Number and costs of prescription items

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1 Number of prescritpion items (m) Cost of prescriptions ( m) HSC Efficiencies - Prescribing in primary/secondary care 1 Introduction 1.1 Purpose It has been reported that there is an expected overspend on primary care prescribing by circa 5-6m by end of 2016/17. This paper is provided by way of update and briefing to the HSCB Board. As part of the financial planning before 16/17, it was projected that 20m prescribing efficiencies could be delivered: 15m through ongoing actions in primary care 5m through policy changes and/or actions by secondary care. Given the delivery of efficiencies in previous years, the potential for efficiencies and the capacity for changes to be made, this package was considered a stretching but realistic target. A summary of volume of prescription items and costs over the past 6 years (together with estimates for 2016/17) is set out in the graph below which shows that despite increasing demand and activity, HSCB has been successful in reducing overall spend in this area: 42 Number and costs of prescription items / / / / / / /17 Year Items(m ) costs ( m) 350 1

2 In early 2016, DH indicated the need and expectation that 30m prescribing efficiencies be delivered. The direction given was that 20m should be delivered from primary care prescribing and 10m from Trusts. Advice was given to DH that for 20m to be delivered in primary care, further action would be required either through policy changes and/or actions by Trusts. A plan for delivery of 15m efficiencies in primary care was developed and implemented by the HSCB Pharmacy Efficiency Review Team (PERT) from 1 st April 2016 and this was shared with DH. In April 2016, The Chief Pharmaceutical Officer convened a group consisting of pharmacy and finance representatives from HSCB and Trusts to consider the potential for delivery of 30m. HSCB shared its plans for 15m of efficiencies in primary care and highlighted areas that Trusts and DH could support delivery of additional efficiencies. Another meeting was convened in May at which further discussion of potential actions that Trusts could lead on were considered. Trusts subsequently identified a relatively modest quantum of efficiencies and these were reflected in Trust Delivery Plans. It was apparent that there would be an under-delivery from Trusts. The Permanent Secretary wrote to Chief Executives on 23 rd August 2016 to outline the final budget position and expected efficiencies. In this letter it was directed that a further 3.235m should be transferred from primary care prescribing budget and that an overall target of m efficiency should be delivered in primary care. It was noted in this letter that 6.6m of the 23m target should be delivered by reducing over the counter medicines spend. However, as of October 2016, no additional policy cover has been provided to expedite this reduction in spend. This paper sets out further context, the factors considered as part of the budget build and efficiency plans and highlights the issues for the Board for the remainder of the year. 1.2 Background The prescription and supply of medicines and related products attracts an investment of circa 580m each year in the HSC. The approximate split is 400m in primary care and 180m in secondary care. There has been a series of reviews conducted which have identified the potential for prescribing efficiencies, predominantly in primary care: The Appleby review commissioned by the DHSSPS in 2004 identified 50m of savings largely through the increased use of generic medicines in line with other parts of the UK The McKinsey review conducted in 2011 identified a range of efficiencies (compared with the lowest quartile in England, at least 100m) The Appleby Rapid Review of 2011 confirmed a higher utilisation of medicines and recommended reduced unit cost through use of generics 2

3 The NI Audit Office in its document, Primary Care Prescribing 2014, commended the work undertaken by the HSCB but highlighted further work should be undertaken to maximise efficiencies. This conclusion was reinforced by the Public Accounts Committee in Crude comparisons have been drawn between primary care prescribing in Northern Ireland and other parts of the UK. However, on closer examination, there are differences that need to be recognised: Simple comparisons of cost per head do not taken into consideration deprivation / need factors The provision of medicines stock to GP practices is managed through a stock order scheme in Northern Ireland charged through to the community prescribing budget line. This is not the case in England and Wales The provision of oxygen in Northern Ireland is charged to the community prescribing budget line. This is not the case in other parts of the UK Trust clinicians in out-patient departments in Northern Ireland write a recommendation to the GP to prescribe a medicine. In all other parts of the UK, Trusts provide substantial out-patient dispensing arrangements which are separate to the community prescribing budget. By way of comparison, in England costs of prescribing between primary care and hospital are in a ratio of 8.5bn : 5.8bn or 60% primary care vs 40% secondary care. In Northern Ireland the ratio is 400m : 180m or close to a 70% primary care vs 30% secondary care split. It is therefore not possible to provide an accurate assessment of how these differences will impact on costs. In taking forward the drive for efficiencies, a whole-systems approach is required to avoid cost-shifting. 3

4 1.3 Prescribing efficiencies to date In simple terms, in order to reduce costs, either less prescriptions could be issued (unit volume) and/or the most cost effective medicines should be selected (unit cost). The Pharmacy Efficiency Review Team has been the lead in co-ordinating the activity of HSCB, LCG and Trusts to optimise prescribing in order to release efficiencies. A fundamental principle has been to focus on quality and safety first which has led to efficiency gain and improved outcomes. Over the last six years, since the HSCB received the devolved budget for this area of spend, there has been significant levels of performance in delivering reduced spend releasing funding to support other aspects of HSC care. Financial Year Actual (A) / Estimated (E) Expenditure Budget Budget gross of Eff Target Total Savings realised (Expenditure v Budget) Forecast Spend gross of cumulative efficiencies k k k k k 2010/11 417,563 A 403, ,320 25, , /12 394,672 A 404, ,219 39, , /13 375,105 A 380, ,607 34, , /14 376,715 A 386, ,084 32, , /15 394,598 A 396, ,207 26, , /16 397,797 A 394, ,280 18, , /17 393,453 E 386, ,176 16, ,443 2,749,903 2,751,658 2,943, ,990 The delivery of the scale of efficiencies to date in this budget area should be recognised as well as the fact that it will be generally much more challenging to release further efficiencies moving forward. 4

5 1.4 Levers to influence change There are professional, clinical and contractual influences that can be brought to bear to influence prescribing choice. The main overt contractual lever to influence action by GP practices was an element of the Quality and Outcomes Framework within the GMS. In 2014/15, these points were subsumed within core funding and it has been recognised that there is potential for a loss of contractual focus on this important element of service. While this incentive is no longer available, there is a disincentive through the contractual obligation to avoid excessive prescribing. Directorate of Integrated Care continues to take action on this element of performance measurement and review with practices. NIGPC has highlighted the need to provide additional resource under an invest to save initiative involving practice based pharmacists to enable change and this is being actively progressed. The recent establishment of GP Federations has been helpful in terms of the effective deployment of practice based pharmacists. However, it is notable that NIGPC is raising issues in respect of the GP practice capacity to make changes. NIGPC leaders hold a view that linking clinical and financial responsibility through indicative budgets held at Federation level would further support changes to prescribing activity at GP practice level. Over the past two years work has been undertaken with HSC Trusts to progress the actions that were being led in primary care through senior clinician engagement and discussion. These have been successful in raising 5

6 awareness through clinical lines within Trusts and developing partnership arrangements to take forward work on the efficiency agenda. Following discussions with DH Permanent Secretary in January 2016, there has been agreement that there should be a whole systems approach to drive out as much efficiency as possible. This recognition that the HSC needs to embrace the work programme was welcomed by the Pharmacy and Medicines Management and Finance Teams in HSCB. Their work has continued in line with the projected efficiency delivery in primary care, however, little additional tangible action has been taken forward by other parties in order to deliver the magnitude of the efficiency target required. 6

7 2 Unit Price 2.1 Generic Prescribing/dispensing Typically, increasing the rate of generic prescribing will reduce unit price. Ten years ago, NI had a relatively poor uptake of generic prescribing but this has since changed with rates of generic prescribing now comparable with other parts of the UK: 80% 75% 70% 65% 60% 55% 50% 45% 40% Generic Dispensing Rate 74% 71% 72% 68% 64% 61% 2010/ / / / / /16 The potential to deliver additional efficiencies through generic prescribing is somewhat limited and the opportunities have reduced. However, where there is still potential, this is highlighted. More recently, there have been ongoing negotiations with Trust clinicians in respect of generic medicines used in epilepsy and organ transplants. There is an anxiety that changing these medicines from a branded form could lead to non-compliance by patients and loss of clinical control. This issue is being worked through carefully with senior Trust clinicians. It should also be noted that full application of generic prescribing is neither appropriate nor safe with some patients requiring continuance of branded medicine for clinical reasons. The reviews mentioned in the introduction all pointed to generic prescribing as a means to deliver significant efficiencies. These have now largely been delivered. 2.2 Branded Generics While the general policy is for prescribers to issue prescriptions for generic medicines, there is a range of medicines that have a specific formulation and it is important that prescribers select out the specific brand. For example, a medicine may be formulated in slow release (such as once per day formulation). In making any change to a patient s medication, it is important that there is engagement with the patient and the prescriber. It is also important that they both have confidence that the change being made will be 7

8 lasting. As it is so important to have the buy-in required and as it is such a competitive market, a process has been established to make recommendations which are likely to provide viable efficiencies over a number of years, with assurance over continuity of supply. Cognisance is also taken of the purchasing arrangements in secondary care to ensure alignment across the HSC. 2.3 Procurement The DHSSPS initiated processes to introduce procurement across primary and secondary care in However, following a judicial review challenge it was accepted by the DHSSPS and HSCB that further legislative changes are required to enable procurement in primary care. In the meantime, HSCB can proceed to issue guidance around the selection of medicines based on clinical and cost-effectiveness. 2.4 Formulary Formularies are good practice reference sources which set out the preferred choice of medicines for common conditions. The selection of a medicine on a formulary will be based on the relative clinical and cost effectiveness. In 2010, the DHSSPS instructed the HSCB to put in place a formulary for primary and secondary care which it has now established. GP practices are now being monitored against their prescribing compliance with the formulary and are being encouraged to align their prescribing choice. Trusts have been unable to provide any level of assurance with respect to clinician compliance in secondary care. This is a key area to be addressed in that hospital prescribing is a major influence on prescribing costs but thus far not systematically monitored or performance managed.the NI Formulary is complete and work will continue on its review and its implementation across the HSC. 2.5 Rebate While procurement of the most economically advantageous price has been blocked in primary care, there are still avenues open in respect of voluntary rebates from pharmaceutical companies. There are a number of rebates currently in place yielding in excess of 2m per year for HSC and a process has been established to ensure HSC maximises the availability of such schemes. 8

9 3 Unit Volume Many medicines are not consumed by patients for a variety of reasons. For some long term conditions, rates of non-compliance can be as high as 50% i.e. 50% of prescribed medicines are not consumed. There is no way of calculating precisely the costs of medicines wasted in Northern Ireland. A study conducted in England in 2012 estimated a cost of 500m per year equating to 18m in Northern Ireland. A range of initiatives have taken place in order to improve compliance and reduce waste. 3.1 Prescription Charges In 2008, Minister McGimpsey approved the removal of prescription charges over two years in 2009 to reduce the charge by 50% and 2010 to remove the charges altogether. Prescription charges are still a feature in England (albeit there was an adjustment to the exemption categories with cancer patients becoming exempt). The current charge is 8.40 per item. HSCB has written previously to the DH to examine this issue further and it is understood that a policy review has been conducted. The expected yield from reintroducing the original prescription charge or a co-payment model is twofold: Income of several millions of pounds depending on model chosen Reduction in prescription volume Any reintroduction of prescription charges would need to be approved through a change in policy. There will be costs to patients and their families which could inhibit the appropriate use of HSC services. The administrative costs of reintroduction of charging would also need to be scoped. 3.2 Publicity Campaigns The DHSSPS sponsored a series of publicity campaigns in 2011, 2012 and 2013 focusing on medicines waste. Polls conducted after the campaign identified a reasonable response to each campaign. The impact of such campaigns have been enhanced with a dedicated focus on patient, carer and community engagement and this element of work is currently being taken forward with a particular focus on social media. The impact of social media can be measured through reach and one particular post has reached 400,000 people through Facebook. 3.3 Restrictions to what is available on the HSC The range of products available on the HSC has been questioned: Prescription of products that are available over the counter (e.g. paracetamol) Medicines that are designated as unsuitable for prescribing based upon clinical appropriateness. Food items available for particular conditions such as Coeliac Disease. 9

10 Herbal products Specially formulated products ( Specials ) HSCB has introduced guidance, monitoring and feedback to improve the appropriateness of prescribing of these products and this has yielded efficiencies of at least 2-3m per year. HSCB has sought policy change to seek further efficiencies. DH has indicated that correspondence will be issued by the Permanent Secretary and/or the chief professional officers. 10

11 4 Pharmacy Efficiency Review Team (PERT) As outlined previously, this Team continues to review the pharmaceutical efficiency programme on an ongoing basis. The Team has overseen the delivery of 177m efficiency in the past six years and reviews and takes forward a planned efficiency programme each year. The plans for 2016/17 have been established and these are being implemented by the HSCB pharmacy advisers. It is anticipated that delivery of the 15m efficiency will be challenging. Factors that are being reported include lack of staff capacity to lead change and lack of capacity in general practice to implement change. An example of this has been the under-delivery of the medicines management dietician project due to recruitment difficulties. 5 Recommendation HSCB Board is asked to note: The work that has delivered 177m of efficiencies in the past six years The change to the efficiency plan that has been directed by DH in-year The impact this change has had in respect of the expected primary care budget out-turn The ongoing activity being taken forward Dr Sloan Harper Director of Integrated Care 11

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