1. Procurement and Distribution Interest Group and the National Homecare Medicines Committee Jointly presents: Medicines & Homecare Symposium Thursday the 15 th January 2009 at “The National Motorcycle Museum”, Birmingham

2. Allan Karr, MRPharmS, DipM, MBA. Chairman, National Medicines Homecare Committee and PDIG What are “Medicines Homecare Services” and why have these services expanded?

3. Myths of the Homecare Medicines Supply Service “Like politics and religion……e.g. variations around UK.” “Like politics and religion……e.g. variations around UK.” “A simple process…….….just fax a prescription to the homecare provider…….” “A simple process…….….just fax a prescription to the homecare provider…….”

4. What are “Medicines Homecare Services” and why have the services expanded? Description of the service and benefits What is the market size? What are the market characteristics? Models of Distribution Governance arrangements Outstanding issues

5. Aim is to : Medicine Homecare Services “Support patients with chronic and acute illnesses in the community.”

6. Description of Service Supplier perspective Technology/ Intervention perspective Clinical risk perspective

7. What is Homecare? Homecare is the provision of medical supplies and/or clinical services to patients in the community. Clinical homecare typically involves the provision of medication, medical supplies, nursing support and clinical waste collection to patients at home.

8. Medicines Homecare – Technical View High Tech –Compounding and Nurse Support TPN IV Cancer treatments Desferrioxamine Infusors Lyposomal storage disorder

9. Medicines Homecare – Technical View Low Tech - Dispensing and Delivery Renal replacement therapy Enteral feeds Anti Retrovirals EPO Oral anti cancer agents

10. Increasing value added service Delivery Process Nurse Administration Increasing Risk + Increasing Cost + Increasing Complexity Dispensing Process Delivery Process Dispensing Process Delivery Process Dispensing Process Nurse Administration Preparation Aseptic Risk Management Potential

11. Existing Therapeutic Areas CardiologyOncology Cystic fibrosis DermatologyGastroenterologyHaematologyHaemophiliaHIVHypopituitarism Lyposomal storage disorders Multiple Sclerosis Post-menopausal Osteoporosis Primary Immunodeficiency Disease Renal dialysis and transplant Schizophrenia Respiratory disease Rheumatoid arthritis RheumatologyThalassaemia

12. Current medicinal products supplied via Homecare Services Home parental nutrition IVF Treatments Adult growth hormone MilrinoneTrastuzumabEpoetinAnitbioticsEtanerceptEfalizumamMethotrexateAdalimumabImigluceraseEpoetin Blood coagulation factor VIII & IX Anti-retrovirals Somatropin(human growth hormone) DesferrioxamineInterferonBeta-interferonTopotecan Teraparatide IV/SC immunoglobulin Darbepoetin Immunosuppressants for renal transplant Clozapine TerbutalineAdalimumabInfliximabTeraparatideMethotrexate DesferrioxamineHerceptin

13. Medicines Homecare - The Services Future Developments? Delivery of chemotherap y regimens Delivery of more biological therapies Clinical Trials Blood Transfusions

14. Homecare Service Process 1. Consider product and type of service 2. Methodology for recruiting/registering patients 3. Prescription process e.g. clinical check, chasing Rx 4. Contract with Homecare provider 5. Communication process between all parties 6. Medicine purchased 7. Delivery and preparation/administration of medicines e.g. signed D/N. 8. Agree performance standards 9. Invoicing and Payment 10. General/Value added e.g. Collection of waste, education and support. Data management, Training, Clinical Governance & Audit

15. What are the benefits of Medicines Homecare? Organisation Discharge patients sooner Discharge patients sooner Reduce non-essential OPD appointments & admissions Reduce non-essential OPD appointments & admissions Moves workload from dispensary to administration Moves workload from dispensary to administration Reduced waiting times Reduced waiting times Financial? Financial? Patient Increased choice Increased choice Time saving - no waiting in OPD Time saving - no waiting in OPD Reduced travel Reduced travel Convenience Convenience Quality of life – less hassle Quality of life – less hassle Less risk of HCAI Less risk of HCAI Pharmacy Capacity gains Capacity gains Reduces stress in the dispensary Reduces stress in the dispensary Refocuses skill mix and clinical priorities Refocuses skill mix and clinical priorities Reduced waiting times for non-home care patients. Reduced waiting times for non-home care patients. Primary care Policy Policy Capacity Capacity Efficiency Efficiency Control Control Patient choice Patient choice Financial Financial

16. Benefits/Drivers Pharma Industry Perspective Company is closer to the patient Ability to offer reduced prices to customers without loss of profit (a) Increased competitive advantage (a) Increased competitive advantage (b) Increased use of high cost medicines (b) Increased use of high cost medicines Fewer control systems? Increased opportunity for DTC marketing? More control over the supply chain

17. What are “Medicines Homecare Services” and why have the services expanded? Description of the service What is the market size Market characteristics Models of Distribution Governance arrangements Outstanding issues

18. What is the size of the Medicines Homecare Market ? Difficult to assess – lack of data. Significant growth in market (products, services, purchasers and suppliers) over last 10 years which is continuing further. Approx £500 million sales Nationally over 100,000 patients Over 150,000 patient visits

19. What are “Medicines Homecare Services” and why have the services expanded? Description of the service What is the market size Market characteristics Models of Distribution Governance arrangements Outstanding issues

20. LOCALISEDCOMMERCIALISED 1 Provision by community pharmacist Provision by a commercial home care company. 2 Medicine prescribed by G.P.’s. Medicines often prescribed by hospitals only 3 Ad hoc value added service Service planned and requires management 4 Patient selects service provider Organisation selects service provider 5 Wide range of medicines involved Specific medicine(s) involved 6 Oral, low cost, less technical High technology medicine with high cost 7 Low cost service – often provided free of charge High cost service – service fee from homecare provider 8 No detailed legal contract required Legal Contract required 9 Consumer driven market Industrial/commercially driven market 10 Medicine dispensed as a single process Medicine could be dispensed as part of a batch 11 Delivery tends to be the only additional service offered. Multiple services can be offered e.g. nurse administration, aseptic preparation, diagnostic testing. Characteristics of the Homecare Market

21. Current list of Homecare Providers Air products Calea Uk Careology Central Home Care (Unichem) Flexible Home Care Health Care at Home/ADS Evolution (AAH/Celesio) Intercare Nutricia Clinical Care Bupa (ex Clinovia) Polarspeed Mawdsley Brooks Willow Movianto UK (Rebrand from Healthcare Logistics) Lloyds Pharmacy (taken over Pharmagen)

22. Vertically Integrated Suppliers Air Products BOC Baxters Fresenius Gambro Merzpharma Homecare Suppliers

23. What are “Medicines Homecare Services” and why have the services expanded? Description of the service What is the market size Market characteristics Models of Distribution Governance arrangements Outstanding issues

24. Key Players in the Pharmaceutical Chess Game Chief Pharmacist MHRA Dispensary manager HCC & CSCI Procurement PCT’s Commissioners Home care providers Wholesalers Formulary Pharmacist Patient Services RPSGB Production manager

25. Channels of Distribution WholesalersRetailersDistributorsInternet and now Homecare….a new channel?

26. Medicines Supply Chain Hospital pharmacy Production unit R&D Manufacturer Original patent holder Specials Manufacturer Generic Supplier PI Supplier DISTRIBUTORDISTRIBUTOR WHOLESALERWHOLESALER & Patient Production unit Community pharmacy Dispensing doctor Homecare delivery service Ward MEDICINES MANAGEMENT EMEA MHRA EMEA MHRA

27. The Procurement Framework and Contracting Models (1) Host Trust Tender Model Trust selects the service Specification developed and tendered Trusts selects a preferred provider (2) Pharma Company Model Pharma tender or selection New distribution route No NHS involvement

28. Pharmaceutical Manufacturers Homecare Supplies Hospitals/ PCT’s/CPH’s Tendering Relationship? No Tendering Pharmaceutical Manufacturers Homecare Supplies Hospitals/ PCT’s/CPH’s Tendering Relationship? No Tendering Models of Distribution

29. Hospitals/PCTs/CPH’s Pharmaceutical Manufacturers Home Care Supplies Role of the National medicines Homecare Committee

30. What are “Medicines Homecare Services” and why have the services expanded? Description of the service What is the market size Market characteristics Models of Distribution Governance arrangements Outstanding issues

31. The Governance and Quality Issues - with outsourcing comes risk Services are not the same as products e.g. Absence of inventory from trust perspective People as part of the service Greater involvement of customers Greater difficulties in maintaining quality standards Importance of time factor

33. The Clinical Governance Framework Establishment of quality systems and performance standards Risk management e.g. assessment and risk reduction techniques Inclusion in Trust Clinical Governance procedures

34. The Governance and Quality Issues – with outsourcing comes risk Prescription checking and validation Aseptic preparation and administration Technical and clinical advice Responsibilities and liabilities of each party Performance standards Error and complaint monitoring

35. What guidance is there? Disease Management EL(94)94 Finance Issues Community Pharmacy Patient Confidentiality Medical Ethics and Patient care Impact on PPRS

36. The Governance and Quality Issues – Managing the risk Robust and effective contracts Examples of how do you ensure the quality status of the provider? –MHRA licensed –RPS registered –NHS QA audits –ISO 9000 –Professional standards

37. Emergence of the National Medicines Home care Committee and the National Clinical Homecare Association

38. National Medicines Homecare Committee – Aims and Objectives 1. Development of effective service level agreements and contracts 2. Monitor adherence to principles of EL94(94)- Disease Management and effective Clinical Governance 3. Encourage competition in the market place 4. Promote improvements to in-house pharmacy and home care supplier systems 5. Provide useful information and documentation 6. Develop performance standards 7. Encourage audit, through Regional QC network, according to agreed home care service standards

39. Documents Being Developed by the National Medicines Homecare Committee 1. List of homecare suppliers 2. List of products and therapeutic areas 3. Definition of types of home care service 4. Summary of process 5. SWOT – posting versus delivery 6. Policy on home care 7. VAT position 8. National contract – core delivery and dispensing 9. Invoicing Processes

40. Documents Being Developed by the National Medicines Homecare Committee Home care contract specifications Contract Adjudication – Decision Analysis document Implementation tasks List of organisations/individuals responsibilities Performance standards Audit process Home care services reports

41. What are “Medicines Homecare Services” and why have the services expanded? Description of the service What is the market size Market characteristics Models of Distribution Governance arrangements Outstanding issues

42. Outstanding Issues NHS strategy e.g. private sector or do-it- yourself, don’t do it all. Confirmation/clarity on VAT position Agreed product list for home care Ensure adherence to principles of EL94(94) and Clinical Governance. Operational systems need improving e.g. employing home care co-ordinators, electronic links with home care suppliers. Data management

43. Outstanding Issues Clarification of PCT/GP/Commissioners role Fit in new financial structure e.g.Tariffs Relationship between home care service provider and manufacturer Managing a contracted service effectively Development of common contracts Development of performance standards What should be the audit arrangements? Unbundling of costs

44. Summary Medicines Homecare Summary Medicines Homecare Significant benefits to stakeholdersSignificant benefits to stakeholders Significant risks – need to be managedSignificant risks – need to be managed Issues to be resolved in the marketIssues to be resolved in the market Undertaken robustly and efficiently will deliver effective and efficient patient careUndertaken robustly and efficiently will deliver effective and efficient patient care

45. Useful resources National Clinical Homecare Association www.nchamedical.co.ukwww.nchamedical.co.ukwww.nchamedical.co.uk National Homecare Medicines Committee –Homecare medicines eLibrary/documents –http://nww.pasa.nhs.uk/PASAWeb/Productsands ervices/Pharmaceuticals/Homecaremedicines/ http://nww.pasa.nhs.uk/PASAWeb/Productsands ervices/Pharmaceuticals/Homecaremedicines/http://nww.pasa.nhs.uk/PASAWeb/Productsands ervices/Pharmaceuticals/Homecaremedicines/

46. Pharma Industry Issues? Credit terms/Financing of channel members Management of information Promotion e.g. DTCA Costs Terms and conditions/responsibilities of new channel member e.g. stock/physical possession/title Relationships with stakeholders e.g. role of ABPI, home care group, MHRA, DoH. Performance standards/Risk/Audits

47. Benefits/Drivers Customer Perspective Patients Efficient supply chain route for bulky products No hospital visit and out-patient waiting Reduced risk of Infection Increased patient choice Hospital Trusts & Pharmacy Services No out-patient visits and costs Improved use of hospital beds Some savings on VAT Contribution to cost improvement scheme Reduction in out-patient workload Government Our health, Our care, Our say

48. Key issues to be resolved or managed Transparency Unbundling of costs Cost of services and products DataQualityProvision QualityServicesAudit Performance standards The workforce Training NHS “Drain” Control Keep it!

49. Impact on Wholesaling 235,000 UK deliveries/week by BAPW wholesalers 2 billion items distributed/year 235,000 UK deliveries/week by BAPW wholesalers 2 billion items distributed/year High volume/low margin business, but efficient route from manufacturer to patient and one-stop supplier to pharmacies High volume/low margin business, but efficient route from manufacturer to patient and one-stop supplier to pharmacies Manufacturer’ s warehouse/pr e-wholesaler Manufacturer’ s warehouse/pr e-wholesaler Communit y Pharmacy Communit y Pharmacy Patient Full line Wholesale r Full line Wholesale r

50. What are the drivers for medicines homecare? Policy Treating patients closer to home PatientsChoiceConvenience Quality of Life NHS Constraints Capacity Waiting times Bed occupancy Admission rates Length Of Strength FinancialInfrastructure Product costs (PbR)

51. What services does a Medicines Homecare Supplier provide? Dispensing Compounding of a medicinal product Delivery and product monitoring Administration Collection of waste Patient and family education and support. Data management and support

52. The Genzyme Case Genzyme vs. Healthcare at Home (2003) OFT upheld HCAH complaint that Genzyme infringed UK Competition act Complex case around bundling of drug price with the homecare services delivery and applying a margin squeeze on competing firms Genzyme in a monopoly situation with Cerezyme (90% of Gauchers disease market) Would only sell Cerezyme at the bundled price and adjudged to thus be anti competitive More likely that companies will offer a drug at an unbundled product price

53. Homecare – Example Process Patient reviewed by clinician Invoice and delivery note to pharmacy Invoice matched with delivery note Rx sent to Homecare provider Prescription prepared by Homecare provider Medicine / service delivered to patient Prescription written Prescription validated Patient registered / Consented Patient Choice Patient signs delivery note Order generated Passed for Payment

54. VAT and Medicines Homecare Medicines dispensed to individuals for their personal use, dispensed by a registered pharmacist against a prescription issued by a registered doctor (or nurse for administration) in their own home (or residential home) are zero-rated. Medicines dispensed to individuals for their personal use, dispensed by a registered pharmacist against a prescription issued by a registered doctor (or nurse for administration) in their own home (or residential home) are zero-rated. Pharmacy dispensing services provided by a registered pharmacist are exempt from VAT Delivery services are subject to VAT at the standard rate Where two or more of the above elements form part of a composite supply, the predominant element will determine the VAT liability of the whole.

55. The Governance and Quality Issues - with outsourcing comes risk Clinical and Technical Financial Responsibilities and liabilities of each party Prescription validation Ongoing Monitoring Product Quality (especially unlicensed medicines including specials) Quality of advice Training of staff Quality systems Error monitoring Performance standards Transport and delivery Product and service costs Tendering Compliance with SFI’s and SO’s Invoice matching Order generation Data management and reporting

56. What is the market like? Traditional Homecare/ DispensingFP10 (HP) Traditional Homecare/ DispensingFP10 (HP) Acute Chronic High Low Low High Distribution Type of Treatment £ / Pack Volume

57. Best Practice in setting up Homecare Maintain control Pharmacy led approach Tender when appropriate Define key processes under SLA / contract service description Training Patient registration Prescription process Delivery of medicines Communication chains Performance standards Procurement Invoicing and payments Audit Liability / legal issues Understand the risks and manage them Ensure appropriate resources

58. Procurement and Distribution Interest Group and the National Homecare Medicines Committee Jointly presents: Medicines & Homecare Symposium Thursday the 15 th January 2009 at “The National Motorcycle Museum”, Birmingham