Members of the procurement and distribution special interest group of the Guild of Healthcare Pharmacists met for a study day in Meriden on November 10 to discuss some of the current trends in procurement, to see the presentation of the 1999 Pharmacia & Upjohn award and to hear a debate on loss-leading
The day was opened by Mr ALAN KARR who announced that, after discussions with the Guild, the University of North London had agreed to add elements on pharmaceuticals to its existing diploma in purchasing and supply. This would make the diploma a suitable qualification for procurement pharmacists and it was hoped that the course would become available next year.
Professor TREVOR JONES (director general, Association of British Industry) said that pharmaceuticals were the third most important industry in the United Kingdom in terms of research and development, and the UK provided 20 per cent of the top 25 products in 1998. Forty-seven new drug entities were launched in the UK in 1997 but this figure had dropped to 38 in 1998. It was envisaged that the number would settle at about 30 products per annum, as companies found it more difficult to obtain a licence.
Since the time of Galen, there had been only 400 sites in the body that had been targeted by drugs. This was set to expand to thousands of sites, because of the recent advances in genetic technology. Keeping up with the speed of these advances and funding them, where appropriate, would present a major challenge for the National Health Service.
The human genome would be fully sequenced by the end of 2001, when it would also be patented. However, gene therapy was probably still a decade away from routine use. Eventually, it would be possible to put a drop of blood on to a chip that would analyse the genes present and provide suggestions for suitable treatment required by that individual. It would also be possible to identify sub-groups of patients who would be most likely to respond well to certain therapies. This would lead to more drugs being needed rather than fewer, as different classes of drugs that had previously been thought to be "me-toos" would turn out to have different degrees of efficacy in different individuals.
With regard to the introduction of new products into the NHS, it was well known that, ideally, the NHS wanted answers to certain questions prior to launch, such as cost and expected market size, but it was not possible to answer them at this time. For example, prices were sometimes fixed only days before the product launch and the UK subsidiary involved might not have any say in the level at which they were fixed. Market sizes could not always be predicted with accuracy, as products sometimes took off unexpectedly. Trials only gave answers to questions using limited categories of patient. They often excluded the patients most likely to need the product but it was often not possible to recruit the numbers or types of these patients within the confines of a clincial trial.
Medicines could be clinically effective but were not always cost effective and it was important, he said, that cost did not obscure more humanitarian issues. The value of a product was only known following routine use in real patients, using broad, valid outcomes. These outcomes varied from product to product but the NHS would find assessment of productseasier with the advent of bodies such as the National Institute for Clinical Excellence and the Cochrane collaboration.
Mr LEE CORNELL (Generics UK) explained that the current shortage of generic drugs resulted from a number of circumstances whose cumulative effects could not have been foreseen.
The manufacturing licence loss at Regent Laboratories had stopped 15 per cent of generic manufacturing, which by itself could have been dealt with. However, APS and Norton had moved their manufacturing sites at the same time, the patient pack initiative had gone too far to be stopped and there was a delay in granting grace periods for patient pack stocks requiring a licence variation. The hold-ups in supply and discontinuation of stock, together with the inadequate numbers of new pack sizes that had been produced had led to off-contract purchasing by hospitals, which, combined with increased purchasing by the community, had increased the pressure on the market. Each of these events would have had little noticeable effect individually, but the combination of all of them happening at about the same time had been a "nightmare", as forecasting by generic manufacturers had not been able to take them all into account.
A number of solutions to these problems had been investigated. Extra raw materials had been made available but applications would have to be made for licence variations because of the new suppliers. Contracting out the packing would mean redesigning packaging to suit different packaging machines. Hospitals that were willing to repackage items could not cope with the enormous volumes of packs required.
To prevent a repeat of the problem, in the future, wholesalers would have to begin to prioritise the orders fulfilled. Company forecasts would be revised after this year but as the true demand was still not known, they might still be inaccurate. Lastly, the Department of Health had yet to decide on the patient pack sizes required.
Mr Cornell said that a further shortage could be avoided by sensible ordering over the millennium period, by prioritisation of orders at the wholesalers and by manufacturers keeping back-up stores. It had been an unhappy year, with shared blame, but what was now important was that the situation was dealt with, lessons were learned and, most of all, acted upon, he said.
The 1998 Pharmacia & Upjohn award winner, Mr BRIAN McCAW (Royal Hospitals, Belfast) described in his award presentation a pilot study of electronic, bar-coded requisitioning at ward level.
Before the pilot, a technician top-up service had been in place and stock was also ordered by nurses using a daily requisition book and a supplementary requisition book that could be used at any time. The problems with this system were the two and a half hour timelag between the nurses ordering the stock and receiving it, incomplete requisitions, nurses not knowing what had already been ordered and not being able to add to their orders. It was decided that a computerised system might overcome these problems and speed up the delivery of stock, so a comparison was made between the manual system and an electronic one.
Manual stock ordering was monitored for 24 days, during which 509 lines were requested on 84 requisitions. Of these orders, 24 per cent were incomplete. On average, 30 per cent of orders took less than two hours to be requisitioned, taken to pharmacy and delivered, and 31 per cent took less than three hours.
During the 24 day phase when the electronic system was used, 443 lines were requested on 68 requisitions, none of which were incomplete. This time, 53 per cent were delivered within two hours and 78 per cent within three hours. Surprisingly, the turn-around time in pharmacy increased when the electronic system was used, with 72 per cent of orders filled within 60 minutes instead of 92 per cent. This was thought to be because computer alerts saying that an order had arrived were ignored or missed.
All of the nurses wished to keep the electronic system, despite the fact they did not perceive that it had had an impact on delivery times. In pharmacy, the benefits were seen to be that there were fewer requisitions and those that were sent were complete and there were fewer inquiries from the wards. However, this was balanced by the increased turn-around time.
Mr STEVE WILLIAMS (NHS supplies) described the processing of bids using the pharmacy electronic tendering (PHAET) system. He explained that PHAET allowed the invitation, processing and exchange of commercial bids through entirely electronic means, which saved time and money. Problems with implementing the system were mainly legislative, as current legal requirements stipulated paper copies of bids. Also, different computer packages were often incompatible and it was difficult to decide on the best medium of distribution as some companies preferred e-mail, some paper, some floppy discs and some the internet. Ultimately, Windows 3.1 had been chosen for PHAET because it was compatible with most systems.
Mr Williams described the first attempt at using the system, in which 113 offers were received. Of these, 70 per cent of companies sent back readable files, 2 per cent were unreadable, 10 per cent returned offers on paper and 18 per cent of companies refused to use the disc or had problems with it. There had been no feedback on the pros and cons of using the electronic system to the companies yet, but it was hoped that they would be available at some stage.
New legislation was needed to deal with advances such as electronic signatures and data encryption, he said. The revised system (PHAET 2) would be an improved tool based on feedback from users. The intention was to use e-mail and the internet for tendering forms and invitations in the future. This would probably take the form of a time-expiring site that would automatically shut down after a given date.
Mr Williams then went on to give an update on NHS supplies. It had 3,000 contracts and 1,800 suppliers. One change that had been made was that the procurement and supplies agency (PASA) was now centrally funded and had been incorporated into the Department of Health from the NHS.
NHS supplies was implementing the Cabinet Office Procurement Review 1998. This aimed to establish best practice in procurement and its publication had raised it as an issue on trusts' agendas, as they were now required to produce a procurement strategy document. This would be based on a model procurement strategy handbook that the PASA was going to produce. It would also be producing a "good choice" guide for medical devices. Terms and conditions would be standardised and the procurement spend would be collated and analysed. At least three mandatory contracts would have to be negotiated and an evaluation made of electronic information management systems as it was planned to introduce such as system in future.
It was vital that the NHS was easy to do business with. Internet links would be explored and catalogues would be provided on CD-ROM, as part of an attempt to improve relationships with suppliers.
It was generally assumed that home care always involved pharmaceuticals but this was not always the case, said Mr EJAZ NABI (Clinovia). Home care could range from provision of social care to intravenous injections to ventilated critical care units at home. Home care was purchased by a range of public sector bodies, with varying degrees of expertise. These included social services, health authorities and trusts. The components of health care included the co-ordination of patients, pharmaceutical products and compounding, arranging transport and other logistics, providing nursing and pharmaceutical care, communicating between all parties and topping up of ancillary products.
The major component of the fees charged for home care related to service provision rather than products. When commissioning home care, it was important to include the views of patient groups, as they tended to provide the patient's point of view and they asked awkward questions that needed to be answered if the service was to improve. Home care would continue to grow as it was cheaper to treat, for example, intensive care patients at home than it was to build new intensive care units. As more complex home treatment was given, the skill level of the staff would also have to increase. Patients preferred to be treated in their own home, so consumer pressure would be a significant challenge for commissioners.
