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All things Pharma

Ready to do Business?…

Alan Jones reports on the Wellards Academy meeting for industry healthcare managers held last month at the King’s Fund in London.

As we begin the new NHS financial year, it is likely more turbulence lies ahead for both the NHS and the industry. An early look-see into the 2008/9 NHS year suggests tightening expenditure and calls for increased productivity. NHS Foundation Trusts will become mainstream and PCTs will be called to account as world class commissioners. For high-cost, low-volume services, specialised commissioners will be more active and early warning systems can be expected to be very focused in flagging up any new technologies in development in good time. The industry’s front line with the NHS in all these areas, the healthcare development manager (HDM), is now a key role and in recognition of this, the Wellard’s Academy hosts twice-yearly meetings for industry HDMs at the King’s Fund. This article reports on the latest meeting, held last month.

Building a new foundation

The meeting began with Malcolm Lowe-Lauri, Chief Executive of King’s College Hospital NHS Foundation Trust (NHSFT), who spoke on the changing managed market structure and outlined why Foundation Trusts were brought into place. This, he said, was to effect change through ‘supply-side deconstruction’ – the tentative deregulation of NHS hospitals at a time when other new players, such as the Independent Sector Treatment Centres, are entering the market.

“Specialised services are an important but often complex and costly part of the portfolio of services provided by the NHS. They account for about 10% of total PCT expenditure on hospital services and were reviewed by Sir David Carter in 2006”

So what are Foundation Trusts? Well, firstly, they are accountable not to the Department of Health but to an independent regulator, Monitor. They are allowed to keep their profits, have some borrowing powers and are more accountable to their local communities through a Board of Governors. So far, NHSFTs have performed well, albeit with some variation, particularly on the financial side. Most are in profit although some clusters of deficit remain. But NHSFTs have certainly looked for new solutions to old problems. There have already been some ‘consolidations’, such as the acquisition of Good Hope Hospital by Heart of England NHS Foundation Trust, while there is also current discussion in the Cambridgeshire health economy on a similar solution. NHSFTs pose a significant challenge for commissioners, as the NHS has historically been a supply-led environment. PCTs, said Lowe- Lauri, have been undersized and underpowered, and so NHSFTs may have an emerging leadership role.

Also in the mix are Academic Health Sciences Centres. This is because the current university hospital lacks scale and the pricing system for NHS services (Payment by Results) lags behind innovation. Tertiary hospitals have to compete globally for staff and academic funding streams are currently unstable. As such, we might see further consolidation to create mergers of hospital and university campuses.

Finally, Lowe-Lauri described novel partnerships to support service delivery and whether there might be a new role here for the private sector. Kings is actually currently in such discussions and, of course, as in all the various waves of reform over the last decade and more, innovators will innovate. So there could be possible investment opportunities for NHSFTs to get into primary care and even more mergers and acquisitions could be on the cards.

Asked if he would see industry representatives Lowe-Lauri said ‘probably not’, but some of his direct reports would likely be interested, though at a fairly high strategic level. He did make a plea to be made aware of any expensive technologies on the horizon! Two key issues for the industry are:
• Should HDMs account manage hospitals in the same way as they do PCTs?
• Should HDMs (and hospital specialists) treat NHSFTs any differently to non-NHSFTS, and if so what might this look like?

For more details on each of the 80 NHSFTs, please see www.monitor.nhsft.gov.uk.

Being world class

Dr Lise Llewellyn, Chief Executive of Berkshire East PCT, reflected on PCT commissioning. Dr Llewellyn described the recent history of PCT reorganisation, the fitness for purpose review and the DH’s vision of ‘world class commissioning’ – better health and wellbeing for all, better care for all and better value for all. PCTs will now have to demonstrate a range of eleven new competencies such as:
• engaging more effectively with the public
• collaborating more with clinicians
• fully assessing health needs
• securing procurement skills.

Dr Llewellyn described her ‘patch’ in this regard and compared Royal Windsor with Slough, where there are 140 languages spoken! All this is new ground for PCTs and though progress will not happen overnight, a new ‘assurance framework’ is being developed to address it. Refreshingly, she wondered about timelines: how long do PCTs have to reach world class commissioning status? She pointed out that US companies over here say that there are no world class commissioners anywhere in the world at the moment!

PCTs will be able to seek assistance by contracting out various bits of work to a range of private companies through a framework for external support of commissioning. These areas might include contracts negotiation and validation, engagement with the local community through social marketing, communication and business skills. Dr Llewellyn was keen to point out the opportunities here for pharmaceutical companies, and mentioned a couple of current examples such as health coaching and nurse support in respiratory disease.

Practice-based commissioning was explored, and it was pointed out that this was not an end in itself but more a lever for service redesign. Clinical engagement remains a problem and progress has been slow because of some cynicism amongst GPs. Again, Dr Llewellyn was keen to point out the opportunities here for companies. These are not about the promotion of products per se but about making explicit links to the benefits of appropriate medicines use – benefits such as the redesign of clinical pathways and freeing up other resources. There is also an opportunity around helping PCTs to get GPs to understand the benefits of service redesign and assistance with communication/marketing. When asked if she would see representatives, Dr Llewellyn said that she looked forward to such contact, albeit with a more strategic focus, rather than simply being ‘detailed’.

Being special

Karen Helliwell, Director of Specialised Services for the West Midlands Specialised Commissioning Group (SCG), offered a helpful review of current progress in this area. Specialised services are an important but often complex and costly part of the portfolio of services provided by the NHS. They account for about 10% of total PCT expenditure on hospital services, and were reviewed by Sir David Carter in 2006. His report recommended various changes, and these have largely now been implemented through the formation of 10 SCGs in England. In the West Midlands the SCG (hosted by Birmingham North and East PCT) controls a budget of £700m (bigger than some PCTs) and the Strategic Commissioning Group (which includes PCT Chief Executives) meets once a year to decide on resources.

But what actually are specialised services? A National Definition Set identifies some 35 services including many of interest to pharma (e.g. HIV, Renal). Generally speaking, such services are low-volume but high-cost and are provided in specialist centres covering populations of over one million and delegated by PCTs to the SCG. The Carter Review recommended a need for simpler commissioning structures and integration with other PCT collaborative functions (including PBC) and a new National Specialised Commissioning Group to give a more uniform approach across England.

So what are the challenges ahead? Ms Helliwell highlighted the rapid growth in new technologies belied by a finite (and static) level of resources. SCGs will therefore likely be at the centre of some difficult decisions around priority setting. In terms of the managed entry of new technologies, the proposed closer collaboration between the 10 SCGs might include possible HTAs where NICE does not get involved, for instance in the area of orphan drugs. Next steps for specialised commissioning will be:
• more robust need assessments for services
• the designation of specific providers for specialised services
• clearer clinical outcomes for the investment (and maybe some ‘decommissioning’)
• more openness and transparency in decision-making around getting information out to practice-based commissioners.

Ms Helliwell said that she would appreciate appropriate contact with the pharma industry, but said the timing of such contact would be critical as resources are allocated in January each year at the latest. Clearly there are new KOLs here for relevant companies.

“The NHSC’s purpose is the early identification of emerging new technologies, providing advanced notice to the DH and national policymaking bodies. As one of its customers is NICE, it is very important to the industry”

Over the horizon

Finally, Dr Claire Packer, Director of the National Horizon Scanning Centre (NHSC), now part of the National Institute for Health Research, looked at the important work of the NHSC. The NHSC’s purpose is the early identification of significant emerging new technologies, providing advanced notice to the English DH and national policy-making bodies. As one of its customers is NICE, the Centre is very important indeed to the industry.

Technologies are identified up to three years before launch, triaged, filtered and then prioritised in terms of any evaluation performed. The Centre would be particularly interested in any new drug on its way that could potentially significantly affect current treatment options and might require some planning for its introduction. For technologies that are monitored, there is consideration of clinical and cost effectiveness, as well as likely cost impact, but this is not a health technology assessment as such. The final publication is a Technology Briefing, and these are to be found on the Centre’s website. As there are now around 350 such briefings, you will undoubtedly find there a briefing on one of your drugs, especially if used in either cancer or coronary/ cardiovascular disease.

The NHSC will also be in contact with your company asking about your new pipeline drugs, being particularly interested in the timing of any application for licence and early details on marketing plans. And in terms of company relationships, Dr Packer said some are very constructive, others less so! In the successful ones there is one contact person with a good understanding of the process, able to pass requests to other relevant internal staff. More ‘difficult’ company relationships are where communications are poor, where there is no overall responsibility for information requests and provision and where confidentiality concerns seem paramount.

The NHSC has strong links with the National Prescribing Centre and UKMI, and its work has informed the recent NHS Cancer Strategy and the deliberations of the Health Select Committee Inquiry into NICE. The NHSC is also involved with the Ministerial Industry Strategy Group Longterm Leadership Strategy Partnership Working Group (out of which has come the recent guidance on joint working with the industry and the toolkit) in looking at ways of maximising the use of horizon-scanning information as an aid to local NHS planning. For more information visit www.pcpoh.bham.ac.uk/publichealth/horizon/.

The next Wellards Healthcare Forum will be held on 30 October 2008, again at the King’s Fund, and topics include SHAs and the Industry, as well as examples of joint working between industry and the NHS. The full programme can be found on the Wellards website.

Alan Jones is an independent healthcare policy analyst and adviser. He can be contacted at alan.jones28@virgin.net .

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