Sweeping powers to curb the cost of drugs to the NHS and 'modernise' professional self-regulation have been laid out in the government's Health Bill.

The centrepiece of the bill, published in the Lords almost exactly 10 years after a Conservative administration issued Working for Patients , is the abolition of GP fundholding, which was first announced in that document.

The legislation will also allow the government to drive forward its primary care and quality reforms, enabling the health secretary 'to establish bodies to be known as primary care trusts' and set up 'a body corporate to be known as the Commission for Health Improvement'.

But the eye-catching clauses are those setting out powers to control the price of medicines and drug company profits and to overhaul professional self-regulation for doctors, nurses and other health professionals.

Dr Kieran Walsh, senior research fellow at Birmingham University's health services management centre, said the bill introduced 'draconian powers' for the health secretary to control drug prices and 'take their profits away'. The bill also includes the power to fine companies that do not comply with regulations and to increase the fine by 50 per cent.

NHS Confederation policy adviser Tim Jones said health authorities and trusts would welcome the move. 'My first feeling was 'good on yer', ' he said.

Department of Health officials stressed that the measures were not intended to sweep away the Pharmaceutical Price Regulation Scheme, although the bill gives health secretaries the right to bring in a statutory scheme.

A senior DoH policy adviser said the bill would 'strengthen' the PPRS by providing a 'proper statutory underpinning' to encourage 'all parties to stick to the agreements they have entered into'.

The Association of the British Pharmaceutical Industry said: 'It remains our view that a voluntary scheme is the best means to achieve compliance.

'We cannot see why the government's reserve powers should need to come into place.'

Professional organisations trod more cautiously in response to the bill's clauses on professional self-regulation.

DoH officials said self-regulation was 'enshrined in many pieces of primary legislation, some of which dates back to the last century'. They said the aim of the bill was to allow health secretaries to amend all such legislation by order - a 'less cumbersome' process than consultation and debate in Parliament.

British Medical Association council chair Dr Ian Bogle said he hoped health secretaries would abide by the spirit of a letter sent to the General Medical Council by health minister John Denham last week. This said 'real safeguards' protecting professional self regulation would be built into the bill, and there would be 'some limitations' on order making powers.

Dr Bogle criticised 'lack of detail' in the bill, which leaves key issues to be dealt with by regulation.

The Royal College of Nursing said its 'initial understanding' was that bodies such as the GMC and UK Central Council for Nursing, Midwifery and Health Visiting, were 'preserved' in the bill.

But a spokesperson said: 'The bill will alter the framework by which regulation takes place.'

Health Bill.

www.parliament.the-stationeryoffice.co.uk/pa/pabills.htm See comment, page 15.