Strategies for Managing Medicines Expenditure in the NHS

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Strategies for Managing Medicines Expenditure in
the NHS

• Peter Sharott
• Pharmaceutical Adviser, London Regional Public
  Health Group
• Director, London, Eastern South East Specialist
  Pharmacy Services
• Chairman, Pharmaceutical Market Support Group

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Subjects Discussed

• Background
• The Current Drivers
• National overview of medicines procurement
• Pharmaceutical Market Support Group (PMSG)
• NHS London
• Drug Expenditure Estimates
• Managing the Entry of New Drugs
• London Procurement Programme
• The future

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Background

• Medicines expenditure has traditionally been a
  target as it represents a high proportion of
  non-pay expenditure both in secondary and primary
  care
• Drugs and Therapeutics Committees have had a
  long-standing role hospital and joint
  formularies with primary care
• Area Prescribing Committees
• New Drugs Panels and Financial Groups
• Drug Procurement Strategies for generic and
  branded medicines
• Evidence-based decision-making
• Clinical effectiveness vs cost effectiveness

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The Current Drivers

• Effective management of drug expenditure driven
  by overall budget position in PCTs and NHS Trusts
• Influenced by turnaround teams and management
  consultants
• National and Local Strategies
• Commercial Directorate of Department of Health
  NHS PASA
• Supply Chain Excellence Programme (national
  generic drug contracts)
• Collaborative Procurement Hubs Procurement
  Confederations, London Procurement Programme
  (branded medicines)
• DHL/NovationNHS Supply Chain (currently excludes
  medicines)
• NICE and Scottish Medicines Consortium
• Payment by Results
• High-cost Drug Exclusions
• Exceptional Treatment Requests
• Commissioning SHAs, PCTs, PBC

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A strategic framework to source pharmaceuticals
for the NHS in EnglandOctober 2005
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A strategic framework to source pharmaceuticals
for the NHS in England

• Organisational Roles and Responsibilities Defined
  for
• National Pharmaceutical Supplies Group (NPSG)
• Pharmaceutical Market Support Group (PMSG)
• Collaborative Procurement Hubs Procurement
  Confederations
• Pharmacy Purchasing Groups
• NHS PASA
• Specialist Procurement Pharmacists

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Pharmaceutical ProcurementKey Groups and Players
National Committees
Specialists
Procurement Groups
Trusts
NHS Trust Pharmacy Services and Clinical Services
PCTs
PaSA Chief Executive
6 x Regional SCEP Groups Generic Medicines
PaSA Pharmaceutical Team
National Pharmaceutical Supplies Group
(NPSG) Strategic
Branded to Generic Medicines
Pharmacists (Procurement, QA, Production,
Medicines Information, and Clinical)
Pharmaceutical Market Support Group
(PMSG) Operational
14 x Local Pharmacy Procurement Groups Branded
Medicines Four in London
Patients high quality, safe, clinically and
cost-effective medicines, available when needed
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PMSG Current Terms of Reference (1)

• Anticipate critical generic product shortages and
  propose and co-ordinate preventative measures
• Prevent potential market monopolies being
  developed
• Encourage new entrants into critical markets
• Assist in managing branded products that have
  just come off patent
• Monitor the effectiveness and advantages of
  contracting in the UK hospital sector through
  benchmarking, audit and quality assurance

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PMSG Current Terms of Reference (2)

• Ensure items are market tested regularly
• Inform new and existing suppliers about the
  contracting process
• Develop strategies to discourage unsuccessful
  suppliers from undermining contracts
• Co-ordinate contracting with Northern Ireland
  Scotland and Wales

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NHS London

• Drug Expenditure in Primary Secondary Care

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Drug Expenditure Estimates 2006/07

• UK - primary secondary care
• 6-7 billion
• England secondary/tertiary care
• Branded 1.6 billion
• Generics 300m
• London secondary/tertiary care
• All drugs 660m
• HIV (antiretrovirals) 125m
• Cancer 96m (NICE 55m)
• Haemophilia 60m
• London primary care
• All drugs 820m

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Annualised Antiretroviral Drug Expenditure
London HIV Centre
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NHS London

• Drug Expenditure in Primary Secondary Care
• Managing the Entry of New Drugs
• London New Drugs Group
• London Cancer New Drugs Group
• London HIV Consortium Drugs Treatments Sub-group

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London New Drugs Group

• Long established group
• Undertakes reviews of new drugs, prioritised by
  members, PCTs and NHS Trusts
• Co-ordinates review programme with the National
  Prescribing Centre and UKMi to avoid duplication
• Avoids subjects listed in the NICE work
  programme, depending on timescales
• Currently produces points for consideration by
  local decision-makers
• Role, accountability and membership currently
  under review and may move to making firm
  recommendations to support commissioning at
  London, sector and PCT levels

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London Cancer New Drugs Group - Reviews

• The LCNDG is a sub-committee of the London Cancer
  Networks Steering Group
• Output has been prolific due to large numbers of
  both new drugs and new indications for older
  drugs
• Makes firm recommendations for implementation by
  the cancer networks
• Does not currently look at cost-effectiveness
• Cancer networks responsible for obtaining funding
  through annual development plans

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London Cancer New Drugs Group - Decisions
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London HIV Drugs Treatments Sub-Group

• This group is a sub-committee of the London HIV
  Consortium members include doctors, pharmacists,
  commissioners and patient group representatives
• All new antiretroviral drugs are reviewed
• Group produces guidelines for approval by the HIV
  Consortium
• Funding decisions are made by the HIV Consortium
• All service providers are expected to follow the
  guidelines

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NHS London

• Drug Expenditure in Primary Secondary Care
• Managing the Entry of New Drugs
• London New Drugs Group
• London Cancer New Drugs Group
• London HIV Consortium Drugs Treatments
  Sub-group
• London Procurement Programme

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London Procurement ProgrammeStructure for
Pharmacy and Medicines Management Project

• Regional Specialist Procurement Pharmacists
• Pharmacy Procurement Consortia Chairs
• Primary Care Pharmacy Specialists
• Mental Health Pharmacy Specialist
• Workstream Leads

NHS Trust PCT Pharmacy Networks Clinical
Networks Pharmacy Procurement Consortia
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Main Workstreams

• Procurement
• Review existing consortia contracts for product
  range and prices
• Identify opportunities for pan-London contracts
  (e.g. antifungals, cancer drugs, anti-TNFs)
• Therapeutic Tendering
• Identify opportunities to rationalise branded
  drug use (e.g. low molecular weight heparins) and
  tender on a volume commitment basis either within
  consortia or on a pan-London basis
• Manage value added services
• Therapeutic Rationalisation
• Identify opportunities to switch from branded to
  generic drugs in secondary and primary care (e.g.
  statins, ACE inhibitors)
• Others
• Homecare supply arrangements
• Local outpatient prescribing policies
• FP10 supply of specialised, high cost drugs (e.g.
  EPO)
• FP10 dispensing of unlicensed specials

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Contracting for Branded Medicines

• Therapeutic tendering
• group of related drugs contract awards could
  cover two or more drugs in the group
• therapeutic rationalisation contract for one
  drug
• prices related to aggregated volume commitment
  for the purchasing group
• price consistency for all participating trusts
• Clinical commitment essential
• Cost benefits in Primary Care as well Secondary
  Care

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Branded Medicines Issues to be considered

• Geographical complexities of London pan-London
  or sector-based approach
• Inclusiveness for all trusts/PCTs
• Engagement with primary and secondary care
  clinicians
• Timescales for achieving commitment and change
• Prioritise work for practicality and
  deliverability
• Impact of imminent branded to generic drugs
  managed through SCEP
• Need to fit in with national approach in terms of
  market management and product availability
• Willingness of pharmaceutical companies to
  co-operate

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Therapeutic Groups

• Anti-platelet drugs
• Anti-psychotics
• Anti-TNFs
• Anti-fungals
• Antiretrovirals
• Antivirals
• Aromatase Inhibitors
• Beta-Lactam Antibiotics
• Bisphosphonates
• Botulinum Toxin

• Cancer Chemotherapy
• EPO
• Gonadorelin Analogues
• Growth Hormone
• Growth Stimulating Factors
• Hepatitis B
• Hepatitis C
• Immunosuppressants
• Low Molecular Weight Heparins

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NHS London

• Managing the Entry of New Drugs
• London New Drugs Group
• London Cancer New Drugs Group
• London HIV Consortium Drugs Treatments
  Sub-group
• London Procurement Programme

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London PCTs - Low Cost Statins Prescribing
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London NHS Trusts - Low Cost Statins Prescribing
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The Future?

• Drug expenditure savings re-invested in new
  drugs?
• More effective processes for managing the entry
  of new drugs?
• Improved equity of access to new drugs across
  SHAs?
• Consistent process for managing Exceptional
  Treatment Requests across SHAs?