How does the NHS buy HIV Drugs?

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1 The April 2011 announcement of changes to HIV drugs purchasing arrangements in London highlighted the direct impact of National Health Service (NHS) drugs procurement budgets and processes on individual prescribing decisions. This briefing puts the most recent London prescribing decisions in context, and looks ahead to how the NHS may buy HIV drugs in future. How the NHS buys pharmaceutical products The NHS negotiates prices for drugs with pharmaceutical companies (except for a range of drugs with listed prices which are not subject to further contract negotiation). Prices for drugs which are branded (on-patent) and those which are generic (off-patent) are set differently. Prices for branded drugs are decided in line with the Pharmaceutical Price Regulation Scheme (PPRS), which is a voluntary agreement pharmaceutical companies have made with the Department of Health. This places controls on how much profit a company may make from selling their drugs to the NHS. Generic drugs are much cheaper for the NHS to buy because they are normally made by more than one supplier, driving down the price. Of the approximately 3.6 billion which NHS hospitals spend annually on pharmaceutical products, 3 billion is spent on branded drugs. The remainder is spent on generic drugs and other pharmaceutical products including blood products. Around one in every five prescriptions is for a branded drug; the rest are generic. However, not all branded drugs have a generic equivalent. It is clear that any cost reduction that the NHS can make in buying branded drugs has a significant impact for the overall drugs budget. How the NHS decides which branded drugs to buy The decision to purchase a branded drug for a particular condition is ordinarily informed by relevant NICE guidelines. NICE (The National Institute for Health and Clinical Excellence) evaluates the clinical and cost effectiveness of all new drugs for England, Wales and Northern Ireland. NICE also considers the effectiveness and cost effectiveness of interventions which are not drugs. In order to compare the effectiveness of different drugs and drugs for different conditions, NICE uses a single unit of measurement called the Quality Adjusted Life Year. QALYs (pronounced qualies ) indicate the benefit in terms of additional years of life and quality of life provided by a drug. To decide if a drug is cost effective, NICE looks at the cost in drugs per QALY. What is considered cost effective will differ between drugs, but as a general rule cost per QALY of above 20,000-30,000 would not be considered cost effective. 1

2 HIV is different The approach to purchasing and prescribing HIV drugs within the NHS is different from that for other drugs. In particular, unlike treatments for most long-term conditions, HIV drugs are not covered by NICE guidelines. A possibly reason for this difference is that although HIV is now considered a long term condition, there are still unique features of HIV treatment: Antiretroviral treatment (ART) is highly effective at suppressing viral load, stopping disease progression and keeping patients well. ART is also now known to have a strong preventive impact. HIV treatment is lifelong and the patient must have near-perfect adherence in order to maintain drug effectiveness and avoid the development of drug resistance. There has been, and continues to be, rapid development of new drugs. Individual drugs must be taken in combination, creating a wide range of possible regimens tailored to patient needs. Not NICE: HIV treatment guidelines Treatment guidelines have been written by the British HIV Association (BHIVA) since the early 1990s and are used by HIV clinicians in guiding their prescribing decisions. Since 2005, NICE has written guidelines for the drugs treatment of other long-term health conditions. If a drug is recommended by NICE, then it must be made available to a patient in line with NICE guidelines. NICE does not prepare guidelines for HIV, so decisions about the prescribing of HIV drugs rely on recommendations made by clinicians which are informed by BHIVA guidelines. The most recent BHIVA treatment guidelines are being developed in line with the same evidential standards as NICE guidelines. How the NHS buys HIV drugs for England In all regions of England, Primary Care Trusts (PCTs) work together to purchase HIV drugs at a regional level, in order to achieve economies of scale and, if possible, secure the same prices for 2

3 What is commissioning? In the NHS, commissioning is the process of: Identifying the healthcare needs of patients and communities; and Deciding how these can be purchased and provided to a high quality in the most costeffective manner. Most commissioning is done by the PCT, with the exception of commissioning for uncommon conditions. These are commissioned by regional specialised commissioning groups (SCGs). Commissioning these at a regional level helps spread a cost burden which may otherwise skew individual PCT budgets. Until 2009, outpatient HIV care was also the responsibility of specialist commissioners at a regional level, but is now the responsibility of the PCT. all PCTs. The regional purchasing group negotiates the prices they will pay for these drugs with the pharmaceutical companies through a tendering and contracting process. The PCT then commissions HIV treatment and care from hospitals and clinics. This is either in the form of a block payment contract, or alternatively a 'pay as you go' system where the service provider receives a payment (based on an agreed tariff) for each patient visit. Some block contracts incorporate drugs funding; others manage this separately. Buying HIV drugs for London In 2010, there were 29,738 people living with HIV accessing care in London, representing about 40% of all HIV patients in the country. There are 23 hospital trusts delivering HIV outpatient services in London. However, in practice PCTs have chosen to continue commission at a regional level. So while HIV is not considered statistically uncommon, it is commissioned in the same way as other specialised conditions. The London HIV Consortium sits within the London SCG and commissions HIV care on behalf on London PCTS. London takes a regional approach to commissioning its outpatient HIV services, including drugs. HIV care is commissioned by the London HIV Consortium, which commissions specialised services for uncommon conditions on behalf of the 31 Primary Care Trusts in London. The negotiation and purchase of drugs is carried out by the London Procurement Programme through the NHS Commercial Medicines Unit. 3

4 Prior to 2010: Negotiating for London Prior to 2010, the London Procurement Programme tendered for HIV drugs based on the anticipated annual use of each drug. By taking this central approach, drugs could be purchased at the best value price for London. Compared with other regions in the UK (indeed, compared with other regions in Europe), the volumes of HIV drugs bought in London are vast. This means that London procurers could negotiate lower prices for branded drugs and ensure equity of access for patients across London. A new approach: Therapeutic tender Although the scale of HIV drugs tenders creates some economy of scale, there have still been significant pressures on the London budget for HIV drugs. For 2011/12, the London HIV Consortium was given a budget of 250 million, the same as the previous year despite a 6% increase in patient numbers since 2010/11. In order to make the savings necessary to balance this new budget, London tried a new approach, which had been found successful in other specialist commissioning therapeutic tendering. This is different from the usual approach in that it does not start with looking at what quantities of specific HIV drugs were purchased last year, in order to predict what the equivalent volume would be for the following twelve months. Instead, the goal of the tender is a specific therapeutic outcome (for example, suppressed viral load and increased CD4 count), which will be achieved by the drugs purchased in line with clinical guidelines. HIV treatment is taken as a regimen, which is made up of a particular combination of drugs. Pharmaceutical companies in the London tender were bidding competitively to provide types of HIV drug (specifically, nucleoside analogue reverse transcriptase inhibitors and protease inhibitors) which are needed to provide effective first-line HIV treatment to patients. It was not assumed that these would be purchased in similar quantities to last year. Instead, suppliers made competitive proposals linking price to volume, offering the London procurement team a lower price on a particular drug when it was purchased in greater volume. Who was involved in the tender? The 2010 therapeutic tender was led by the London HIV Consortium working in a partnership arrangement. The decision to use a therapeutic tender approach was decided upon after consultation with clinician and patient representatives. The process was overseen by a panel of clinicians, commissioners, specialist pharmacists, public health experts and patient representatives. 4

5 The clinical scenarios and appropriate drugs for each regimen were determined by the London HIV consortium drugs and treatment sub-group, in line with BHIVA treatment guidelines. The outcome of the tender was new 'prescribing messages' for London. This was unprecedented and controversial, as the choice of drugs prescribed by clinicians to patients appears to be more directly influenced by the procurement process. Clinics have been given guidelines to prescribe a particular set of drugs to treatmentnaive patients, and to consider switching some patients already on treatment to other drugs. The London HIV Consortium has noted that while this approach will result in the desired savings for 2011/12, it would not necessarily lead to any further savings if repeated. The sustainability of the approach has also been questioned by HIV community groups, who observe that it would not be possible to keep switching HIV regimen to keep up with price changes. There are also concerns that the more immediate costs of the change have not been taken into account. For example, some stable patients may need more regular clinic visits to support their switch to new medication. The London tender process was an entirely new approach to buying HIV drugs. It has since been adopted by four other English regions. Broader changes There are a range of other significant changes to how the NHS commissions and delivers treatment and care which are relevant to, and may impact upon, how HIV drugs are budgeted for and purchased in future. QIPP QIPP (Quality, Innovation, Productivity and Prevention) is a programme encompassing the whole of the NHS with the aim of both improving the quality of NHS services and making 20 billion of savings through greater efficiency by 2014/15. QIPP has been a guiding principle in the radical change of approach taken by the London HIV Consortium, which needed to ensure that patients in London had access to the best possible treatments while working with a constrained budget. The London HIV QIPP plan has also informed the ongoing HIV service review (below). HIV service review An HIV service review is underway in London, to assess and agree the extent to which the existing configuration of services meets professional standards, the needs of patients and delivers value for money.6 The provision of HIV care in the UK still to a degree reflects the early history of the epidemic, when there was a focus on inpatient care, frequent monitoring and a lack of effective 5

6 treatments. HIV remains strongly rooted in secondary care. The service review aims to identify ways in which HIV care models can be innovated to use resources most effectively in a time of increasing demand, while addressing the new challenges associated with what is now a long term condition: life-long drug regimens, comorbidities, and ageing. The London HIV Consortium has been engaging with patients, clinicians and stakeholders as part of this review. Generics As of 2013, two key HIV drugs, efavirenz and nevirapine will be off-patent. The availability of generic versions of commonly prescribed drugs could lead to substantial savings. Generic drugs could also make any therapeutic tender process more sustainable, as it can be expected that these will be consistently and predictably cheaper than the branded equivalent. Value based pricing In 2012, the Department of Health will begin negotiations with pharmaceutical companies for value-based pricing, which will replace the PPRS when the current agreement expires in Value based pricing aims to more directly link the price of a drug to its therapeutic benefit. If HIV drugs did come under a NICE-style system of guidance from 2013, it is possible that a value based approach would be taken to pricing the drugs. References 1 Commercial Medicines Unit (CMU) 2 Department of Health Introduction to pharmaceutical price regulation. harmacyandindustry/pharmaceuticalpriceregulat ionscheme/dh_ Parliamentary Office of Science & Technology Drug pricing. PostNote Number Claire Foreman, Brian Gazzard, Margaret Johnson et al Maintaining cost-effective access to antiretroviral drug therapy though a collaborative approach to drug procurement and regular audit: the experience of London HIV commissioners and providers. Sex Transm Infect 88: Full details of the prescribing messages are available from the London Specialised Commissioning Group 6 Claire Foreman, The HIV Quality Innovation Productivity and Prevention Plan Optimising delivery beyond 2011/12. Report to the London Specialised Commissioning Group Board. 20 June

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