Delivering the maximum possible benefits to the NHS does not necessarily mean minimising prices, finds a new report
European public sector procurement policy may not seem like the topic most closely-aligned with improving patient outcomes, but changes earlier this year could bring it much closer to home for anyone concerned with patient care and public health.
In April it became mandatory for European Union Member States to adopt a new Directive on Procurement by public bodies and make it law. The Directive's aims are to remove unnecessary bureaucracy and improve the efficiency and effectiveness of the purchasing of goods and services. At the same time it wants to apply the brake to minimise the prices of items at the expense of quality and ongoing innovation.
The uncertainty of the aftermath of the UK's decision to leave the EU is not going to be resolved any time soon. Even once Article 50 is invoked to begin the Brexit process, no significant changes in procurement policies are likely to result from it in the next few years. Consequently, this is a European change that will continue to impact the UK for the foreseeable future.
So, while it can be difficult to get worked up about public sector procurement if you're not directly involved in the area, 'innovation' and 'quality' should make many ears within pharma prick up. That was certainly the case at Shire, which sponsored and funded a new study by the London School of Economics (LSE) that found choosing drugs on price alone would stifle innovation.
The report concluded that commissioning practices for health technologies in the UK must focus on maximising value rather than minimising cost to secure the best outcomes for patients and encourage investment in the country.
Driving health gains
Pharmaceutical advances are estimated to have driven around half of the 15-year gain in life expectancy at birth seen across the UK since the birth of the NHS in 1948. And yet, despite the UK being Europe's largest hub for pharmaceutical R&D, the amount spent on medicines and related products as a percentage of national income is below the OECD average.
The LSE's report, Tender Loving Care, highlights the future risk to public service spending if government revenues should fall, in response to Brexit or other economic challenges, and warns against the introduction of "narrowly focused ways of purchasing NHS medicines via tendering processes aimed exclusively at price minimisation" as a means of cutting outlay.
Purchasing approaches that focus on cost and do not value all aspects of medicines provision and use would "endanger constructive partnerships between health service clinicians, service managers and pharmaceutical companies," it argues, and could also work against the objective of the Pharmaceutical Price Regulation Scheme (PPRS) and NICE to protect the balance between affordability and fuelling R&D. Medicines tendering systems must be geared towards obtaining the maximum economic advantage for society, it concludes, selecting goods and services that "offer the highest level of net benefit over their working lifetimes, as against choosing the cheapest possible options regardless of overall value concerns".
Identifying the 'Most Economically Advantageous Tenders' (MEATs) will involve assessing the 'whole life' value of competing bids, and exploring all aspects of value potentially generated by partnerships between producers and users of products. "People with unmet therapeutic needs can gain both from fundamental scientific progress and from developments in the ways that established treatments are used to optimise individual health outcomes," says the report.
As such, it recommends that "explicit mechanisms" should be in place to retain a healthy balance between promoting medicines affordability and incentivising innovation. One way to achieve this could be the creation of a system for research companies to have their performance as 'NHS Innovation Partners' evaluated, with their rankings then used to help weight MEAT procurement decisions.
One of the therapy areas cited in the report is haemophilia care, which it says highlights the public interests involved in ensuring good medicines purchasing practices. For children born with moderate to severe haemophilia, life expectancy has risen from a little over a decade in the 1950s to almost 80 years today. That exceptional increase was possible despite the NHS being slow to offer UK patients access to safer recombinant treatments in the 1980s and 1990s. Now, "good purchasing practices help NHS haemophilia care standards to be amongst the world's best, while keeping treatment costs affordable", the report notes.
Underpinning this drive to excellence in care are the use of sophisticated contracts that aim to protect clinical freedom and patient choice, while also ensuring individual purchases provide value-for-money. But even in this one therapy area there is still room for improvement, the LSE says. "Currently, further health outcome improvements could be achieved by improving the monitoring of clotting Factor levels and personalising treatment in ways that minimise the incidence of unwanted bleeding episodes."
The report goes on to use haemophilia care as an illustration of an area in which further joint working between "clinicians, pharmaceutical company staff with relevant expertise and the consumers of medicines" could further enhance health outcomes and the overall cost-effectiveness of care. Cutting the red tape "Pharmaceutical companies offer not only progressively more effective medicines, but can also to help ensure that their products deliver the maximum possible benefit to patients," said report co-author Professor David Taylor.
"Bureaucratic commissioning is not always the best way of promoting optimal care delivery. Unduly narrow, price minimisation rather than value maximisation focused, approaches to pharmaceutical purchasing could harm patient interests and weaken the confidence of potential investors in Britain," he stressed.