Fifth Standing Committee on Statutory Instruments, &c.


Thursday 4 March 1993


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The Committee consisted of the following Members:

Chairman: MR. JAMES HILL

AINGER, MR. NICK (Pembroke)

Anderson, Ms Janet (Rossendale and Darwen)

Austin-Walker, Mr. John (Woolwich)

Bayley, Mr. Hugh (York)

Biffen, Mr. John (Shropshire, North)

Lidington, Mr. David (Aylesbury)

Lynne, Ms Liz (Rochdale)

McCartney, Mr. Ian (Makerfield)

MacKay, Mr. Andrew (Berkshire, East)

Mabel, Mr. David (Bedfordshire, South-West)

Mahon, Mrs. Alice (Halifax)

Moss, Mr. Malcolm (Cambridgeshire, North-East)

Pawsey, Mr. James (Rugby and Kenilworth)

Rowe, Mr. Andrew (Mid-Kent)

Sackville, Mr. Tom (Parly Under Secretary of State fox Health)

Thompson, Mr. Patrick (Norwich, North)

Trend, Mr. Michael (Windsor and Maidenhead)

Wise, Mrs. Audrey (Preston)

Dr. M. R. Jack, Committee Clerk.

3 Fifth Standing Committee on Statutory Instruments, &c. Thursday 4 March 1993

[MR. JAMES HILL in the Chair]

Draft Medicines Control Agency Trading Fund Order 1993

10.30 am

Motion made, and Question proposed,

That the Committee considered the draft Medicines Control Agency Trading Fund Order 1993. [Mr. McCartney.)

The Parliamentary wider-Secretary of State for Health (Mr. Tom Sackville): The Medicines Control Agency is an executive agency of the Department of Health. It acts on behalf of United Kingdom Ministers in the protection medicines and public safety by controlling the licencing, manufacturing and use of human medicines. Its' costs—about £20 million per annum— are met entirely by fees from the pharmaceutical industry. It is regarded as one of the most effective and highly respected licensing authorities in the world. It is used as the model by other licensing authorities. The MCA is important for two reasons. First, by providing an efficient and rapid service, it ensures that medicines produced here can be marketed longer under patent, which is of great benefit to the pharmaceutical industry. We must remember that the pharmaceutical industry makes an enormous contribution to our balance of trade. Secondly, the fact that the MCA gets medicines onto the market quickly brings great advantages to patients. The licensing time—the turn around time for applications—has recently been reduced from21 months to two months, with enormous benefit for the industry and patients. We believe that the MCA's effectiveness will be greatly enhanced by establishing as a trading fund, which provides the closest parallel to a commercial operation available in government. It will have greater flexibility in managing its own affairs, which it has shown that it deserves. That is especially useful, given the difficulty of predicting accurately the level of licence applications in any year. The Committee will know that experience has shown that trading fund status is of great benefit to certain government agencies, such as the vehicle inspectorate and the Patent Office. There is no question of any major changes of accountability; existing effective controls will remain and the chief executive of the MCA will continue to provide quarterly reports to the Secretary of State on financial results and performance. The Secretary of State will continue to receive advice on its' performance from the supervisory board, which has a majority of independent members. I assure the Committee that interested parties have been consulted on this matter and a report has been laid before the House. The responses received were generally supportive. 4 As I have said, the MCA has made great progress in the past few years. However, we are convinced that the additional flexibility that trading fund status confers will be of great use to the agency and will confer benefits on the industry and, therefore, on patients. One of the reasons that we continue to have such a vibrant and technologically advanced pharmaceutical industry is the availability of a highly efficient and respected licensing authority. We want to ensure that that remains the case. Trading fund status will further enhance the status of the MCA. I commend the order to the Committee.

Mr. Ian McCartney (Makerfield): I congratulate the Minister on his use of those bits of his speech that time prevented him from using last week in the Committee considering the Medicines Information Bill. I do not intend to cause the Minister any problems this morning, and merely seek clarification about a couple of technical points arising out of the Secretary of State's letter in response to the consultation procedure. The Minister was right to say that the industry agreed, in principle, almost entirely with the proposal. Indeed, the Association of the British Pharmaceutical Industry said that it would benefit the pharmaceutical industry. It is very rare for the industry to say that any proposals coming from this House would be beneficial, so I congratulate the Minister on overcoming that hurdle. The Secretary of State said that financial autonomy was about rapidly adjusting demands on public funds. As a former member of a local authority finance committee I recognise that phraseology. Does it mean that there will be a change in charging or income generation policy? If so, what is it likely to be, and what will be the consequences for registration fees? The public expenditure round is coming up: will that cause a dramatic or less than dramatic change in charging policies? What will the consequences of that be? My second question concerns drug control policy making. I accept that the order is to do with financial regimes and not about the principle of registration in terms of efficacy or safety, but the charging regime will have an effect on policy making. What role does the Minister envisage for the chief executive in policy development? Will that role be an advisory one, or will it be similar to that of the national health service management executive board, for example, which gives direct advice to Ministers on the development of policy strategies in respect of the NHS? Will the role of the chief executive of the MCA, in the context of the pharmaceutical industry, resemble that of the chief executive of the NHS board? I hope that the Minister will respond so positively to those two questions that I will not have to rise to speak again this morning.

Mr. Sackville: I hope that I will be able to do that. The main change that the order makes is to the relationship between the agency and the Treasury. At present, there is considerable inflexibility in the amount that the agency can spend. If there is a change in the level of demand, such as in the number of applications, it would be of benefit if the agency could increase its spending over a given period against an expected income from fees. That is difficult to achieve at the moment and so that could create bottlenecks and management difficulties. The additional flexibility given by the order will remove those difficulties to some 5 extent. In an extreme case, that could mean that the agency will function more efficiently and thus retard the increase in fees to the industry. That would be to everyone's benefit. The relationship between the chief executive and the Department of Health and the Secretary of State will not change. The agency has a responsibility to the Secretary of State to ensure that safety and product licensing are delivered as efficiently as possible. The same regime of quarterly information will apply, and there will be no other change. The main thrust of the order is financial and is aimed at achieving greater efficiency.


Question put and agreed to.

Resolved, That the Committee has considered the draft Medicines Control Agency Trading Fund Order 1993.

Committee rose at twenty-one minutes to Eleven o'clock.


Hill, Mr. James (Chairman)

Lidington, Mr.

McCartney, Mr.

MacKay, Mr.

Madel, Mr.

Moss, Mr.

Pawsey, Mr.

Rowe, Mr.

Sackville, Mr.

Thompson, Mr. Patrick

Trend, Mr.

Wise, Mrs.