Procurement in England
How will the national medicines procurement
service be improved?
How will contracting arrangements change
in the future?
Peter Sharott
Chairman, Pharmaceutical Market Support Group
peter.sharott@btinternet.com
Subjects Discussed
• Drug expenditure trends
• National strategic approach to medicines
procurement
• Current key drivers for medicines procurement
• National Pharmaceutical Supply Group (NPSG)
• National standards for collaborative medicines
procurement and management
• Product categorisation
• SHA Pharmacy and Medicines Management
Groups
UK Annual Drug Expenditure (£m)
Primary Care
Secondary Care
£12,000
£10,000
£8,000
£6,000
£4,000
£2,000
£0
Jul-05
Data Source: IMS
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Proj.
Jul-11
Proj.
Jul-12
Proj.
Jul-13
Proj.
Jul-14
Proj.
Drug Expenditure Estimates 2009/10
• UK - primary & secondary care
= £14.1 billion
• England – primary care
– Branded
– Generics
£6.1 billion (80%)
£1.6 billion (20%)
• England – secondary/tertiary care
– Branded
£3.0 billion (84%)
(includes Homecare at £750m to £1 billion?)
– Generics
£590m (16%)
Secondary Care Drug Expenditure is rising by about 14.5% p.a.
High-Cost PbR Excluded Drugs account for 50-60% of expenditure
National Strategic Approach to Collaborative
Medicines Procurement & Management
• Supply Chain Excellence Programme (SCEP) (2003)
• A strategic framework to source pharmaceuticals for the NHS in
England (October 2005)
• Pharmaceutical Products and Services List (November 2008)
• NHS Commercial Medicines Unit (January 2010)
• Pharmaceutical Market Support Group sub-groups (March 2010)
• National Pharmaceutical Supply Group (NPSG) restructuring (June
2010)
• Commercial Support Units (CSUs) National Pharmacy Workstream
Report (June 2010)
• A strategy for collaborative medicines procurement and
management for the NHS in England (August 2010)
• National pharmacy lead for branded medicines (August 2010)
(subject to business case agreement)
Collaborative Medicines Procurement in
England: Organisational Chart from 2010
National Committees/Groups
Specialist Support
NHS CMU Pharmacy
Non-Executive Board
Commercial
Support
Units
National
Pharmaceutical
Supply Group
Pharmaceutical
Market Support
Group
National Homecare Medicines Committee
Pharmacy Business Technology Group
Generic Medicines Sub-Group
Branded Medicines Sub-Group
Transitional Products Sub-Group
Specialist Medicines Sub-Group
NHS
Commercial
Medicines
Unit
NHS
Pharmacists
(Procurement,
QA, Production,
Medicines
Information
and Clinical)
Procurement Groups
Trusts/PCTs
NHS Trusts
& PCT
Pharmacy
Networks
6 x Regional
SCEP Groups
Generic Medicines
SHA Pharmacy
Procurement Groups
Branded Medicines
Therapeutic
Rationalisation
QIPP
Clinicians
Clinical
Networks
PCT
Commissioners
Specialised
Commissioners
Current Key Drivers for Medicines
Procurement
• NHS financial position and efficiency targets
• National prescribing and medicines management initiati
• Primary focus on secondary care generic and branded
medicines
• Market management
–
–
–
–
effective and robust supply chain management
efficient and transparent tendering and contracting processes
competitive markets with two or more suppliers
homecare: contracting, corporate and clinical governance
• Collaboration with a wide range of stakeholders
• Commercial Support Units
– pharmaceutical leadership
– governance and accountability for pharmacy activities
National Pharmaceutical Supply Group
(NPSG) (1)
• Chairman:
– Andrew Alldred, Clinical Director for Clinical Support and Cancer
Services and Director of Pharmacy, Harrogate and District NHS
Foundation Trust
• Membership:
–
–
–
–
–
–
–
–
–
PMSG Chairman and two other PMSG members
QC Pharmacist representing National Pharmaceutical QC Group
PCT Pharmaceutical Adviser
PCT Commissioning Pharmacist
Northern Ireland, Scotland & Wales representatives
Department of Health representative
NHS CMU General Manager, Principal Pharmacist & Lead Category Managers (2)
SHA Commercial Support Unit/CPH representative
NHS Trust Chief Pharmacists representing 10 SHA pharmacy networks
National Pharmaceutical Supply Group
(NPSG) (2)
• Terms of Reference:
– To provide advice to the Pharmacy Non-Executive Board on the cost effective
purchasing, supply and distribution of medicines and other pharmaceutical products
to the NHS in England (secondary care) in order to ensure continuity of supply to
patients
– To support national initiatives such as ‘Pharmacy in England White Paper’‘,
Standards for Better Health’, ‘Better Health, Better Care’ and ‘Purchasing for Safety’,
‘Quality, Innovation, Productivity and Prevention (QIPP)’, ‘Commissioning for Quality
and Innovation (CQUIN)’.
– To work collaboratively with the PMSG and support this group with strategic advice.
– To act as a focal point for the DH and NHS for the strategic procurement and supply
of medicines of a national nature and provide pharmaceutical advice accordingly
– To act as a strategic link between Pharmacists and key stakeholders in the supply
chain.
– To maintain a list of PMSG operational and advisory sub-groups, their terms of
reference and reporting frequencies. To consider, evaluate and advise on the
strategic impact of the issues arising from these groups.
– To maintain links with primary care commissioners and providers.
– To agree the strategy that will inform the annual work plan, objectives and defined
outcomes for the PMSG
Draft National Standards for Collaborative
Medicines Procurement and Management (1)
• Contracts for branded medicines will normally be at SHA
Pharmacy Procurement Group level, but, where appropriate, may
be at sector or network level.
• Contracting at individual NHS Trust level should only occur
following agreement with the SHA Pharmacy Procurement Group.
• Contracting decisions should take account of the potential impact
on primary care prescribing patterns and costs and may actually
be driven by the emerging commissioning agenda.
• Annual and rolling work programmes should be developed in
order to drive identification and implementation opportunities for
clinically-driven initiatives and demand management projects,
through close engagement with the local pharmacy and clinical
networks, clinicians, public health specialists and commissioners.
Draft National Standards for Collaborative
Medicines Procurement & Management (2)
• Local guidelines for managing the financial impact of
contracts for medicines that are covered by the PbR high-cost
drugs exclusion list should be developed through consultation
with the NHS Trust and PCT chief pharmacist networks and
commissioners
• Tendering and contracting for branded medicines should be
undertaken by the NHS Commercial Medicines Unit; in those
exceptional circumstances where it is necessary to undertake
this activity locally at SHA, sector or individual NHS Trust
level, there should be full compliance with EU procurement
legislation.
• Contracts involving homecare supply should comply with the
standards and guidance developed by the National Homecare
Medicines Committee.
Draft National Standards for Collaborative
Medicines Procurement & Management (3)
• NHS Trusts and contractors should fully comply with contract
Terms and Conditions.
• Branded medicines purchased at contract prices should not
be sold-on to third party healthcare service providers without
the written agreement of the relevant pharmaceutical
manufacturer.
• A formal relationship should be developed between the local
Commercial Support Unit and the SHA Pharmacy
Procurement Group covering the organisational structure,
accountability, governance and funding arrangements
Product Categorisation
Procurement-driven
National – Generic medicines
•
•
•
•
•
oral products
hospital-only oral products
Injectables
Transitional, branded to generic medicines
NHS CMU tendering and contracting
SHA/Regional
•
•
•
•
Branded medicines
Branded biosimilars
Mostly NHS CMU tendering and contracting
Some local tendering and contracting
Product Categorisation
Clinically-driven
SHA Pharmacy & Medicines Management Group
• Therapeutic rationalisation
• Underpinned by procurement and supply chain
management
• Assessment of influence and impact on primary care
prescribing
• Alignment with QIPP, NICE and other national initiatives
• Clinician and clinical network engagement
• Commissioner involvement
• SHA/sector clinical policy and protocol development
identifying first, second and third choice
• Framework agreements – commitment volumes and
prices
• Value-added services
• Homecare services and community-based services
• Pharmaceutical industry engagement and partnerships
Proposed Generic SHA-level Structure
CSU Board
Strategic Pharmacy Lead
(SPM or Procurement Specialist?)
Operational Pharmacy Lead
(SHA Procurement Specialist)
SHA Pharmacy & Medicines Management Group
Trust
Procurement
Leads
SPM
Representation
PCT
Representation
Clinical
Specialists
NHS Trust & PCT Pharmacy Networks
Clinical Networks
MI/QA
Specialists
SHA Level Stakeholder Engagement
NHS Trust
Chief
Pharmacists
SHA, PCT &
Specialised
Commissioners
Pharmaceutical
Industry
SHA & PCT
Pharmaceutical
Advisers
SHA
Pharmacy &
Medicines
Management
Group
SHA and NHS
Trust
Procurement
Pharmacists
Hospital
Clinicians
and GPs
Clinical
Networks
NHS
Commercial
Medicines
Unit
Commercial
Support
Unit