First Standing Committee on Statutory Instruments, &c.


Tuesday 14 March 1995


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The Committee consisted of the following Members:

Chairman: Mr. James Hill

Ainger, Mr. Nick (Pembroke)

Bayley, Mr. Hugh (York)

Boyes, Mr. Roland (Houghton and Washington)

Burden, Mr. Richard (Birmingham, Northfield)

Carlile, Mr. Alex (Montgomery)

Duncan, Mr. Alan (Rutland and Melton)

Eagle, Ms Angela (Wallasey)

Hughes, Mr. Kevin (Doncaster, North)

Illsley, Mr. Eric (Barnsley, Central)

Lait, Mrs. Jacqui (Hastings and Rye)

Lloyd, Sir Peter (Fareham)

Robathan, Mr. Andrew (Blaby)

Roberts, Sir Wyn (Conwy)

Robinson, Mr. Mark (Somerton and Frome)

Sackville, Mr. Tom (Parliamentary Under-Secretary of State for Health)

Thurnham, Mr. Peter (Bolton, North-East)

Twinn, Dr. Ian (Edmonton)

Willetts, Mr. David (Havant)

Mr. M. Hennessy, Committee Clerk

3 First Standing Committee on Statutory Instruments, &c. Tuesday 14 March 1995

[MR. JAMES HILL in the Chair]

Draft Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Amendment Order 1995

4.30 pm

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): I beg to move, That the Committee has considered the draft Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Amendment Order 1995. The order is proposed because section 102 of the Finance Act 1987 requires approval by affirmative procedure to set fees in specified areas. In this case it will allow the Medicines Control Agency, the body that advises Ministers on medicines licensing, to cover its costs through fees charged to the industry, following the introduction in January of a new European licensing system by way of regulations approved by Parliament. The new European system introduced two new licensing procedures, centralised and decentralised. The centralised procedure requires a Eurolicence to be issued by the new European Medicines Evaluation Agency recently established in London and to be valid throughout the Community. The scientific assessment work will be carried out by member states and the cost of work that falls to the United Kingdom will be paid by the EMEA directly to the agency. This procedure is presently limited to biotechnology products, where the MCA already carries out more than half of all European work. The decentralised procedure allows companies to obtain a licence in one member state and have it recognised in other individual member states. Companies can apply to the UK for the first licence and then take it to other countries, or they can go to another member state first and come to the UK with their new licence. Without the order the agency would be unable to charge fees for assessing either sort of application. Assuming that the order is agreed, regulations will be laid before the House setting out charges in detail, following a full consultation exercise. This year the proposal will be for an overall reduction of 4 per cent. in MCA fees, which is possible because of the agency's success in attracting work from companies around the world. We have consulted the relevant trade associations, which agree with us that the order is essential for fees to be charged under the decentralised system.


4.33 pm

Mr. Eric Illsley (Barnsley, Central): I shall not detain the Committee. The order is technical and is required by the Finance Act 1987. It produces an authorisation system for medicines in the United Kingdom and, as the Minister pointed out, a European Community-wide system for the licensing of products. I have two questions for the Minister. The fees charged by the Medicines Control Agency will be reduced for products licensed abroad to allow them to be licensed in this country. Has the Minister any information on the reverse process? When an application is made in another EC member state to license products that are licensed in the UK, will there be a level playing field with respect to the fee charged, or will there be differentiation between member states? Secondly, will we be able to maintain our large share of products licensed throughout the EC? About 30 per cent. of products are licensed in the UK for the entire EC.

Mr. Sackville: The hon. Gentleman's question about reciprocal charges tempts me to speak about the general level playing field, or otherwise, between us and Europe, but I will remain within the confines of the order. I assure the hon. Gentleman that it will be out' aim to do everything possible to ensure that we get a fair deal vis-a-vis other countries, but we expect to have a good share of the medicines licensing business because of the considerable expertise and respect that has been built up by the MCA Europe-wide, which we hope to retain.

4.35 pm

Mr. Kevin Hughes (Doncaster, North): Why are there no details before the Committee? I am at a loss to know why the Government keep expecting us to pass Bills and orders without our having the necessary details. The Government then produce them later. That is a worrying trend, and I hope that the Minister will respond. When considering the fees, do the Minister and his Department take them into account when setting prescription charges? Why have prescription charges increased by 2,275 per cent. since the Government came into office? That is an increase in inflation of 894 per cent. Does the hon. Gentleman realise that, if prescription charges were set to keep pace with inflation, they would only be 53p, not £4.75—a charge that will increase to £5.25 in April?

4.36 pm

Mr. Sackville: The hon. Gentleman shows great ingenuity by trying to tempt me down another path—the topic of prescription charges. They are set to defray the expenses of the vast number of individual transactions and pieces of paper issued by general practitioners and processed through pharmacists. The 5 cost of reimbursing pharmacists is different from the licensing of medicines, which should be a one-off transaction that could cost anything from a few thousand pounds to many tens of thousands of pounds, depending on the amount of work. The two matters are unrelated. It is the Medicines Control Agency's intention to focus charges precisely at those who benefit from them in line with the amount of work that is done. That has been achieved with great distinction and it would be possible to consider a price reduction in future for the pharmaceutical industry, at the same time as providing a good, fast service compared with many of our EU competitors.

Mr. Hughes: My other question was about our not having details of the measure. The Minister said that they would be laid before the House at a later date. I asked why they were not before the Committee today.


Mr. Sackville: That is a procedural matter. I am sorry that I did not answer the hon. Gentleman's question. To lay the negative resolution for fees, we must first have the affirmative order that allows us to lay the negative resolution. I am sorry not to be more clear. We can, following what I hope will be agreement, not recall the Committee to lay the other, negative resolution orders.

Question put and agreed to.

Resolved, That the Committee has considered the draft Medicines (Fixing of Fees Relating to Medicinal Products for Human Use) Amendnient Order 1995.

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


Hill, Mr. James (Chairman)

Bayley, Mr.

Duncan, Mr. Alan

Hughes, Mr. Kevin

Illsley, Mr.

Lait, Mrs.

Lloyd, Sir Peter

Robathan, Mr.

Roberts, Sir Wyn

Robinson, Mr. Mark

Sackville, Mr.

Twinn, Dr.

Willetts, Mr.