If memory serves, it was a team of investigative journalists from The Sunday Times that focused on that issue. However, the hon. Gentleman is right: we should pause and reflect, and be thankful for the tremendous tradition of British investigative journalism, which helps us and is our ally in Parliament. It is important to put that on the record. What The Times did contributed to the Secretary of State launching the Competition and Markets Authority inquiry. I am pleased that that happened.
A number of speakers have made a valid point, with which I strongly agree, that it is absolutely vital that we continue to have a strong pharmaceutical industry in the UK. In the months before she was appointed, the Prime Minister said:
“It is hard to think of an industry of greater strategic importance to Britain”
than the pharmaceutical industry, and she was absolutely right. The briefing from the House of Commons Library says that the output of the pharmaceutical industry in 2015 was £12.7 billion, which amounts to 8% of the UK’s entire manufacturing output. Let us look at one or two of the larger players.
GlaxoSmithKline is active in more than 150 markets around the world, and has 110,000 employees globally. It has 80 manufacturing sites, and it is the largest vaccines business in the world. Of particular significance is the fact that it conducts all its research in two research hubs: one in Philadelphia and the other in Stevenage in the United Kingdom, where a number of my constituents are proud to work. AstraZeneca is another large pharmaceutical company that is active in the UK. It has 6,700 UK employees, and supports a further 35,000 jobs in the UK. It operates across seven sites, including one in Luton, close to my constituency. Again, a number of my constituents are rightly proud to work there.
As the Secretary of State said, the medicines bill for NHS England, at £15.2 billion in 2015-16, is the second largest cost for the organisation, after staff costs, so it is
absolutely vital that we secure value for money in this huge area of spend. It is a concern that the CMA has spoken of “excessive and unfair prices” and has referred to companies that have “abused a dominant position”. There have been incidences of no competition or insufficient competition, so it is right that the Government have stepped in to deal with the issue. That touches on a broader philosophical point. We had a brief exchange on this earlier. In a response to me only a couple of days ago on the morality of business behaviour, the Prime Minister wrote:
“we need to ensure that the free market has an ethical basis”.
I absolutely agree.
The Library briefing for the debate looks at the top 11 medicine price increases, ranging from ascorbic acid, with an eye-watering 1,012% price rise, right up to Doxepin, which had a 5,281% price rise. In some cases—if some of the ingredients and some of the raw material for a particular drug are suddenly in short supply—a price increase such as that may be justified, but the Department knows that, in the majority of cases, there is no valid reason for the huge increases. That is why the Government have, properly, acted. Therefore, I welcome the Bill’s powers to reduce prices, to impose price controls and, importantly, to gather information. However, I have a couple of questions for my hon. Friend the Minister on gathering information.
Getting information is vital, and I am pleased that the Government have included measures in the Bill to obtain complete information. Is the Minister satisfied that there is sufficient analytical ability in his Department to really know what is going on? I ask that for this reason. I have had the huge privilege of working with members of the senior civil service in a different Department in the past two years, but sometimes we expect civil servants to have a range of skills that it is not fair of us to expect them to have. Is there the necessary commercial expertise in his Department to really work out what is going on with the additional information that he and his officials will have at their fingertips? Is there a scheme for secondments between pharmaceutical businesses and the Department of Health, so that his officials really know how the market works and any particular games that might be played? That is important.
I am aware that one permanent secretary in post at the moment had a secondment earlier in his civil service career to Diageo, but it is important that the Minister and the permanent secretary ensure that there is that capability in their Department. If it is not there, I hope that he and the ministerial team will take steps to ensure that it is. I say that because, if we look at some of the emails that came into the public domain as a result of the investigation by The Times—some were brought to light through freedom of information requests—it seems that there was not quite the level of serious analysis, probing and inquiry that we would all, including the Minister, have liked to see.
The Government have introduced the Bill because they care passionately about the future of our NHS. They will do everything necessary to protect it and that very much includes getting value for money from the drugs that the NHS pays for. On the Conservative Benches, we value and care about the role of the free market. We know that it is the greatest economic mechanism in the history of mankind for creating wealth and for relieving poverty. It is because we care about it that we
will act to reform where that is necessary, whether that be in the interests of the NHS or any other part of our country.
7.33 pm