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Healthcare communications and public affairs

Changes within the NHS have increased the industry's need for a more thorough understanding of the political sphere

Pig money boxIn November 2005, the then Secretary of State for Health Patricia Hewitt MP announced to Parliament that PCTs should fund Herceptin for the treatment of early-stage breast cancer in advance of a NICE appraisal if the patient's clinician believes it is necessary. This marked a watershed for healthcare communications. The statement came at the peak of the public clamor over the availability of the therapy driven by highly effective campaign by stakeholders notable for political grass roots activity. The mood of the public and its parliament was such that Patricia Hewitt was given no choice but to go to the Commons and ride a coach and horses through a forthcoming NICE appraisal.

While it is far beyond my realms to pass judgment on whether Herceptin would have received a positive appraisal for the treatment of early stage breast cancer, the fact is that NICE was not given a choice. Health ministers may swear blind that NICE makes its independent decisions based on the available evidence but NICE is also accountable to the elected politicians who breathed life into it in the first place and who are responsible for spending in the NHS and setting acceptable levels of taxation. With ministers similarly accountable to public and their representative MPs in parliament, a negative decision by NICE could have the potential for a vote of no confidence in the government.

The Herceptin campaign was a major victory for Roche who effectively mobilised stakeholders to not only ensure that the government couldn't say no to rationing of therapy but also brought the product to market post-licence very quickly while simultaneously giving it a huge amount of profile within the oncology community. The therapy may well be extremely effective for those unfortunate enough to be diagnosed with early-stage breast cancer but it may have been made available on the NHS were it not for targeted public affairs communications that backed the government into a corner.

Rationing of the NHS
Whether we like it or not, rationing of NHS healthcare is a reality, albeit an unplanned one. When the NHS was created in the late 40s it was widely envisaged by its political creators that following an initial surge of patients requiring treatment for conditions untreated for years, demand would fall to steady stream of patients presenting common conditions such as toothache and hernias. What the politicians didn't foresee was the white heat of technology and associated economic tidal wave of the middle 20th century that did so much to revolutionise the ambitions of scientists and doctors. Today that revolution continues unabated with our media reporting virtually every day on therapeutic breakthroughs and the possibilities of science.

For the patient it means that was once a terminal disease is now a chronic condition and for the government it means that what was envisaged as a community-based health service with falling demand is now a multi-billion pound monolith expected to be at the cutting edge of medicine. Politics is, however, only the art of the possible. Our politicians therefore must make decisions on our behalf as to what extent we are taxed and how that money is spent between the priorities of defence, health, social services etc. With demand for healthcare outstripping already resources due to the combined forces of the ever broadening frontiers of science and an ageing and unhealthly population this can mean only one thing – rationing.

The last Comprehensive Spending Review (CSR), which the government uses to define public spending in three-year cycles, was announced to parliament by the Chancellor of Exchequer in summer 2007. He told MPs that investment in health would rise on average four per cent above inflation from £90bn in 2007 to £110bn in 2010. Increased government borrowing notwithstanding, NHS commitments in the next CSR are unlikely to be repeated as the revenue accountants count the cost of an economic downturn at best or a fully blown recession at worst. Nevertheless the CSR of 2007 marked the latest notch in what has been an incredible journey for the NHS since 1997 with investment nearly quadrupling. Such has been the success of the policy
that all main political parties have pledged now to keep the NHS as free at the point of delivery and match present government spending commitments.

Yet still the money doesn't go far enough with rationing a necessary evil. In a series of independent reviews commissioned by the Treasury, the leading economist Sir Derek Wanless, concluded that return on investment has been poor with little gains in productivity from staff despite an average 25 per cent increase in wages. Furthermore, that without further significant investment, increase in NHS productivity and preventative health strategies to tackle the causes of illness, the NHS will sink back towards the bottom of the EU league table. The net impact of all of this is that services and medicines are rationed at the point of delivery through a variety of mechanisms such as NICE, PCT commissioners, exceptional case panels, within Primary Care and through means tested policies developed with the Department of Health. The politics of healthcare means that success can often be a case of he who shouts the loudest.

For the private sector interests that supply the NHS, never before have their fortunes been so closely allied to politics and policy. Whereas 20 years ago the role of healthcare commissioners in the medicines market was simply to negotiate price controls on a periodical basis, they now are stipulating best medical practice and having access to huge amounts of data. This puts them in a very powerful position. The pharmaceutical industry can no longer communicate the benefits of an efficacious medicine to clinicians and expect it to be widely prescribed. Successful reimbursement is now dependent on whether the policy area is a priority for the leadership of the Department of Health.


Healthcare public policy environment and the pharmaceutical industry

• NHS spending rising to £110bn in 2010. Approximately 10 to 11 per cent of total NHS budget is spent on medicines. The nearly quadruple investment in the NHS since 1997 has largely gone to wage increases and capital spend with the percentage of medicine spend falling. Conservative Party committed to matching spending levels.
• Value-based pricing. An Office of Fair Trading report, reform of the Pharmaceutical Price Regulation Scheme (PPRS) and proposed consultations arising from top-up fees debate is expected to pave the way for value based pricing of medicines. Prices will be set according to efficacy and value to NHS.
• Healthcare public affairs. As commissioners and purchasers of services with access to data become the key hurdle for reimbursement, marketing communications cannot rely on clinical endorsement only. Product managers will have to understand and engage with public policy environment to ensure success.


Tackling the funding gap
With an ever-decreasing government authority and a more powerful and reactive parliament, the extent to which the policy area is a priority for government or not will fluctuate according to the mood of the many stakeholders involved. For pharma, this represents both a threat and opportunity with strategies that successfully influence the policy environment having a major impact on the sales over the life cycle of a product, so vividly demonstrated by Herceptin.

For policy-makers to tackle the funding gaps would be to move the emphasis from treatment to prevention as the former becomes unsustainable. However politically unpalatable it may be, it seems more likely than not that the DH will be forced to devote a much larger proportion of their healthcare expenditure to preventative measures. Again, the impact of this on the healthcare industry will be profound as the development of vaccine and cures will be far more highly prized than palliative medicines. The alternative to not undertaking a seismic shift in healthcare policy would be for our politicians to instigate an honest rationing debate on what proportion of GDP we are prepared to spend on healthcare, how service delivery priorities should be enforced and what portion of funding they should be afforded, and whether taxation should be increased to cope with demand.

In theory, such a debate would be a sensible and democratic means to answer the big policy questions facing us as a generation. The reality, however, would be a debate so emotively charged it would constitute little more than political suicide. The short-term answer to this issue has been the establishment of NICE to determine what products are reimbursable by the NHS. While NICE has set the gold standard for impartial assessment of the cost-effectiveness of treatments, at the end of the day it has to be accountable to politicians and has to make judgements within the parameters set by what is available for medicine and product funding. Cynics would argue that NICE is therefore little more than a clever diversion from the wider issue.

The alternative to this is to base the pricing of medicines and products on performance, not just want the manufacturer thinks it is worth. This is essentially what the Office of Fair Trading proposed in its recent review of the Pharmaceutical Price Regulation Scheme and represents the thin end of the wedge for the increased development of risk-sharing agreement policies. In its recent review of top-up payments, the latest Secretary of State for Health again reiterated the Department of Health's commitment to risk sharing agreements and announced a widespread public consultation on the issue. Whatever the outcome, the status quo is unlikely to be maintained and impact on the pharmaceutical industry profound.

The industry would rightly argue that they only bring to market those therapies that are effective anyway and are only purchased according to efficacy. However, they have never before has there been such a direct correlation proposed between price and efficacy that ultimately will mean both big winners and losers. The net impact will be felt right through the industry affecting its very shape and form. Corporate giants are likely to take an ever more predatory approach to start-ups and the most promising medicines subject to government backed early access schemes in the immediate pre or post–licensing phase to ascertain viability and negotiate on price.

Looking forward
For product managers and marketers the days when a product could be launched with effective communications to clinicians to ensure successful reimbursement are over. Product managers now need to understand the public policy environment they are launching into but also ensure the therapy area becomes or is a policy priority for the NHS. The ability to deliver creative and strategic public affairs communications to communicate right across this environment from backbench politician to patient and government official to Minister will be critical to success. Furthermore, shifting public healthcare policy is not a short-term game with one former Secretary of State for Health likening it to turning a super tanker. Strategic vision and early engagement will undoubtedly be the keys to success.

On a corporate level, the industry also has its work cut out to both effectively communicate the benefits of the industry to the public consciousness and negotiate policy on risk sharing agreements with the Department of Health. The writing is on the wall for the days of yonder when the PPRS was negotiated on a periodical five-yearly basis by senior industry executives. What will now be required are skilled healthcare public affairs practitioners with a real understanding of how policy is both developed, the nuances of politics and what it means for the industry in order to lead effective engagement programmes with decision makers in support of price negotiations. Effective healthcare public affairs communications does not just matter. Rather the ultimate success of both NHS reimbursement of therapy and the future of the UK industry depends on it. 

The Author
Jamie Holyer is managing director at Advocate Policy & Public Affairs Consulting
He can be contacted at or on +44 (0)20 7233 3558.

5th October 2009


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