Switching scripts: the impact of NHS reforms
pharmafile | June 15, 2006 | Feature | Sales and Marketing |Â Â NHS, healthcare, sales, strategyÂ
During 2006/7, the NHS in England will see an unprecedented level of change within primary care with the reconfiguration of Strategic Health Authorities and Primary Care Trusts, new developments to the GP contract, and the first full year of practice-based commissioning. Within secondary care, we will see the establishment of more Foundation Trusts, more Independent Sector Treatment Centres and the results of the review of specialist commissioning.
All these changes are expected within an environment of tight financial control, increased levels of patient choice and improvements in service delivery as outlined in 'The NHS in England: the operating framework for 2006/7'. All health economies will be expected to recover any overspends from 2005/6 and should be planning for a small surplus at the end of 2006/7 (see below).
The rest of this article will explore in more detail the likely impact of some of these policies on the pharmaceutical industry.
Six NHS priorities for 2006/7
Health inequalities focus on areas that will make the most progress in reducing health inequalities by 10% by 2010 with an initial focus on smoking cessation
Cancer waits to ensure a maximum waiting time of two months from urgent referral to treatment and of one month from diagnosis to treatment, for all cancers
18-week waits to ensure that by 2008 no one waits more than 18 weeks from GP referral to hospital treatment
MRSA to achieve year on year reductions in MRSA levels
Patient choice and booking to ensure that every hospital appointment will be booked for the convenience of the patient and that every patient is offered the choice of at least four providers
Sexual health to ensure that by 2008 everyone referred to a genito-urinary medicine clinic should be able to have an appointment within 48 hours
Payment by Results (PbR)
In 2006/7, the national tariff included within the PbR system will cover admitted patient care, outpatients and accident and emergency services. It will apply to services provided by NHS Trusts, Foundation Trusts and Primary Care Trusts, which are directly commissioned from PCTs, and all forms of consortia.
A number of services will be excluded from the tariff in 2006/7, including community services, mental health services, chemotherapy and primary care services.
A number of high-cost drugs are excluded from the tariff and the following criteria were used to identify the exclusions:
* The cost of the drug is high compared to the rest of the activity within the relevant Healthcare Resource Group (HRG)
*A sub-set of trusts within the HRG disproportionately provides the high cost drug (the benchmark used is that fewer than 20 providers are carrying out half of all activity)
For all excluded high-cost drugs, commissioners and providers should agree local prices, and local arrangements for monitoring the use of the drugs. These local prices will be paid as an additional payment to the relevant HRG or outpatient tariff. In all cases, commissioners and providers need to agree whether they will agree volumes and prices of drugs used as part of a Service Level Agreement or whether to operate on a case-by-case basis.
Any excluded drugs that are subject to national guidance from NICE will be expected to be used in line with this guidance. This means that for companies marketing drugs within the excluded list, an understanding of the cost and volumes agreed between local commissioners and providers will be imperative to help underpin local sales strategies and sales forecasting.
It could be seen as an advantage in that you will be able to clearly identify the total size of the market you are competing in and will be able to identify more clearly the customers that will influence drug usage once you understand where the budget is being held.
Practice-Based Commissioning (PBC)
PCTs are expected to achieve universal coverage of practice-based commissioning by December 2006 and they have to send monthly updates on progress towards this target to their Strategic Health Authorities.
All practices will receive information that will allow them to understand the implications of their clinical decisions. They will be provided with information about their historical referral patterns, historical spend and will see how these compare with other practices, both in the PCT and with the national average.
To enable practices to make better informed recommendations, PCTs are expected, from April 2006, to provide as much relevant information as possible to practices. Each practice will receive activity and financial information on a range of procedures including elective, non-elective, use of diagnostic and primary care services.Practices will be expected to use this information to manage their indicative budgets and they will need to decide which elements of healthcare services they wish to include within the budget. This indicative budget will be used as the basis for determining the scale of resources that the practice has freed-up for reinvestment. Practices will have to develop a PBC plan for the services included in their indicative budget, which will include the practices proposals for improving service and reallocating resources.
While the practice will be free to determine the range of clinical redesign it engages in, its indicative budget against which freed resources will be measured must include as a minimum:
* all services covered by the national tariff under payment by results in 2006/07
*prescribing
Practices are entitled to make recommendations on how to reallocate resources freed-up from their indicative budget made from service redesign and more cost-effective treatments. Resources freed-up must be used to fund services for the benefit of patients locally and may be spent on equipment, training, and clinical and non-clinical staff. Practices are allowed to retain 70% of all savings identified and the PCT retains 30% to meet wider health needs across the whole PCT area. However, in areas where the PCT is in financial deficit, some SHAs have directed that the PCT must use all identified savings to go towards paying off the deficit, and practices' financial rewards should be limited to payments from the nationally negotiated Directed Enhanced Services (DES) as part of the updated GMS contract. The DES pays a practice 95p per registered patient for taking part in PBC in 2006/7 and will pay an additional 95p per patient if the practice can demonstrate achievement within their PBC plan at the end of the year.
This all has important implications for your local sales teams and they should be mapping out how PBC is being implemented in their accounts by being able to answer the following questions:
* Where are the PBC clusters/localities in my region?
* What health care services have the practices decided to include within their indicative budgets?
* What is included in the practices PBC plan?
* How can our products and services help the practice achieve savings within their indicative budgets?
By answering these questions, you should be able to identify where you can align with the local PBC clusters and it will then be possible to approach them with services and solutions to help them achieve savings and meet the objectives of their PBC plan.
PCTs will be responsible for ensuring that the following arrangements are in place:
* All practices are receiving information that will allow them to understand their clinical and financial activity compared with local and national indicators
* All practices have received an indicative budget covering an agreed scope of services.
* All practices are receiving support from the PCT and the offer of an incentive payment to support practice-based commissioning.
* Governance and accountability arrangements for practice-based commissioning are in place and these are agreed in partnership between the practice and the PCT.
Drugs excluded from the tariff in 2006/7:
AIDS/HIV antiretrovirals
Antifungals
Antifibrinolytic drugs/haemostatic blood products
Betaine
Cytokine inhibitors
Drugs affecting bone metabolism
Drugs affecting the immune response
Drugs used in metabolic disorders
Drugs used in neutropenia
Growth hormone and growth hormone receptor antagonists
Hyperuricaemia associated with cytotoxic drugs
Immunomodulating drugs
Intravenous/subcutaneous human normal immunoglobulins
Somastatin analogues
Vasodilator antihypertensive drugs/primary pulmonary hypertension drugs
Viral Hepatitis B & C and Respiratory Syncytial Virus
GMS contract revisions
Revisions to the GMS contract came into effect in April 2006, and the main changes of note are developments to the Quality and Outcomes Framework (QOF) and a new Annex which covers excessive or inappropriate prescribing.
A number of new disease areas have been added to the QOF, including heart failure, depression and obesity.
Annex 8 of the revised GMS contract provides guidance for health professionals on excessive or inappropriate prescribing of NHS medicines. This provides PCTs with the opportunity to penalise practices for excessive prescribing based on cost or quantity.
The full details can be found on the NHS Employers' website (www.nhsemployers.nhs.uk).
GPs are expected to prescribe the most cost-effective medication for a patient and switching patients to a less expensive drug, usually within a therapeutic class, is seen as appropriate where there is no contra-indication and where there is evidence of equal or greater efficacy.
The guidance also states that switching significant numbers of patients' drugs within a therapeutic class should only be undertaken where the predicted savings can be sustained and there is no clinical disadvantage to the patient. The guidance then appears to contradict earlier statements by stating that it is appropriate for doctors to have the clinical freedom to switch individual patients to higher priced drugs for clinical reasons.
An example of excessive prescribing would include prescriptions where the drug is initiated or switched, with the effect that reimbursement is based on a product that provides a larger purchase margin for the prescriber, and the product selected costs the NHS more.
Another example would be prescribing that is varied according to the impact on reimbursement to the practice e.g. differences between patients to whom the practice directly supplies medicines and those to whom they supply prescriptions for dispensing elsewhere.
Prescriptions for excessive amounts of high cost drugs or high quantities of drugs that are significantly at variance with comparable clinical scenarios and the prescriber is unable to provide a reasonable explanation also fall into the same category.
Clearly, this guidance may present opportunities, and threats, to the pharmaceutical industry, and before any action is taken, it should be identified how each PCT is likely to approach the implementation of this guidance. The following is an example of how the guidance may be interpreted:
Inappropriate prescribing:
* Prescribing by brand rather than generic, except for identified and named drugs (e.g. lithium)
* Higher use than PCT norm of black triangle drugs where clinical evidence does not support improved outcomes or population benefit
Excessive prescribing:
*longer than three months for non-CDs
* longer than 30 days for CDs
* longer than 28 days for nurse prescribers
This interpretation does not appear overly excessive and threatening to the pharmaceutical industry, and therefore it is important for local sales teams to identify how the guidance will be implemented in their local health economy before taking any pre-emptive actions.
In conclusion, 2006/7 will be a year of unprecedented change for the NHS, particularly within primary care, and sales and marketing teams need to ensure they are closely mapping out the different levels of implementation that will undoubtedly exist between health economies.
Andrew Platten, MSc, MRPharmS, DipM, MCIM is Associate Director, Consultancy at HealthGain Solutions, a contract services organisation supplying specialist sales, nurse and pharmacist and PCT teams to the pharmaceutical industry and NHS.
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