Date laid: 21 December 2018
Parliamentary procedure: affirmative
These draft Regulations are laid by the Department for Health and Social Care and set out the Government’s plans for the recognition of European Economic Area (EEA) and Swiss professional healthcare qualifications in the event of ‘no deal’ with the EU. Under these Regulations, qualifications which are automatically accepted in the UK at present by virtue of an EU Directive will be accepted in the UK, but UK regulators will have a power to designate such qualifications as not comparable. Those qualifications which are not listed in the EU Directive, but which are currently recognised in the UK, will continue to be recognised. However, in cases where a qualification is not comparable, UK regulators will have discretion as to how they proceed with the recognition process. These Regulations also remove the ability for EEA and Swiss healthcare professionals to work in the UK on a temporary or occasional basis.
We draw these Regulations to the attention of the House so that it may press the Minister on how the Government will ensure there is a consistent and fair approach by UK regulators in determining whether EEA and Swiss professional healthcare qualifications are comparable, and on what assurances the Government can give that there will be no detrimental impact on the provision of health and social care in the UK after exit day.
We draw these Regulations to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
4.A European Union Directive (“the Directive”) sets out a framework of two systems for the reciprocal recognition of professional qualifications: the “automatic system” and the “general system.” It enables European Economic Area (EEA) and Swiss nationals to have their professional qualifications recognised and to work in another EEA state or Switzerland.
5.The automatic system obliges Member States to recognise automatically qualifications listed in Annex V to the Directive with no further checks on the practical skills of the holder of the qualification. If an EEA or Swiss qualification is not listed in Annex V then it falls within scope of the general system, under which qualifications are considered on a case-by-case basis. The general system requires the qualification holder to be registered and allowed access to the profession if the UK regulatory bodies assess that the level of qualification is comparable to the relevant UK qualification standards.
6.These Regulations are laid by the Department for Health and Social Care (DHSC) along with an Explanatory Memorandum (EM). We also requested additional information from DHSC which is published at Appendix 2. The Regulations deal with the recognition of European qualifications in the health and social care profession after exit.
7.In the event of ‘no deal’ with the EU, qualifications included in Annex V of the Directive at exit day will become “acceptable overseas qualifications”. However, UK regulators will have power to designate such qualifications as not comparable. The grounds for designating a qualification as not comparable will be determined by the regulator. Qualifications can be designated as not comparable at the level of a course, institution or nation as the regulator determines appropriate. Such designation of a qualification will require Privy Council consent.
8.The EM explains that the “continued recognition of Annex V qualifications will be subject to a review by the Secretary of State for Department of Health and Social Care two years after these Regulations come into force.”
9.EEA and Swiss qualifications not listed in Annex V of the Directive will be assessed against the equivalent UK qualification standards. If a qualification is deemed to be comparable to the UK qualification standards, then UK regulators will be required to recognise the qualification.
10.In cases where a qualification is not comparable, UK regulators will have discretion as to how they proceed with the recognition process. There will be no obligation to offer compensatory measures where a qualification is not comparable to the UK qualification standard.
11.We asked DHSC how the UK regulators will make decisions. The department responded:
“This instrument enhances regulators’ powers to protect the public. It will give regulators the power to designate EEA and Swiss qualifications that they are currently obliged to accept automatically as not comparable. The grounds for designating a qualification as not comparable will be determined by the regulator. EEA and Swiss qualifications that are not accepted automatically at present will continue to be assessed against UK qualification standards by the relevant UK regulator. UK regulators will retain the power to check an applicant’s language skills and whether there are concerns about their fitness to be registered.”
12.We questioned whether this meant that regulators could set their own criteria for designation, and DHSC confirmed:
“Health and Care regulators are best placed to assess qualifications. Privy Council scrutiny ensures continuity for applicants in the short term whilst providing an inbuilt safety mechanism for removing qualifications that require further testing. The overarching principle behind the designation is the safety of the public–and we will work with regulators to ensure this.”
13.We asked DHSC about ensuring a consistent and fair approach to decisions by the different regulators. DHSC explained:
“Each regulator will be responsible for establishing the criteria for designation and it is therefore possible that there will be different approaches to designations. However, qualifications will only be considered by the regulator of the relevant professions. There is, therefore, no possibility of individual qualifications being designated by one regulator but not another. Some institutions may, nonetheless, have qualifications designated by one UK regulator but not another. Such designations will require Privy Council approval, which will provide some protection against regulators taking an unreasonable approach …
These regulations allow regulators to be flexible in their approach but can facilitate discussions around consistency through the Privy Council if necessary. The mechanism is designed for public safety concerns - and we will work with regulators to ensure this.”
14.These Regulations give UK regulators the discretion to designate EEA and Swiss qualifications as not acceptable in the UK after exit from the EU. The House may wish to ask the Minister what criteria regulators will apply in designating a qualification as not comparable with UK standards, and what steps will be taken to ensure that regulators maintain a consistent and fair approach in their application.
15.DHSC clarified that there will be no change to language testing arrangements. Holders of qualifications which are currently recognised automatically are also required to identify that they have the necessary English language skills to practise safely in the UK, and this will continue to be the case. Similarly, under the general system, if a qualification is assessed as being comparable to UK standards, then the applicant will still have to demonstrate that he or she has the necessary language skills. This is done either by providing evidence or taking a language test.
16.We asked DHSC how many people will be affected by this new arrangement. It responded:
“The amended legislation will put in place a system for the recognition for EEA and Swiss qualifications listed in Annex V that is similar to the current system. This will oblige UK regulators to recognise such qualifications (unless they are designated as not acceptable) as being sufficient for practising in the UK for at least two years starting when the regulations come into force. This means the roughly 3,200 EEA and Swiss qualified healthcare professionals who join the register each year under automatic recognition will continue to have a streamlined and proportionate route to registration in the UK. Qualifications not accepted automatically at present will continue to be assessed against UK qualifications standards by the relevant UK regulator. This will allow the roughly 1,500 EEA and Swiss qualified health and care professionals registered in the UK each year to continue to access a predictable and proportionate route to registration. As these regulations maintain the current systems little disruption to application processes is expected at exit day.”
17.Given the contribution of EEA and Swiss qualified professionals to the NHS, the House may wish to ask the Minister for assurances that the NHS will suffer no detrimental impact as a result of these Regulations.
18.In explaining how applications will be processed by UK regulators, DHSC responded:
“As these regulations seek to maintain the current systems (as far as is possible) for at least two years upon coming into force little change or disruption is expected in the application process at exit day. Regulators will continue to assess and process applications as they currently do, while having the ability to consider the content of qualifications and pursue designation. This will allow the continued registration of healthcare professionals who meet the UK’s training and safety standards to be registered in the UK under a proportionate system which protects patient and public safety while helping meet the future workforce needs.”
19.We asked DHSC whether these changes will cause an administrative burden on regulators. It explained:
“No. We have completed a regulatory Triage Assessment for these regulations assessing Direct Business Costs. There will be a negligible impact on regulators under these regulations as they ensures continuity.”
20.We asked DHSC if the UK regulators have the resources to carry out these functions. DHSC explained:
“UK regulators have been preparing for a possible no-deal outcome. As these regulations seek to maintain the current systems (as far as is possible) for at least two years upon coming into force little impact is expected at exit day.”
21.In light of this answer, we questioned what resources regulators will need at the end of the two-year transitional period. DHSC explained:
“Future arrangements for EEA applicants are dependent on discussions with the EU. Two years will provide adequate time for Government and regulators to put in place new arrangements. Changes made beyond the two-year period may impact upon regulators’ administrative burdens.”
22.We asked how much these additional duties will cost regulators. DHSC confirmed:
“Negligible for the first two years of operation. After this time if a new system is implemented Health and Care regulators will continue to operate on a full cost recovery basis. As such our analysis assumes that there will be a net zero cost to them as any increase in cost of assessing applicants for registration with EEA qualifications should be recouped via the regulators setting and charging fees that cover the additional costs.”
23.We asked DHSC how long will it take to process an application and the costs involved. DHSC explained:
“As these regulations maintain the current systems for at least two years upon coming into force little change is expected in terms of applicant cost, costs to regulators, or application processing time at exit day. As such, applicants can expect to pay similar fees (varying between regulators) and receive a recognition decision within four months as is the case under the current system” …
“Fees are set by the regulators and will depend upon the qualification and whether they fall under the Privy Council mechanism. All fees can be found on regulators’ websites and fee changes are subject to approval by Parliament (including Devolved Parliaments). Initial registration fees for those with qualifications subject to the designation range from £150 to £1038.”
24.Given that this function of having to assess whether a qualification is not comparable may impose an additional burden on UK regulators, the House may wish to ask the Minister for assurances that UK regulators would have the administrative capacity and resources in place to deal with these decisions.
25.The Directive facilitates the temporary and occasional provision of services, allowing EEA and Swiss professionals to practise across the EEA and Switzerland without the need for full registration with the relevant regulator. Providing temporary and occasional service allows the professional to remain established in their home state while practising in another state. If an applicant is a practising sectoral professional in another EEA state or Switzerland then any temporary and occasional registration requirements must be automatic, and fees cannot be charged.
26.The provisions on temporary and occasional services rely on reciprocal arrangements with the EEA (which facilitate free movement of persons and services). These Regulations revoke those provisions as the Government do not consider them to be appropriate once the UK leaves the EU.
27.DHSC confirmed that there are 42 General Medical Council registrants, two General Chiropractor Council registrants, one General Pharmaceutical Council registrant, one Nursing and Midwifery Council registrant, and 88 Health and Care Professions Council registrants currently practising under temporary and occasional arrangements.
28.We queried with DSHC what will happen to those working in the UK on exit day on a temporary or occasional basis. It explained:
“The instrument contains transitional and savings provisions which protect recognition decisions already made, allow applications which have been made before exit day to be concluded under current arrangements as far as possible, and allow individuals practising under temporary and occasional status or under the European Professional Card to continue to do so until such registration expires.”
29.Given the number of EEA and Swiss professionals providing healthcare services in the UK on a temporary or occasional basis, the House may wish to ask the Minister how the Government will ensure there is no detrimental effect on the NHS as a result of the removal of the right for EEA and Swiss professionals to work on a temporary or occasional basis in the UK.
30.After exit day, professional qualifications awarded in the UK will no longer be covered by the Directive. The EU has agreed that holders of UK qualifications that have been registered in EEA countries and Switzerland will continue to be registered. However, in the absence of an agreement with the EU, the recognition of UK qualifications will be determined by individual EU Member States after exit day.
31.The House may wish to invite the Minister to explain the impact of ‘no deal’ on UK professionals wishing to practise in the EU after exit day.
32.Given the potentially significant impact on the health sector in the UK in the absence of an agreement with the EU, we draw these Regulations to the attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
Date laid: 12 December 2018
Parliamentary procedure: negative
These Regulations are laid by the Department for Health and Social Care and make provision for the National Institute for Health and Care Excellence (NICE) to charge industry for the costs of submitting their products for appraisal. This transfers the costs of NICE carrying out technology appraisal and highly specialised technologies programmes from the NHS to industry.
We draw these Regulations to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
33.The National Institute for Health and Care Excellence (NICE) is an independent, expert body responsible for providing authoritative, evidence-based guidance, advice and recommendations for the health and care system.
34.NICE operates a range of work programmes, including: the development of guidelines providing guidance on the diagnosis, management and care of defined groups of patients; recommendations on the clinical and cost effectiveness of individual treatments; and recommendations on the safety and efficacy of interventional procedures.
35.Using its technology appraisal (TA) and highly specialised technologies (HST) programmes, NICE assesses the clinical and cost-effectiveness of health technologies (such as new pharmaceutical and biopharmaceutical products) as well as procedures, devices and diagnostic agents.
36.Through these programmes, NICE makes recommendations on whether drugs and other medical technologies should be routinely used in the NHS, based on evidence of their cost-effectiveness. The NHS is legally obliged to fund medicines and medical technologies recommended by NICE’s TA or HST programmes.
37.These Regulations are laid by the Department for Health and Social Care (DHSC) along with an Explanatory Memorandum (EM) and an Impact Assessment (IA).
38.The Regulations will allow NICE to charge industry for the cost of making TA and HST recommendations.
39.NICE’s TA and HST programmes are currently funded from the grant-in-aid funding that NICE receives from DHSC. The IA explains that NICE’s grant-in-aid funding has been reduced in recent years, falling from £66.4 million in 2013–14 to £51.2 million in 2018–19. The Government argue that NICE needs to identify other sources of funding to enable it to continue with its full programme of work.
40.DHSC confirmed that charging will enable NICE to continue the full breadth of its important work, while at the same time reducing its reliance on central government funding.
41.The IA explains that NICE provided a list of 120 companies that had submitted 413 products for appraisal between April 2013 and September 2018. Of these, 75% of companies (90 out of 120), covering 92% of appraisals (378 out of 413), were matched to data on company annual UK turnover in 2016–17. Of the 90 companies matched:
42.The 2016–17 average annual turnover of these companies was:
43.The estimated cost per appraisal (proposed charges for 2019–20) by appraisal type is shown in the table below:
Cost per appraisal
Single Technology Appraisals (STA)
Highly Specialised Technologies guidance (HST)
Fast Track Appraisals (FTA)
Multiple Technology Appraisals (MTA) - Standard
Multiple Technology Appraisals (MTA) - Complex
Source: IA, p 9.
44.DHSC carried out a public consultation on the proposed amendments between 10 August and 14 September 2018. The majority of respondents (62%, 48/78) disagreed with the main proposal that NICE may charge companies for making TA and HST recommendations.
45.Industry respondents agreed that a financial contribution from companies was justified, but argued that the proposed model of charging could reduce the attractiveness of the UK as a market in which to develop and sell new medicines. Several respondents suggested that uncertainty about regulatory and market conditions following the UK’s exit from the EU made charging a riskier policy in this respect.
46.We asked DHSC why the Government decided to continue with the proposals. The department explained that:
“The Government is satisfied that the introduction of charging for NICE TA and HST recommendations will create a sustainable model for NICE, and that the proposed changes to the charging model will mitigate the risk of any unintended and undesirable consequences.”
47.During the consultation, the impact of charging on the relationship between NICE and industry was raised as a concern. The potential for conflicts of interest and the public perception of such conflicts were identified as risks. Some respondents were concerned that reliance on industry funding could mean that NICE’s TA and HST programmes would be inappropriately influenced by companies that stand to benefit from a positive recommendation. Several respondents suggested that industry finance could damage the international reputation of NICE.
48.DHSC has acknowledged that the potential for conflict “was raised during the consultation and it is an issue which we discussed in detail with NICE prior to running the consultation. NICE’s board also considered the issue of potential conflicts of interest.” However, DHSC explained that it was satisfied that the issue of potential conflicts of interest would be mitigated by the following:
(a)NICE has well-developed published policies and procedures that govern the way that it selects topics and appraises medicines, including policies to manage and mitigate individual conflicts of interest. For each individual appraisal, the process is fully documented and published, including minutes of committee meetings. This level of transparency offers the main protection against conflicts of interest;
(b)External independent organisations and individuals, not funded by NICE or industry, are involved in the process throughout, from the identification and filtering of topics to the review and synthesis of evidence and the final assessment of the evidence;
(c)Other than for small companies, fees would be paid upfront, which would mean that neither NICE as an organisation, nor its staff, would have a financial incentive to provide a positive recommendation in an appraisal;
(d)The Medicines and Healthcare Products Regulatory Agency, for example, has a long history of charging for its regulatory work, and has taken steps through its internal organisation to avoid conflicts of interest. In addition, agencies in Canada and Australia that fulfil a similar function to NICE charge for their work and have procedures in place to avoid conflicts of interest.
49.We asked DHSC how it would ensure that the standards currently applied by NICE will be maintained. They explained:
“NICE has long established arrangements for managing potential conflicts of interests to ensure guidance is produced by independent advisory committees. NICE’s policy on declaring and managing interests was substantively updated in 2018 following a public consultation, and is subject to regular review … We are confident that the introduction of charges will not impact on NICE’s impartiality.”
50.DHSC also acknowledged that “there is a risk that a company may decide that it does not wish to pay for a NICE appraisal.” However, the department pointed out that:
“It is worth remembering that the total NHS spending on medicines in England was over £18 billion in 2017/18. The financial cost to companies of these charges will be approximately £10m per year. Equally, the Government is taking forward a range of actions to continue to support the flourishing life sciences sector in the UK, such as:
51.The specific impact of charging for HST guidance on incentives to launch medicines for rare conditions was raised as a concern by industry respondents, since expected returns from sales of orphan drugs are lower than for medicines with larger patient populations. Similar concerns were raised in relation to medical devices, diagnostics and transformational products. Patient groups also expressed concern about access to new medicines, especially for rare conditions. DHSC states in the IA that is has considered whether the introduction of charges would affect the availability of orphan products for the treatment of rare diseases, but said that there was insufficient evidence to conclude that such products would be disproportionately impacted by the introduction of changes.
52.Respondents to the consultation supported a mechanism for reducing the impact on small companies, but felt that a proposed 25% discount did not go far enough and that a more complex system than a discounted cost would be more appropriate.
53.As a result of these concerns, the Government decided to provide a subsidy of 75% to small companies (by funding 75% of the cost of appraisals for small companies from NICE’s government funds) and to allow small companies to pay by instalments.
54.DHSC estimates that the impact on business will be a cost of approximately £10 million per year to the global life sciences industry, taking into account the discount for small companies. The department estimates that the impact on the public sector will be a commensurate saving of approximately £9.3 million per year, taking into account the 75% discount for small companies.
55.During the consultation period, several respondents requested further information on how public savings from charging companies for NICE’s TA and HST programmes would be reinvested in the NHS.
56.DHSC has committed to monitor the impact of the charges.
57.These changes aim to reduce the costs to the public purse of NICE carrying out TA and HST appraisals by transferring the costs of these appraisals from the NHS to industry. Concerns have been raised about the potential for a conflict of interest between NICE and life science companies and whether these changes will dissuade industry from submitting products for appraisals. Questions have also been asked about how the anticipated saving will be used. We therefore draw these Regulations to the attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.
4 Term used by DHSC at para 2.8 of the EM.
5 The UK Health and Care Statutory Regulatory Bodies include: the Health and Care Professions Council, the General Chiropractic Council, the General Dental Council, the General Medical Council, the General Optical Council, the General Osteopathic Council, the General Pharmaceutical Council (GB only), the Nursing and Midwifery Council, and the Pharmaceutical Society of Northern Ireland (NI only).
6 Privy Council consent will be provided by written notice upon review of the regulator’s request for designation, including any material the regulator provides to justify the designation.
7 Impact Assessment (IA), p 6.
8 National Institute for Health and Care Excellence, NICE guidance: [accessed 16 January 2019].
9 IA, p 6.
10 IA, p 6.
11 EM, para 7.7.
12 Taken from the Life Sciences database held by the Office for Life Sciences in the Department for Business, Energy and Industrial Strategy. A match was not possible when companies submitting products to NICE had been recently incorporated or did not have a UK subsidiary.
13 Small company with turnover less than £10.2 million per year and fewer than 50 employees.
14 Turnover between £10.2 million and £36 million per year, fewer than 250 employees.
15 Turnover greater than £36 million per year or more than 250 employees.
16 DHSC explains that these figures could overstate the turnover of these companies at the point in time when they submitted their products for appraisal. Nearly half (9 out of 21) of small companies and a fifth (3 out of 17) of medium-sized companies were subsidiaries of larger overseas companies (listed Global Ultimate Owners - GUOs) with higher listed UK turnover. For one of the small companies, the GUO was not listed.
17 There were 78 responses to the consultation, of which 41 respondents represented views from the life sciences industry, including pharmaceutical companies, industry representatives, consultancies and Medtech companies. The next largest group of responses came from patient groups (12, 15%) with other responses from NHS organisations and individuals.
18 Explanatory Memorandum (EM), para 10.1 and 10.2.
19 IA, p 7.
20 IA, p 7.
21 Additional information from DHSC and IA p 11.
22 Additional information from DHSC.
23 An orphan drug is a medicine that is licensed for the treatment of a rare disease, which is defined as one that affects, in the EU, less than 5 per 10,000 persons.
24 IA, p10.
25 59%, 24 of the 41 respondents. See footnote 17.
26 EM, para 12.1.
27 IA, p 5 and EM, para 12.4.
28 IA, p 7.