With crucial changes to funding models and new formulary arrangements emerging at system and place levels, Oli Hudson shares the latest intelligence on how the drug funding landscape will be affected by reforms, and how industry must adapt accordingly

“Who selects, who authorises, who pays?”

When it comes to medicines funding, these are fundamental questions that go to the heart of how pharma companies gain market access at a local and national level – and the answer to each is changing significantly as a result of the reforms now underway.

In this article, we will look at how the landscape of drug funding is changing. While this is still an emerging picture, we will explore – via a series of ‘deep dives’ – how the reformed system will operate at different levels and what this will mean for industry’s approach.

Seismic shifts

Let’s start with the context – the fundamental shifts underway across the medicines management landscape.

The system we all know as an industry has been in place in a similar form for at least a decade. On one level, many drugs, especially those used in primary care, have been funded locally by the local payer, which since 2013 has been clinical commissioning groups (CCGs).

For rarer diseases, there is the specialised commissioning route, with these drugs funded nationally by NHS England. Meanwhile, for high-cost novel cancer drugs, there was the Cancer Drugs Fund, again funded centrally. And a few other drugs, such as those for hepatitis C, also get ring-fenced national funding.

Now, two seismic shifts are reshaping this landscape into something less familiar. The first is the demise of CCGs, which are being replaced by larger integrated care systems (ICSs) – which will, in turn, be supported by integrated care providers (ICPs), coalitions of local providers operating a level below system.

The second shift is at a national level, where responsibility for specialised commissioning will be gradually taken over by ICSs, thereby introducing regional differences in how specialised medicines are selected across the country.

A new Innovative Medicines Fund – supplementing the existing Cancer Drugs Fund – will simultaneously provide access to national funding for new and promising drug treatments that cannot be supported at ICS level.

Added to this are further layers of complexity. With CCGs consigned to history, the area prescribing committees (APCs) that traditionally held sway over local formularies will need to be replaced by something, and the current likelihood is that these APCs will move to ICS level too.

Furthermore, within ICSs there will be independent decision-making by integrated care providers (ICPs) or groups of providers on medicines use, to the extent that ICPs are developing their own formularies and ways of interpreting overall ICS medicines guidelines.

The relationship and interplay between these formularies at ICS and ICP levels, as we will see, will be crucial in determining regional context and decision-making processes.

Deep dive 1: the creation of ICS-level formularies

So what will this mean in practice? Let’s start at system level. While NICE-approved medicines must by law be funded by the NHS for appropriate use in appropriate patients, this by no means guarantees widespread prescribing, which is set through formularies devised and managed at local level.

Formulary development has for the past decade been carried out by area prescribing committees (APCs) attached to one or more CCGs. The composition of these committees includes commissioners, medicines management advisors, prescribing leads and pharmacists from CCGs and Trusts in roughly equal measure.

What happens to these decision-makers in the reformed landscape depends on local circumstance. Some APCs have already tended to cover a greater area than one CCG. In this case, their consolidation into a new ICS structure is likely to be evolution rather than revolution.

Things get trickier, however, where the ICS straddles multiple APCs. Here, the process of matching against the new system footprint will likely mean a more significant upheaval in terms of personnel and decision-making processes.

Deep dive 2: place and ICP-level involvement – the battle of the formularies

What, then, is happening within new ICPs? Here it is becoming apparent that at place level, formularies are also being devised, adding another layer of market access to navigate.

With formularies potentially in operation at both place and system level, the question is which will hold sway in determining local drug policy? The answer, unfortunately, will vary. Where local power is invested more centrally in the ICS, the ICS formulary is likely to continue the work of the APC without the need for separate placed-based medicines management initiatives.

Where the sense of autonomy at place level is greater, with strong voices from large teaching hospitals, for example, there will more likely be moves towards local interpretation and variation from the ICS formulary. And as Anusha Patel, the NHS Regional Homecare Lead for the East Midlands, explained at a recent Wilmington Healthcare webinar, this is already becoming custom and practice across key parts of the NHS as the new structures and relationships bed down.

Deep dive 3: the national funding landscape

Finally, what is changing at the centre? We know from NHS England’s Integrating Care White Paper, released in January 2021, that the direction of travel is for ICSs to have a ‘single pot’ of funding, which would bring together previously disparate acute, primary care and specialised commissioning (spec comm) budgets.

Recent statements by NHSE’s Amanda Pritchard have clarified the situation with specialised commissioning – with different ICSs taking on different levels of responsibility based on their ability and willingness to take over some specialised commissioning – with some services remaining at the centre.

The National Tariff review, meanwhile, explained how the aligned system would work when it came to drugs – specifically, it provided a list of drugs with a column explaining whether or not a drug would be covered by the aligned (block) payment.

Drugs from both the ‘exclusion list’ paid for by CCGs, and ones on the specialised commissioned list, paid for by NHSE, are now included on the new ‘block’ list, meaning that responsibility for funding these is now gradually moving over from the national system to ICSs.

There is an important caveat though: whatever the planning guidance and White Paper says, it may take a while for full transfer of spec comm powers to be transferred. Pharma will therefore need to operate in an environment of uncertainty and regional variation as the new ways of organising medicine funding bed down.

Four final takeaways

So, in short, this is a complicated, emergent and fast-moving picture. But there are still four important takeaways for pharma.

First: understanding regional context will be more important than ever. Knowing how ICP and ICS formularies have developed and what their relationships and ways of operating are, needs to be a vital part of your go-to-market strategy. This means that extensive stakeholder mapping will need to operate at both levels – ICS and ICP – to ensure pharma companies can influence across a more layered and nuanced decision-making process.

Second: pharma must recognise that this will likely involve a movement of people and some significant changes to the context in which they make decisions. Wilmington Healthcare is building a comprehensive database of contacts within ICSs and ICPs to help you understand who influences formulary decision-making at both levels.

Third: high quality data will continue to be paramount in influencing medicines management decisions at national, system and place levels. Clinicians are likely to have an enhanced role in determined how funding is used within a provider or system and they will need robust, comparable real-world data when deciding whether to introduce a drug therapy into practice.

Fourth: these are no longer hypothetical changes. These shifts are happening now, to varying degrees, across the country. It’s vital pharma companies get up to speed quickly, with the granularity necessary to take account of the different working relationships and decision-making processes being established.

Finally, this is – by necessity – a whistle-stop guide to what we currently know. Wilmington Healthcare’s Medicines Review has much more in-depth analysis on this, including how to access the data and intelligence you need to adapt your strategy. Find out more by visiting https://www.wilmingtonhealthcare.com/medicines-funding-report

Oli Hudson is content director at Wilmington Healthcare