Danny Beales

I agree that we do need to find a permanent and comprehensive solution. Hopefully we can air those issues fully today. Fundamentally, the principle underlying this issue is very straightforward: if a pharmaceutical company is willing to provide a lifesaving medicine to a patient free of charge because that patient has a serious or life-threatening condition and has exhausted the available standard treatment options, the tax system should not make access to those lifesaving drugs more difficult. That reflects the points raised by the hon. Member and my hon. Friend the Member for Morecambe and Lunesdale (Lizzi Collinge). Pharmaceutical companies already operate these schemes at a loss. For example, over the last four years, AstraZeneca alone has given more than 2,500 patients access to innovative, lifesaving medicines free of charge, costing millions of pounds. This is clearly not a commercial transaction. It is a moral, compassionately motivated decision and programme, and in my view that means it should be supported, championed and facilitated by Government, not blocked, disincentivised, or made administratively more burdensome—but unfortunately that is exactly what has been happening since HMRC started charging VAT on those donations. This is not just a line on a tax return, impacting on the bottom line; the impact is also having real-world consequences on patient groups. The consequences of this delay are gut-wrenching and deeply frustrating for clinicians, patients and their families. Every day, every week and every month that we wait for a permanent solution to move forward, more severely ill patients are denied access to drugs that could save or extend their lives, at no cost to the NHS. It is also important to note that patients with rarer cancers are disproportionately affected by this issue, as they generally have fewer treatment options. In August, I was contacted by Emma and her husband Ian. Ian and Emma are currently watching this debate online from Ian’s hospital room at University College hospital, as they could not be here in person. Ian has an advanced, rare and aggressive bile duct cancer. Following his latest chemotherapy, his consultant Professor Bridgewater recommended regorafenib as Ian’s next treatment. Regorafenib was previously supplied free of charge by Bayer through a compassionate use programme. However, since Bayer became liable for VAT on the medicines it was donating, it withdrew from the programme, meaning that Ian lost free access to this potentially life-extending treatment. Ian and Emma are now urgently trying to find the money to pay privately for Ian’s treatment, and the cost is thousands of pounds per month. It goes without saying that many families cannot afford to pay thousands of pounds, each and every month, for treatment. Working with Sarcoma UK, I have also heard from Dr Robin Young, a consultant medical oncologist at Weston Park cancer centre. He reported that a 62-year-old patient with metastatic leiomyosarcoma, whose disease had progressed through all the standard chemotherapy options, was also denied this drug in January 2026 because of Bayer’s withdrawal. That patient subsequently self-funded an alternative treatment at a cost of £3,500 for one month, before deciding that he could not afford to continue with that treatment. These are heartbreaking decisions for patients and their families. I have also heard from Dr Alex Lee, a consultant medical oncologist at the Christie NHS foundation trust, who has reported that two patients with advanced osteosarcoma were refused access to the drug earlier this year, with Bayer citing the VAT position. Tragically, one of those patients has since died. She was just 20 years old. I hope these stories make clear the urgency of resolving this issue as soon as possible. This would not only enable Bayer to re-engage, but ensure that existing participants could continue to access their drugs through the programme and enable potential new drugs to enter early access and compassionate access schemes in the future. On paper, this might be a niche and complex part of tax policy, but in real life it is a desperately ill patient, it is a family and it is a clinician having to explain why a medicine that had previously been made available can no longer be provided. I shall turn now to the position of the pharmaceutical industry. Patients, clinicians and the Minister will be pleased to hear that the pharma companies are keen and willing to re-engage with compassionate, early access and other similar schemes once a suitable solution has been finalised with Government. However, I have heard concerns from the industry about the pace and scope of negotiations since the Government announced the pause. The first issue is about the breadth of the definition of the products that will be exempted from VAT liabilities. The definition used to determine any VAT exemption should include the full range of schemes that pharma companies engage in to provide these medicines free of charge. These include: compassionate use, where a clinician requests a specific medicine as a last resort once other options are exhausted, usually off-licence; early use, for new patients immediately after a trial; post-trial provision, for patients who responded well during a trial and need to continue; and bridging prescriptions, for patients where a drug has been approved but is not yet funded on the NHS. However, I have been told that the definition initially suggested by HMRC during negotiations has been too narrow to cover all those uses. I encourage the Minister to look again at this, given that compassionate use of off-licence drugs accounts for a substantial proportion of the patients who benefit from donations to the programme. I understand that the Government may be now moving to a better position on this point, and I would welcome confirmation of that from the Minister. The second issue I have heard is that HMRC is considering attaching two conditions to any VAT exemption: first, that the patient must be treated on the NHS rather than by a private clinician; and secondly, that medicines must be supplied directly by the company to the NHS. I am sceptical of the merits of both those points. First, patients should not potentially lose access to a lifesaving free treatment, which is at the cost of industry, just because the clinician recommending the treatment is a private doctor. On the second point, I would be grateful if the Minister would explain how such an arrangement would work on a practical level. We know that the NHS can refer to private clinics and that clinicians can, particularly for specialist issues, work regularly between NHS practices and private clinics. The fundamental question must surely be whether the medicine is clinically needed and whether it is free at the point of use for the patient. The third issue raised by pharma pertains to the question of historical liabilities. My understanding is that many pharma companies have already paid VAT for historical liabilities, and it is important to say that we do not expect that they will be able to recover that in full. However, given the upcoming changes, it would be helpful if the Government provided some clarity on the legal position on historical liabilities before the pause. I urge that settlements should be negotiated constructively and with understanding based on the nature of these liabilities. Closely related to the issue of historical liabilities is that of co-ordination between Departments on this issue. AstraZeneca has told me that, despite ongoing negotiations with HMRC and the pause announced in July, it is currently being pursued by His Majesty’s Treasury for accounts by the end of September, which it has been indicated should include VAT liability on compassionate access—a position AstraZeneca is not confident is consistent with what it is hearing from HMRC. Business needs certainty to prepare accounts. I encourage the Minister to ensure that HMRC and the Treasury are working from the same hymn sheet. On the method and pace of resolution, my understanding is that the Government are looking at creating an exemption for the compassionate donation of medicines through a legislative change to the Value Added Tax Act 1994. However, have the Government considered issuing a business brief from HMRC to clarify the new position, given that this could be a faster and more effective route? I would be grateful for the Minister’s perspective on that. As well as the patient benefits, there is also a key strategic opportunity for us as a country to be a global industry leader in life sciences research. Many other countries have complex schemes in place, and sometimes charge VAT or the equivalent on such things. However, I understand that although liabilities technically exist in the Netherlands, they are not enforced in practice. If the UK were to fully resolve this issue and put it beyond doubt, this would be a genuine point of competitive advantage in attracting life sciences investment, research and clinical trials to this country, at a time when our overall competitiveness in the sector is under pressure from other directions and policies. It would also encourage the participation of innovative new drugs and potential wider patient applications of them, driving forward potential research opportunities and improving healthcare practice. To sum up, my questions to the Minister are as follows. First, can he confirm that a permanent solution will define eligible products as widely as possible, to include the full range of schemes that are currently used? Will he reconsider the proposal to restrict eligibility to NHS-treated patients only? Secondly, the Government have said that they will act as soon as possible, but for a patient with a life-threatening disease, that phrase can feel like a very long time. Will the Minister set out a clearer timetable about actions and next steps, and when the consultation with industry is likely to conclude? Will the Government decide to bring forward a reimbursement mechanism? Can the Minister explain why a business brief route has not been preferred, or whether one can be explored? When is detailed guidance likely to be published and operational? Finally, what is being done to repair the relationships with industry, which have been damaged as a result of this policy? Where a company such as Bayer has withdrawn, I hope that it will be strongly encouraged to re-engage as soon as possible, so that the patients we have heard about today can gain access quickly. Will the Treasury work with the Department of Health and Social Care to engage industry and be in direct communication with clinicians to help to identify which patient groups have been most affected, so they can be notified as soon as possible that the treatments may become available again? This is, on paper, a narrow, technical issue of tax policy—not always the thing that makes the front pages of newspapers or the most engaging social media videos—but in practice, a clear and quick resolution to this issue is a life-and-death issue for many thousands of people. It is the difference between a patient like Ian fighting to save thousands of pounds a month—just to be able to focus on his health and his loved ones— or not. It is the difference between a clinician having to explain why a medicine that was available last year is not available now, and being able to provide that innovative and lifesaving drug to them and many more patients besides. It is the difference between a pharmaceutical company that wants to do the right thing, providing drugs to patients for free or at a low cost, and it withdrawing its drugs completely because the costs become significant. Once again, I strongly welcome the ministerial statement and the pause from June. I thank the Minister and his predecessor considerably for their work to date, which has made a difference. I know that he is committed to engagement on this issue and to finding a way forward.