Feature / Flight of fancy?

As the NHS drugs budget comes under scrutiny, there are signs the service can make savings in medicines expenditure. But can the potential for savings be turned into reality, asks Seamus Ward

In today’s climate, no stone will be left unturned as the NHS explores ways of improving efficiency and productivity. Some savings schemes will, no doubt, be esoteric or only available to a limited number of organisations; others will span the NHS. Driving efficiencies in drugs budgets will fall very much into the latter category and is an area where the NHS has made gains recently – by increasing the proportion of low-cost drugs prescribed, for example. But can the service expand on these encouraging successes?

It is not surprising drugs expenditure should come under early scrutiny. In England, it accounted for about 12% (almost £11bn) of overall health spending in 2007/08. The Department of Health set the ball rolling last year, agreeing a revised pharmaceutical price regulation scheme (PPRS), which controls the amount the NHS pays for branded medicines (about £8.75bn according to 2007/08 figures).

Under the new PPRS, £500m will be cut from the price of branded drugs this year. And under an initiative now out for consultation, pharmacists will be allowed to substitute a cheaper generic (if available) for a branded product written on a prescription.

The Department says 83% of prescription items are prescribed generically but another 5% are prescribed by brand name when a generic is available. Closing this gap is the driving force behind the initiative and would save £275m in primary care.

While the biggest savings are to be found by negotiating discounts on branded drugs, the potential for savings through generic prescribing will rise in the next decade as big-name branded medicines come off patent.

The service has already demonstrated it is possible to increase the proportion of cheaper drugs dispensed. Since 2006 the better care, better value (BCBV) initiative has measured the proportion of low-cost (cholesterol-reducing) statins and more recently added proton pump inhibitors (which reduce stomach acid) and angiotensin-converting enzyme inhibitors (ACEI), used to regulate blood pressure and other cardiovascular conditions.

According to NHS Institute figures, low-cost prescribing of statins was as low as 19% in some PCTs in the first quarter of 2006, while others were achieving more than 80%. At quarter two 2009/10, the range had narrowed to 59% to 85%. The institute says the NHS spends around £500m a year on statins and a 28-day course of a branded statin is on average six times more costly than an appropriate generic statin. If PCTs with less than 79% of lower cost statins (the proportion achieved by the top quartile of trusts) increased this to 79%, more than £64m would be saved in a year (based on quarter one, 2009/10), it adds.

A top performer, Heart of Birmingham Primary Care Trust, reported a 14% increase in the volume of low-cost statins in the first half of 2008/09. This reduced costs by 25%.

Not just statins

If PCTs reached upper quartile level for lower-cost proton pump inhibitor prescribing (92% and above), £22m would be saved each year. Top quartile performance for ACEIs (74%) would save about £22m. In these three areas, the NHS could save £108m on spending that stands at just over £1bn.

Richard Seal, NHS Institute medicines management adviser, says there has been significant change in prescribing behaviour, as demonstrated by the BCBV indicators. He says that while the talk is of money saved or potential savings, the reality is the money is ploughed back into other parts of the drugs budget, or indeed other service areas.

This is an important message, as the initiative was not solely about making savings, but also quality by encouraging the implementation of NICE guidance.

Mr Seal recognises there may be local factors affecting the uptake of lower-cost medicines and believes this is recognised by the institute’s decision to highlight the productivity opportunity if all PCTs achieved the top quartile level. But he says there is more to do. The Q2 figures show 110 PCTs still fall short of the 80% mark often seen as close to the maximum generic prescribing level achievable.

‘If I was down near the bottom, I would be asking myself: “What is it I am not doing that other people are doing and do I want to do anything about it?”,’ he adds.

Ron Pate, an independent consultant and pharmaceutical adviser to Keele University’s medicines management department, agrees the BCBV indicators have produced gains. ‘Once the data was exposed to SHAs it allowed questions to be asked and got PCTs to focus on specific prescribing objectives,’ he says.

He believes a key to success is collaboration between commissioners and providers. He adds: ‘Every prescription written in hospital outpatients or at discharge frequently generates another 13 prescriptions for that product in the community’. Clearly, the management of primary care drugs budgets has as much to do with decisions in the hospital ward or consulting room as the GP surgery.

Hospital drugs excluded from payment by results also have a big impact on PCT drugs budgets. Mr Pate says at least 50% of hospital medicines spend is on these exclusions. ‘Yet there is little incentive for hospitals to actively manage these non-PBR drugs because they are paid for by PCTs,’ he continues.

Mike Cross, managing director of medicines management consultancy Hambleton Medical, who spent 18 years as a director of pharmacy in NHS hospitals, says commissioners and providers must work together. This is one of the reasons he likes to look at both together when assessing the efficiency of their drugs spending. ‘The biggest issue is hospitals working with primary care because there is a massive amount of money to be saved there.’

He too points to the PCTs spending large amounts on drugs excluded from the tariff. These tend to be newer, more expensive medicines but in the current system, secondary care providers have no incentive to help PCTs save money. More sophisticated commissioning can create opportunities to make savings – by perhaps developing a mechanism for sharing money saved.

Mr Cross adds that hospital prescribing has a knock-on effect on community prescribing. ‘This is not just in terms of what is prescribed but the messages that go out. The message could be that certain drugs are good when everyone else does not think so – that could affect a GP’s prescribing. That’s why good drug control in secondary care is so important.’

Though now much less common, there are times when hospitals pay a much lower price for a medicine than their community counterparts. In these cases the PCT and trust could work together, Mr Pate says. For example, he knows of a trust that was offered a particular proton pump inhibitor that would give them a saving of about £24,000 a year, but it recognised that switching to this product would have an adverse impact on local primary care drugs budgets as the PPI had a much higher price in primary care.

The organisations’ prescribing teams got together and it was agreed the PCT would give the trust £24,000 per year in return for the trust turning down the deal and focusing on supporting the PCT BCBV target for PPIs. The success of this was carefully monitored by the PCT, both sides benefited and the agreement helped the PCT meet its PPI savings target. In the process it became the best performer in its SHA for this target.

‘It’s frustrating when I see some colleagues in primary care battling to manage drugs expenditure, yet not pursue the potential opportunity of collaboration with secondary care to deliver their objectives,’ Mr Pate says. ‘If your bath is overflowing you turn the tap off – it’s like they are not turning the tap off.’

Mr Cross says there is great potential for savings in the drugs budgets but BCBV may be too narrowly focused to realise them. ‘I think it is missing a trick. It feels like a large amount of money is relying on these metrics but it’s not the holistic approach that is needed. There are still areas of the country patchy on BCBV.’

While the BCBV initiative has delivered improvements, he believes a wider view is needed in the current financial climate and is working with NHS organisations on this. ‘We look at a whole range of savings and at the processes, procedures and practices, rather than just the outcome measures,’ he adds.

The NHS Institute is developing a number of other BCBV indicators. Nothing has been finalised, but it is understood the institute could extend the indicators to pain killers, antibiotics, enteral nutrition and sip feeds.

And what of hospital prescribing? The latest figures from the NHS Information Centre show hospital prescribing costs rose by 15.2% in 2008, compared with 3.4% overall. Although the increase can in part be attributed to the rise in activity, there is a growing sense that hospital drugs expenditure must be curbed.

There are rumours the institute will launch hospital-based BCBV prescribing indicators within the year. Mr Seal says that while he would ‘love’ there to be hospital indicators, he is sceptical it will happen quickly.

‘Unlike general practice, there is no single data collection mechanism in hospitals. In primary care we use the system used by the Business Services Authority to pay community pharmacists. There isn’t a system like that in trusts and it would take a massive effort to achieve this. Maybe this is something that will begin to happen as the electronic prescription service rolls out across the NHS,’ he adds.

Mr Cross says there have been several attempts to benchmark overall hospital drugs spending but little success. ‘It is probably a waste of time at that high a level. What managers want to know is if they are doing everything possible,’ he adds.

His company has collected more than 400 ways of saving money on drugs and tests NHS organisations against those across medicines spending, not just those that cost the most.

Mr Pate says comparisons are not easy because of incompatible computer systems and the fact that most hospitals do not have electronic prescribing systems but he insists the data is there. ‘Given the NHS Information Centre report, which showed that the cost of medicines used by hospitals rose by 15.2% in hospitals compared with 3.4% overall, it is high time the NHS focused on comparing hospital medicines use and research funding needs to be made available to support this.’

There is a renewed focus on drugs expenditure and though branded items make up the bulk of the cost, the NHS will be expected to prescribe generic medicines as much as possible.

If nothing else, it will at least ensure that when branded drugs lose their patent over the next few years, the NHS will be prepared to benefit from the drop in prices.