Wilmington Healthcare’s Oli Hudson explains how the drug funding landscape is changing and what industry must do to adapt.
Who pays for what in the NHS is a fundamental question for pharma companies seeking market access, and the answer is changing significantly as key reforms take effect.
This article looks at how drug funding is evolving. While this is still an emerging picture, we’ll provide the latest intelligence on how the reformed system will operate at different levels and what this means for industry.
Seismic shifts
The system we all know has been in place in a similar form for at least a decade. On one level, many drugs, especially those used in primary care, have been funded locally by the local payer, which since 2013 has been clinical commissioning groups (CCGs).
For rarer diseases, there’s the specialised commissioning route, funded nationally by NHS England. For high-cost novel cancer drugs, there was the national Cancer Drugs Fund, while a few other drugs, such as those for hepatitis C, also got ring-fenced national funding.
Two important developments change all of this. The first is the phasing out of CCGs. These are being replaced by larger integrated care systems (ICSs) which will be supported by integrated care providers (ICPs), coalitions of local providers operating at place level
The second is at a national level, where responsibility for specialised commissioning will be gradually taken over by ICSs, thereby introducing some significant regional differences in how specialised medicines are selected across the country.
Yet added to this are further layers of complexity. With CCGs gone, the area prescribing committees (APCs) that traditionally held sway over local formularies will need to be replaced. It is likely is that these APCs will move to ICS level too.
Furthermore, within ICSs there will be independent decision-making by integrated care providers (ICPs) as they develop their own formularies and ways of interpreting overall ICS medicines guidelines.
The creation of ICS-level formularies
What will this mean in practice? Let’s start at system level.
While NICE-approved medicines must by law be funded by the NHS for appropriate use in appropriate patients, this by no means guarantees widespread prescribing, which is set through formularies devised and managed at local level.
Formulary development has for the past decade been carried out by area prescribing committees (APCs) attached to one or more CCGs. The composition of these committees includes commissioners, medicines management advisors, prescribing leads and pharmacists from CCGs and Trusts in roughly equal measure.
What happens to these decision-makers in the reformed landscape depends on local circumstance. Some APCs have already tended to cover a greater area than one CCG. In this case, their consolidation into a new ICS structure is likely to feel familiar.
Things are different where the ICS straddles multiple APCs. Here, the process of matching against the new system footprint will likely mean a more significant upheaval in terms of personnel and decision-making processes.
Place and ICP-level involvement
At place level, it is become apparent that formularies are also being devised, adding another layer of market access to navigate.
With formularies potentially in operation at both place and system level, the question is which will hold sway in determining local drug policy?
The answer, unfortunately, will vary. Where local power is invested more centrally in the ICS, the ICS formulary is likely to continue the work of the APC without the need for separate placed-based medicines management initiatives.
Where the sense of autonomy at place level is greater, with strong voices from large teaching hospitals, for example, there will more likely be moves towards local interpretation and variation from the ICS formulary.
The national funding landscape
Finally, at a national level, we know from NHS England’s Integrating Care White Paper that the direction of travel is for ICSs to have a ‘single pot’ of funding, which would bring together previously disparate acute, primary care and specialised commissioning (spec comm) budgets.
Recent statements by NHSE’s Amanda Pritchard have clarified the situation, with different ICSs taking on more responsibility based on their ability and willingness to take over some specialised commissioning, while some services will continue to be commissioned centrally.
The National Tariff review, meanwhile, explained how the aligned system would work when it came to drugs – specifically, it provided a list of drugs with a column explaining whether or not a drug would be covered by the aligned (block) payment.
Drugs from both the ‘exclusion list’ paid for by CCGs, and ones on the specialised commissioned list, paid for by NHSE, are now included on the new ‘block’ list, meaning that responsibility for funding these is now gradually moving over from the national system to ICSs.
There is an important caveat though: whatever the planning guidance and White Paper says, it may take a while for full transfer of spec comm powers to be transferred. Pharma will therefore need to operate in an environment of uncertainty and regional variation.
Medicines Funding Review
This is a complicated, fast-moving picture. There will be variation in custom and practice, which means understanding regional and local context will be more important than ever -securing highly granular stakeholder intelligence is vital.
Crucially too, these are no longer hypothetical changes. It is really important that pharma companies get up to speed quickly, securing the data they need to take account of the different working relationships and decision-making processes being established.
To help you do so, Wilmington Healthcare’s Medicines Review has in-depth analysis of the key issues to consider, including how to access the intelligence you need to adapt your approach.