1. Chairman, Pharmaceutical Market Support Group
Procurement in England How will the national medicines procurement service be improved? How will contracting arrangements change in the future?
Peter Sharott
Chairman, Pharmaceutical Market Support Group

2. Subjects Discussed Drug expenditure trends
National strategic approach to medicines procurement
Current key drivers for medicines procurement
National Pharmaceutical Supply Group (NPSG)
National standards for collaborative medicines procurement and management
Product categorisation
SHA Pharmacy and Medicines Management Groups

3. UK Annual Drug Expenditure (£m)
Data Source: IMS

4. Drug Expenditure Estimates 2009/10
UK - primary & secondary care
= £14.1 billion
England – primary care
Branded £6.1 billion (80%)
Generics £1.6 billion (20%)
England – secondary/tertiary care
Branded £3.0 billion (84%)
(includes Homecare at £750m to £1 billion?)
Generics £590m (16%)
Secondary Care Drug Expenditure is rising by about 14.5% p.a.
High-Cost PbR Excluded Drugs account for 50-60% of expenditure

5. National Strategic Approach to Collaborative Medicines Procurement & Management
Supply Chain Excellence Programme (SCEP) (2003)
A strategic framework to source pharmaceuticals for the NHS in England (October 2005)
Pharmaceutical Products and Services List (November 2008)
NHS Commercial Medicines Unit (January 2010)
Pharmaceutical Market Support Group sub-groups (March 2010)
National Pharmaceutical Supply Group (NPSG) restructuring (June 2010)
Commercial Support Units (CSUs) National Pharmacy Workstream Report (June 2010)
A strategy for collaborative medicines procurement and management for the NHS in England (August 2010)
National pharmacy lead for branded medicines (August 2010) (subject to business case agreement)

6. Collaborative Medicines Procurement in England: Organisational Chart from 2010
National Committees/Groups
Specialist Support
Procurement Groups
Trusts/PCTs
NHS Trusts
& PCT
Pharmacy
Networks
Clinicians
Clinical
PCT
Commissioners
Specialised
NHS CMU Pharmacy
Non-Executive Board
Commercial Support Units
6 x Regional
SCEP Groups
Generic Medicines
National
Pharmaceutical
Supply Group
Pharmaceutical
Market Support
Group
NHS
Commercial
Medicines
Unit
Simplified diagram of how Medicines Procurement is currently
SHA Pharmacy
Procurement Groups
Branded Medicines
Therapeutic
Rationalisation
QIPP
National Homecare Medicines Committee
Pharmacy Business Technology Group
Generic Medicines Sub-Group
Branded Medicines Sub-Group
Transitional Products Sub-Group
Specialist Medicines Sub-Group
NHS
Pharmacists
(Procurement,
QA, Production,
Medicines
Information
and Clinical)

7. Current Key Drivers for Medicines Procurement
NHS financial position and efficiency targets
National prescribing and medicines management initiati
Primary focus on secondary care generic and branded medicines
Market management
effective and robust supply chain management
efficient and transparent tendering and contracting processes
competitive markets with two or more suppliers
homecare: contracting, corporate and clinical governance
Collaboration with a wide range of stakeholders
Commercial Support Units
pharmaceutical leadership
governance and accountability for pharmacy activities

8. National Pharmaceutical Supply Group (NPSG) (1)
Chairman:
Andrew Alldred, Clinical Director for Clinical Support and Cancer Services and Director of Pharmacy, Harrogate and District NHS Foundation Trust
Membership:
PMSG Chairman and two other PMSG members
QC Pharmacist representing National Pharmaceutical QC Group
PCT Pharmaceutical Adviser
PCT Commissioning Pharmacist
Northern Ireland, Scotland & Wales representatives
Department of Health representative
NHS CMU General Manager, Principal Pharmacist & Lead Category Managers (2)
SHA Commercial Support Unit/CPH representative
NHS Trust Chief Pharmacists representing 10 SHA pharmacy networks

9. National Pharmaceutical Supply Group (NPSG) (2)
Terms of Reference:
To provide advice to the Pharmacy Non-Executive Board on the cost effective purchasing, supply and distribution of medicines and other pharmaceutical products to the NHS in England (secondary care) in order to ensure continuity of supply to patients 
To support national initiatives such as ‘Pharmacy in England White Paper’‘, Standards for Better Health’, ‘Better Health, Better Care’ and ‘Purchasing for Safety’, ‘Quality, Innovation, Productivity and Prevention (QIPP)’, ‘Commissioning for Quality and Innovation (CQUIN)’.
To work collaboratively with the PMSG and support this group with strategic advice.
To act as a focal point for the DH and NHS for the strategic procurement and supply of medicines of a national nature and provide pharmaceutical advice accordingly
To act as a strategic link between Pharmacists and key stakeholders in the supply chain.
To maintain a list of PMSG operational and advisory sub-groups, their terms of reference and reporting frequencies. To consider, evaluate and advise on the strategic impact of the issues arising from these groups.
To maintain links with primary care commissioners and providers.
To agree the strategy that will inform the annual work plan, objectives and defined outcomes for the PMSG

10. Draft National Standards for Collaborative Medicines Procurement and Management (1)
Contracts for branded medicines will normally be at SHA Pharmacy Procurement Group level, but, where appropriate, may be at sector or network level.
Contracting at individual NHS Trust level should only occur following agreement with the SHA Pharmacy Procurement Group.
Contracting decisions should take account of the potential impact on primary care prescribing patterns and costs and may actually be driven by the emerging commissioning agenda.
Annual and rolling work programmes should be developed in order to drive identification and implementation opportunities for clinically-driven initiatives and demand management projects, through close engagement with the local pharmacy and clinical networks, clinicians, public health specialists and commissioners.

11. Draft National Standards for Collaborative Medicines Procurement & Management (2)
Local guidelines for managing the financial impact of contracts for medicines that are covered by the PbR high-cost drugs exclusion list should be developed through consultation with the NHS Trust and PCT chief pharmacist networks and commissioners
Tendering and contracting for branded medicines should be undertaken by the NHS Commercial Medicines Unit; in those exceptional circumstances where it is necessary to undertake this activity locally at SHA, sector or individual NHS Trust level, there should be full compliance with EU procurement legislation.
Contracts involving homecare supply should comply with the standards and guidance developed by the National Homecare Medicines Committee.

12. Draft National Standards for Collaborative Medicines Procurement & Management (3)
NHS Trusts and contractors should fully comply with contract Terms and Conditions.
Branded medicines purchased at contract prices should not be sold-on to third party healthcare service providers without the written agreement of the relevant pharmaceutical manufacturer.
A formal relationship should be developed between the local Commercial Support Unit and the SHA Pharmacy Procurement Group covering the organisational structure, accountability, governance and funding arrangements

13. Product Categorisation Procurement-driven
National – Generic medicines
oral products
hospital-only oral products
Injectables
Transitional, branded to generic medicines
NHS CMU tendering and contracting
SHA/Regional
Branded medicines
Branded biosimilars
Mostly NHS CMU tendering and contracting
Some local tendering and contracting

14. Product Categorisation Clinically-driven
SHA Pharmacy & Medicines Management Group
Therapeutic rationalisation
Underpinned by procurement and supply chain management
Assessment of influence and impact on primary care prescribing
Alignment with QIPP, NICE and other national initiatives
Clinician and clinical network engagement
Commissioner involvement
SHA/sector clinical policy and protocol development identifying first, second and third choice
Framework agreements – commitment volumes and prices
Value-added services
Homecare services and community-based services
Pharmaceutical industry engagement and partnerships

15. Proposed Generic SHA-level Structure
CSU Board
Strategic Pharmacy Lead
(SPM or Procurement Specialist?)
Operational Pharmacy Lead
(SHA Procurement Specialist)
NHS Trust & PCT Pharmacy Networks
Clinical Networks

16. SHA Level Stakeholder Engagement
SHA Pharmacy &
Medicines
Management
Group
SHA & PCT
Pharmaceutical
Advisers
Hospital
Clinicians
and GPs
Clinical Networks
NHS
Commercial Medicines Unit
Commercial
Support
Unit
SHA and NHS Trust Procurement
Pharmacists
Pharmaceutical Industry
SHA, PCT & Specialised
Commissioners
NHS Trust
Chief Pharmacists