A new twist on Make/Buy for the NHS - how to avoid the latest drugs rip-off?

I was very late getting to today's Times but when I did get round to reading it I was fascinated to find a procurement story dominating the news: "'Extortionate' prices add £260m to the NHS drug bill". I won't try to explain the whole story but in a nutshell it appears there's a loophole in the NHS purchasing policy which has created a 'get rich quick' opening for a few entrepreneurs.  The opportunity is linked with the selling of patents which are bought from the big pharmaceuticals by comparatively small, clever,  opportunistic entrepreneurs, who are then able to harvest excessive profits from the NHS, etc.  For example, here's one price trend provided by The Times:

For more than five years the NHS in England paid pharmacists £3.77 for a 28-pack 25mg tablets and £5.71 for a packet of 50mg tablets. In July 2014, under [one of the firms using the strategy], the price suddenly increased to £24 and £48 a packet respectively. Eight months later both prices doubled. Eight months after that, last November, they almost doubled again, this time rising to £97 fro a 25mg pack and £154 for a 50mg packet.

The Times suggest that this, perfectly legal practice, is costing the NHS an extra £262m a year for over 50 drugs! When NHS budgets have been unsustainable for a few years it seems odd that the Times uncovered this as opposed to the NHS - what's been happening there with benchmarking prices, procurement strategy and category management?

Now, it would be easy to throw stones at the NHS but I wondered what I would recommend if I was involved in NHS procurement. Of course I have no inside knowledge of what is actually going on but I think I would start with:

1. Exploring why such price increases have been justified and accepted?
2. Clarifying why the market isn't working effectively?
3. Ensuring prescribers only name the drugs in question when absolutely no other alternative is available - pharmacists will have a part to play here? 
4. Exploring the feasibility of a new model of patenting, and agreement to purchase, with the major pharmaceuticals which ensured that the NHS had first refusal on a transfer of some patents?
5. Establishing why the NHS, WHO or even the EU couldn't intervene and take on role which the entrepreneurs have - clearly the business case evidence is there?

It does strike me this is another variation of the make/buy decision.  Yes, I appreciate that what I'm suggesting may well be contrary to the prevailing political philosophy but when the money is running out of the NHS 'piggy-bank' surely all options need to be explored.

Can specifiers tell the difference?

Doubtless, you familiar with the old 'taste tests': "can you tell the difference between Stork and butter?" or "Coke and Pepsi?". You may also be aware of the ploys that some of those running the tests use to confuse the taste buds during such tests. However, many will also be familiar with the cry of "clinical preference" which isn't a million miles away from the 'taste tests' but rely on deference to those who say they can tell the difference between one type of surgical glove, for example, and another. The challenge has long been how to argue with someone who's a specialist in their field and cuts people up for a living! The problem, of course, isn't unique to clinicians but, in my experience variations are fairly common across most sectors. A paper by Fritz, et al., in The Proceedings of the National Academy of Sciences should provide some hope.

Fritz and Co have been experimenting with a variation of the 'taste test' on violins, l suppose we should refer to it more correctly as the 'tone test'. Anyway, they wanted to establish if some of the world's leading violinists really could tell the difference between new and old violins, including five Stradivarius (which everyone knows are the best!!). The 'tone test' has surprised many in that the leading violinists not only couldn't tell the difference but many actually preferred newer instruments!

Procurement managers need to hone some of the skills of Fritz et al., in trying to create and gain the ownership of specifiers for 'blind tests' - if specifiers really can tell the difference the test will provide the evidence, if they can't then the problem is resistance to change and possibly supplier loyalty (symptoms of a different aliment). Overcoming that resistance to change will require political and diplomatic skills and tenacity, but it could make markets more effective, save a fortune and stimulate innovation.  

I'd be interested to hear of some of the more innovative 'taste tests' you use in procurement?

P.S. On the 10 April 2014 there was widespread media coverage on how the NHS had 'wasted' £473m on treatments which were more expensive yet with no additional benefit - exactly what this post was about. You can read Ben Goldacre's account of the Tamiflu research  here.

Bad Pharma, data manipulation & procurement inquiries

Richard Bacon MP, a member of the Public Accounts Committee, gave a very good interview on the Today programme this morning. I have listened to Bacon during various PAC procurement related inquiries and have always been impressed - to me he grasps key procurement issues very quickly and provides excellent scrutiny and probing. 

Although he did make reference to the NHS being a monopoly buyer, his interview wasn't about procurement but the publication of clinical research, or more specifically, the problems of drug companies withholding information which doesn't suit their vested commercial interests. I discussed some of these issues in my review of Ben Goldacre's Bad Pharma. 

However, he made a number of comments which are particularly relevant to procurement, for example, stating that "The whole point of scientific research is that you take all the data ..." because cherry-picking and just using research which suits your vested interests distorts the truth and leads to false impressions. 

I would like PAC to reflect on that when they consider procurement evidence too.

Bad Pharma - procurement book review

I suspect that Ben Goldacre's 'Bad Pharma' would not immediately come to mind as a recommended procurement read. Let me correct that misconception. While the book is primarily about the pharmaceutical industry, it has a sub-plot of market manipulation of buyers. It highlights how sales-forces, conferences, professional bodies, advertisements, magazine articles, and even academic journals are used to manipulate, within strategic marketing plans, to deliver sales. It is a book which should be read by every procurement manager, regardless of industry - all those who touch the edge of procurement decision making need a healthy level of scepticism, if we are to deliver the best deal. If you are in doubt about its relevance, then I would ask you: 'how have you have formed opinions about the percentage savings anticipated, the basis for selecting some procurement solutions, and the judgements on perceived 'best practice?'

However, the book, like Goldacre's earlier 'Bad Science', should also be on the reading list of anyone undertaking research or involved in the peer review process. I have no doubt that rigour, reliability and validity in research would be improved. A good thing all round.

On the downside

Doctor in Commissioning

How long has GP commissioning been argued about?  How long has it been implied that GPs and their group practices could take on a wider commissioning role with assumed procurement expertise?

Today we hear that GPs have a tendency to hand out anti-depressants too hastily.  Meanwhile I'm reading Ben Goldacre's excellent book on Bad Phama which suggests that decisions by GPs are frequently distorted by skewed information from journals and the market which shape their decision making.

To me these are both indicative of poor procurement practice and, to use a widely used medical term, question the efficacy of GP commissioning. Why?

1. Good procurement is concerned with seeking out that best whole life cost solution.  Prescribing  drugs unnecessarily doesn't sit well with that as it suggests a narrow options appraisal, a lack of Whole Life Costing for patient, the NHS and even the GPs surgery;
2. Good procurement is about challenging potential requisitioners (patients) and whether there is need to consume (buy), albeit via the NHS, anything at all;
3. Good procurement is about ensuring the best possible unbiased search of the market and avoid being swayed by the marketing (see Goldacre's analysis of the existing pharma marketing).

The pursuit of GP commissioning may well be on a sound foundation of trying to get as close to the patient needs as possible, but there are some fairly basic procurement principles which need to be more generally practiced too.

Now, since it's the weekend a loosely relevant good ol' YouTube: