Peter Sharott Director, East & South East England Specialist Pharmacy Services

1. Peter Sharott Director, East & South East England Specialist Pharmacy Services

2. Subjects Discussed • Background to the London Procurement Programme (LPP) • LPP Pharmacy & Medicines Management Workstream • Structure of the project • Workplan and key areas of activity • Commissioning Context • London HIV Commissioning Arrangements for Prescribing and Medicines Management • South London Therapeutic Tender for Erythropoesis Stimulating Agents (ESAs) • Lessons Learned from ESA Tendering • Key Success Criteria

3. LPP Formation & Structure • London Procurement Programme set in April 2006 with the formation of the new London Strategic Health Authority (NHS London) as a short-term alternative to a pan-London Collaborative Procurement Hub or similar arrangement • Identify savings opportunities across trusts within NHS London and evaluate and implement accelerated savings initiatives • Deloitte responsible for project management • LPP Steering Board – strategic board chaired by Dr. Jane Collins (CEO, Great Ormond Street Hospital). Peter Sharott represents P&MM • LPP Operational Board – Project Director, Heads of Procurement, Directors of Finance, PaSA and Deloitte. Phil Aubrey represents P&MM. • Pharmacy & Medicines Management Steering Group

4. LPP Vision To drive the delivery of substantial savings to NHS Trusts within NHS London enabling funds to flow directly to front line services and to create a leading purchasing capability across London that delivers significant benefits for better healthcare in the long term.

5. LPP Mission • To drive the LPP through all London based Trusts by means of a dynamic, professional and collaborative team approach focussed on sound business case analysis and a strong result based ethic. • To prepare Procurement in London for the development and implementation of a more permanent, high performing organisation structure in the medium term.

6. LPP Accelerated Workstreams • IT and Telecoms • Desktop computer • Computer software • Mobile tariffs • Land to mobile tariffs • Medical & Surgical • Pacemakers, prosthetics • Renal dialysis solutions and equipment • Stents • Estates and Facilities • Energy • waste • Professional Services • Interpretation services • Legal services • Pharmacy & Medicines Management

7. Pharmacy & Medicines Management Workstream (1) • Managed by NHS pharmacy staff through the Steering Group on behalf of all NHS Trusts and PCTs • All licensed medicines procurement managed through the Steering Group • Compatible with A Strategic Framework to source Pharmaceuticals for the NHS in England published in October 2005 • Identification of savings opportunities on branded medicines primarily through therapeutic rationalisation at an appropriate level; pan-London, sector or specialist clinical service (e.g. renal) • Scoping opportunities for homecare, enteral feeds, contrast media, unlicensed medicines • Tendering and Contracting carried out by PaSA pharmacy team • Use existing networks to disseminate information and facilitate implementation – Senior Pharmacy Managers, PCT Leads, Procurement and Clinical Pharmacy networks • Build on existing trust and sector initiatives and facilitate wider implementation through a light-touch, non-directive approach

8. Pharmacy & Medicines Management Workstream (2) • Engagement with clinicians and commissioners • Savings Targets • All savings attributable to the trusts • Realistic and achievable, with an understanding by LPP Board that they are not guaranteed • Based on optimum rather than maximum outcomes • Some individual projects will over-achieve, while others will under-achieve • Full impact will be over more than one financial year and may depend on up-front infrastructure changes and investment • Benefits tracking from IMS and Pharmex databases on a monthly basis for NHS Trusts and ePACT data for PCTs

9. Structure for Pharmacy and Medicines Management Group Project Lead NHS Trust & PCT Pharmacy Networks Clinical Networks Pharmacy Procurement Consortia

10. Stakeholder Engagement

11. Pharmacy & Medicines Management - Categorisation • Procurement • Review existing consortia contracts for product range and prices • Establish pan-London contracts with improved prices for aggregated volumes • Therapeutic Tendering/Rationalisation • Identify opportunities to rationalise branded drug use and tender on a volume commitment basis either within consortia or on a pan-London basis • Framework agreements with market share targets • Single drug contracts • Manage value added services • Prescribing Policies • Identify opportunities to influence local prescribing policies to achieve: • shift from branded to generic drugs in secondary and primary care • shift between therapeutic groups (e.g. A2RAs to ACEIs) • Others • Homecare supply arrangements • Enteral feeds • Purchase and supply of unlicensed “specials” and unlicensed medicines London-wide benchmarking, comparative data, targets and monitoring Build on local initiatives and guidelines Primary, secondary and tertiary care coverage

12. Anti-TNFs Anti-fungals Antivirals Aromatase Inhibitors Bisphosphonates EPO Growth Stimulating Factors Gonadorelin Analogues Hepatitis C Urological Solutions X-Ray Contrast Media Anti-platelet drugs Anti-psychotics Antiretrovirals Beta-Lactam Antibiotics Botulinum Toxin Cancer Chemotherapy Growth Hormone Hepatitis B Immunosuppressants Low Molecular Weight Heparins Urology Solutions Potential Division of Contracting Arrangements Framework Agreements Pan-London Price Contracts

13. Pharmacy & Medicines Management Work Stream 2006/07 Priorities • Increased prescribing of low cost statins in acute trusts and PCTs –75% LPP target • Antiretrovirals • HIV homecare • IV Protein Pump Inhibitors • Oxaliplatin – SCEP contract • Sevoflurane – SCEP contract • Enoxaparin – pan London contract from February 2007 • Statins

14. Pharmacy & Medicines Management Workstream 2007/08 Priorities • ESA tender - South London • ESA tender - North Central + North East London • Pan London contracting for branded medicines • Therapeutic tenders • Implement and monitor framework agreements • Review options for further work in absence of tenders • Depot antipsychotic injections • Inhalation anaesthetic agents • Enteral feeds • Homecare

15. Low Cost Statins Prescribing • Low cost statins – simvastatin and pravastatin • High cost statins – atorvastatin, rosuvastatin, fluvastatin and combinations • P&MM Group set target for low cost statin prescribing – 75% • NHS Trusts and PCTs encouraged to review their statin prescribing policies • Regular patient monitoring and follow-up essential • Savings in 2006/07 • NHS Trusts: £380,000 • PCTs: £16.7m

16. London PCTs- % Low Cost Statins Prescribing (Volumes)

17. London NHS Trusts- % Low Cost Statins Prescribing Volumes (ex. HIV)

19. The Commissioning Context • London Commissioning Group • Managed entry of new drugs • Exceptional treatments request procedures • London Specialised Commissioning Group • Bone Marrow Transplantation – high-cost antifungals • Haemophilia – blood clotting factors • HIV/AIDs – antiretrovirals • PCT-Led Commissioning at sector or pan-London level • Cancer – new high-cost chemotherapy • Hepatitis C – peginterferons and ribavirin • Ophthalmology – Age Related Macular Degeneration drugs • Pulmonary Hypertension – new high cost drugs • Renal – ESAs • Thalassaemia – iron-chelating agents

20. London HIV Consortium 2007/08 (1) • Fully commissioned service by HIV Consortium on behalf of PCTs, based on principle of equality and equity of access to all clinical services and treatments • 24 Provider Trusts • Trusts have fixed budgets with no risk sharing arrangements, • Tariffs for treatment-naïve patients with separate funding arrangements • Separate, capped budget for new high cost drugs used to treat patients with triple-class resistance • Drugs & Treatments Sub-group accountable to the HIV Consortium • Clinical effectiveness is the main criterion but cost-effectiveness gaining importance within fixed budgets

21. London HIV Consortium 2007/08 (2) • All new drugs approved by the Drugs & Treatments Sub-group and endorsed by the HIV Consortium, although new funding may not be available • New drug reviews produced by the London Medicines Information Service • Treatment guidelines for new and existing drugs • Once daily therapies are unlikely to be approved unless there is supporting clinical evidence or there is price-matching with the current twice-daily regimen • Potential switching policies have been considered to reduce cost without comprising patient care • Introduction of Pan-London arrangements for home supply in 2006 using three homecare suppliers to stimulate competition on service charges – currently 2,600 patients in scheme • Pan-London contracting since 2005 for antiretroviral drugs, but all drugs available

22. The Antiretroviral Drugs Market

23. London – Antiretroviral Drug Expenditure Trends

24. Tendering & Contacting for ESAs • March 2006 – South East London Task Force on Medicines agreed a programme to optimise procurement of medicines, including an initiative to manage expenditure on ESAs for renal patients at two centres • June 2006 – LPP Board agreed to fund the Pharmacy & Medicines Management workstream (P&MM) • Joint agreement between LPP P&MM and SEL Task Force on Medicines to work together on the ESAs project and extend it cover the two renal centres in South West London • David Stead was recruited as the project lead • Within the P&MM programme it was also intended to run a similar project for the two renal centres in North Central and North East London • A contract had recently been established in North West London giving the opportunity to have pan-London coverage through three separate contracts

25. ESAs Pre-tender Situation in South London • Four renal centres – King’s College, Guy’s and St. Thomas’, St. George’s, Epsom and St. Helier • June 2006 - 2,200 renal patients on ESAs across South London with annual growth at 10-12% for pre-dialysis and dialysis patients • Patients reside in South London and also in Kent, Surrey and Sussex • Expenditure on ESAs Jun 2006 - £9.65m (£1.62m non-London patients)

26. ESA Expenditure Breakdown within South London - June 06

27. Current and Future ESA Market • Branded biosimilar drugs: therefore can’t treat as a generic market • Clinical considerations a major factor • Licensed ESAs: • Epoetin alfa (Eprex) – Ortho Biotech (J&J) • Epoetin beta (NeoRecormon) – Roche • Darbepoetin alfa (Aranesp) – Amgen • Epoetin delta (Dynepo) – Shire • Market Trends: • 2-3 more licensed ESAs expected in next two years • CERA (Roche) – long acting ESA

28. ESAs Therapeutic Tender Strategy • Tendering and Implementation Groups • Stakeholders’ Meeting • OJEU framework tender for ESA use across South London • OJEU framework tender for homecare services for renal patients across South London and Kent, Surrey and Sussex • ESA suppliers requested to provide ESA prices with and without homecare on patient numbers up to 3,500 in bands of 500 patients • Repatriate patients currently receiving their ESAs via the GPs to the acute trust renal centres to optimise savings (current ESA hospital discounts 50-60%) • Offer patients a choice - to receive their ESA via the homecare route or from the acute trust • Inform suppliers that value added services will not be a part of the award process and will be consider separately • One year contract with the option to extend for a year due to changing market

29. Tendering Group • Key objective to manage tendering process for ESAs • Multidisciplinary group consisting of: • Renal clinicians, including a nurse consultant • Renal pharmacists • Renal service manager • Medicines Procurement Specialists • PCT Commissioners • NHS PaSA • Senior Pharmacy Manager

30. Implementation Group • Key objective – to manage the implementation of the contract • Multidisciplinary group consisting of: • Renal clinicians • Renal service managers • Renal pharmacists • PCT pharmaceutical advisors • Commissioners • Medicine procurement specialists • Agree local renal tariffs to include cost of medicines, additional trust infrastructure costs for repatriation and replace any added value previously provided by the ESA suppliers • Agreed three tariffs for different ESA dosing (4,000units, 8,000units and 20,000units • Note: national renal tariff not due until at least 2009

31. Lessons Learned • Thorough scoping of project and data collection • Develop tendering strategy • Current and future market analysis of therapeutic area • Identify and engage all relevant stakeholders from onset – essential • Identify and demonstrate potential benefits of exercise • Only proceed with all stakeholders agreed and signed up to strategy • Effective communication with suppliers to explain tendering process • Retain a united front – suppliers may use divide and rule tactics! • Manage implementation of contract and benefits tracking

32. Conclusions from ESA Project • Therapeutic tendering is an option to leverage additional savings across a therapeutic class • The potential success of the South London Renal ESA Tender demonstrates how agreement can be made to make savings across the health economy as a whole • Early engagement with key stakeholder groups vital for success • Funding can move across the health economy to fund infrastructure and value added costs • Therapeutic tendering is more of a clinical exercise than a procurement exercise • Clinicians have been fully supportive of the exercise • Further pan-London therapeutic tendering for North London currently underway

33. Key Success Criteria for the P&MM Project • Manage geographical complexities: pan-London, sector and clinical group contracts • Achieve full coverage for all London NHS Trusts and PCTs • Effective engagement with primary and secondary care clinicians and commissioners • Deliver commitment and change within agreed timescales • Prioritise work for practicality and deliverability • Set and achieve realistic savings targets without compromising patient care • Manage transfer of imminent branded to generic drugs to SCEP • Work within national strategies for market management and maintaining product availability • Achieve full engagement and buy-in from pharmaceutical companies and homecare suppliers • Develop a longer strategy to maintain pharmacy as the lead for medicines procurement in London