1. Medicines Purchasing in Secondary Care in the NHS & the Market for Specials and Outsourced Services Kevan Wind, Medicines Procurement Specialist Pharmacist, London & East of England

2. What we will cover 1.Pricing and Procurement of Medicines in the NHS. 2.Specific arrangements in Secondary Care for medicines contracting. 3.Purchasing of Specials. 4.The Specials Market in the UK. 5.Outsourced Services.

3. Currently in Procurement we are Operating about 4 reorganisations ago. But it still works!

4. Reviews on Procurement Too Numerous to Mention Common themes Needs Higher ProfileNeed for Data / Benchmarking Not done wellLeadership StandardsControl of Demand

5. Pharmacy Procurement Though Seen to be an exemplar……… WHY?? Pharmacy systems provide usage data to high level accuracy Strategic Approach National contracting Strategic Awards Clinical Expertise allows Demand Side Management Formularies Clinical Interventions

6. This is a Good Job Because Medicines Spend High New Drugs Expensive and Increasing. Demand for Medicines Increasing

7. Procurement of Medicines is Complex & Highly Regulated PPRS Health Act Licensing System PL, ML, WDL OJEU Medicines Act Primary and Secondary Care Markets Global Pricing PAS Schemes NICE Commissioning Retrospective Discounts

8. A typical supply chain supplierWholesalerCustomer Pharmacy supply chain (therapeutic substitution) PatientWholesalersupplier 95% 100%95% 95% Mid Essex Trust recorded 55 problems in 2 weeks = 7hrs 55 mins to resolve = 0.1wte (of high level staff) Compelling Need to Supply

9. What We Should Do Ensure medicines are available to treat patients when required Source medicines of appropriate quality, minimising risks of patient harm through the recognition of patient safety objectives within the procurement process Avoid the creation of monopolies for hospital only products and associated risks to supply and cost

10. We deliver value for money by: Maximising leverage by aggregation of business that the Commercial Medicines Unit (CMU) competitively tenders on a phased and cyclical basis Maintaining the specific objective of competitively tendering for supply the moment medicines come off patent and generic competition emerges to generate maximum savings as soon as they are available Capturing any pricing advantages available for branded medicines by aggregating clinical commitment to achieve maximum available discounts, also known as ‘therapeutic tendering’

11. Secondary Care Procurement Department within the DoH Consists of expert buyers (one pharmacist) Work closely with procurement pharmacists within NHS Lone Survivor of NHS Supplies Commissions Guys MI Department for Work http://cmu.dh.gov.uk/

12. Contracting Organised Across England Generic Primary Care Medicines tendered on national contract Secondary Care Medicines phased contracts in six regions Transition All tender at most opportune time and slot into generic medicines programme. Branded National Contract for branded medicines THERAPEUTIC tender for some classes Now Looking more at services (e.g. dose banded chemotherapy, specials, homecare)

13. Tendering Process  Identify lines to tender  Place OJEU advert  Issues tender documents  QA Technical Sheets returned  Tender return date  Market Intelligence data collated for PMSG report  Advice from PMSG to contracting group  Adjudication process including offer clarification and PQA assessment  Resolve post tender queries  Award notification to suppliers  Contract documents issued to Trusts  Post award feedback/ review to suppliers  Contract start date

14. Award Criteria Governed by EU Public Procurement Legislation (which UK follow) Series of hurdles Quality of Product …………………………PQA Assessment Supply Performance………………………Prospective only for now Supply Channel Strategic Considerations Price See later on awards for services.

15. Therapeutic Tender Gives a Volume Price Matrix Drug2005001000 A£10£10£10 B£2£2£1 C£20£18£15 D£10£8£6 E£12£8£4

16. What this process IS An opportunity to apply leverage to branded medicines price. Only successful if clinicians can buy into the proposed changes. A chance to obtain better value for the same level of care for patients. Integral part of QIPP / medicines management systems in trusts / regions.

17. What this process is NOT An attempt to curtail clinical freedom. Saving Money at any price Procurement Process leading clinical choice. Anything the drug companies say it is.

18. BIOSIMILARS Most new medicines are going to be Biosimilars Neither generics or brands Probably best dealt with by therapeutic tendering. High need for objective product assessments.

19. National Pharmacy Supplies Group (NPSG) Leads Procurement Strategy for Medicines Consists of Chief Pharmacists one from each (old) region. Provide advice to Commercial Medicines Unit (CMU), concerning the cost effective purchasing and distribution of pharmaceutical products to the NHS in England. Act as a focal point for the NHS for pharmaceutical issues of a national nature and provide pharmaceutical advice accordingly. Acts as a link between pharmacists and CMU at national level. Advise the Department of Health and pharmaceutical industry on significant commercial matters.

20. Pharmacy Market Support Group The Anoraks Anticipates critical generic product shortages and proposes and co- ordinates preventative measures. Prevents potential market monopolies being developed Encourages new entrants into critical markets Assists in managing branded products that have just come off patent Monitors the effectiveness of contracting through benchmarking, audit and quality assurance Ensures items are market tested regularly Informs suppliers about the contracting process Develops strategies to discourage suppliers from undermining contracts Co-ordinates contracting with Wales, Northern Ireland and Scotland.

21. PMSG Operates through Several Sub Groups Branded medicines (including IV fluids) Generic medicines Transition medicines (near patent expiry)

22. Unlicensed Medicines Medicines Act assumes these are individual medicines for individual patients Therefore it is not appropriate to tender for these medicines. So rely on risk assessments and process control Unlicensed Medicines Policy in each trust Risk Assessment of each request for unlicensed medicine Sourcing from known and trusted suppliers Minimising the use of unlicensed medicines Buying the lowest risk unlicensed medicine

23. Remember unlicensed = DANGEROUS Still some licences (manufacturer and wholesaler) Caveat Emptor

24. Risk assessment Tool (Unused) on NELM Allows assessment of an unlicensed medicine & recording of result on line. http://www.nelm.nhs.uk/en/Communities/NeLM/Unlicensed-Medicines-Risk-Assessment-Tool/ Consists of Clinical Assessment 1.Comparison with licensed alternatives 2.Review of clinical evidence for usage in this indication. Product Assessment 1.Special or Import 2.Source of Product (manufacturer & country) 3.Product Assessment (based on formulae) 4.Labelling and Packaging 5.Support Materials 6.Price

25. Labelling and Packaging Guidelines Will be the same as a PQA assessment as undertaken by QA for standard contract lines. Need good labelling Need Good Packaging Need good PIL / SPC / support material Otherwise we won’t buy your products.

26. Contracting for Services E.g. dose banded chemotherapy, homecare, TPN. Even more risky Not necessarily any licence at all How do you define a service? So how do you measure the bid? AND How do you justify your decision once you have made it. (Against a legal challenge) More from Jan later.

28. NB there are specific issues for NHS units who may be tendering for this business You are both a supplier and a consumer & may have inappropriate access to pricing information. May need “glass walls” between the bidder and the adjudication panel to prevent conflicts of interest. NB when Birmingham tendered for a homecare service they resigned from the adjudication committee.

29. Questions?