The new NHS: a marriage of inconvenience?
pharmafile | August 13, 2013 | Feature | Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing |Â Â CCG, NHS England, andy lee, market access, quarry houseÂ
As NHS England tries to squeeze more money out of the healthcare budget to pay for specialist commissioning, Andy Lee takes a look at its relationship with CCGs, and examines the role pharma companies can play in supporting proper pathway analysis to help cash-strapped CCGs protect their budgets.
This April, NHS England (formerly known as the NHS Commissioning Board) published a range of policies to underpin its direct commissioning responsibilities. The 14 policies, published to coincide with the dawn of a new commissioning landscape in England, cover all aspects of directly commissioned services, including specialised and primary care.
The new set-up will mean the funding of many services treatments will move from CCG control to NHS England – in particular in specialist commissioning pathways such as MS, HIV, hepatitis and cancer.
This is likely to present new and significant market access barriers for pharmaceutical companies promoting high-cost, high-value medicines. It remains to be seen whether companies are doing enough to overcome these barriers, or if the full implications have yet been understood.
Shifting the balance
Historically, funding for treatments has come from one pot of money – either directly from a PCT, or from a top-sliced specialist commissioning allocation. This approach functioned like a happily married couple successfully managing a joint account.
But whilst the new interim policies don’t quite signal that a divorce has taken place, funding now sits in two pots – one with the CCGs, the other with NHS England – and the marital bickering over who pays for what is just around the corner.
For the first time, specialist commissioning has moved from being managed locally – by ten regional Specialist Commissioning Groups (SCGs) – to being managed centrally. The change was designed to standardise the access and funding of specialist services and associated medicines.
Although its aims are laudable, they might just lead to unintended consequences and, in some areas, have entirely the opposite effect. A national barrier has emerged; whereas previously PCTs were responsible for making decisions about whole care pathways, decisions for patients with specialist or rare diseases are now separated out and enshrined in national policy.
As such, the honeymoon period between CCGs and NHS England is already over. The squabbling is only likely to intensify.
The bickering couple
At the outset of the UK government’s plans for a reorganised health service, NHS England secured an estimated £12 billion for specialist commissioning from the commissioning budget. But it has subsequently been hungry for more.
In between the passing of the Health & Social Care Act and its official confirmation as a statutory body, NHS England quietly managed to commandeer an extra £8 billion from the collective CCG budget – taking its total budget to £20 billion and reducing CCGs’ to £72 billion. And, having discretely increased the size of its own balance, it’s going to fight tooth and nail over what it gets spent on.
Like a bickering couple, where one partner refuses to allow the other’s cigarettes and alcohol to come out of the household budget because they themselves neither drink nor smoke, NHS England is likely to claim funding responsibility for certain specialist commissioning rests with local CCGs. And since it writes the rules, it’s in a position to call the shots.
Ever keen to limit what it pays for, and also happily wearing the trousers in the relationship, NHS England is in dominant position in its relationship with local commissioning organisations. And so CCGs may increasingly find themselves required to foot the bill for services they believe fall under NHS England’s commissioning jurisdiction.
The happily married couple that once shared a joint account is facing a marriage of inconvenience.
Commissioning policies
The new policies around specialist commissioning are drawn together in the Prescribed Services Single Operating Model. The rationale is to provide a national approach to strategic planning and ensure the future commissioning and provision of prescribed (specialist) services is organised to provide better patient outcomes and avoid geographical variation.
Specialised services commissioning will be operationally delivered on behalf of NHS England by ten Area Teams – in an effort to maintain local and regional stakeholder relationships. To support the single model, NHS England has also published a swathe of commissioning policy documents designed to provide clear guidance for NHS organisations. A number of these documents have specific relevance to specialist commissioning.
In-Year Service Developments
A new policy to support ‘In-Year Service Developments’ – defined as ‘any aspect of healthcare which NHS England has not historically agreed to fund which will require additional and predictable recurrent funding’ outlines the criteria by which NHS England will agree to fund services outside the annual commissioning round.
However, the single operating model essentially represents a framework by which NHS England can hold onto the burgeoning purse it has acquired for itself. Effectively, the model loosely defines which specialist services it is prepared to pay for, and makes it clear that everything outside of that will be sent back to CCGs.
Individual Funding Requests
Interim guidance has also been issued to support Individual Funding Requests in England. Under the new policy, clinicians – on behalf of their patients – are able to ask NHS England for individual funding for treatments that are not normally commissioned by them under defined conditions. The policy applies only in circumstances where NHS England is the responsible commissioner. Again, the document outlines the criteria used to support NHS England decision-making.
Cancer Drugs Fund
Guidance to support the operation of the Cancer Drugs Fund (CDF) in its final year (2013-14) has also been amended to reflect the newly structured NHS. The CDF is now managed by NHS England as part of the Prescribed Services Single Operating Model.
The new policy document outlines national Standard Operating Procedures for management of the CDF, which will be managed regionally by four of the Area Teams responsible for commissioning Prescribed Services. Despite these apparent attempts at clarity, the CDF continues to create confusion.
NHS England recently published an updated CDF, increasing patient access to an additional three new cancer drugs – but questions remain about the transparency of their decision-making in determining what is funded by the CDF and what is ‘baseline commissioning’. At present, there is no baseline commissioning list – meaning that trusts and CCGs remain unclear as to the drugs for which they’ll have funding.
A relationship in conflict
In reality, the new ‘single model’ approach appears to have facilitated a clear conflict of interests. NHS England holds the purse-strings for commissioning, but is also a commissioner itself. And as a commissioner, it is likely to do all that it can to protect its own budget.
This developing situation will undoubtedly present pharmaceutical companies with new barriers to market access. As CCGs and NHS England inevitably argue and procrastinate over who pays for what, access to products may be delayed or restricted. The implications for companies with high value, specialist products are significant.
But although the challenge is not insurmountable, the questions remain: how real is the threat, and how big is the opportunity?
Specialist commissioning: the pharma perspective
The UK pharma industry is, of course, extremely interested in specialist commissioning. This is the area where the majority of high-cost drugs sit and, with most new developments likely to end up there too, pharma has a large role to play and much at stake. But, instead of that being funded from a largely unified budget managed by 150 PCTs, a major chunk of it is now essentially managed by one player – NHS England – and the bits around the periphery are managed by 212 ‘downtrodden’ spouses.
There is a huge degree of variability around the country – with some CCGs being more demanding than others. This, in turn, is creating further operational challenges for pharma in terms of targeting and approach. The solutions will depend upon a complicated combination of therapeutic area and localised commissioning priorities. To move forward, marketers must understand the national and local tensions at play in each individual relationship.
The most proactive will recognise the opportunity to help CCGs develop creative solutions to their challenges, and almost become a marriage guidance counsellor in the arrangement. Although the new commissioning policies appear certain to create confusion around funding, it’s equally unclear whether pharmaceutical companies have actually picked up on their significance. But the repercussions are potentially enormous.
The shift from local to national decision-making around specialist commissioning should dictate a wholesale change of approach for pharma. The old model, where companies focused operational activities at a regional level and conducted stakeholder mapping to understand the local health economy and inform their approach, will no longer work. Previously, there was not only huge local variation in care pathways, but the market was also fragmented into 12 SCGs.
This gave companies 12 shots at getting regional funding decisions. In the new environment, the decision has become a national one, and there might be just one shot at getting it right.
Proactive engagement
To progress, companies need to be proactive and conduct their market access work far earlier than has historically been the norm. They need to ensure their value propositions are ready for the April commissioning cycle, or else they will need to pursue ‘in-year service requests’ for funding, for which the business cases will need to be enormously robust.
Either way, whenever they make their approach, with the possible threat of having ‘one strike and you’re out’, companies need to ensure that they get it right.
There will undoubtedly be some companies that will avoid making the national approach and will prefer to continue to deal with CCGs. Some may take the view that the ‘one shot’ approach is too risky, and instead opt to work incredibly hard to jump through all the little hoops at the local level, in the hope that they pick up some piecemeal sales.
But in some areas, this won’t be possible as decisions will already have been taken out of CCGs’ remit. But whatever the disease area, in specialist commissioning areas, continuing to take the local approach will be an incredibly difficult task.
Ultimately, success will depend on the quality of a company’s data. The most effective companies will be those that can look at their product’s data objectively and confidently conclude that their business case is good enough to present at a national level.
Does their evidence stack up? Is the data good enough? Is the pricing right? Are the patient benefits worth it? And alongside this, they will understand that the objective is not only to secure national funding for their product, but to ensure that local pathways support it.
And they’ll know that beyond funding, there is still work to do on the ground to understand how they drive through patients along the pathway. Whether your customer is NHS England or a local CCG, the development of proper pathway analysis will be critical to the success of your drug.
Achieving market access in the UK remains a complex process. Changes to the commissioning landscape in England – and the potential for ongoing fractious relationships between CCGs and NHS England – will only complicate matters further.
But they also create a big opportunity for pharma companies to steal a march on their competitors. Marketers therefore have two choices; they can either do nothing and stick to old methodology, or they can consider how the new policies will effect them, and proactively shape their market access strategies to help them demonstrate real value.
One thing is for sure, the new NHS which began life on 1 April 2013 has brought the commissioning landscape into the real world. The challenge of securing access for specialist, high-value medicines will continue to shape the pharma/NHS relationship – in sickness and in health.
Andy Lee is Partnerships and Commissioning director at WG Consulting
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