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Baroness Sharp of Guildford moved Amendment No. 164:

After Clause 27, insert the following new clause--

Annual report by Secretary of State

(" . The Secretary of State shall make an annual report to Parliament containing a general survey of developments during the preceding twelve months on the voluntary schemes including references to--
(a) any modification of an existing voluntary scheme or introduction of a successor voluntary scheme,
(b) decisions taken to prohibit price increases and collect payments under section 26(4), and
(c) decisions taken to control prices and profits under section 27.").

The noble Baroness said: This amendment picks up the issue to which I referred in my earlier intervention. The Secretary of State is answerable to Parliament and, through Parliament, to the electorate. If he is party to a voluntary agreement, he should be answerable to Parliament for his actions. At present, we know remarkably little about the deals done under the PPRS. It is a classic corporatist deal. Those on the Opposition Benches should be joining us in wishing to bring some of those dealings out into the open.

The amendment asks the Secretary of State to make an annual report on developments within the voluntary scheme and to report in detail on any modifications agreed. It is pursuing the agenda for transparency and open government which we have been pressing on the Government throughout the Bill. We hope that we are beginning to make an impact. I hope that the Minister will respond positively to that request. I beg to move.

Baroness Hayman: I hope that I can be helpful in terms of the spirit of what the noble Baroness seeks to achieve.

I accept her view that there have been criticisms of PPRS agreements in terms of their complexity and lack of transparency. Indeed, that was one reason that I put forward earlier for needing to make some changes. That is why we are trying to place the voluntary agreements and statutory schemes on a clear basis--to meet some of those criticisms.

I should say to the noble Baroness that the Government intend to publish reports to Parliament on the operation of both the voluntary and statutory arrangements. Much has been done with the first two reports which have already been published, although I hear what she says about not being satisfied completely as regards the detail of that. There are problems which we should acknowledge in respect of matters of commercial confidentiality. But certainly, aggregate figures should be made available and we should do what we can to meet that.

I would question whether it is sensible to place a requirement to publish an annual report on the face of the Bill. One can easily envisage circumstances over the lifetime of the Bill once it becomes an Act when it might be inappropriate in terms of timing to publish a report as described by the amendment. There may be a time when there is no voluntary agreement or when

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negotiations between the Department of Health and the industry body are at a late stage when the 12 months comes round.

It is in order to have flexibility that I suggest that it is better not to put the requirement for an annual report on the face of the Bill, especially when we look at the issue of a statutory scheme where it might be the case that only a small number of suppliers and manufacturers are affected in any given year. It could be only one or two. It would be very difficult in those cases to see how confidentiality could be maintained and the company's business affairs would be placed in the public domain against its will. One way around that might be found in aggregating the results over a longer period so that a report on the results of the statutory scheme was produced which did not breach areas of confidentiality. Again, we need some ability to act flexibly and responsibly to the conditions prevailing over the lifetime of this legislation. I can assure the noble Baroness that it is our intention to publish reports to Parliament on the operation of both the voluntary and the statutory schemes.

Baroness Sharp of Guildford: I thank the Minister for that very forthcoming reply. We would like to see something on the face of the Bill as a statutory requirement. However, in the light of the Minister's assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 [Statutory schemes]:

Baroness Sharp of Guildford moved Amendment No. 165:

Page 21, line 41, after ("State") insert ("for Trade and Industry").

The noble Baroness said: This is a minor amendment but is of some significance. As I have argued, we believe that there should be no hybrid scheme. There should be either a voluntary or a statutory scheme. This amendment relates to the statutory scheme. If it is to be introduced we believe that there is a conflict of interest between the position of the Secretary of State as a regulator and as a purchaser of health services. Essentially the statutory scheme, if introduced, is a piece of industrial policy about the health of the pharmaceutical industry. As such, we believe that the right Minister to act as intermediary is not the Secretary of State for Health but the President of the Board of Trade. I beg to move.

Earl Howe: I support this amendment. It is self-evident that if a statutory scheme were to apply the Department of Health would be both customer and regulator at the same time. That is not at all satisfactory. If we are to have a statutory scheme--I sincerely hope we do not--then there ought at least to be another department of government in charge of it, a department which can perhaps take a wider and more dispassionate view of the issues involved.

Baroness Hayman: This amendment arises perhaps from an unnecessary broadening of the Government's overall purpose in terms of any statutory scheme. Our purpose, as indeed with the voluntary scheme, is to

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ensure that the prices paid by the NHS for its medicines are fair and reasonable both to the NHS and the pharmaceutical industry. It is not the purpose of the Bill to regulate the operations of the pharmaceutical industry beyond that aim.

I have said several times this evening that we hope to proceed in this matter by co-operation under a voluntary agreement, but it is clear that circumstances might arise where a statutory scheme would need to be introduced. Clause 28 is concerned with the making of such a scheme. It is a matter for the Secretary of State to determine after appropriate consultation. After all, he is the purchaser of medicines for the NHS and it is his concern that those medicines are priced reasonably and fairly.

The Secretary of State for Health has a key interest in maintaining close contact with the industry in its role of ensuring best value for money as purchaser as well as seeking to maintain an industrial policy within the UK which encourages development of innovative medicines and treatments. Acting as a sponsor commits the Secretary of State for Health to maintain a sensitive and broad perspective as regards developments and concerns within the industry which will, in turn, impact on the provision of healthcare through the NHS.

The amendment will place that responsibility with the Secretary of State for Trade and Industry, whose concerns are not with the NHS. Furthermore, once the Secretary of State for Trade and Industry has made a statutory scheme, it will then fall to the Secretary of State for Health to introduce it under Clause 28. I suggest to the Committee that cannot be a sensible course of action.

I have to say also, simply in terms of drafting, that there is the issue of naming Secretaries of State in primary legislation. That is most unusual and, where it has occurred in the past, has led to confusion and uncertainty as to responsibility when departments have merged or split. Therefore, I suggest to the noble Baroness that that is one good reason for the all-purpose term, "Secretary of State" rather than being more specific in the legislation. However, that is, perhaps, a technical point.

Although I understand where the noble Baroness was coming from on the amendment, I believe that this is not a matter of regulation of the industry as a whole. This is very specifically about ensuring fairness under any statutory agreement that might need to be introduced. I suggest that putting responsibilities for part of that with the Secretary of State for Trade and Industry would not help.

Baroness Sharp of Guildford: I thank the Minister for the answer. As we know, the Department of Trade and Industry has been empire building very hard and it is possible, of course, that it might at some time merge with the Department of Health, although one would hope not to see that! We may think about this at a later stage, but, in the light of the Minister's reply, I beg leave to withdraw the amendment.

Noble Lords: No!

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11.57 p.m.

On Question, Whether the said amendment (No. 165) shall be agreed to?

Their Lordships divided: Contents, 8; Not-Contents, 28.

Division No. 1


Addington, L.
Burnham, L. [Teller]
Clement-Jones, L.
Henley, L. [Teller]
Howe, E.
McNair, L.
Mar and Kellie, E.
Sharp of Guildford, B.


Ahmed, L.
Amos, B.
Archer of Sandwell, L.
Bach, L.
Carter, L. [Teller]
Desai, L.
Donoughue, L.
Falconer of Thoroton, L.
Farrington of Ribbleton, B.
Gilbert, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Grenfell, L.
Hacking, L.
Hardie, L.
Hayman, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
Monkswell, L.
Palmer, L.
Pitkeathley, B.
Ramsay of Cartvale, B.
Sawyer, L.
Sefton of Garston, L.
Walton of Detchant, L.

Resolved in the negative, and amendment disagreed to accordingly.

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12.4 a.m.

[Amendments Nos. 166 to 168 not moved.]

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