Experience in the UK National Health Service Dr Jim Smith Chief Pharmaceutical Officer

1. PAHO/WHO INTERNATIONAL SEMINAR ON CHALLENGES FOR COMPREHENSIVE PHARMACEUTICAL SERVICES BRASILIA, OCTOBER 2002 Experience in the UK National Health Service Dr Jim Smith Chief Pharmaceutical Officer Department of Health, England, UK

2. BACKGROUND • UK National Health Service (NHS) since 1948 • Funded through tax revenues • Free at point of use - nb dental, optical, prescription charges • Locally managed • Funding, strategyset by central government • Small insurance-based private sector (<10%) • Devolution - Scotland, Wales, N Ireland

3. NHS IN ENGLAND • Strategy, standards, funding set centrally • Local management by 305 primary care trusts (PCTs) - commission hospital services - contract with practitioners for 1ary care (also increasing direct provision) • Direct allocation of funds to PCTs • Strategic health authorities (28) - performance management role

4. NHS RESOURCE ALLOCATION • Agreed by Ministers - advisory committee for resource allocation, weighted capitation model • Unified allocations to PCTs (‘cash limited’) - cover hospital & community services, primary care services, pharmaceuticals • PCTs set drug budgets within overall allocation • ‘Indicative’ drug budget for each GP practice • Hospital drugs within total hospital funding

5. PRESCRIBED MEDICINES IN ENGLAND • Most frequent clinical intervention - 550 M GP Rx (11 per person) and 200 M in hospitals p.a • £1.5 B spent on hospital medicines each year (c. 5% of revenue) • £5.6 B in primary care (c. 50% of revenue) • Overall, >15% of NHS revenue • Current real growth of about 12-15% p.a.

6. GOVERNMENT STRATEGY FOR PHARMACEUTICALS: POLICY OBJECTIVES • Convenient and appropriate access to medicines for patients • Medicines appropriately and effectively prescribed and used • Appropriate uptake of new treatments • Good value for the NHS from supply chain with fair returns for suppliers • Strong and competitive UK pharmaceutical industry

7. ACCESS TO MEDICINES • Generally very good • Doctors enjoy substantial clinical freedom • Prescribing within budgetary framework in hospitals and primary care • No national drug list • Ministers have powers to restrict drugs - used sparingly, eg viagra • Local formularies - usually not mandatory • Access to new drugs - NICE

8. LOGISTICS AND SUPPLY • Primarily by private sector • Manufacturers and wholesalers - two large national wholesalers, AAH- GEHE and Unichem, both also have chains of pharmacies • Hospitals make national or regional contracts through NHS Logistics with some NHS warehousing and distribution

9. PRICE REGULATION • Branded products - pharmaceutical price regulation scheme (PPRS) negotiated between central Government and industry (ABPI) - model takes into account return on capital, R&D spend etc for each company • Generics - no price regulation prior to 2000 - maximum price scheme (under review)

10. MANAGEMENT SYSTEMS: CONTROL AND EVALUATION OF PHARMACEUTICALS STRATEGY • Cash limits on NHS bodies • Indicative drug budgets for GPs • Performance management by strategic health authorities and, exceptionally, DH • Powerful data system for GPs - operated by Prescription Pricing Authority (PPA) - provides detailed feedback for clinical and financial management • National Audit Commission

11. GROWTH IS DRIVEN BY CLINICAL PRIORITIES: NHS NATIONAL SERVICE FRAMEWORKS • Mental health (September 1999) • Coronary heart disease (March 2000) • Cancer plan (October 2000) • Older people (March 2001) • Diabetes (2002) • Children (?2002) • Long term conditions (2002-3)

12. Spend on statins in an English health authority (population 1.5 m)(Source: Steve Chapman, Keele University, UK)

13. Spend on antidiabetic drugs in an English health authority (population 1.5 m)(Source: Steve Chapman, Keele University, UK)

14. Spend on atypical antipsychotics in an English health authority (population 1.5 m)(Source: Steve Chapman, Keele University, UK)

15. Spend on nicotine replacement therapy (NRT) in an English health authority (population 1.5 m)(Source: Steve Chapman, Keele University, UK)

16. SUBOPTIMAL CARE: HYPERTENSION THERAPY IS OFTEN ABSENT OR INEFFECTIVE All adults Normal blood pressure TREATED - blood pressure controlled 33% 82% TREATED - blood pressure not controlled 19% Not currently taking medication prescribed for high blood pressure 48% People with high blood pressure 18% All adults aged 16 and over, England Source: Health Survey for England, 1998

17. Spend on ACE Inhibitors and AIIRAs (population 1.5 m) (Source: Steve Chapman, Keele University, England)

18. PRIMARY CARE PRESCRIBING IN ENGLAND: THERAPEUTIC AREAS DRIVING COST GROWTH Growth (%) Impact (%) • Lipid regulating drugs 32.6 19.1 • Antihypertensives 17.7 11.0 • Anti-diabetic drugs 22.7 9.1 • Antidepressants 14.0 7.2 • Antipsychotic drugs 31.5 5.3 Source: Dave Roberts, Prescribing support Unit, Leeds, UK, 2002

19. NEW DRUGS: NATIONAL INSTITUTE FOR CLINICAL EXCELLENCE (1999) PURPOSE “To provide health professionals in England and Wales with advice on securing the highest attainable standards of care for National Health Service patients”

20. WHY WAS NICE CREATED? • To minimise inappropriate variations in clinical practice • To provide clear standards based on clinical and cost effectiveness • To resolve uncertainty

21. NICE: SOME CURRENT PROGRAMMES • Appraisals of individual health technologies • Guidelines for the management of individual conditions • Assessment of new interventional procedures • Debate about ‘rationing’ but • NICE is estimated to have facilitated £300 m new drugs for 1.5 m patients - cancer, CHD, arthritis, Alzheimers

22. GENERIC MEDICINES • Generic prescribing has been Government policy for c. 20 years • Not mandatory • Substitution not permitted in primary care • Substantial savings • Price volatility in 1999-2000 • Maximum price scheme • Pricing & supply under review by Ministers

23. INCREASE IN GENERIC PRESCRIBING RATES IN AN ENGLISH REGION 1994-2001

26. PHARMACEUTICALS STRATEGY IN THE UK: SUMMARY • Medicines predominantly provided by public sector (NHS) funded out of taxation • Small private sector (<10%) • Logistics largely by private sector • Central price controls on NHS medicines • Pro-active management of cost and quality of prescribing • Advice on new drugs from NICE • Major growth pressures at present