Primary Care Pharmacy November 2001 Vol 2 No 3 p61-62

Viewpoint

Creative ways to work with prescribing budgets
By Tim Beard, PhD, MRPharmS

Personal medical services (PMS) pilots in general practice arose out of the NHS (Primary Care) Act 1997 and were designed to allow those who wanted the flexibility to explore new models for the provision of medical services to test the practical implications and the benefits they could bring. A first wave of PMS pilots were established in 1998.

Goyt Valley Medical Practice, in North West Derbyshire, became a second wave PMS-plus site in October 1999. PMS-plus includes funding for conventional general medical services (GMS) and also a plus element for continuation and extension of existing practice based services which were a legacy of the fundholding era. First and second wave PMS pilots have a contract with their health authority (HA) although this will transfer to the primary care trust (PCT) from April 2002.

The partners decided to employ a full-time pharmacist primarily to oversee prescribing policy. This was an initiative "piloted within a pilot" and was funded by top-slicing the prescribing budget, an option theoretically open to any practice within our HA. I was appointed as practice prescribing support pharmacist in April 2000.

In practice, each key clinical area is defined by a protocol which identifies objectives and outcomes, describes how a service operates, records critical incidents and incorporates formal review. The protocols are finalised through agreement with the North Derbyshire HA and a budget set. The whole process rolls through an annual cycle of review.

The devolved budget covers all aspects of the service; prescriptions are no-longer submitted to the Prescription Pricing Authority (PPA) for items personally administered and items of service are not claimed.

For example, the budget associated with the immunisation protocol includes an element for a pre-determined number of influenza vaccinations. If we vaccinate more people against 'flu than anticipated, the shortfall must be renegotiated. This year we have administered significantly more pneumococcal vaccine than originally intended. Next year's budget must take this into account if we are to avoid an overall shortfall. Budget increases must be negotiated with the National Health Service Executive via the HA. A requirement for growth is implicit under PMS, but there is no guarantee of additional funds. The exception to this arrangement is the prescribing budget which has always been set, in the usual way, by our PCG/T (High Peak & Derbyshire Dales).

The limitations of a prescribing budget set in this way creates a logical inconsistency which we have yet to resolve. Many of the specific therapeutic targets set out in our protocols and agreed by the HA carry a cost implication which is not reflected in the prescribing budget. The targets of the national service frameworks (NSFs) imply similar costs which will be met (at least in part) by new money devolved to PCTs. However, in several areas we are already ahead of NSF targets and this is recognised in our protocols. How is the inevitable shortfall in our prescribing budget to be met? Will the HA/PCT tell us to withdraw treatment from some of our cardiovascular patients or change its mind about how many women can receive HRT?

Clearly our arguments for appropriate funding lose their force if our prescribing is inappropriate or wasteful. A considerable portion of my workload is devoted to putting our prescribing largely beyond reproach and we are making progress. But we are also exploring other ways to treat more patients within our existing budget than we do and to improve upon a medicines supply system which contains many inequities. These have been widely considered and include unfair prescription charges, the lack of control over drug prices, the waste that occurs when newly prescribed drugs are ineffective or not tolerated and the pharmacy remuneration system, which remains skewed to favour prescription volume. Would there be benefits to patients, the practice and the NHS if we were able to use our drug budget to purchase directly the drugs our patients require and to distribute them? Would such a system be legal and might it be financially viable?

For example, last year we bought goserelin implants for our patients and took advantage of the considerable discounts available. The number of patients involved continues to rise and is beyond our control. No extra funding is forthcoming, so once we have spent this portion of the budget, it still will be necessary to prescribe the implants which will then cost up to 35 per cent more. This notion of cost is, of course, artificial but this is how performance is measured. Practices submitting traditional items of service claims can take full advantage of available discounts and dispensing practices can extend the benefits to include all their prescribing. This is of no direct benefit to patients or taxpayers and in the latter case is a barrier to evidence based prescribing.

We have the option of including our prescribing budget in the PMS plus contract and essentially taking our budget in "cash". If we did this we could explore some radical ideas. We might set up a non-contract pharmacy. It would then be necessary for us to issue private prescriptions to all our patients. This is now possible for patients otherwise treated under the NHS, usually when there is a price advantage for the patient who pays prescription charges. This would allow us to explore alternatives for our patients such as no charge at all, a nominal charge, or an annual dispensing fee. We would negotiate with suppliers to maximise our discounts (with no claw-back) to cover our costs. We could develop the idea of e-pharmacy to supply patients of our satellite surgery in a neighbouring town and would provide pharmacy services to the community. Repeat prescribing by instalment becomes possible and many of the issues around the electronic transfer of data from prescriber to pharmacy disappear.

Patients would benefit from a faster and cheaper service. We could issue starter packs for new medication and set up our own repeat dispensing system. Such a pilot scheme would provide a strong incentive to remain within budget and prescribing statistics could be extracted from the practice computer system. The logical extension of this, when other practices joined the scheme, would be for the HA or PCT to negotiate prices and achieve better discounts to the ultimate benefit of the taxpayer. Unlike existing dispensing practices we are a not-for-profit organisation, although we would not be averse to performance incentives and would expect to spend any savings made in other areas. It would be necessary to link the prescribing budget to historical prescribing costs and include a "safety-net" to cover expensive prescriptions or patients joining the practice.

Would any organisation be prepared to enter into such an arrangement or would it be cost-effective for us to provide our own pharmacy services? Dispensing practices frequently obtain discounts of between 12 and 40 per cent and pharmacy multiples probably achieve more. Hospitals already use private companies to source and supply expensive drugs. A budget of £750,000 would yield a potential gross profit of £112,500 at a discount of just 15 per cent. Obviously there are considerable start-up costs, but savings can be made from reduced bank charges and lack of claw-back along with the possibility of negotiating for container allowances or a proportion of dispensing fees. Overheads would be reduced by simplified prescription processing and finance would not be required to fund late payment. Even taking into account the discount element within the budget and the loss of prescription tax revenue, this begins to look like a viable proposition.

A company might want to use the opportunity to circumvent limitation of contract or respond to the possibility that we might bypass the existing supply system. The PCT would benefit from a balanced drug budget with more patients treated and the bureaucratic intervention of the PPA would become unnecessary. This is an opportunity to cut through much of the red tape which surrounds the supply of medicines on FP10. No one has said, as yet, that it is illegal.

Such proposals are, however, likely to be challenged vigorously but recent initiatives and changes to the law may offer a less controversial route forward. Local pharmaceutical services (LPS) pilots might include the development of starter-pack schemes and instalment dispensing. Patient group directions could be used for all our repeat prescribing and electronic transmission of prescriptions is becoming a reality. Medication management services will improve prescribing cost-effectiveness. We could work with existing pharmaceutical services providers to explore the limits of the PMS/LPS model. Our aim would remain the optimum use of resources (including pricing anomalies), within the new models of service provision, to meet the prescribing cost implications of agreed clinical objectives.

Of course a fundamental change in the discount structure would remove a principal incentive behind these ideas (and would lead to the overdue reform of pharmacy remuneration and of dispensing practices). A successful alternative to the present system might force the pace of change.