managing the entry of new medicines in the national health service: health authority experiences and...

Health and Social Care in the Community

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© 2001 Blackwell Science Ltd

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Abstract

For the most part, the management of new medicines in the NHS has hitherto been a matter for local discretion. The result is that access to medicines is often determined by where a patient lives, as opposed to some nationally agreed clinical criteria. This ‘postcode prescribing’ has led to widespread variations in access to medicines and concerns about the resulting inequalities. Primary care groups and trusts are expected to reduce variations in access to care, whilst at the same time balancing their finances, since any overspends on prescribing must be covered by disinvestment in hospital and community services. We interviewed 21 health authority (HA) prescribing advisers to ascertain how they viewed the managed entry of new medicines in order to identify lessons for PCGs. In addition, we report the views of local prescribing managers on the potential impact of recent government policy changes on the process and speculate on the likely implications of these for primary care groups and trusts. What is clear from the study is that HAs often have no explicit objective in relation to new medicines, but that their desire to act is prompted by fears of overspending on prescribing budgets. The danger of this approach is that patients may be denied cost-effective treatments since all new medicines are seen as a problem. It seems likely that PCG/Ts will face the same dilemmas with which the HA advisers in our study have been wrestling for some time. Recent policy changes in relation to prescribing budgets and new medicines are likely to exacerbate these problems. The tensions between local priority setting, which may mean saying no to new medicines, whilst at the same time eradicating postcode prescribing and balancing budgets means that PCG/Ts face difficult policy choices.

Keywords:

Costs, drugs, medicines, policy, prescribing, rationing

Accepted for publication

6 April 2001

Blackwell Science LtdOxford, UKHSCHealth and Social Care in the Community0966-0410Blackwell Science Ltd, 2001N0vember 200196341347Original ArticleNew medicines and the NHSR. McDonald et al.

Managing the entry of new medicines in the National Health Service: health

authority experiences and prospects for primary care groups and trusts

Ruth McDonald

BA MSc PhD

, Peter Burrill

BPharm (Hons) PgDipPresSci MRPharmS

and Tom Walley

MB BCh BAO FRCPI FRCP

Prescribing Research Group, Department of Pharmacology and Therapeutics, University of Liverpool, Liverpool, UK

Correspondence

Ruth McDonald Prescribing Research Group Department of Pharmacology and Therapeutics University of Liverpool The Infirmary 70 Pembroke PlaceLiverpool L69 3GF UK E-mail: [email protected]

Introduction

Rising prescribing costs in many developed countrieshave prompted governments to adopt methods for con-taining expenditure on medicines (Bloor & Freemantle1996, Bloor

et al.

1996, Durand-Zaleski 1997, Bosch1999). A key driver of these costs is the use of newmedicines (Marchant 1997). In the UK National HealthService (NHS), these are only a small volume of totalprescribing, but are often relatively expensive. As such,the unplanned entry of an important new medicine

could disrupt NHS financial planning, and there hasbeen a government emphasis on managing the entry ofnew medicines to avoid any disruption of the service(NHS Executive 1994). At the same time, the govern-ment wishes to avoid charges of denying effective newmedicines to patients or stifling innovation in the phar-maceutical industry.

For the most part, the management of the entry ofnew medicines in the NHS has hitherto been a matterfor local discretion. The result of this is that access tomedicines is often determined by where a patient lives,

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© 2001 Blackwell Science Ltd, Health and Social Care in the Community

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as opposed to some nationally agreed clinical criteria.This so-called ‘postcode prescribing’ has led to wide-spread variation in access to medicines and concernsabout the resulting inequalities (Walley

et al

. 2000).Primary care groups and trusts (PCGs and PCTs, organ-isations responsible for delivery and commissioning ofservices in the NHS) are expected to reduce variationsin access to care, whilst at the same time balancing theirfinances. Their major focus on this is often aroundprescribing where PCG budgets are cash limited, andany overspends on prescribing must be covered bydisinvestment in hospital and community services.

Cost containment and new medicines within the NHS: recent history

In the UK, government attitudes toward the pharma-ceutical industry have been ambivalent. On the onehand, faced with an NHS drugs bill rising faster thangeneral inflation, the desire from the Department ofHealth has been for cost containment. However, theimportant role of the pharmaceutical industry as anexport earner has hitherto inhibited central directionin relation to prescribing policy (McDonald 2000). Theresulting government policies can best be characterisedas a careful balancing act, with indirect regulation leav-ing medicine producers free to set prices (Maynard &Bloor 1997). In 1994 the NHS Executive issued guidanceto HAs to ‘develop and agree strategies for improvingthe cost effectiveness of prescribing’ and specificallyinvited them to formulate a local policy for the managedentry of new medicines (NHS Executive 1994). Whilstcompliance with NHSE guidance is not mandatory,HAs who fail to implement it may leave themselvesexposed in the event of a legal challenge. Recent courtrulings in relation to medicines such as interferon betaand sildenafil (Viagra) suggest that the courts may view‘guidance’ as something intended to be implemented(Dyer 1997, Dyer 1999).

No advice was given to HAs on the methodology ormechanism to be used for considering the cost effective-ness of new products. HAs have little or no expertise inhealth economics and are suspicious of pharmaceuticalindustry studies in this area (Walley

et al.

1997). Theguidance might therefore be interpreted either as anattempt by government to protect itself from charges ofexplicit rationing by transferring responsibility to HAs,or as window dressing, giving the appearance of usefulactivity whilst in reality changing nothing. The fact thatimplementation of the guidance was never assessedsupports these views.

Following the election of the Labour government in1997, the policy toward new medicines was character-ised by greater central direction. Various measures have

been put in place which attempt to constrain the risein medicine expenditure and monitor compliance withcentral policy directives. One such measure was theintroduction of a cash-limited unified budget for healthservices at PCG level to include prescribing from April1999, to create incentives for all GPs to consider the costimplications of prescribing behaviour.

Another important change is the creation of theNational Institute for Clinical Excellence (NICE) to ruleon the ‘clinical cost effectiveness’ of new technologiesand to end ‘postcode prescribing’. However, since HAs,PCGs (and now PCTs) are charged with delivering localpriorities, a tension exists between the need to bothmaintain local flexibility and put an end to local vari-ations in access to medicines. Evidence-based ‘NationalService Frameworks’ (NSFs) are being introduced formajor disease groups in order to reduce local variation‘in the availability and quality of services’ within theNHS (Department of Health 1999, 2000). PCGs willoversee the implementation of NSFs and NICE guide-lines, with oversight from a newly created body, theCommission for Health Improvement (CHI).

However, these developments do not mean thatlocal policies are now unnecessary. Although NICE hasincreased its capacity recently, its wide remit which, inaddition to drugs, includes non-pharmaceutical tech-nologies, guideline production and clinical audit meansthat the number of new medicines (typically 50–60 peryear) exceeds NICE’s capacity to make recommenda-tions. A policy to deal with areas other than thoseconsidered by NICE and to actively implement NICEadvice will be needed by PCGs and PCTs, therefore.

All this raises a number of important questions.How, if at all, do individual HAs ‘manage in’ newdrugs? Who is involved? What are the objectives ofthose charged with commissioning care for local popu-lations in relation to new drugs and to what extent arethese being achieved? To what extent are governmentreforms likely to improve prospects for those chargedwith balancing budgets at local level? What lessons canPCGs and PCTs learn from HA policy on the manage-ment of new drugs? We interviewed HA pharmaceut-ical advisers to ascertain how they viewed the managedentry of new medicines with the aim of providing someanswers to these questions.

Methods

We wrote to all 100 English HAs to ascertain thenumber having a formal policy for managing in newmedicines in accordance with the 1994 NHSE guidance.We requested copies of written policies where theseexisted. A total of 83 replies were received and an ana-lysis of these revealed substantial variation in approach


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from very elaborate processes to no policy at all. Forty-seven HAs had written policies.

We then identified the staff member with majorresponsibility for prescribing (prescribing advisers) in26 HAs. The duties of these advisers included settingbudgets for primary care prescribing and monitoringperformance against these indicative amounts, provid-ing information and education to local GPs and devel-oping drug protocols and policies for new or sharedcare (i.e. primary secondary care interface) drugs. Allthe advisers were pharmacists and all had been in postat least 1 year (range 14 months to 7 years). Those whoagreed to participate were interviewed by telephonefrom June to August 1999, using a semistructured inter-view guide. This was developed by the researchers inconsultation with a local GP and HA pharmaceuticaladviser and piloted, using two HA pharmaceuticaladvisers as respondents. The main areas of questioningrelated to the existence of mechanisms for managingin new drugs, the nature of the process and the role ofthe pharmaceutical adviser and others in that process. Inaddition, respondents were asked to define what theyunderstood by the term ‘managed entry’. For ourpurposes ‘managed entry’ was broadly defined as doingsomething, as opposed to doing nothing, in relation tothe diffusion of new drugs locally. A detailed interviewschedule is available on request from the authors. Aresearcher with a background as an HA pharmaceuticaladviser undertook all of the interviews due to the tech-nical nature of the subject. The interviews were audio-taped and fully transcribed and institutional andindividual confidentiality was assured. The selection ofprospective participants was informed by the findingsof our review of HA policies and our sample selectionwas guided by a desire to ensure geographical distribu-tion and by the absence or presence of a new medicinespolicy (i.e. equal numbers of HAs with and without awritten managed entry policy). Twenty-one of the 26prescribing advisers approached agreed to be inter-viewed and of these 21 interviewees, 12 were based inHAs with a written policy. All English regions wererepresented.

A thematic analysis of the data was conducted bytwo researchers identifying emerging themes by study-ing transcripts repeatedly. Interview text was codedand categorised manually. This process involvedinitial close reading of the text noting down issuesby annotating the transcripts. The transcripts werereread a number of times, with recurrent themes iden-tified and data categories developed on the basis ofthese. Segments of text were then grouped by theme.Toward the end of the study, no new themes hademerged, which suggested that major themes hadbeen identified.

Additionally, a researcher unconnected with thestudy read three transcripts to validate the identifica-tion of major themes.

Results

Managed entry at local level

The results presented below summarise key themesevident from the interview data about the process ofmanaging in new medicines at local level. Therewere no differences discernible between advisers withand without written policies in terms of responses.

Participants saw managed entry as important and defined this in terms of proactive policy, producing guidance based on appropriate, cost-effective care

All participants saw managed entry as important andnecessary in cash-limited NHS. When asked to define‘managed entry’ all definitions focused on assessing theworth of new medicines in the context of scarce resources:

It means ensuring that when a new medicine becomes availa-ble, that it’s used appropriately within primary or secondarycare. By appropriately I mean in terms of its ...cost-effective-ness. So that doesn’t mean it’s not used, it means that it’s usedand as far as possible that the expenditure is planned for.

I mean basically it’s about new drugs coming to market andthem being introduced into the NHS on the basis of a properassessment of their value and where they should be used, whothey should be used in, so that we get the best value from theresources we spend on them.

The processes for managed entry described by respond-ents ranged from ad hoc responses for individual medi-cines to elaborate committee structures. However, allrespondents reported that action would be taken on newmedicines where these were likely to have a significantimpact on the HA budget. In other words, althoughthe declared intention focused on cost-effectiveness orappropriate care, the mechanisms used suggested thatcost containment was the major drive to action.

The respondents focused on the need to ‘do some-thing’ with the immediate output of the process gener-ally being the production of ‘guidance’ or ‘advice’

.

However, respondents appeared to spend little timeon the process beyond this phase. No mechanisms formonitoring, evaluation or appeal were in existence.

The practice of managing in new medicines often falls far short of the ideal

The interviews highlight the lack of health economicdata available to the HAs (only two had health economics

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input) and the inability to forecast, other than in verycrude terms, the likely local impact of the drug.

Although cost-effectiveness data was seen as desira-ble, respondents were sceptical about the contributionof more health economic data to the decision-makingprocess:

It’s not very relevant either a lot of the time is it? It means,often it appertains to some foreign country or something likethat, and so its really difficult to interpret.

Reservations in relation to economic evaluation reflectalso the real world constraints of annual budgets andthe problems of releasing resources from hospitals asthese responses indicate:

I must admit I’m a bit sceptical about some of the cost-effectiveness stuff, when they start talking about [how] itsaves this number of hospital admissions. You never get rid ofa ward or a bed. Or you never sack a consultant.

I think when you’re working at an operational level that’s notgoing to have much of an impact, and then when you blur theissue that many of the savings from drug intervention comeinto social services budgets and other peoples, and you takethe last point which is that within the health service and socialservices there is such a demand that it will always take up anyresource that you free, so nothing is going to be cash releasing.

When asked how the potential impact of the medicineon local medicine budgets was estimated, respondentshighlighted difficulties due to the absence of epidemio-logical data on likely patient numbers:

Epidemiological information? We attempt to [use it], thoughI’m slightly sceptical about some of the projections that we endup with. I think what it does as much as anything is exposehow little we know about the health or the presence of diseasein our local population … it does expose the fact that very oftenwe don’t have any sensible information on our local popula-tion itself.

This lack of data limits the ability of HAs to monitornew medicine entry, since if the size of the target popu-lation cannot be estimated, monitoring activity againstexpected volumes prescribed is difficult.

Success criteria are often not defined explicitly, but implicitly, success is viewed in terms of cost containment

When asked to comment on the success of managedentry policies locally, the majority of respondents viewedtheir processes as successful. Respondents defined suc-cess in terms of low volumes of prescribing or low levelsof expenditure on new medicines: ‘We said this is goingto cost us a fortune if you take it and then they didn’t’.

For hospital prescribing, where HAs had little infor-mation, the view that doing something was better than

doing nothing was expressed by several respondents.Another measure of success was having in place aprocess which ‘helps GPs to say no, when they’rebeing pressurised’ to prescribe new medicines. Onlyone respondent sought to elaborate on explicit successcriteria. His comment illustrates the tensions betweenproviding appropriate care and containing costs:

If your classification of success is managing it within a reason-able budget that you set out, then yes, it has been reasonablysuccessful. If the ultimate question is has the right patient gotthe right medicines within clinical need, I don’t think we knowthat.

The decision-making process was narrow both in terms of focus and stakeholder participation

Policy decisions in relation to new medicines weretaken, in almost all cases, at a prescribing committee asopposed to a broader priority setting forum. The mem-bership of these committees varied, but the HA pre-scribing adviser was, in all cases, the individual steeringthe process. In addition to this co-ordinating and secret-arial role, the advisers were required to gather datafrom a range of sources for consideration by decision-makers. In only one case did the committee include a laymember (in this case nominated by the CommunityHealth Council) and patient or public participationappears not to have been considered in the other casesas the definition of ‘all inclusive’ indicates below:

We tried to be all-inclusive, we included medicine and ther-apeutics chairmen from the trusts, we included a number ofGPs, we had an LMC representative, there was myself anda consultant in public health medicine from the healthauthority.

The process described was one of reacting to drugdevelopments (see below) and consulting prescribers orprescribing experts with the result that medicine devel-opments were not usually assessed alongside othercompeting candidates for resources.

The ideal of proactive medicine management contrasts with the reality of reactive decision-making under pressure, and with little or no control over prescribers

Although several participants used the word ‘pro-active’ when asked to define ‘managed entry’, the picturepainted of events on the ground was more one of react-ing to the onslaught of new products. This preventedthem from planning far ahead. In deciding whichmedicines to ‘manage in’, the major factor was cost, buturgency was a key factor in prioritising workload. Man-aged entry ‘tends to be when [the medicines] are due to




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be coming on the market’, said one participant, whilstanother admitted that the process for selecting medi-cines to be managed was not systematic: ‘We tend to sitthere and talk about what has come to the top of theagenda since the last meeting really’.

This reactive nature of the process meant thatadvisers were able to respond to major issues, albeitin a somewhat haphazard fashion. As one respondentcommented: ‘At the moment I think we’re too busy fire-fighting to do much horizon scanning (for future areasof difficulty)’. Many respondents complained of a lackof control over clinicians:

I think we still have problems in particular specialities whereconsultants don’t really seem terribly aware that the NHS haschanged and is in the process of changing and that’s the oldstyle, ‘I’m going to use this medicine because I feel like it’.

This lack of control was seen as greater in the contextof new medicines, compared with other technologies asillustrated by this comment:

If a drug’s been licensed and it’s effective for use then clini-cians believe they should have the ability to use it … whereas ifit were something like a new surgical procedure or a new pieceof equipment they wouldn’t immediately assume they had theright to use it, they’d have to go through all sorts of processesto get hold of it.

Some advisers were hopeful that the introduction ofa unified budget to include prescribing, together withcompulsory GP membership of PCGs, would increaseincentives amongst prescribers in primary care toconsider the cost implications of their prescribingbehaviour.

Reservations were expressed in relation to government policy changes on cost-effective prescribing

Most respondents were lukewarm, however, in relationto another aspect of government reforms, the NationalInstitute for Clinical Excellence. Almost all respondentssaw some form of early warning or specific guidancefrom government as useful. One attraction of the NICEarrangements is that difficult decisions might now beremoved from HA shoulders as illustrated by theresponse below:

I suppose that I would prefer it to be more directive in thesense that it enables you then to say, well this is the position onthis nationally and this is what we do. It removes a lot of theambiguities and the argument. I think there’s a lot of buckpassing goes on at the moment, and it always turns out to beeverybody else’s fault when a decision is made.

Expectations in relation to the potential contributionof NICE to local decision-making processes were low.

Respondents expressed fears that central guidance,by forcing the HA to provide a particular medicine orservice, might undermine local priority setting anddelivery. As one commented: ‘What worries me aboutNICE is that it could cause us more trouble .... it couldmake life more difficult’.

Discussion

Although our respondents saw managed entry asimportant, they appeared to make no connectionbetween their stated aims and the reality of managedentry, which was in many respects at odds with theseaims. The focus was on containing costs and measuringsuccess in terms of low volumes prescribed rather thanpursuing the cost-effective use of resources and appro-priate care. This reflects what appears to be theoverriding aim of the HAs: to contain costs withinbudgetary limits. This is underlined by the fact thatbudgetary impact is the main factor motivating HAs tochoose to manage in a new drug.

The use of measures such as low volumes prescribedcan also be understood in the context of the limited dataavailable to HAs to assess ‘success’. Prescribing systemsin the NHS record costs and volumes of medicinesprescribed in great detail, but there is no ability to assessthe extent to which prescribing is appropriate. Theresponses indicate that HAs are content to measuresuccess in terms of budgetary pressures, or perhapsindicate the low priority given to evaluation in theNHS generally (Ranade 1997).

Whilst respondents suggested that their managedentry process was aimed at assessing costs and benefits,often alongside other competing candidates for scarceresources, it is difficult to see how such a process is pos-sible given the lack of economic data available to deci-sion makers. The comments suggest that the societal orNHS-wide perspective taken by many economic evalu-ations was not seen as helpful by prescribing advisersfocusing on narrower agendas. Additionally, this high-lights the difficulties of freeing up resources currentlyinvested in hospital services. These arise partly becausehospitals find it difficult to release savings followingmarginal reductions in activity, or actively resist anyreduction in their budgets (Ferguson & Baker 1997).However, the fact that health authorities have no man-date and little power to engage in explicit rationing isalso likely to act as a strong disincentive to disinvest inexisting services (Klein

et al.

1996).Success was also defined in terms of empowering

GPs to refuse to prescribe new medicines. In supportingGPs in this way, respondents did not seek to distinguishbetween medicines in relation to their efficacy or cost-effectiveness. This may be because they are sceptical


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generally in relation to new medicines or because suchtechnological innovation presents HAs with a problem,in terms of increased demands from limited resources.

A rather narrow approach in terms of focus and par-ticipation was taken in relation to new drugs. It may bethat the history of ‘indicative’ amounts for prescribing,as opposed to hard budget constraints, together withthe fact that responsibility for prescribing was onlygiven to HAs in 1996, has encouraged HAs to perpetu-ate the separation of prescribing issues from main-stream HA decision-making. The problem with this,however, is that policy formulated by experts behindclosed doors may be difficult to implement, since theprocess may not be seen as legitimate by those on thereceiving end.

In addition, the introduction of cash-limited budgetsand the transfer of financial responsibilities to PCGsand PCTs means that overspending on medicines willimpact on other service areas. This suggests that PCGsand PCTs will need to open up decision-making in rela-tion to new medicines in a way which the HAs in ourstudy have not. PCGs and PCTs may want to moveaway from prescribing committees as the focus for newmedicine policy and toward broader priority settingforums with input from local communities. If this is thecase, there will be few HA blueprints around fromwhich to learn.

The picture which emerges is one of duplication ofeffort with HAs ‘reinventing wheels’ in an effort to copewith new medicines. This process leads to variation inaccess, which itself raises questions about the extent towhich HAs are able to give priority to cost-effective, asopposed to low cost, care. For PCGs and PCTs, how-ever, the situation is different. Compliance with stand-ards laid down in the National Service Frameworksand by NICE will require them to increase spending onboth new and old medicines that are recommendedin these national guidelines. This creates a tensionbetween trying to ensure a uniform provision of ser-vice across the NHS and maintaining local flexibilityin priority setting.

The creation of bodies such as CHI to oversee theimplementation of guidelines in the NHS marks a breakwith previous arrangements, whereby poor or non-existent implementation ensured peaceful coexistencefor the rhetoric of quality and the reality of scarceresources. This means that PCGs and PCTs will beunder increasing pressure to comply with central direct-ives. However, as some of our respondents pointedout, guidance from NICE may not reflect local circum-stances or acknowledge the inability to release resourcesfrom other areas and within annual timescales.

Primary care groups and PCTs will face many, andat times competing, tasks including raising standards of

care, meeting waiting list targets, ensuring fair access toservices and balancing budgets. By contrast, NICE evalu-ation is based on clinical and cost-effectiveness criteria.Whilst this may make life simpler for those involvedin NICE evaluations, the failure to acknowledge thecomplex local environment means that implementationof guidance formulated in a political vacuum will bedifficult.

Given these circumstances, it seems likely thatPCGs, like the HAs in our study, will be forced to placecost containment above cost-effectiveness in prioritysetting decisions. However, unlike HAs, PCGs willneed to monitor compliance with prescribing policies ifoverspending on new medicines is not to distort localpriorities.

Whereas HA respondents felt powerless to exertinfluence over clinicians, some saw the involvement ofGPs in PCGs and the cash limiting of the prescribingbudget as potentially encouraging GPs to adhere tolocal guidance in relation to new medicines. Anecdotalevidence suggests that the sharing of practice prescrib-ing data at PCG level is encouraging GPs to investigatetheir performance against their PCG peers and whereapplicable, investigate reasons behind their deviationfrom the PCG norm. This sharing of data is one meansby which PCGs can expose primary care prescribing togreater scrutiny. In addition, the proposed expansionof the Personal Medical Services (PMS) scheme, whichremoves the independent contractor status from parti-cipating GPs, will allow greater opportunities for PCGsand PCTs for control over the practices of PMS GPs. AsPCGs become PCTs, there will be opportunities toencourage GPs to prescribe in accordance with trustformularies and, importantly, to monitor the activity ofPCT prescribers. A key theme which emerges from theHA respondents is the failure of HAs to monitor com-pliance with policies. PCGs and PCTs are better placedto undertake this role because of their geographicalproximity to prescribers and the ability to use peer pres-sure on those who flout central policy directives. How-ever, as PCGs merge to form larger PCTs, the tendencyis likely to be toward more centralised and hierarchicalstructures, with less capacity for professional engage-ment. This may mean that opportunities for engagingwith prescribers and sustaining their commitment,resulting from the creation of PCGs, are lost in a driveto obtain economies of scale from larger PCTs (Bojke

et al

. 2001).What is clear from the study is that HAs often have

no explicit objective in relation to new medicines, butthat their desire to act is prompted by fears of over-spending on prescribing budgets. The danger of thisapproach is that patients may be denied cost-effectivetreatments since all new medicines are seen as being a




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problem. Ideally, PCGs and PCTs which formulate andmonitor policies for new medicines should be clear onthe objectives of such policies and their likely conse-quences in terms of patient access and affordability. Inpractice, however, it seems likely that they will facethe same dilemmas with which the HA advisers in ourstudy have been wrestling for some time. The tensionsbetween local priority setting, which may mean sayingno to new medicines, whilst at the same time eradicat-ing postcode prescribing and balancing budgets, meansthat PCGs and PCTs face difficult policy choices.

Conclusion

Our study found a yawning gap between the idealisednotion of how HAs thought managed entry

should

oper-ate and the reality of the process at local level. It seemslikely that the tensions observed at HA level betweenthe provision of appropriate cost effective care and costcontainment will characterise PCG and PCT thinking inrelation to new medicines.

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