive. If companies are making major profits as a consequence of the exploitation of their drug in other markets, the price that they get from the NHS could be a disadvantage. There should be real incentives for exports, rather than disincentives. Although the research and development allowance went up, and although it can be an effective floor, I fear that it can also be a ceiling. Companies such as Pfizer have demonstrated the value of high levels of research and development activity in relation to their turnover, but our R and D allowance sets a benchmark and perhaps underplays the benefit of allowing companies to take a strategic option.

The Office of Fair Trading is engaged in a review of these matters. I believe that the House, whether through the Select Committee or some other means, should examine the health and NHS purposes of the PPRS. I am an advocate of what the OFT does, and Members will recall that it quite rightly tries to drive towards competition outcomes. It needs to understand, however, what the health and NHS purposes of the PPRS are, in the course of its review.

When the OFT considered the control of entry regulations in regard to pharmacies, it went away and thought about competition, and came up with a set of solutions. There was then a big row about the consequences because it had not taken fully into account the NHS purposes involved. Perhaps the answer is that we should derive all the competition benefits and, if the NHS wants other things, such as research, to happen, we might just have to pay more for that. Perhaps we should pay much more through the science and technology budgets to encourage companies to undertake their R and D here, and defray many more of the costs that they would otherwise meet.

I am absolutely sure that because the PPRS is not a statutory scheme—it is all voluntary—it is very difficult for us to get a handle on anything that happens in it. That is not necessarily because the Government and the industry are secretive; it is because there is no mechanism for the scheme to be examined. I am asking for a mechanism—perhaps operated through the Select Committee—by which we can examine the fitness for purpose of the PPRS. We should do this over the next year, not in three years' time, when any such examination would become confused with the question of the negotiations. It would be better to examine in theory what the PPRS is intended to do, before we arrive at the next PPRS negotiations.

Having said all that, I believe that the Select Committee has done an excellent job that has resulted in real, positive benefits in terms of the reporting of adverse events and the promotion of a new code of practice throughout the industry. I hope that the report will also lead to the more open and responsible use of clinical trial data and to the establishment of a scientific community
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that is able to give us a much better idea of what works and what does not, because we depend dramatically on the output of the industry.

4.23 pm

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