Getting to know the new NHS in England

The NHS in England has undergone a major transformation during 2013 as a result of the Health and Social Care Act 2012. There are new agencies and structures that are influencing how the NHS is working with the pharmaceutical industry. Even the much older and established National Institute for Health and Care Excellence (NICE) saw changes.

With change come opportunities for new working relationships: there are plans for new partnership agreements and Industry Councils. No matter how well these go, it will likely be the relationship between industry and the Government that will shape how the industry fares in the future.

Introduction

The NHS spends around £1 in every £10 on branded medicines. Given that spend, the relationship between the NHS and those that research, develop and manufacture branded medicines is always going to be important. That’s aside from the value of bringing new medicines to the core business of the NHS: improving health.

With the Health and Social Care Act of 2012 came changes that are showing the beginnings of a new relationship between the NHS in England and the pharmaceutical industry.

NHS England – buyer of orphan drugs and key influencer for the rest of the system

NHS England has taken over and centralized a number of areas of responsibility in the revised structures of the NHS in England. They buy services themselves instead of regional agencies.

They also set the tone for Clinical Commissioning Groups (CCGs) (groups of general practitioners who buy care for their defined population from a limited budget) by setting the national contracts that they must use, and their budgets.

NHS England’s direct influence is via:

• specialised services worth £11.8 billion – some of this is on orphan drugs.

• the Cancer Drugs Fund – a ring fenced fund worth £200million a year, now centrally managed by NHS England.

And NHS England is beginning to flex it’s new found muscle: there is a volume agreement on Stribild for HIV, and confidential commercial ‘schemes’ agreed for some CDF products.

There are early signs of a new relationship forming between industry and NHS England. There is to be a written Association of the British Pharmaceutical Industry (ABPI) working agreement with NHS England and an Industry Council. This is according to changes under the Pharmaceutical Price Regulation Scheme (PPRS).

The 2014 PPRS is the latest voluntary agreement between the ABPI and the UK Government. The partnership agreement is likely to include ways of limiting additional rebates within the NHS over and above the national agreements that are in place.

National Institute for Health and Care Excellence (NICE) – more independent and building a new partnership model

Under the reforms, not only did NICE have a minor name change (from Clinical to Care) NICE also became more independent of Government. Although that changes little on the face of it, after all, NICE is essentially largely untouched in operational terms, it might embolden Appraisal Committees.

The Committees are those people behind the logo that really have to weigh the evidence from companies, patients, and others. They face the often stark choice of limiting access despite the Daily Mail headlines.

“The NHS spends around £1 in every £10 on branded medicines.”

NICE too has been working on a partnership agreement with the ABPI and an Industry Council. The draft agreement includes principles to:

• Work together openly and constructively

• Cooperate actively

• Ensure the content and spirit of the partnership agreement is reflected in each other’s business and implementation plans and strategies

• Brief each other and alert each other to emerging issues

• Subject to reasonable confidentiality restrictions, advise each other of matters which are / are likely to be the subject of media coverage

The agreement also nods to the wider influence of the industry: their influence on the health of UK plc.

It also highlights that it is the Department of Health that sets the legal and policy framework that NICE must work within: reminding NICE of the limits of their independence. The Industry Council will monitor adherence and meet twice a year.

It’s likely that the topic of Value Based Pricing will come up: NICE is going to make changes to implement what we might call ‘Value Based Assessment’ since they’ll be changing their approach to assessing value but have no role on price.

Clinical Commissioning Groups – local buyers and prescribers

More difficult to unpick is how the relationship between these 211 groups across England are working with companies and industry overall (not to mention the many others that support them from Commissioning Support Units, Clinical Senates, Clinical Networks etc – the architecture of the new NHS feels a little overwhelming!).

“Under the reforms, not only did NICE have a minor name change (from Clinical to Care) NICE also became more independent of Government.”

It’s not clear what the new PPRS will mean to them. At the national level spend can’t go above an agreed amount: that means industry pays back into Government coffers. But does that mean that prescribers within CCGs will prescribe more or less? Or will their budget administrators (since they’re not always the same people) be keeping an eye on medicine spend just as they have always been?

Hospitals – prescribers

Hospitals are in a similar position to the CCGs: they have always had to be aware of getting agreement from their commissioners in the past before spending on some of the expensive medicines for rare diseases, for example.

There’s little reason to believe that they’ll be freed up even with the new PPRS. Plus in some cases, they’ll have to show more detail under audits required by NHS England when they are prescribing orphan drugs. Industry has much insight on monitoring drug use, so there may be some learning to be shared.

“Although not part of the reforms, these membership organisations of different parts of the NHS are part of the new ways of working to encourage innovation.”

Academic Health Science Networks (AHSNs) – membership organisations working to speed adoption of innovation

Although not part of the reforms, these membership organisations of different parts of the NHS are part of the new ways of working to encourage innovation. Hopes for them specifically include building strong relationships with industry.

There are 15 across England: we’ll have to wait and see how they’ll work and if they’ll hasten adoption of innovation as hoped by many.

But the relationship with Government will, as ever, be important despite the more (supposedly) de-politicised NHS following the reforms. The latest PPRS says that Government will hold NHS England to account for its commitment to innovation, for example. And it is Government that industry will lobby hard to secure access to medicines in light of offering certainty on the branded medicines bill through the latest PPRS: something we’ve already seen with nine major companies signing an open letter published in the Telegraph on the problems they see across the UK.

 

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About the author:

Leela Barham is an independent health economist and policy expert who has worked with all stakeholders across the health care system both in the UK and internationally. Leela works on a variety of issues: from the health and wellbeing of NHS staff to pricing and reimbursement of medicines and policies such as the Cancer Drugs Fund and Patient Access Schemes. Find out more here and you can contact Leela on leels@btinternet.com

How will the relationship between industry and Government shape pharma in the future?