Health Bill [H.L.]

Health Bill [H.L.] - continued	House of Lords
SCHEDULE 12A, EXPENDITURE OF HEALTH AUTHORITIES AND PRIMARY CARE TRUSTS - continued
Control of prices of medicines and profits - continued

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Power to control prices.

30. - (1) The Secretary of State may, after consultation with the industry body-

(a) limit any price which may be charged by any manufacturer or supplier for the supply of any health service medicine, and

(b) provide for any amount representing sums charged by that person for that medicine in excess of the limit, so far as those sums are attributable to supplies to the health service, to be paid to the Secretary of State within a specified period.

(2) The powers conferred by this section are not exercisable at any time in relation to a manufacturer or supplier to whom at that time a voluntary scheme applies.

Statutory schemes.

31. - (1) The Secretary of State may, after consultation with the industry body, make a scheme (referred to in this section and section 32 as a statutory scheme) for the purpose of-

(a) limiting the prices which may be charged by any manufacturer or supplier for the supply of any health service medicines, or

(b) limiting the profits which may accrue to any manufacturer or supplier in connection with the manufacture or supply of any health service medicines.

(2) A statutory scheme may, in particular, make any provision mentioned in subsections (3) to (6).

(3) The scheme may require any manufacturer or supplier to whom it applies to-

(a) record and keep information, and

(b) provide information to the Secretary of State.

(4) The scheme may provide for any amount representing sums charged by any manufacturer or supplier to whom the scheme applies, in excess of the limits determined under the scheme, for health service medicines covered by the scheme, so far as those sums are attributable to supplies to the health service, to be paid by that person to the Secretary of State within a specified period.

(5) The scheme may provide for any amount representing the profits, in excess of the limits determined under the scheme, accruing to any manufacturer or supplier to whom the scheme applies in connection with the manufacture or supply of health service medicines covered by the scheme, so far as those profits are attributable to supplies to the health service, to be paid by that person to the Secretary of State within a specified period.

(6) The scheme may-

(a) prohibit any manufacturer or supplier to whom the scheme applies from increasing, without the approval of the Secretary of State, any price charged by him for the supply of any health service medicine covered by the scheme, and

(b) provide for any amount representing any increase in contravention of that prohibition in the sums charged by that person for that medicine, so far as the increase is attributable to supplies to the health service, to be paid to the Secretary of State within a specified period.

(7) A statutory scheme may not apply to a manufacturer or supplier to whom a voluntary scheme applies.

Statutory schemes: supplementary.

32. - (1) The Secretary of State may, after consultation with the industry body, make any provision he considers necessary or expedient for the purpose of enabling or facilitating-

(a) the introduction of a statutory scheme or of a limit under section 30, or

(b) the determination of the provision to be made in a proposed statutory scheme.

(2) The provision may, in particular, require any person to whom such a scheme or limit may apply to-

(a) record and keep information,

(b) provide information to the Secretary of State.

(3) Where the Secretary of State is preparing to make or vary a statutory scheme, he may make any provision he considers necessary or expedient for transitional or transitory purposes which could be made by such a scheme.

Enforcement.

33. - (1) Regulations may provide for a person who contravenes any provision of regulations or directions under sections 29 to 32 to be liable to pay a penalty to the Secretary of State.

(2) The penalty may be-

(a) a single penalty not exceeding £100,000, or

(b) a daily penalty not exceeding £10,000 for every day on which the contravention occurs or continues.

(3) Regulations may provide for any amount required to be paid to the Secretary of State by virtue of section 29(8)(b), 30(1)(b) or 31(4) or (6)(b) to be increased by an amount not exceeding 50 per cent.

(4) Regulations may provide for any amount payable to the Secretary of State by virtue of provision made under section 29(8)(b), 30(1)(b) or 31(4), (5) or (6)(b) (including such an amount as increased under subsection (3)) to carry interest at a rate specified or referred to in the regulations.

(5) Provision may be made by regulations for conferring on manufacturers and suppliers a right of appeal against enforcement decisions taken in respect of them in pursuance of sections 29 to 32 and this section.

(6) The provision which may be made by virtue of subsection (5) includes any provision which may be made by model provisions with respect to appeals under section 6 of the Deregulation and Contracting Out Act 1994, reading-

(a) the references in subsections (4) and (5) of that section to enforcement action as references to action taken to implement an enforcement decision,

(b) the reference in subsection (5) of that section to interested persons as a reference to any persons.

(7) In subsections (5) and (6), "enforcement decision" means a decision of the Secretary of State or any other person to-

(a) require a specific manufacturer or supplier to provide information to him,

(b) limit, in respect of any specific manufacturer or supplier, any price or profit,

(d) require a specific manufacturer or supplier to pay any amount (including an amount by way of penalty) to him,

and in this subsection "specific" means specified in the decision.

(8) A requirement or prohibition, or a limit, under sections 29 to 32 may only be enforced under this section and may not be relied on in any proceedings other than proceedings under this section.

(9) In this section "regulations" means regulations made by the Secretary of State, and the Secretary of State must consult the industry body before making any regulations under this section.

(10) The Secretary of State may by order increase (or further increase) either of the sums mentioned in subsection (2).

Controls: supplementary.

34. - (1) Any power conferred on the Secretary of State by sections 29(2)(a), (7) and (8) and 30 to 32 may be exercised by-

(a) making regulations, or

(b) giving directions to a specific manufacturer or supplier,

and the regulations may themselves confer power for the Secretary of State to give directions to a specific manufacturer or supplier; and in this subsection "specific" means specified in the direction concerned.

(2) Directions given under any of those provisions may be varied or revoked by subsequent directions given under the provision.

(3) Any power to make regulations under any of those provisions or section 33 may be exercised generally in relation to manufacturers or suppliers of health service medicines or be exercised in relation to any class of manufacturers or suppliers.

(4) The powers to refuse approval under section 29(8)(a) or 31(6)(a) or to impose a limit under section 30(1)(a) or 31(1) are exercisable only with a view to limiting the prices which may be charged for, or the profits which may accrue to any manufacturer or supplier in connection with, the manufacture or supply of health service medicines by reference to the prices or profits which would be reasonable in all the circumstances; and in so exercising those powers (in the case of sections 30(1)(a) and 31(1) and (6)(a)) the Secretary of State and any other person must bear in mind, in particular, the need for medicinal products to be available for the health service on reasonable terms and the costs of research and development.

(5) Section 57 of, and Schedule 11 to, the 1977 Act (maximum prices of medical supplies) are to cease to have effect in relation to health service medicines; but the powers conferred by sections 29 to 32 do not affect any other powers of the Secretary of State to control prices or profits.

(6) This subsection and subsections (7) and (8) apply for the interpretation of sections 29 to 33 and this section-

"directions" means directions by an instrument in writing,

"health service" has the same meaning as in the 1977 Act,

"health service medicine" means a medicinal product used to any extent for the purposes of the health service,

"the industry body" means any body which appears to the Secretary of State appropriate to represent manufacturers and suppliers,

"manufacture" includes assemble and "manufacturer" means any person who manufactures health service medicines,

"medicinal product" has the meaning given by section 130 of the Medicines Act 1968,

"supplier" means any person who supplies health service medicines.

(7) References to contravention of a provision include failure to comply with it.

(8) References to supplying medicines include selling them.

Evasion of charges, fraud etc.

Evasion of charges etc.

35. - (1) After section 122 of the 1977 Act there is inserted-

"Recovery of other charges and payments.	122A. - (1) Where goods or services to which this section applies are provided and either-
	(a) any charge payable by any person under this Act in respect of the provision of the goods or services is reduced, remitted or repaid, but that person is not entitled to the reduction, remission or repayment, or
	(b) any payment under this Act is made to, or for the benefit of, any person in respect of the cost of obtaining the goods or services, but that person is not entitled to, or to the benefit of, the payment,
	the amount mentioned in subsection (2) below is recoverable summarily as a civil debt from the person in question by the responsible authority.
	(2) That amount-
	(a) in a case within subsection (1)(a) above, is the amount of the charge or (where it has been reduced) reduction,
	(b) in a case within subsection (1)(b) above, is the amount of the payment.
	(3) Where two or more persons are liable under section 122(1) above or this section to pay an amount in respect of the same charge or payment, those persons shall be jointly and severally liable.
	(4) For the purposes of this section, the circumstances in which a person is to be treated as not entitled to a reduction, remission or repayment of a charge, or to (or to the benefit of) a payment, include in particular those in which it is received (wholly or partly)-
	(a) on the ground that he or another is a person of a particular description, where the person in question is not in fact of that description,
	(b) on the ground that he or another holds a particular certificate, when the person in question does not in fact hold such a certificate or does hold such a certificate but is not entitled to it,
	(c) on the ground that he or another has made a particular statement, when the person in question has not made such a statement or the statement made by him is false.
	(5) In this section and section 122B below, "responsible authority" means-
	(a) in relation to the recovery of any charge under section 122(1) above in respect of the provision of goods or services to which this section applies, the person by whom the charge is recoverable,
	(b) in relation to the recovery by virtue of this section of the whole or part of the amount of any such charge, the person by whom the charge would have been recoverable,
	(c) in a case within subsection (1)(b) above, the person who made the payment.
	(6) But the Secretary of State may by directions provide for-
	(a) the functions of any responsible authority of recovering any charges under this Act in respect of the provision of goods or services to which this section applies,
	(b) the functions of any responsible authority under this section and section 122B below,
	to be exercised on behalf of the authority by another health service body.
	(7) This section applies to the following goods and services-
	(a) dental treatment and appliances provided in pursuance of this Act,
	(b) drugs and medicines provided in pursuance of this Act,
	(c) the testing of sight,
	(d) optical appliances,
	(e) any other appliances provided in pursuance of this Act.
Penalties.	122B. - (1) Regulations may provide that, where a person fails to pay-
	(a) any amount recoverable from him under section 122(1) above in respect of the provision of goods or services to which section 122A above applies, or
	(b) any amount recoverable from him under section 122A above,
	a notice (referred to in this section as a penalty notice) may be served on the person by the responsible authority requiring him to pay to the authority, within a prescribed period, that amount together with a charge (referred to in this section as a penalty charge) of an amount determined in accordance with the regulations.
	(2) The regulations may not provide for the amount of the penalty charge to exceed whichever is the smaller of-
	(a) £100,
	(b) the amount referred to in subsection (1)(a) or (b) above multiplied by 5.
	(3) The Secretary of State may by order provide for subsection (2) above to have effect as if, for the sum specified in paragraph (a) or the multiplier specified in paragraph (b) (including that sum or multiplier as substituted by a previous order), there were substituted a sum or (as the case may be) multiplier specified in the order.
	(4) Regulations may provide that, if a person fails to pay the amount he is required to pay under a penalty notice within the period in question, he must also pay to the responsible authority by way of penalty a further sum determined in accordance with the regulations.
	(5) The further sum must not exceed 50 per cent. of the amount of the penalty charge.
	(6) Any sum payable under the regulations (including the amount referred to in subsection (1)(a) or (b) above) may be recovered by the responsible authority summarily as a civil debt.
	(7) But a person is not liable by virtue of a penalty notice-
	(a) to pay at any time so much of any amount referred to in subsection (1)(a) or (b) above for which he is jointly and severally liable with another as at that time has been paid, or ordered by a court to be paid, by that other, or
	(b) to a penalty charge, or a further sum by way of penalty, if he shows that he did not act wrongfully, or with any lack of care, in respect of the charge or payment in question.
	(8) In spite of section 126(1) below, no order is to be made under subsection (3) above unless a draft has been laid before, and approved by resolution of, each House of Parliament.
Offences.	122C. - (1) A person is guilty of an offence if he does any act mentioned in subsection (2) below with a view to securing for himself or another-
	(a) the evasion of the whole or part of any charge under this Act in respect of the provision of goods or services to which section 122A above applies,
	(b) the reduction, remission or repayment of any such charge, where he or (as the case may be) the other is not entitled to the reduction, remission or repayment,
	(c) a payment under this Act (whether to, or for the benefit of, himself or the other) in respect of the cost of obtaining such goods or services, where he or (as the case may be) the other is not entitled to, or to the benefit of, the payment.
	(2) The acts referred to in subsection (1) above are-
	(a) knowingly making, or causing or knowingly allowing another to make, a false statement or representation, or
	(b) in the case of any document or information which he knows to be false in a material particular, producing or providing it or causing or knowingly allowing another to produce or provide it.
	(3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 4 on the standard scale.
	(4) A person, although he is not a barrister or solicitor, may conduct any proceedings under this section before a magistrates' court if he is authorised to do so by the Secretary of State.
	(5) Proceedings for an offence under this section may be begun within either of the following periods-
	(a) the period of three months beginning with the date on which evidence, sufficient in the opinion of the Secretary of State to justify a prosecution for the offence, comes to his knowledge,
	(b) the period of 12 months beginning with the commission of the offence.
	(6) For the purposes of subsection (5) above, a certificate purporting to be signed by or on behalf of the Secretary of State as to the date on which such evidence as is mentioned in paragraph (a) of that subsection came to his knowledge is conclusive evidence of that date.
	(7) Where, in respect of any charge or payment under this Act-
	(a) a person is convicted of an offence under this section, or
	(b) a person pays any penalty charge, and any further sum by way of penalty, recoverable from him under section 122B above,
	he shall not, in a case within paragraph (a) above, be liable to pay any such penalty charge or further sum by way of penalty or, in a case within paragraph (b) above, be convicted of such an offence."

(2) Any power conferred by section 37 of the 1977 Act or section 17 of the National Health Service (Primary Care) Act 1997 to confer functions on the Dental Practice Board includes, in particular, power to confer functions relating to the prosecution of offences concerning charges for the provision of dental treatment and appliances.

(3) Sections 122A to 122C of the 1977 Act apply to charges which may be made and recovered under section 20 of the National Health Service (Primary Care) Act 1997 as they apply to charges under the 1977 Act which may be recovered under section 122(1) of that Act; and the reference in section 122A(7)(a) to the 1977 Act includes a reference to a pilot scheme (within the meaning of the 1997 Act).

Prepared 22 March 1999