Health Bill

moved Amendment No. 87:"Page 30, leave out lines 16 to 25." The noble Earl said: In moving on to Clause 34 we arrive at what to my mind are the most contentious provisions in the Bill outside Part 1. I have very considerable concerns about them. Clause 34 contains new regulation-making powers which seek to alter the approach of PCTs in the processes they use to award contracts to provide pharmaceutical services in the community. This amounts to saying that where there is competition between two or more contenders, the cost of over-the-counter medicines and of other healthcare products is to be taken into account as one of the criteria for determining the award of a new NHS contract. This idea is quite new and, in my opinion, it is neither fair nor workable. It is unfair because there would appear to be nothing to stop a large multiple chain of pharmacies or a supermarket chain using its commercial muscle to bid on the basis of artificially low prices of OTC medicines which an independent pharmacy business could not hope to match. It is equally unfair because to judge the attractiveness or otherwise of one basket of products against another basket of products is an extremely subjective process. There are absolutely no criteria given, or even hinted at, to enable the judgment to be made in anything like a scientific manner, which is why many people regard the whole clause as a lawyers’ beanfeast. It is also unfair because PCTs have no business interfering in the sale of products over which they have no jurisdiction. OTC medicines are completely outwith the remit of the NHS. It is not for the NHS to manage prices in what are, let us remember, privately run and privately owned businesses. If the Government want to do that, there are better and more upfront ways of getting there. And perhaps we need also to remind ourselves that retail price maintenance on OTC medicines was abolished a little while ago. I also said that the provisions would be unworkable. Let us suppose that there are two bidders for a contract and one of them is chosen on the basis of the prices of its OTC medicines. What is to stop it from moving in and then putting up its prices a few months later? Even if it does not do something so blatant, how on earth will it be possible for a PCT to monitor the extent to which the provider maintains or increases its prices over time? If its stock lines change, as they very likely will, how will a PCT be expected to draw up appropriate and fair benchmarks against which to assess whether or not the contract is being adhered to? Realistically, what kind of enforcement of the contract will be possible over the longer term? What penalties will there be if a pharmacy fails to deliver on its promises? There do not appear to be any. To introduce this new criterion for awarding NHS contracts opens up a hornets’ nest. Importantly, it also risks undermining the new pharmacy contract. The new contract is all about widening access to primary care. Some pharmacy groups—Lloyds, for example, and Moss—have made huge efforts to develop their services to patients: giving advice, providing diagnostic and screening services, offering appropriate facilities for drug addicts and so on. These sorts of activity are the way forward for the modern pharmacy business. If we want to measure quality in a pharmacy I suggest that it is these services not the price of OTC medicines that should be the main determinant. Patients have access to OTC medicines all over the place. The market is competitive. What they need in a pharmacy is something additional and quite different from just a shop. In looking at Clause 34 in the round, we need to ask what the Government are trying to achieve. Is it cheaper prices in OTC medicines, more pharmacies or what? What, in the Government’s view, would define success in the longer term? I do not profess to know the answer to that, and I hope the Minister can bring us closer to one. It seems odd to me that, little more than a year after the new control of entry rules came into force, the Government are already trying to amend them, albeit for those comparatively rare occasions when a choice has to be made between two providers. I do not know what Ministers see as being the problem in the way the new rules are being applied. It would be very useful if the Minister could take us through the whys and wherefores of this clause and address the difficulties of unfairness and unworkability that many people have identified in the proposals. I say to him genuinely that I think this is an area that would benefit from a fundamental rethink. I hope he will at least agree to look at the points I have made. I beg to move.