Developing Commercial Support for
Medicines Management
V7 22 November 2010
Contents
Page
Executive summary
4
Introduction
6
Section One:
1.
2.
Medicines management landscape
7
Medicines pricing
7
1.1
Pharmaceutical Price Regulation Scheme (PPRS)
7
1.2
Drug Tariff
8
1.3
Payment by Results (PbR)
9
Medicines supply
11
2.1
Background
11
2.2
Supply Chain
12
2.3
Issues with supply
10
3.
Clinical and cost effectiveness: the role of NICE
13
4.
High cost cancer drugs
13
5.
Efficient prescribing
13
6.
Quality and productivity: medicines procurement and use
13
7.
Improving access to innovative medicines
14
8.
Support for pharmaceutical procurement
14
8.1
The NHS Commercial Medicines Unit
14
8.2
Regional arrangements
15
8.3
Local arrangements
15
Section Two:
Commercial support to medicines management
17
1.
Development of commercial support in the NHS
17
2.
Effectiveness in medicines management
18
3.
Approach to developing commercial support guidance
19
4.
Design principles for commercial support to medicines management
19
5.
Priorities for medicines management commercial support functions
20
5.1
Business intelligence and business modelling
20
5.2
Adoption of best practice/ innovation
21
5.3
Facilitation of collaborative working
22
5.4
Implementation support for national strategies
24
2
6.
Developing extended commercial functions to support medicines management
6.1
Operational performance
26
6.2
Medicines management systems
27
6.3
Market management
28
7.
Focus of commercial activity
29
8.
Operational considerations
30
8.1
Establishing services and a work programme
30
8.2
Staffing models
30
8.3
Determining level of commercial support
31
1.
DH policy on medicines pharmacy and industry
10
2.
Key relationships and dependencies in the supply chain
12
3.
The environment to support effective medicines management
16
4.
Priorities for medicines management support functions
20
5.
Developing extended functions to support medicines management
26
6.
Pharmaceutical market segmentation and associated issues
29
Figures
Tables: Summary of functions and associated services
1.
Business intelligence and business modelling
21
2.
Adoption of best practice/ innovation
22
3.
Facilitation of collaborative working
23
4.
Implementing support for national strategies
24
5.
Operational performance
27
6.
Systems
28
7.
Market management
28
Appendices
1.
CSU medicines management support functions outcomes and benefits 31
2.
Services associated with functions, outputs, outcomes and benefits
3.
Glossary of relevant terms used in medicines management landscape 42
35
3
Developing Commercial Support for Medicines Management
Executive summary
1. The challenge
The use of medicines plays a vital role in the delivery of high quality care and
accounts for over 12% of NHS expenditure. The pharmaceutical market is dynamic,
with new medicines coming to market and rising demand for healthcare pushing
expenditure. However, across the system expenditure is rising, particularly in
secondary care where prescribing costs increased by 15.2% from 2007-2008.
A range of initiatives delivered from national to local levels set out to manage the use
of medicines effectively and achieve best value for money in a constantly changing
market. There has been considerable success but there are still many wellrecognised challenges and good practice is not always adopted systematically.
In a tough financial environment, these challenges need to be tackled effectively and
must not be allowed to create barriers to securing better value for money.
2. The medicines management landscape
Arrangements for pricing and supply of medicines are complex and medicines
shortages and product discontinuations have become increasingly prevalent for a
number of reasons.
There is significant national interest and leadership in the most appropriate and cost
effective use of medicines with the National Institute for Health and Clinical
Excellence (NICE) to be put on a firmer statutory footing. The QIPP medicines use
and procurement workstream is seeking to achieve additional potential savings of
£475million a year by 2013-14.
The NHS Commercial Medicines Unit (CMU) provides the nationally accepted route
for contracting of medicines for secondary care and has established strategic
leadership in medicines procurement areas considered important to the NHS.
Significant supporting structures have been developed at regional/ local level with
highly effective pharmaceutical networks established. Specialist procurement
pharmacists play a key role in co-ordinating local trust decisions and ensuring they
are aggregated locally, thereby ensuring that the NHS CMU frameworks meet the
requirements of pharmacists and clinicians within the NHS.
3. The opportunity for commercial support
Commercial support arrangements have been developed to respond to local need
and this has resulted in a range of models to support commissioners and providers.
There is an opportunity to explore whether commercial support could add value to
the established systems, processes and expertise developed by specialist
procurement pharmacists and the wider medicines management community, in order
to drive further improvements in cost effective prescribing and to respond effectively
to the needs of emerging clinical commissioners.
4
4. Developing the guidance
This guidance has been developed in consultation with senior medicines management specialists and other stakeholders. It describes the complex medicines
management environment and recommends where commercial support functions
should be developed to assist the work of specialist procurement pharmacists most
effectively. Clear principles are set out for working in partnership and collaboration.
5. Recommendations
The functions that commercial support could provide are considered as core and
non-core. Core functions are those viewed as priorities by medicines management
specialists involved in the development of this guidance. Non-core functions may be
considered as options for development based on an assessment of local needs.
Commercial support functions for medicines management
Functions
Core
Business Intelligence and Modelling
Facilitation of Collaborative Working
Implementation support for national strategies
Adoption of Best Practice and Innovation
NonCore
Operational performance
Systems
Market Management
6.
Anticipated benefits
It is important that the added benefit from commercial support to medicines
management be measured in a systematic and reproducible way. Benefits will vary
on a project-by-project basis but are likely to fall into one of the following areas:
■
■
■
■
7.
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better information)
Commercial risk reduction (decreased budgetary and supply chain risk)
Quality (improved patient outcomes and experience, lower clinical risk)
Next steps
A number of projects have been set up to develop best commercial practice in
supporting medicines management specialists in areas considered to have potential
for high impact when rolled out nationally. These projects will set out to develop
systematic measures of success and learning will be shared nationally.
5
Developing Commercial Support for Medicines Management
Introduction
The use of medicines plays a vital role in the delivery of high quality care and
account for over 12% of NHS expenditure. In 2008-09, the NHS drugs bill was
approx £11.4 billion, equivalent to around 12% of the entire NHS budget and the
biggest single item of spend after staff. Of this around £7.8 billion was spent in
primary care and £3.6billion in secondary care.
Approximately 75% of the total spend was on branded medicines and 25% on
generic medicines (including appliances, testing agents etc.) This cost is increasing
at a rate of about 5% per year and when associated costs such as monitoring and
service costs are added the true cost of medicines is much greater. Unintended costs
may arise through adverse drug reactions, which are estimated to account directly for
5% of all hospital admissions.1
Analysis of historical trends for dispensing volumes reveals that between 1998 and
2008 the number of prescription items dispensed within the community in England
increased from 513.2 million items in 1998 to 842.5 million items in 2008 (an increase
of over 60%).
Whilst the overall picture is one of increasing direct expenditure on medicines, this is
not uniformly true across the whole health system. In primary care, total costs
decreased by 0.7% from 2007- 2008. Within hospitals prescribing costs increased by
15.2% from 2007 to 2008 for medicines prescribed and dispensed within hospital.
For medicines prescribed in hospital but dispensed within community settings via the
hospital FP10 route, the increase over the same period was 5.2%.
It is likely that this upwards pressure on expenditure will continue for the foreseeable
future driven by factors such as improving access to innovative medicines and
increasing levels of ill health associated with a population that is living longer. The
Quality Innovation Productivity and Prevention workstream (QIPP) for medicines has
identified £475million of potential savings a year by 2013-14 through more efficient
use of medicines in primary care, better medicines management in secondary care
and supporting patients in use of medicines and reducing waste.
The NHS Commercial Medicines Unit (CMU) provides the nationally accepted route
for contracting of medicines for secondary care and has established strategic
leadership in medicines procurement areas considered important to the NHS. Highly
effective pharmaceutical networks have been established at regional and local levels
with specialist procurement pharmacists playing a key role in co-ordinating local trust
decisions and ensuring they are aggregated locally.
Commercial support arrangements have been developed to respond to local need
resulting in a range of models to support commissioners and providers. There is now
the opportunity to explore whether commercial support could add value to the
established systems, processes and expertise developed by specialist procurement
pharmacists in order to drive further improvements in cost effective prescribing and to
respond most effectively to the needs of emerging clinical commissioners.
1. Pirmohamed M, James S, Meakin S et al. Adverse drug reactions as a cause of admission to
hospital: prospective analysis of 18820 patients. British Medical Journal 2004;329:15-19
6
Section One: Medicines management landscape
1. Medicines Pricing
1.1
The Pharmaceutical Price Regulation Scheme (PPRS)
The National Health Service (NHS) spends over £9 billion a year on branded
prescription medicines in the UK. The PPRS is the mechanism which the Department
of Health (DH) (on behalf of the UK health departments) uses to control the prices of
branded prescription medicines supplied to the NHS by regulating the profits that
companies can make on their NHS sales.
It is a voluntary agreement made between DH and the branded pharmaceutical
industry – represented by the Association of the British Pharmaceutical Industry
(ABPI) – under Section 261 of the National Health Service Act 2006.
There have been a series of voluntary agreements with the industry since 1957 to
limit branded medicine prices and profits, each lasting five years or so, although the
details of these agreements have evolved over time to reflect developments in the
NHS and the pharmaceutical industry.
The scheme seeks to achieve a balance between reasonable prices for the NHS and
a fair return for the industry to enable it to research, develop and market new and
improved medicines.
The 2009 PPRS agreement, effective from 1 January 2009, has the following key
components:
 A new non-contractual voluntary scheme providing stability and
predictability in pharmaceutical pricing for the next 5 years;
 A 3.9 per cent cut in the list price of branded medicines sold to the NHS from
1 February 2009 and a further price cut of 1.9 per cent in January 2010;
 Subject to discussion with affected parties, the introduction of generic
substitution from January 2010;
 Action to support innovation so patients have faster access to new medicines
that are clinically and cost-effective;
 New and more flexible pricing arrangements that will enable pharmaceutical
companies to supply medicines to the NHS at lower initial prices, with the
option of higher prices if value is proven at a later date; and
 A more systematic use of patient access schemes, which allow
pharmaceutical companies to offer discounts or rebates that reduce the
effective cost of a medicine to the NHS.
Most companies have signed up to the voluntary scheme. Those companies that
have not signed up to the voluntary scheme are subject to statutory controls under
the Health Service Branded Medicines (Control of Prices and Supply of Information)
(No.2) Regulations 2008.
7
In summary, the PPRS:



Allows companies freedom of pricing for new medicines (new active
substances) but requires companies to seek the agreement of DH for price
increases, which are only granted if the reasons for the application meet the
criteria for increases set out in the agreement
Requires companies with NHS sales of more than £35 million a year to submit
annual data on sales, costs, assets and profitability and to repay the excess
where profits exceed the agreed threshold
Provides significant support for research and development (R&D) and
initiatives to encourage and reward innovation.
Further information is available on the DH website at www.dh.gov.uk/pprs
1.2
Drug Tariff
NHS Prescription Services (SBS) produces the Drug Tariff on a monthly basis on
behalf of the Department of Health. It is supplied primarily to pharmacists and doctors
surgeries.The Drug Tariff outlines:




What will be paid to pharmacy contractors for NHS services provided either for
reimbursement (the cost of the drugs, appliances etc which have been
supplied against an NHS prescription form) or for remuneration (what will be
paid as part of dispensing contract with local health trust for fees/allowances
etc)
The rules to follow when dispensing
The value of the fees and allowances to be paid
The drug and appliance prices to be paid.
Category M: Around 90% of generic medicines (by value) are listed under Category
M of the Drug Tariff. Prices for drugs in Category M are set by DH and are based on
a calculation that incorporates the volume-weighted average prices charged by
generics manufacturers in the UK based on quarterly surveys of transaction prices
between manufacturers, wholesalers and pharmacies.
Part IX: New arrangements, as announced in April 2009 following the Part IX Review
for the NHS supply of certain appliances in primary care require changes to the NHS
Pharmaceutical Service Regulations, Directions and amendments to the Drug Tariff.
The Amendment Regulations - The National Health Service (Pharmaceutical
Services) (Appliances) (Amendment) Regulations 2009 - came into effect on 1 April
2010. They can be found on the Office of Public Sector Information website. Where
pharmacies and appliance contractors supply appliances, these amendment
regulations make provision for new essential services including emergency supply at
the request of the prescriber, and for certain appliances, a home delivery service,
provision of wipes and disposal bags and provision of specialist advice. Appliance
contractors will also be able to offer repeat dispensing and will be required to operate
a system of clinical governance, similar to pharmacies.
8
The Pharmaceutical Services (Advanced Services)(Appliances) (England) Directions
2009 make the provisions for new advanced services to be offered by appliance
contractors and pharmacies who choose to do so. The advanced services include
customisation of stoma appliances and appliance use reviews. They can be found at
the link below.
A transitional period of nine months from 1 April 2010 gives pharmacies and
appliance contractors sufficient time to ensure they are able to comply with the new
terms of service by 31 December 2010.

1.3
Download An overview of the new arrangements under Part IX of the Drug
Tariff for the provision of stoma and urology appliances, and related services,
in primary care (PDF, 166K
Payment by Results
Under the system of Payment by Results (PbR), most services delivered by hospitals
are subject to a National Tariff. PbR uses a national tariff of fixed prices that reflect
national average prices for hospital procedures.
There are a number of High Cost Drugs (HCDs) that are excluded from the Payment
by Results (PbR) tariff. Excluding certain drugs means that additional funding can be
locally agreed over and above the national mandatory tariff.
Factors considered by the HCD Steering Group for inclusion on the HCD list are:
• The drug and its expected associated costs of care are disproportionately high
cost compared to the other expected costs of care within the HRG, which
would affect fair reimbursement; and
• There is, or is expected to be, more than £1.5 million spend or 600 cases in
England per annum.
Further information can be found on the DH website at:
http://www.dh.gov.uk/en/Managingyourorganisation/NHSFinancialReforms/DH_1143
39
9
Figure 1
Medicines are the most frequently and widely used NHS treatment and
account for over 12% of NHS expenditure. A coherent medicines policy aims
to control costs, increase patient access and improve value for money.
DH policy
Components of the system
DH’s policy on medicines, pharmacy and industry covers every step of the journey from the
development of medicines to their use by the patient.
New medicines/
technologies are
developed…
…decisions are made
on their pricing…
Pharmaceutical
pricing system
Life sciences
products
…and regulated…
Government
sponsorship
of life sciences
Co-ordinating
Government’s
relationship with
the pharmaceutical
and medical
technology
industries
…their clinical- and costeffectiveness is assessed…
Prescribers
and
pharmacists
NICE
…medicines are
prescribed and
dispensed to the
patient.
PATIENT
National
Prescribing
Centre
MHRA
Pricing and supply of NHS
medicines
1. Drug pricing
(Pharmaceutical Price
Regulation Scheme)
and reimbursement for
branded/generic drugs.
2. Dealing with medicine
shortages/discontinuations
3. Prescription charges
E.g. The pricing framework
aims to balance value for the
tax-payer with the need to
encourage innovation and
deliver a fair return to the UK
pharmaceutical industry.
…prescribers are
supported and informed…
Clinical and cost
effectiveness
Sponsorship of
NICE and the
National
Prescribing
Centre and drugs
bill management
E.g. NICE’s role is fundamentally
about maximising the VFM of
NHS resources spent on
medicines and treatments.
Prescribing
(medical
and non-medical)
Expansion of
prescribing to nonmedical roles eg
nurses,
pharmacists
Pharmacy
Community pharmacy
contractual
framework; hospital
pharmacy; electronic
prescription service;
professional
regulation reform;
professional
leadership and advice
E.g. Reforming the pharmacy
contract, shifting emphasis from
dispensing to clinical and public
health services, utilising pharmacy’s
accessibility and skills through new
services and incentivising quality
10
2. Medicines Supply
2.1
Background
The NHS comprises primary (community) care, secondary (hospital care) and tertiary
(specialised consultant care eg cancer.)
Primary care
GPs write a prescription for drugs. The patient takes the prescription to a pharmacy
where the drug is dispensed either for a flat rate prescription fee or on the basis of
exemption, at no charge to the patient. Pharmacies are responsible for purchasing
drugs either directly from manufacturers or through wholesalers. They are
reimbursed by the NHS for the cost of these drugs.
Primary Care Trusts contract for services from GPs under the terms of the General
Medical Services (GMS) contract. Cost effective prescribing is incentivised through
GMS and local incentive schemes. Additional influence comes from guidance from
national bodies (NICE), local formularies, PCT prescribing advice activity and other
factors such as peer pressure, pharma marketing activity and patient pressure.
Dispensing doctors may procure and dispense medicines.
Secondary and tertiary care
Hospital clinicians prescribe and drugs are dispensed by the hospital pharmacy.
Hospitals are responsible for purchasing the drugs they dispense. They are not
reimbursed directly but must draw on overall NHS revenue. (See previous section on
Payment by Results). Patients do not pay any charge for drugs supplied during a
hospital stay but charges apply on medicines associated with outpatient, A&E and
day case episodes.
NHS CMU working with NHS pharmacists provides a national programme delivering
framework agreements for hospitals to call off supplies of both generic and branded
medicines and manages arrangements to secure the benefits to be achieved during
the transition from branded to off patent medicines.
Homecare
Hospital services may on occasion arrange for the supply and administration of
medicines to the patient whilst in their own home. The use of homecare services is
expanding, with more than120, 000 patients receiving their medicines via the
homecare route within England. The value of medicines supplied by this route is
estimated to be in excess of £500 million, and these figures are expected to increase
as more clinical services move away from hospitals to the community.
11
2.2
Supply Chain
Fig 2: Key relationships and dependencies in the supply chain
Pharmaceutical Development & Supply Chain
Research based
pharmaceutical industry (ABPI)
Generic pharmaceutical
manufacturers (BGMA)
Research & develop new medicines
Produce generic copies of license
expired medicines
Pharmaceutical
wholesalers
Industry
NHS
Integrated Supply Chain
Secondary care -
Primary care/community
NHS Commercial Medicines Unit
Purchasing collaboratives
PPRS (branded medicines)
Generic reimbursement scheme
Hospital
Pharmacists
2.3
Community
Pharmacists
Issues with supply
Medicine shortages & product discontinuations have become increasingly prevalent
for a number of reasons that include:
● Pharmaceutical industry globalisation
● Production failures
● Regulation
● Parallel exporting
● Manufacturers’ distribution systems and quotas
Best practice guidelines on shortages were published jointly by DH, the association
of British Pharmaceutical Industry (ABPI) and the British Generic Manufacturers
Association (BGMA) in January 2007. Guidance on Trading Medicines for Human
Use: Shortages and Supply Chain Obligations was published jointly in November
2009.
Further actions were agreed at a supply chain summit in March 2010 to include a
proactive, targeted programme of inspection by the Medicines and Healthcare
Products Regulatory Agency (MHRA), tougher standards for the issue of wholesaler
licences; and development of best practice guidance on how supply difficulties are
dealt with by doctors, pharmacists, manufacturers and wholesalers.
DH is procuring stocks of essential medicines- those necessary to avoid
hospitalisation and/or early death- to ensure that increased stocks of key medicines
are held in the UK to safeguard against disruption to the medicines supply chain.
12
3. Clinical and cost effectiveness: the role of NICE
The National Institute for Health and Clinical Excellence (NICE) was set up 1999 and
its role currently includes:
● Development of appraisals of new and existing technologies
● Development of authoritative clinical guidelines
● Publishing of advice on new interventional procedures
●Advice on improving people’s health and preventing illness and disease
● Development and definition of the (Quality) standards of healthcare that
people can expect to receive
● Overseeing the development of QOF indicators
● Fellowship programme to improve local engagement with NICE
● Hosting “NHS Evidence” service
The Arms Length Body review published in July 2010 sets out the intention for
provisions in the forthcoming Health Bill to put the National Institute for Health and
Clinical Excellence on a firmer statutory footing and to expand its role.
4. High cost cancer drugs
The Government has pledged to create a £200 million Cancer Drugs Fund, due to
run until the end of the current PPRS scheme in 2014 and an interim £50 million sum
has already been allocated.
5. Efficient prescribing
DH supports efficient and effective prescribing.
● 80% of prescriptions are repeat prescriptions for long term conditions
● Generic (non-branded) prescribing rate is 83% - the highest in the EU
● Better Care, Better Value (BCBV) indicators are used to drive more efficient
prescribing
6. Quality and Productivity: medicines use and procurement
The QIPP medicines workstream has identified additional potential savings of up to
£475m a year by 2013-14 through:
● More efficient medicines usage in primary care eg greater use of generic
medicines, new Better Care, Better Value indicators and through focused work
on specials (specially prepared medicines) and nutritional supplements
● Better medicines management in secondary care
● Supporting patients in using their medicines and reducing waste
13
7. Improving access to innovative medicines
Recent actions have included:
● New and more flexible pricing arrangements and more systematic approach
to use of patient access schemes in 2009 PPRS
● Innovation package in 2009 PPRS which includes a single horizon scanning
process for new drugs and the development of new metrics for uptake of
clinically and cost-effective medicines, both domestically and internationally
● A new timetable to speed up the NICE appraisal process
● NICE’s supplementary advice for its Appraisal Committees on end of life
treatments
8. Support for Pharmaceutical Procurement
8.1
NHS Commercial Medicines Unit
The NHS Commercial Medicines Unit (CMU) is part of the Procurement Investment
and Commercial Division of DH. The work of the NHS CMU is focused on strategic
supply management and procurement of medicines for use in secondary care.
The team works in partnership with hospital pharmaceutical procurement colleagues
across the NHS in England. This includes leading a selective competitive tendering
work plan for the implementation of hospital framework contracts. Objectives are to
ensure a stable supply of critical drugs and to maintain, develop and realise the
benefits of competition. Specific procurement programmes deliver framework
agreements for the NHS to call off requirements targeted at generic, branded and
specialised medicines.
CMU works collaboratively with both NHS Pharmacists and suppliers in the collation
and analysis of secondary care medicines spend on behalf of both the department
and the NHS via its information systems
Members of the category team have specialist market knowledge to assist in
managing the contracting process for medicines in England and to provide support
for projects on behalf of the Department of Health. Support is available for
procurement in the following areas:











homecare medicines
branded medicines
generic medicines
delivery of procurement savings
securing the benefits of the transition from branded to off patent medicines
childhood and other vaccines (UK wide)
blood products
medical gases
information and analysis of expenditure
nutrition / enteral products
Pharmaceutical countermeasures
14
Specialist skills and experience is engaged via strategic groups notably



8.2
National Pharmaceutical Supply Group (NPSG)
Pharmaceutical Market Support Group (PMSG)
National Homecare Medicines Committee (NHMC)
Regional arrangements
Regional and national arrangements are part of a well-developed nationally
coordinated approach the success of which is built through the regional groups and
their relationships with NHS Trust chief pharmacists.
Structures developed at regional level include:
-
SHA pharmacy procurement groups
Pharmacy Clinical Networks
Regional Specialist Pharmacy Services
Prescribing Committees
Regionally based NHS procurement pharmacists are at the centre of this activity and
use their expertise to ensure that the medicines procurement approach is built
through strong relationships with clinicians. The procurement pharmacist plays a key
role in co-ordinating local trust decisions and ensuring they are aggregated locally,
thereby ensuring that the NHS CMU frameworks meet the requirements of
pharmacists and clinicians within the NHS.
A more detailed description of the role of the procurement pharmacist is set out in
Appendix 3.
8.3
Local arrangements
Local structures have been developed to a varying extent at local level notably:
-
Prescribing/ drug and therapeutics committees
PCT prescribing teams
Hospital pharmacists
Roles within regional and local arrangements are set out in more detail at Appendix 3
15
Fig 3: The environment to support effective medicines management
National
Direction
Setting
PICD and SMDU
NHS Commercial
Medicines Unit
Pharmaceutical
Market Support
Group
National
Pharmaceutical
Supply Group
National
Homecare
Medicines
Committee
Quality and
productivity
agenda
SHA Procurement Groups
Collaborative Procurement
Hubs
Regional
Support
Prescribing Committees
CSU
Clinical Networks
Regional QIPP workstreams
Locally Led
Delivery
Providers
Commissioners
16
Section Two: Commercial support to medicines management
1. Development of commercial support in the NHS
Regional Commercial Support Units (CSUs) were established to offer a range of
dedicated commercial support to NHS health care commissioners and providers to
help them improve their commercial and business skills, gain better value from
procurement and contracts and respond more effectively to the challenges of
operating in today’s NHS. Commercial skills include:
● Business intelligence
● Performance improvement
● Business modelling
● Negotiating, contracting and procurement
support
● Market management
●
Contract
compliance,
management and benchmarking
● Utilisation review
performance
● Commercial skills training
● Risk stratification tools
● Claims management and invoice validation
There is a focus on developing commissioning support to ensure the delivery of QIPP
work streams relating to right care, procurement, pharma and medtech. In particular:
Right Care
● Produce
categories)
Procurement
programme
budgets
(23 ● Implement high impact changes
● Maximise use of national contracts
● Support use of map of medicine to ● Produce and implement efficiency
produce specifications
procurement plans for key categories
● Ensure commissioners use contract ● Promote collaborative procurement
levers to reduce:
(achieving better prices)
-
variation
undertaking of procedures
limited clinical effectiveness
● Increase levels of automation in
of procurement processes (to reduce costs)
Pharma
Medtech
● Implementation support for national ● Support adoption and diffusion of two
strategy
new technologies per region
● Business intelligence and modelling
support
● Facilitation of collaborative working
● Diffusion of best practice/ innovation
● Benchmarking of medicines practice
17
Transition support for the emerging NHS landscape
Models of commercial support are being developed that will be sufficiently flexible to
adapt to the emerging NHS landscape and to provide effective support during
transition. The initial focus was on developing commissioning support models and, in
the changing NHS environment, there is a return towards this position. Developing
areas for commissioning support could include:
● Producing data to GP level
●Support for contract management and
maintaining business as usual
● Evaluating GP consortia requirements
for commissioning support
● Providing population and health needs
data through to contract and claims
management, supporting all aspects of
the commissioning process
● Contribution to management cost
savings by collaboration/ consolidation at
regional level where appropriate
● Undertaking procurements eg any
willing provider
● Provider intelligence
Collaborative Procurement Hubs
Collaborative Procurement Hubs (CPHs) are regional purchasing organisations set
up to accelerate savings through collaborative purchasing for their member trusts.
There will be a need for continuing collaboration in terms of commercial support to
commissioners and provider organisations to ensure a cohesive approach to local
pharmacy procurement strategy where the impact across a whole community needs
to be considered.
2. Effectiveness in medicines management
The following principles apply in ensuring effectiveness in medicines management
and encompass clinical, safety and commercial issues:
■
■
■
■
■
■
Medicines should be evaluated on the basis of clinical and cost effectiveness,
with only those demonstrated to be clinically effective at an affordable price
approved for usage
Approved medicines should be procured at the best possible price
Approved medicines should be used only when appropriate for patient needs
Systems and processes should be in place to ensure that medicines are used
safely, minimising the likelihood of harming patients
Wastage through over-ordering of medicines or patients not taking them should
be minimised
Patients take medicines as prescribed and understand and adhere to measures
which reduce the likelihood of them experiencing adverse effects from
medicines
These factors can be thought of as a medicines value chain. When all of the links are
in place then the likelihood of the optimal outcome for the patient and the best value
for money is significantly increased.
18
3. Approach to developing guidance on commercial support to medicines
management
This guidance has been developed following:
- An engagement exercise with NHS stakeholders including senior pharmacists,
DH, Strategic Health Authorities and Primary Care Trusts. Interviews and
workshops were held within four SHA regions to gain an understanding of
challenges to effective use of medicines and explore the value that could be
added from commercial support.
- Input and advice from the Medicines Pharmacy Industry Division (MPI) (NHS
Medical Directorate)
- Liaison with the QIPP Medicines management and procurement workstream
4. Design principles for commercial support to medicines management
The maximum benefit in procurement and management of medicines across the local
NHS community will be derived from collaborative working and commercial support to
medicines management should always seek to underpin this collaborative whole
systems approach. The design of commercial support should involve:
■
■
■
■
■
■
■
■
Partnership from the outset with specialist procurement pharmacists to identify
opportunities for and facilitate collaboration on an appropriate scale
Development of annual work plans in conjunction with the regional pharmacy
community, that are regularly reviewed to reflect changes in priorities for
supporting commercial effectiveness
The enablement of benefit across the whole NHS community rather than at the
level of an individual organisation
Evaluation of the impact on the whole system; with benefits across primary and
secondary care
Support for invest to save initiatives such as investment in medicines to deliver
over all savings on care or projects in secondary care that will deliver savings in
primary care
Close working with established systems and structures to identify gaps in
existing commercial capability rather than duplication or seeking to become a
new delivery body for existing services. However, in certain instances, it may be
appropriate for the commercial support organisation to become the new ‘home’
for certain services (this will need to be determined on a local basis)
Support for regional implementation of national initiatives to support greater
commercial effectiveness (including QIPP medicines/ procurement work
streams)
Consideration as appropriate of the potential for savings generated for the
health system to be re-invested into service developments or new medicines
with the potential to enhance quality of care. This approach could be used as a
means to achieve clinical buy-in and support for the proposed courses of action
19
5. Priorities for medicines management commercial support functions:
2010/11
Fig 4: The stakeholder engagement exercise identified four priority areas for
development of core commercial support functions in 2010/2011, which are
described here. Commercial support organisations will need to work with specialist
procurement pharmacists to identify local needs and priorities and to identify areas
where systems can be developed and improved through joint working:
5.1
Business
intelligence &
business
modelling
Diffusion of best
practice /
innovation
Facilitation of
collaborative
working
Implementation
support for
national strategy
Business intelligence and business modelling
Access to high quality data on pharmaceutical spend and usage patterns is essential
to identifying opportunities and to understanding the full implications of any proposals
designed to exploit them. Commercial support organisations may be in a good
position to provide and develop improved systems for business intelligence and
business modelling support to specialist procurement pharmacists for a number of
reasons including:
■
■
■
The existence of appropriate skill sets currently deployed to support business
intelligence in other areas
Efficiency of service delivery – Scaling up to gain the most from limited resource
Impartiality and an ability to use business intelligence as a lever for achieving
better collaboration and cooperation thus delivering benefits for the region
20
Table 1: Summary of function and associated services: business intelligence and modelling
Function
Service
Description
Business Intelligence and
business modelling
Prescribing and spend
analysis
Collation and analysis of data on
medicines usage and associated
spend with a view to identifying
opportunities for reducing costs
without compromising care quality.
This function could be used to identify
‘postcode prescribing’ as a starting
point to addressing inequalities.
Benchmarking
Comparison of prescribing trends and
associated spend between similar
organisations.
Scenario modelling
Modelling capability to support more
robust opportunity assessments.
5.2
Adoption of best practice / innovation
There is strong evidence that pockets of best and innovative practices in the delivery
of medicines management frequently exist in isolation within a region, typically where
an individual organisation has taken the initiative to develop a new way of working.
Systematic adoption of best practice in other organisations may not take place
despite apparent benefits associated with new ways of working. Reasons for this
may include:
■
■
■
■
■
Lack of awareness of initiatives underway in other organisations
Lack of resource to follow suit
Reluctance to adopt practices developed elsewhere on the assumption that
they are not transferable or due to a desire to develop practices in different
ways
Lack of quantifiable evidence of benefits realised from an initiative and how they
translate to other organisations
Unwillingness to share materials, protocols etc which are associated with
delivery of the new way of working
Commercial support could include the development of systematic measures of
success and transferability and leadership of collaborative working and shared
learning in order to support the spread of best practice and innovation.
Interestingly, a concern was raised in the stakeholder workshops that innovation
might be stifled as organisations focus their energy on implementing similar practice
to others. As a rule, commercial support resources and expertise are best placed
where the benefits:
21
■
■
■
Are assessed as: measurable, significant and likely to be transferable
Do not cut across or preclude other innovation that might deliver additional
benefit
Raise standards across the region rather than seeking to deliver a completely
homogenised service
Table 2: Summary of function and associated services: best practice and innovation
Function
Service
Description
Adoption of best practice /
innovation in the delivery
of medicines management
Identification of best / innovative
practice
Pro-active identification of best /
innovative practice through
existing regional networks.
Feedback provided to support
commissioning for quality in
medicines management.
5.3
Benefits tracking for best /
innovative practice
Quantification of benefits
associated with best / innovative
practice
Sharing materials associated with
best / innovative practice
Sourcing and adaption of
materials to avoid duplication of
effort as other organisations
follow suit. Possibly enabled
through contractual levers with
acute providers
Facilitation of collaborative working
Working collaboratively across the commissioning and provider landscape will enable
better value from medicines management procurement to ensure the continuing
provision of high quality services. During stakeholder interviews, concern was
expressed that organisations may opt for deals on medicines that would provide
benefit to one organisation without considering the implications for the whole health
economy.
The use and development of improved business modelling expertise could support
forecasting of the impact of potential decisions taken for example by secondary care
on primary care. This modelling could support dialogue between sectors aimed at
reaching decisions that represent best value for the whole local health economy.
A core role for commercial support is to identify opportunities for collaborative
working. Some opportunities may be identified through the business intelligence and
modelling function; others may arise through active engagement and working with
medicines management stakeholders to identify examples of duplicated activity and
potential efficiency gains. The following case study describes a London initiative
22
where a joint workshop was established between commercial and medicines
management leads.
Table 3: Summary of function and associated services: facilitation of collaborative working
Function
Service
Description
Facilitation of
collaborative working
Opportunity identification
Identification and verification of
options for collaborative
working on activities such as
procurement and sharing non
front line services.
Project management support
for collaboration
Support for identifying
stakeholders, developing
project plans etc to enable
implementation of collaborative
working initiatives
Case study in facilitation of collaborative working
The challenge:
To develop a systematic approach to improving productivity in line with QIPP
priorities with a focus on reducing drug spend and prescription variability.
The approach:
The London Commercial Support Unit held a joint pharmacy and medicines
management workshop in May 2010 with senior colleagues from the pharmacy
community that included representatives from commissioning, hospital trusts and
SHA procurement specialists and analysts.
Commercial support contribution:
A number of projects were identified in primary and secondary care and cash
releasing and value improving savings opportunities were estimated. These
projects were then prioritised and incorporated into the region’s QIPP plan.
Commercial support included project management, procurement support to the
secondary care programme and analytical support to the primary care initiatives.
23
5.4
Implementation support for national strategies
A key national priority is the delivery of QIPP efficiency savings. The development
of this guidance for commercial support to medicines management will be
supported by a number of projects to develop commercial best practice in areas of
work considered to have potential for high impact when rolled out nationally. These
priority areas include therapeutic tendering within secondary care and homecare.
Each of the projects is required to:
i) Support QIPP objectives and achieve added value in procurement/
commissioning
ii) Have systematic measures of success
iii) Be delivered in close partnership with the medicines management
community and with CMU
iv) Develop guidance and learning that can be shared/ rolled out nationally
that considers both commercial best practice and optimum scalability of
approach for future commissioning models
The NHS Commercial Leads meeting will consider how best to develop and support
these workstreams, working in close liaison with the NHS Commercial Medicines Unit
and the QIPP workstream. This work will complement the continuing development of
coordinated strategies for the contracting and procurement of medicines for Generic
and Branded Medicines with members of NPSG and PMSG.
Relevant commercial capabilities to support the implementation of national strategies
include data analysis and baselining to establish the pre-implementation position,
scenario modelling to determine resource requirements associated with
implementation and audit support to measure the extent of, and benefits associated
with, implementation.
Table 4: Summary of function and associated services: support for national strategies
Function
Service
Description
Implementation support for
national strategies
Baseline analysis
Analysis of the pre-implementation
position and steps required for
implementation.
Resource modelling
Modelling service to determine
resources required for the
implementation of strategy and identify
cost effective solutions for
implementation.
Audit support
Support for measuring implementation
for example through the provision of
audit templates and analysis of raw
audit data.
24
Implementation support for national strategies
Scenario: PbR excluded drugs:
The management of PbR excluded drugs can be challenging:
-
Both providers and commissioners have concerns about the workload created
through compiling and reviewing individual patient funding requests for these
drugs
-
Commissioners are also concerned by a lack of transparency on the costs of PbR
excluded drugs. Typically they are not always aware of what it costs trusts to
purchase drugs and do not see discounts reflected on invoices. There is also a
lack of clarity on the level of additional charges added to the final invoice to cover
unspecified ‘on’ costs
-
Variability in processes for approving PbR excluded drugs on a case by case basis
may lead to ‘post code’ prescribing scenarios
The challenge:
-
To develop standard protocols governing the procurement, reimbursement and
individual patient approval mechanisms for PbR excluded drugs
-
The solution should reward providers for negotiating discounts but also allow for
re-investment of savings for the benefit of the whole health economy and support
the eradication of postcode prescribing within a region.
Commercial support:
-
Could work to mediate and improve communication between providers and
commissioners
-
Could work in partnership with medicines management specialists/ hospital
providers to develop greater understanding of
-
o
Baseline position for spend on PbR excluded drugs to include expenditure
on medicines, added costs and any additional services might be included
within the price by the pharmaceutical industry such as nursing support for
administration.
o
True costs (and therefore reasonable additional charges on top of the
acquisition cost) of activities associated with handling PbR excluded drugs
such as re-constitution and the use of consumables such as syringes.
Armed with better understanding of the costs associated with PbR excluded drugs
could work to develop principles for cooperation on the re-imbursement of PbR
excluded drugs. These principles would:
o
Encompass agreed reimbursement rates for various activities associated
with handling PbR excluded drugs such as aseptic preparation and
administrative processes associated with generating invoices
o
Require transparency from providers on how much they spend on
medicines
o
Specify how savings made through procurement discounts are to be
shared between providers and commissioners.
25
6.
Developing extended commercial functions to support medicines
management
The previous section sets out four priority areas for developing commercial support to
medicines management. Extended support could be developed in any of the
following areas following an assessment of local needs and circumstances:
● Operational performance
● Systems
● Market management
Further detail including mapping of the functions to outputs, outcomes and benefits is
included within Appendices 1& 2.
Figure 5: Developing extended functions to support medicines management
Business
intelligence &
business
modelling
Diffusion of
best practice /
innovation
Facilitation of
collaborative
working
Implementation
support for
national
strategy
Market management
(non-core)
Systems (non-core)
Operational
performance (noncore)
Market management
6.1 Operational performance
A nationwide review of medicines management in acute trusts by the former
Healthcare Commission recognised that effective medicines management can
contribute greatly to the delivery of high quality, cost effective and safe care. Reports
provided to individual organisations allowed them to better understand their own
performance versus other organisations and investigate reasons for performance
problems.
26
Recently there has been less opportunity for hospitals to understand how they
perform on the operational aspects of delivering medicines management services.
Commercial support could facilitate analysis of performance in medicines
management and the impact of resulting performance improvement programmes.
There may also be an opportunity to provide support to pharmacy departments to
understand how they perform on measures of clinical productivity with resources at
their disposal. An example of this might be the number of patients who receive a
medication review on admission per pharmacist engaged in this role. Benchmarking
the outputs of this type of assessment could give organisations insight into the
efficiency of their service and through sharing practices with other organisations
identify opportunities for performance improvement.
Table 5: summary of function and associated services
Function
Service
Description
Operational performance
Clinical productivity and
efficiency reviews
Analysis of service inputs (staff
time and other over-heads) and
processes versus service outputs
(number of prescriptions
reviewed, number of interventions
made etc) to determine the
productivity and efficiency of
hospital pharmacy services.
Medicines management
capability assessments
Analysis of performance in
medicines management through
measurement of KPIs such as
error rates, intervention rates and
use of patients own drugs on
admission.
6.2
Medicines management systems
Commercial support may identify opportunities for improving systems, for example
through the identification of IT solutions, then ensure their cost effective procurement
and implementation to improve efficiency and reduce administration time and costs in
medicines management. This in turn could help to enable the focusing of resources
on front line services.
Concerns identified in workshops included resource involved in the management of:
● Patient access schemes and recuperation of costs/ rebates
● Use and associated funding for non PbR drugs
● Contract management
● Homecare schemes
27
Table 6: summary of function and associated services
Function
Service
Description
Systems
E-enablement opportunity
identification
Support in identifying
opportunities for the introduction
of IT systems to increase
productivity, efficiency and care
quality relating to the use of
medicines.
E-enablement –
implementation support
Support for the procurement and
roll out of IT systems to increase
productivity, efficiency and care
quality relating to the use of
medicines.
6.3
Market management
The introduction to this document sets out the complexity of pharmaceutical markets
and the specialist structures that are in place at national regional and local levels to
lead and support activity in this area.
Commercial support offerings can include well developed general market analysis
and management skills that could be applied to add value to these exisiting
arrangements. Potential areas for involvement could include:
● Regional contract management support
● Homecare provider management
Table 7: summary of function and associated services
Function
Service
Description
Market management
Contract management
support
Support to existing bodies such as
regional pharmacy procurement
groups for medicines supplier
performance management against
contractual requirements with
outputs used to support the
development of sourcing plans for
medicines.
Homecare provider
management
Management of homecare
providers to establish
transparency in pricing and
service levels and associated
performance.
28
7. Focus of commercial activity
The pharmaceutical market is a highly complex and specialist area and commercial
support should be applied where it can be most effective and with a clear
understanding of national and regional priorities. The market segmentation analysis
below may indicate that the initial focus of commercial activity should be in the
secondary care branded segment where:
■
■
■
■
■
There is the highest rate of increase in medicines expenditure
Prescribing practices are easier to influence
Influencing prescribing practices often has the knock on benefit of influencing
practices in primary care
There are identified challenges and opportunities such as non PbR medicines,
patient access schemes and homecare
There is an opportunity to deliver benefits to both hospitals and primary care,
which directly funds a large proportion of prescribing through PbR exclusions.
Effecting change within other market segments is likely to be more challenging. For
example, within the secondary care generic segment a great deal of work has
already been undertaken to ensure that best value is secured from generic
medicines. Within the primary care branded segment it is generally accepted that it is
more difficult to influence GP prescribing and opportunities for making savings are
limited by fixed prices within the Drug Tariff.
However priorities should be determined locally in partnership with the medicines
management community and it will be important to provide support across the whole
health economy.
Figure 6: Pharmaceutical market segmentation and associated issues
Secondary care
Greatest rate of inflation in
medicines expenditure
Easier to influence prescribing
practices with recognised ‘spill
over’ effect on primary care
Root of homecare market
More opportunities for therapeutic
tendering?
0% inflation (for primary
care prescribing as a whole)
Challenging to influence GP
prescribing
Opportunities limited by
Drug Tariff
Area of considerable focus
in recent years (Category
M, Better Care Better Value
Indicators etc)
Challenging to influence GP
prescribing
Generic medicines
Branded medicines
Source of PAS prescribing
Source of PbR excluded drugs
prescribing and primary care
expenditure
Opportunities exploited via
national and divisional
contracting
Generally accepted that
generic prescribing in
secondary care is optimised
Primary care
29
8. Operational considerations
8.1 Establishing services and a work programme
This guidance outlines the types of commercial support functions and services that
could support the effective management of medicines but priorities must be locally
determined. Key steps in establishing the scope of services and a work programme
will include:
- Engagement with the local medicines management community from the outset for
example through the Chief Pharmacists network
- Assessment of existing arrangements, to identify gaps and opportunities and
avoid duplication or cross cutting. It will be important to assess local regional and
national activity before developing plans
- Understanding of challenges and gauging the level of buy-in for functions and
services designed to address them
- Identification of project areas where there could be added value from commercial
input and the potential for quick wins to demonstrate value and build support for
continued commercial involvement
- A focus on supporting the delivery of QIPP priorities for the medicines work
stream
- Close working with specialist procurement pharmacists and DH colleagues to
ensure understanding and operation within national legislation and regulation and
to gain guidance and support in interpreting this into commercial activity
8.2
Staffing models
Staffing requirements should be considered on a project-by-project basis with the aim
of creating a team of individuals with an optimal blend of skills and expertise. For
most projects, commercial skills such as data analysis or business modelling will be
needed alongside specialist pharmaceutical expertise.
There is a considerable range of size, resource and approach in the way that
commercial support arrangements have been established. This section considers
options for developing a sufficiently flexible staffing model that can be used to
resource projects appropriately and cost effectively.
■
Permanent staff
It may be appropriate to consider employing a permanent member of staff with
specific pharmacy expertise such a pharmacist or a pharmacy technician where
there is confidence that the work programme warrants this investment and skills
will be fully utilised on an on-going basis.
■
Secondments
Secondments may be an attractive option for sourcing staff from local NHS
organisations with specific skill sets on a temporary basis to fulfil the needs of a
project.
30
■
Collaboration with a lead organisation
May be appropriate where there is a desire and capability from an individual
organisation to lead on a project with potential to deliver region wide benefits to
the health economy. Commercial support would provide additional skills and
expertise not available within the lead organisation.
■
Interims
Recruiting interims could be an attractive option where there is a need to either
source an individual with a very particular skill set not available within the region or
where there is a need to staff projects quickly. Ordinarily interims are a relatively
expensive resource and should only be called upon when essential.
8.3
Determining level of commercial support
Commercial support to medicines management can be offered at a range of levels
from advisory right through to leading the delivery of a piece of work and the right
approach will need to be decided based on local needs. Close partnership working
with specialist procurement pharmacists and the wider medicines management
community will be critical and the key to successful working will be a mutually shared
understanding of roles, and responsibilities from the outset as work programmes and
supporting project plans are developed.
31
Appendix 1: CSU medicines management support functions, outcomes and benefits
Core
Function
Description
Outcome
Benefits
Business
Intelligence
and
Modelling
Identifying and filling
gaps in the collection
and analysis of
prescribing data and
associated spend from
primary and secondary
care with modelling
capability to support
opportunity
identification from data
analysis.
Better
understanding
of prescribing
practices and
associated
spend, with
identification of
opportunities
for securing
improved value
for money from
prescribing
budgets.
Financial (cost reduction and cost containment)
Support for identifying
and realising
opportunities which
support the delivery of
more efficient higher
quality services
through sharing
services and pooling
expertise – both clinical
and non-clinical
Greater cooperation and
more uniform
services
reflective of
best practices
Financial (cost reduction and cost containment)
Support for providers
and commissioners on
the implementation of
national strategy and
realisation of
associated benefits in
an efficient manner.
Faster more
comprehensive
implementation
of national
strategies
across a region
Facilitation of
Collaborative
Working
Implementati
on support for
national
strategies
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
32
Function
Description
Outcome
Benefits
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
Adoption of
Best Practice
and
Innovation
Noncore
Operational
performance
Systems
Sharing best and
innovative practice
across organisations to
achieve replication of
the benefits associated
with these practices in
more organisations
efficiently.
The management of
people, systems and all
other resources to
deliver high quality,
efficient and safe
management of
medicines
Support for the
implementation of IT
systems which
increase the efficiency
of activities associated
with medicines.
Reduced lag
time between
invention and
best /
innovative
practices
becoming
widely adopted
with replication
of benefits.
Optimal
performance of
pharmacy
services with
resources
available from a
quality,
efficiency and
safety
perspective.
The
development of
information
technology
systems and
infrastructure to
support the
management of
prescribing in
local health
economies
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
33
Function
Description
Outcome
Market
Management
The review of providers
of pharmaceutical
products and services
and resulting actions to
encourage improved
provider performance
Better
understanding
of provider
performance
and value for
money
delivered.
Benefits
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better management
information)
Commercial risk reduction (decreased budgetary risk, reduced supply chain
risk)
Quality (improved patient outcomes, improved patient experience, lower clinical
risk)
34
Appendix 2: Services associated with functions outputs, outcomes and benefits
Function: Business intelligence and modelling
Service
Description
Outputs
Outcomes
Benefits
Prescribing and
spend analysis
Collation and analysis of data on
medicines usage and associated
spend with a view to identifying
opportunities for reducing costs
without compromising care quality
Prescribing
practices and
spend analysis
reports
Improved understanding of
prescribing practices and ability
to identify potential
opportunities which can then be
investigated further (typically by
those with clinical and
pharmaceutical expertise) to
determine validity
Financial (cost reduction and cost
containment)
Benchmarking
reports to support
meaningful
comparison of
prescribing
practices
between
organisations
Improved understanding of
comparative prescribing
practices to support
opportunities for therapeutic
rationalisation
Financial (cost reduction and cost
containment)
Scenario models
of benefits
associated with
changes in
prescribing
practices.
Improved understanding of the
potential benefits associated
with changes in prescribing
practice
Financial (cost reduction and cost
containment)
Benchmarking
Scenario
modelling
Comparison of prescribing trends
and associated spend between
similar organisations
Modelling capability to support more
robust opportunity assessments
Enablement (improved capability,
better management information)
Commercial risk
reduction(decreased budgetary
risk, reduced supply chain risk)
Enablement (improved capability,
better management information)
Commercial risk
reduction(decreased budgetary
risk, reduced supply chain risk)
Enablement (released capacity,
improved capability, better
management information)
Commercial risk reduction
(decreased budgetary risk,
reduced supply chain risk)
Quality (improved patient
outcomes, improved patient
experience, lower clinical risk)
35
Function: facilitation of collaborative working
Service
Description
Outputs
Outcomes
Benefits
Opportunity
identification
Identification and verification
of options for collaborative
working on activities such as
procurement and sharing non
front line services. Likely to be
enabled in part by business
intelligence
Reports outlining
opportunities and summaries
of model outputs, indicating
what benefits are likely to be
associated with the
opportunities
Greater understanding of
where collaborative
opportunities might lie with
greater buy-in for acting on
them through quantification
of benefits
Financial (cost reduction
and cost containment)
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
Project management
support for
collaboration
Support for identifying
stakeholders, developing
project plans etc to enable
implementation of
collaborative working
initiatives
Project plans, project
management resource (most
likely in conjunction with a
local clinical champion)
The application of robust
project management
methodologies leading to
projects being delivered on
schedule and on budget
Financial (cost reduction
and cost containment)
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
36
Function: Implementation support for national strategies
Service
Description
Outputs
Outcomes
Benefits
Baseline
analysis
Analysis of preimplementation
position and steps
required for
implementation
Gap analysis reports outlining
current practices versus
policy intentions
Greater understanding of the
pre-implementation state
Enablement (released capacity, improved capability, better
management information)
Modelling service to
determine resources
required for
implementation of
strategy e.g. human
resources and finance.
Identification of cost
effective solutions for
implementation
Models depicting the
resource requirements
associated with full
implementation of the policy
Improved understanding of
how much resource is required
to support policy
implementation from a
financial, HR and technological
perspective.
Support for measuring
strategy
implementation for
example through the
provision of audit
templates and analysis
of raw audit data.
Audit reports on
implementation progress
Resource
modelling
Audit support
Commercial risk reduction (decreased budgetary risk,
reduced supply chain risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better
management information)
Commercial risk reduction (decreased budgetary risk,
reduced supply chain risk)
Quality (improved patient outcomes, improved patient
experience, lower clinical risk)
Improved ability to track
implementation and determine
what actions may be required
to address instances of partial
implementation.
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better
management information)
Commercial risk reduction (decreased budgetary risk,
reduced supply chain risk)
Quality (improved patient outcomes, improved patient
experience, lower clinical risk)
37
Function:
Adoption of best practice and innovation
Service
Description
Outputs
Outcomes
Benefits
Identification of
best /
innovative
practice
Pro-active identification of
best / innovative practice
through connecting with
existing regional networks
and engaging with local
organisations to uncover
examples
Database of best /
innovative practice
examples
Greater awareness of best
practice and innovation within
a region, associated benefits
and the potential for
widespread application
Financial (cost reduction and cost containment)
Quantification of benefits
associated with best /
innovative practice
Case studies
incorporating benefits
analysis – including
estimates on the
benefits of rolling the
initiative out to other
organisations.
Independent verification of the
success of initiatives and
greater understanding of the
benefits associated with wider
roll-out
Library of generic
materials which can be
accessed by other
organisations
Increased ease of
implementation of new
initiatives
Benefits
tracking for
best /
innovative
practice
Sharing
materials
associated with
best /
innovative
practice
Sourcing and adaption of
materials to avoid
duplication of effort as
other organisations follow
suit.
Enablement (released capacity, improved capability, better
management information)
Commercial risk reduction (decreased budgetary risk, reduced
supply chain risk)
Quality (improved patient outcomes, improved patient
experience, lower clinical risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better
management information)
Commercial risk reduction (decreased budgetary risk, reduced
supply chain risk)
Quality (improved patient outcomes, improved patient
experience, lower clinical risk)
Financial (cost reduction and cost containment)
Enablement (released capacity, improved capability, better
management information)
Commercial risk reduction (decreased budgetary risk, reduced
supply chain risk)
Quality (improved patient outcomes, improved patient
experience, lower clinical risk)
38
Function: operational performance
Service
Description
Outputs
Outcomes
Benefits
Clinical productivity
and efficiency reviews
Analysis of service inputs
(staff time and other overheads) and processes versus
service outputs (number of
prescriptions reviewed,
number of interventions made
etc) to determine the
productivity and efficiency of
hospital pharmacy services.
Reports outlining efficiency
and productivity
benchmarked against similar
organisations with
recommendations on areas
for further investigation with
potential for performance
improvement.
Greater understanding of
departmental performance on
measures of clinical
productivity and capability
and potential areas for
improvement versus similar
organisations.
Financial (cost reduction
and cost containment)
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
Medicines management
capability assessments
Analysis of performance in
medicines management in
hospitals through
measurement of KPIs such as
error rates, intervention rates
and use of patients own drugs
on admission
Benchmarked reports
outlining performance
against a range of medicines
management KPIs with
recommendations on
potential areas for further
investigation and
subsequent improvement
Greater understanding of
medicines management
capability within hospital
pharmacy departments and
insight into potential areas for
improvement
Financial (cost reduction
and cost containment)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
39
Function: systems
Service
Description
Outputs
Outcomes
Benefits
E-enablement
opportunity
identification
Support for identifying
opportunities for the
introduction of IT systems to
increase productivity,
efficiency and care quality
relating to the use of
medicines.
Opportunity assessments
including quantification of the
benefits associated with eenablement.
Greater understanding of the
opportunities for eenablement including likely
benefits from a quality and
productivity perspective
Financial (cost reduction
and cost containment)
E-enablement –
implementation support
Support for the procurement
and roll out of IT systems to
increase productivity,
efficiency and care quality
relating to the use of
medicines.
Business cases and
requirements specifications
for IT systems. Project plans
for the introduction of new IT
systems.
Better value for money in the
procurement of IT systems
and faster realisation of
benefits associated with eenablement.
Financial (cost reduction
and cost containment)
Enablement (released
capacity, improved
capability, better
management information)
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
40
Function: market management
Service
Description
Outputs
Outcomes
Benefits
Homecare provider
management
Management of homecare
providers to establish
transparency in pricing,
service levels and associated
performance.
Performance management
frameworks and service
specifications for homecare
providers.
More consistent care delivery
of a higher quality in the
home setting.
Financial (cost reduction
and cost containment)
Data sets outlining
comparative prices between
homecare providers, levels
of service offered,
governance arrangements
etc
Greater understanding of
costs associated with
homecare delivery and
potential to negotiate on price
for non-pharmaceutical
industry schemes.
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
Quality (improved patient
outcomes, improved
patient experience, lower
clinical risk)
Contract management
support
Support to existing bodies
such as regional pharmacy
procurement groups for
medicines supplier
performance management
against contractual
requirements with outputs
used to support the
development of sourcing plans
for medicines.
Supplier performance
databases and associated
reports.
Improved understanding of
performance versus
contractual requirements.
Financial (cost reduction
and cost containment)
Enablement (released
capacity, improved
capability, better
management information)
Commercial risk reduction
(decreased budgetary
risk, reduced supply chain
risk)
41
Appendix 3: Glossary of relevant terms used in medicines management landscape
Term
Abbreviation
Description
Association of British
Pharmaceutical
Industry
ABPI
ABPI is the trade association for more than 90 companies in the UK producing prescription medicines for
human use. Its member companies research, develop, manufacture and supply more than 80 per cent of the
medicines prescribed through the NHS.
British
Generic
Manufacturers
Association
BGMA
The BGMA represents the interests of UK-based manufacturers and suppliers of generic medicines and
promotes the development and understanding of the generic medicines industry in the United Kingdom.
British
Healthcare
Trades Association
BHTA
Trade Organisation, represents a wide cross range of Medical and Assistive Technologies and is consulted as a
voice of industry by both Government and non-Government bodies.
Clinical Networks
Clinical networks are linked groups of healthcare professionals and organisations that aim to improve the
treatment and prevention of ill health in particular disease area – for example cancer or cardiology. Whilst they
do not tend to hold prescribing budgets directly, they are typically major influencers of prescribing through the
production of treatment protocols and clinical guidelines.
Collaborative
Procurement Hub
CPH
Regional purchasing organisations set up to accelerate savings through collaborative purchasing for their
member Trusts. CPHs should be aligned with the Commercial Support Unit set up.
Commercial support
Unit
CSU
Offer a range of dedicated commercial support to NHS healthcare commissioners and providers to help them
improve their commercial and business skills, gain better value from procurement and contracts and respond
more effectively to the challenges of operating in today’s NHS.
Hospital Pharmacists
All acute and mental health trusts are able to access some specialist support for the management of medicines
through an in-house pharmacy department. The level of support provided varies greatly on a trust-by-trust basis
but broadly aims to ensure that medicines are used within the organisation in a clinically effective, cost effective
and safe manner. In practice, the support offered by most hospital pharmacy services encompasses:
procurement, dispensing of medicines, advice to individual prescribers and patients and enforcement of
formularies and clinical guidelines as well as the manufacture of medicinal products.
Hospital pharmacy departments tend to be represented on prescribing committees and in most cases are
considered to be very influential in determining how medicines are used within their organisation.
42
Term
Abbreviation
Description
Medicines Pharmacy
Industry Division
MPI
The Medicines Pharmacy and Industry division within the DH Medical Directorate covers the following areas:
-
Government sponsorship of life sciences (pharmaceutical and medical technology industries)
-
Pricing and supply of medicines
-
Clinical and cost effectiveness including sponsorship of the National Institute for Health and Clinical
Excellence (NICE)
-
Improving access to innovative medicines
-
Pharmacy
-
Prescription charges
Medicines
and
Healthcare products
Regulatory Agency
MHRA
MHRA is an executive agency of DH that sets out to enhance and safeguard the health of the public by
ensuring that medicines and medical devices work and are acceptably safe.
Ministerial
Industry
Strategy Group
MISG
Provides a forum for government to work closely with industry on high level strategic issues
Ministerial
Medical
Technology Strategy
Group
MMTSG
Provides a forum for joint industry/ Government discussion of strategic issues of importance
NHMC
A subgroup of the National Pharmaceutical Supply Group. The committee is facilitated and managed by the
NHS Commercial Medicines Unit. Representation on the committee consists of stakeholder professions with
experience in the area of homecare delivery services in primary care, secondary care, specialised
commissioning and industry. The main role of the committee has been to act as a national focus for developing
and improving processes for homecare delivery services and advise the NHS on matters relating to these
services.
National Homecare
Medicines Committee
The key work areas are the production of standard tender documentation, supplier audits, key performance
indicators, decision analysis tool and management of complaints and adverse incidents.
43
Term
National Institute for
Health and Clinical
excellence
National
Pharmaceutical
Supply Group
Abbreviation
Description
NICE
Independent organisation responsible for providing national guidance on promoting good health and preventing
and treating ill health. NICE makes recommendations to the NHS on new and existing medicines, treatments
and procedures and on treating and caring for people with specific diseases and conditions. These
recommendations are a very significant factor in driving uptake of new medicines by Acute Trusts.
NPSG
The key purpose of the NPSG is to develop a national medicines procurement strategy in order to maintain
continuity of supply of medicines for all patients and to ensure that there are effective strategic communication
channels directly to NHS Trust Chief Pharmacists through their SHA networks.
NPSG is the strategic focus in the relationships between the NHS Commercial Medicines Unit, the Department
of Health, NHS Trust Chief Pharmacists and the SHA pharmacy procurement groups and is the ‘point of entry’
for any NPSA and MHRA input into contracting dialogue.
National Prescribing
Centre
NPC
The National Prescribing Centre is a health service organisation, formed in April 1996 by DH. It promotes and
supports quality, cost-effective prescribing and medicines management across the NHS, to help improve patient
care and service delivery.
NHS
Business
Services
Authority
Prescription Services
Division
NHS BSA
Calculates reimbursements and pays pharmacies, Primary Care Trusts (PCTs) budgets are then debited
accordingly. Pricing is based on drug type and volume in accordance with that month’s Drug Tariff
NHS
Commercial
Medicines Unit
CMU
SHA pharmacy procurement groups are supported by a dedicated NHS Commercial Medicines Unit category
specialist and Quality Assurance and Technical Pharmacists. Business identified by the groups is competitively
tendered on their behalf by the NHS Commercial Medicines Unit.
Following adjudication of tenders by the group, reflecting the interests of its constituent trusts, their clinicians
and budget holders, the NHS Commercial Medicines Units also awards and manages the resulting contracts on
their behalf.
Pharmaceutical
Market
Support
Group
PMSG
Operating at the national level, PMSG is now accountable to the Department of Health Pharmacy NonExecutive Board on operational matters relating to the procurement and supply of medicines to the NHS.
Amongst other roles, PMSG brings together a national overview of commercial and pharmaceutical expertise to
assist the NHS Commercial Medicines Unit to coordinate pharmacy purchasing group activity and to advise the
SHA pharmacy procurement groups on the most appropriate award decisions. This aims to achieve maximum
benefit for the NHS while avoiding and managing any introduction of risk to supply.
44
Term
Prescribing/ drug and
therapeutics
committees
Specialist
Procurement
Pharmacist
Abbreviation
Description
There is a wide range of committees, which aim to evaluate medicines on clinical and cost effectiveness
grounds to determine which medicines should be recommended for use in the area they cover. Typically these
committees focus on those medicines which are not reviewed by NICE or in some instances aim to evaluate
medicines before NICE reviews are completed. Whilst these committees generally have very similar roles they
vary greatly in their membership, the area they cover (some may operate on behalf of a single organisation
whilst others may operate across part of or even a whole region) and their name. Terms used to describe
prescribing committees include medicines management committees, drugs and therapeutics committees.
Regional and national arrangements are part of a well-developed nationally coordinated approach the success
of which is built through the regional groups and their relationships with NHS Trust Chief Pharmacists.
Regionally based NHS procurement pharmacists are at the centre of this activity and use their specialist
expertise to ensure the medicines procurement approach is built through strong relationships with clinicians.
Key roles include:
-
PCT Prescribing
Teams
Promotion of robust, effective and efficient patient orientated pharmacy procurement of medicines
Specialist consultancy on all aspects of the procurement storage and distribution of medicines and its
application to medicines management
Contribution to the development of national strategies and solutions for the long term cost-effective
procurement of medicines within the secondary care sector
Ensuring that procurement prioritises patient safety and leads the purchasing for safety agenda
Within each PCT, there are typically a number of pharmacists who work on medicines management related
activities. These activities may include working with individual GP practices to influence prescribing patterns,
reviewing funding requests for PbR excluded medicines, sitting on local prescribing committees and managing
aspects of the community pharmacy contract. In many cases, PCT pharmacists will liaise closely with hospital
pharmacists with the aim of aligning objectives and ensuring that they are working effectively together as
constituent parts of the same health system.
The specific role of PCT prescribing teams and the resources at their disposal varies greatly from PCT to PCT.
45
Procurement
Investment
and
Commercial Division
PICD
SHA Procurement
Groups
Strategic
Market
Development Unit
PICD provides expert commercial and procurement support to both DH and the NHS and has a key system and
professional leadership role encompassing oversight of the entire NHS landscape. PICD will undertake this
leadership role by establishing and leading:
- NHS commercial network which will be the formal arrangement for DH to work with all 10 health regions
- NHS National Procurement Council which will provide the main forum for industry/NHS collaboration
and exchange
Each NHS trust is represented on a SHA pharmacy procurement group by a pharmacist or technician.
Representing the interests of the trusts’ budget holders, clinicians and relationships with PCTs, these
pharmacists meet locally and regularly on a group basis to align procurement standards and approaches, and
exploit the purchasing power of their collective trusts.
SMDU
SMDU works alongside PICD and takes responsibility for leadership and support to commissioners in market
analysis and market making. The aim is to provide a single voice for the NHS and DH to speak to the
independent sector and engage the latter in the creation of new markets in healthcare. The new Cooperation
and Competition Panel which investigates potential breaches of the established principles and rules of cooperation and competition for the provision of NHS-funded healthcare now sits within SMDU.
46