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What will the NHS’s Capped Expenditure Process (CEP) mean for pharma?
Paul Midgley, Director of NHS Insight at Wilmington Healthcare, explains how pharma should tailor its approach
Since the publication of the Five Year Forward View (5YFV) in 2014, the NHS has taken a tough stance on trusts and CCGs that continue to overspend and rely on hand-outs from others elsewhere within the service.
In April this year, NHS England and NHS Improvement made it clear that the newly formed Sustainability and Transformation Partnerships (STPs) must live within their means, and they singled out 14 trusts and CCGs that are expected to fall short of their 2017-18 control targets.
The Capped Expenditure Process (CEP) is designed to ensure that the 14 CCGs and trusts deliver on their control totals and do not exceed their budgets. These health economies are spread out across the country from Devon and Cornwall to North West and South-East London, the Vale of York and Scarborough and Ryedale, and Northumberland. They have been told they must make ‘difficult choices’ to stay within the combined funding envelope for their area.
Overall, the CEP initially aimed to close a financial gap of £470m, which was the difference between the financial plans and targets of providers within the 14 areas. However, proposals drawn up locally suggest they will now be expected to meet potential savings of £250m, although there are significant concerns about the risks involved in delivering them.
What will be the regional impact of CEP?
Trusts and CCGs will have to make drastic cuts to comply with the CEP. A variety of measures are being considered as part of the process and they are believed to include closing or downgrading hospitals, wards and services, including maternity and A&E units. Redundancies and cuts to staff numbers; limiting or blocking outsourcing and patient choice; rationing services and systematically extending waiting times for planned care are among the other potential implications of CEP. It is also anticipated that NHS funding for certain treatments could be restricted or removed.
How should pharma respond to the CEP?
Identifying where money is being wasted on sub-optimal healthcare and defining how products and services could be changed in order to improve outcomes and save money is already a key priority for the NHS. Effecting such change will be critical in CEP areas and pharma companies that wish to engage with them must gain a clear understanding of the unique challenges they face and tailor their proposition accordingly.
NHS Rightcare is a good starting point since it recently published regional performance statistics in its Commissioning for Value Insight packs, which are designed to provide planning guidance across the NHS. To help CEP areas better manage their prescribing costs, pharma could conduct a further analysis of Rightcare statistics.
Balancing doctors’ demands for drugs that demonstrate strong clinical benefit and patient safety against medicines management teams’ focus on cost savings will be critical in CEP areas. Selling expensive new drugs will clearly be very challenging and to gain competitive advantage, pharma needs to think about adding value wherever it can, such as supporting on adherence and gathering real world evidence on a drug’s performance.
Managing the pharma salesforce
Localised deployment and targeting resources on a regional basis has never been more important. For many pharma brand teams, the CEP may mean they have a new end customer in these areas. For example, some CEP areas may be forced to adopt a ‘lockdown’ mentality to new drugs, which may result in sales representatives being unable to visit doctors without permission from the Chief Pharmacist.
Rather than struggling to deploy field sales representatives in those areas, pharma may find it more beneficial to have market access experts who can engage directly with the senior budget holders and Transformation Directors who will be making critical decisions on drugs and technologies.
Maintaining a strong relationship with the HCPs who will be prescribing these drugs will still be very important, of course, and, if face-to-face contact is not possible, then pharma needs to ensure that it marries its business proposition in CEP areas with a strong content marketing programme disseminated across a variety of channels.
In such areas, bringing together multi-disciplinary networks of senior stakeholders across clinical settings, with commissioners, finance, local authority, public health and local third sector partners is an approach that would stimulate a focus on solutions to their shared problems.
Conclusion
To succeed in this increasingly tough economic NHS climate, pharma must truly understand and empathise with the diverse needs of individual CEP areas and become adept at locally managing and targeting its resources. This could involve the development of networks and dissemination of innovative and engaging content-led marketing campaigns for HCPs as well as the strategic deployment of market access staff if face to face engagement for field sales representatives is not feasible.
Ends
Paul Midgley is director of NHS insight at Wilmington Healthcare. For information on Wilmington Healthcare, log on to www.wilmingtonhealthcare.com
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