British Generic Manufactures Association Limited v Secretary of State for Health and Social Care

The Secretary of State has a broad, context-specific discretion to decide which industry body is appropriate to participate in negotiations for a voluntary medicines pricing scheme. Recognition of a body as appropriate for one negotiation does not create an immutable status requiring its inclusion in later negotiations. The discretion must be exercised rationally, but the predictive assessment of whether additional negotiating parties may cause delay, complexity or failure to reach agreement generally attracts conventional rationality review. A body may be offered observer or other intermediate status even though that status is not specified in the statutory scheme, because negotiations for a voluntary scheme arise under the common law.

The claimant, a representative body for manufacturers of generic medicines, challenged the Minister’s decision not to give it full negotiating status in negotiations for a successor to the Voluntary scheme for Branded Medicines Pricing and Access. The Association of the British Pharmaceutical Industry was participating as the designated negotiator for the branded pharmaceutical industry, while the claimant was offered formal observer status.

The claim was heard on a rolled-up basis, covering permission to apply for judicial review and, if permission were granted, the substantive merits. The central issue was whether excluding the claimant from full participation was unlawful, irrational or inconsistent with the statutory framework governing voluntary and statutory medicines pricing schemes.

1. Outcome. Permission to apply for judicial review was refused. The Minister’s decision fell comfortably within the parameters of Wednesbury reasonableness.
2. Negotiations for a voluntary scheme are conducted under a common-law power. The National Health Service Act 2006 does not define or circumscribe that power. Its relevant provisions provide enforcement mechanisms once a voluntary scheme has been agreed.
3. The expression “the industry body” in section 266(6) is context specific. A body may be appropriate to represent manufacturers and suppliers for one negotiation but not thereby acquire a continuing entitlement to participate in negotiations conducted on different parameters. The Secretary of State may engage with more than one body, but the statutory language leaves significant scope for subjective appraisal.
4. The discretion is wide. There is no statutory obligation to initiate negotiations or to conclude a voluntary scheme. No manufacturer is required to subscribe to a voluntary scheme. The Minister was entitled to consider the risk that adding the claimant as a full negotiating party, with a potential veto, would complicate or delay negotiations or prevent agreement altogether. That was a predictive assessment legitimately entrusted to the decision-maker.
5. The Minister was also entitled to adopt an intermediate arrangement. Formal observer status could permit participation in meetings, access to materials, comment on matters affecting the claimant’s members and involvement in the negotiating protocol. The absence of express statutory provision for that status did not prevent its use in a common-law negotiation.
6. More intensive review, including anxious scrutiny, was not required. Arguments based on statutory purpose, broad reasonableness and natural justice did not justify a different approach. The challenge was not out of time, but it disclosed no arguable ground with a realistic prospect of success.