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, concludes a new report by the London School of Economics.

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.

"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.

The report was commissioned and funded by Shire.