Lord Carter chairs the NHS Co-operation and Competition Panel (CCP) and is UK head of US-owned healthcare firm McKesson
The Department of Health said it had "every confidence" in the head of the body that polices competition in the NHS after concerns were raised that he also runs one of the UK's biggest healthcare companies.
Scrutiny of the role played by Lord Carter as chairman of the NHS Co-operation and Competition Panel (CCP) comes at a particularly sensitive time for the government as it faces growing opposition to its healthcare reforms, which would usher in a big expansion of private competition.
It is also embarrassing for Labour, which elevated Lord Carter of Coles to the House of Lords under prime minister Tony Blair, and is now leading the political opposition to the health and social care bill, and in particular what it regards as creeping privatisation.
There is no suggestion that Carter has done anything wrong. His role as UK chairman of US-owned healthcare giant McKesson and other companies was well known when he was appointed to chair the CCP, and all jobs are clearly recorded on his parliamentary profile.
On its website, US-owned McKesson says it has contracts with more than 90% of NHS organisations, as well as with other private health companies. However, it is likely to cause further concern about companies that are seen to benefit from a widespread programme of private involvement in public services. There have been calls for more investigation into how much private consultants advising government on the controversial health reforms stand to make from the changes.
Under proposals in the health and social care bill going through parliament, the CCP is due to be merged with another regulatory body, Monitor, which will oversee what is expected to be a huge expansion of private sector companies in the NHS.
Reacting to Carter's dual roles, Dr Clare Gerada, chairman of the Royal College of General Practitioners, said: "He cannot have any credibility when he is also heading a company with such huge interests in the very contracts his organisation is meant to police. GPs are being minutely scrutinised for possible conflicts of interest. But if we are going to have to have transparency, it has to apply throughout the system."
The Department of Health defended the peer's dual roles, in a statement that said: "We do not believe there is any evidence of a conflict of interest. Since the CCP was established, they have done an excellent job in helping to ensure good procurement practice and fair competition, and we continue to have every confidence in Lord Carter."
In a separate statement, McKesson said: "Lord Carter steps down from any investigation where there is potential conflict of interest. Lord Carter was appointed for his experience in this area. It is also worth noting that the CCP only has an advisory role in making recommendations to either the DoH or Monitor. The CCP has a track record of making objective assessments."
The company also stressed that the scope for conflict of interest was "limited" because CCP was in charge of patient services and had no remit over the IT contracts in which McKesson specialises.
McKesson has operated in the UK since 1990, employs 450 staff in the UK, and boasts that its NHS HR and payroll IT system is the world's largest. The Guardian
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