National Tenders Update UK

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National Tenders Update UK

• WFH Global Forum 2007
• Paula Bolton-Maggs
• Charles Hay Chairman, UKHCDO

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Factor VIII usage by UK Haemophilia Centres
1988 to 2005Current 330 million units p.a.
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Background

• Previous success with national pricing for the
  recombinant rollout
• About 5000 haemophiliacs of whom 2200 have severe
  haemophilia
• 27 comprehensive care centres and 67 smaller
  centres on recombinant products
• DH working with UKHCDO, the haemophilia society
  and local health systems (primary care trusts)
  agreed a strategy

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Information required

• All centres make returns to the National
  Haemophilia Database
• Known number of patients
• Known location and local health purchaser
• Known total quantity of products used
• Known expenditure on products

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Interviews across the clinician group indicated a
strong interest in collaborative arrangements

• Clotting products are rapidly growing area of
  spend (100 in 4 yrs)
• National contracting would reduce workload and
  improve predictability
• Many centres have no formal contracts
• Pro-active procurement would allow clinicians to
  drive the process
• Commissioners are likely to put increasing
  pressure on clinicians to justify their
  prescribing
• Switching between products has not increased
  inhibitors, increasing the acceptance of
  switching

• Centres across the country were consulted

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The Commercial Directorate leads on procurement
excellence in the DH and NHS

• A collaborative exercise across a several parts
  of the DH and NHS
• The objectives include
• To ensure commercial and procurement excellence
  across the DH and the NHS
• To promote the adoption of best commercial
  practices where and when they significantly
  improve the effectiveness and efficiency of the
  NHS 

Department of Health
General Health Protection
Commercial Directorate
NHS PASA
Deloitte
UKHCDO
Hospitals
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The Commercial Directorate has direct experience
of pharmaceutical procurement

• NHS pharmaceutical pricing and procurement for
  the last three years
• Pharmacy savings include over 20 on some
  products
• The 2004 negotiations resulted in an
  unprecedented 7 price cut across all products in
  the UK
• Pricing discussions covering other pharmaceutical
  products are ongoing
• Noted the importance of
• clinical preference and the role of national and
  regional pharmacy networks behind pharmacy in the
  UK
• international markets for these products

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Savings of up to 55M may be achievable across
clotting factor products
Savings ranges
International Best Prices 50-55M
US Best prices 40-45M
06-07 post Rec for all
UK Best Prices 24-28M
As a key global market for recombinant
manufacturers, the UK should be able to achieve
low prices
UK market size is such that the whole UK spend
would not be required to drive significantly
better prices
Notes Based on data collected to date. Assumes
total UK spend of 180M baseline is predicted
UK spend for 2006-7 excluding RFA prices.
Source World Haemophilia Federation. US big 4
FSS prices includes VA, DH information. Best
international prices do not include savings on
NovoSeven and BeneFix
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What regional vs national arrangements would be
achievable ?

• What are the pros and cons of national
  arrangements?
• What existing structures could be used to develop
  local or regional arrangements across the NHS?
• What involvement would your centre want in any
  future contracting arrangements?

Greater volumes per tender improve purchasing
power and usually achieve lower prices
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What are the key drivers determining allocation
to suppliers?

• Would your centre be willing to switch products
  to avoid moving patients back to plasma products?
• How many products would be required per contract
  for
• Security of supply
• Clinical preference
• Would you be prepared to switch to one
  predominant supplier if
• Other dominant manufacturers were providing
  product to other centres
• Responsiveness requirements from other suppliers
  allow rapid supply to you in case of emergency

The objective of the DH to understand the
willingness of clinicians to switch NOT to remove
prescribing freedom
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Strategy

• The procurement strategy is to drive price
  harmonisation through concentration of volume.
• The award was made following two waves of
  procurement to minimise risk and to maintain
  supplier interest
• The agreement
• A framework agreement with volume commitments was
  awarded
• Extended stakeholder engagement activity will
  help ensure that the expected volumes are bought
  on these contracts
• 2-3 year length of contract the duration of the
  contract will also drive competitive pricing

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Input of a wide range of stakeholders
Haemophilia Society consultation

• Centres across the country were consulted

At a UKHCDO meeting, there was input from a wider
group of clinicians
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Tender Evaluation criteria and weightings were
agreed as follows




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Some key remarks about product range and savings
targets

• Security of supply and sustainability are
  critical
• This programme was designed to help the NHS buy
  the products it needs at a better price.
• This process was not aimed at limiting the number
  of products clinicians can prescribe

• No saving targets or budget cuts forecast were
  set for this work
• There are no plans to cut Hospital budgets as a
  result of this work
• Commissioners will continue to be responsible for
  allocating funds locally

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Two tenders for products completed by April 07
Pre-OJEU phase
Product OJEU

• Data collection
• Stakeholder engagement
• Supplier meetings

Wave 1 tendering North, Midlands, SW
Jan 07
6 months
Wave 2 tendering South East
5 months
Apr 07
5 months
Supplier and specification development
Services tendering National
Apr 07
October
April
May
July
August
Award timing
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Thames Valley LSCG works closely with the Oxford
Haemophilia Centre

• Well tested tendering process based on close
  working relationships between clinicians,
  commissioners at LSCG level and procurement
  specialists in the acute trust
• Effective use of local networks with volume
  consolidation across the patch
• Analysis of price and volume data and accurate
  volume projections
• A clear understanding of impact of price
  reductions through detailed analysis of the
  different offerings at tender

• Significant savings have been achieved through
  tenders for products
• First tender achieved 10 savings (800,000)
• Second tender achieved 1 savings (100,000)
• Tender for 2006 - 07 resulted in a small saving
  but required change products increased
  percentage of patients on 3rd generation product

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E-auction
Price
Time
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Adjudication after the e-auction

• Evaluation of data from e-auction
• Meeting with centre directors, modelling
• Decision on total split
• Decisions by individual centres on product split
• Contracts agreed (safety margins)

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Outcome

• Saving of 55 million over 2 years compared to
  reference year
• 20 patients moved products (adults)
• Large shifts in market shares of different
  companies

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Key Elements

• A cohesive group of clinicians who all bought
  into the process
• Involvement of Deloitte (cost vastly outweighed
  by benefit of savings to DH)
• Years of regular committed data collection from
  centres about individual patients to the national
  database

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