Understanding the Role of CMU in NHS Pharmaceutical Procurement, Slides of Competition Law and Policy

Download Understanding the Role of CMU in NHS Pharmaceutical Procurement and more Slides Competition Law and Policy in PDF only on Docsity! An Introductio Staff , Contents 1. How do we decide which suppliers to use? 2. Who is this CMU I keep hearing about? 3. What is OJEU? 4. Why should we worry about destabilising the market? Can’t we just award to the cheapest tender? 5. Can we sell pharmaceuticals to GP’s or the community, other hospitals or to abroad? 6. How does licensing work? Docsity.com Many purchasers develop an approved suppliers list that limits the suppliers they will deal with to those that have passed an accreditation process. However the view of CMU is that this contravenes the Competition Act (see additional resources paper on Competition Act). This is a piece of European Legislation which seeks to control anticompetitive behaviour by either buyers or sellers. It is CMU’s view that an approved suppliers list may represent anticompetitive use of the NHS monopoly supplier position. We therefore have developed a list of inspected suppliers. These suppliers have been inspected by QA according to a risk assessment template agreed by the National QA Group. Information about these suppliers is shared within the NHS so only one inspection is required. Docsity.com Questions 1. Describe supplier appraisal. 2. Name at least 5 of the 10 C’s 3. Why may it be anticompetitive to use an approved suppliers list. Additional resources 1. See Separate Paper on Competition Act - document linked on Procurement Training page of PDIG website 2. CIPS Guide to Supplier Evaluation www.cips.com Docsity.com Question 2 Who is this CMU I keep hearing about? Answer The Commercial medicines Unit (CMU) Founded in 1991 as NHS Supplies, CMU is the purchasing arm of the NHS for England (similar organisations exist in Scotland Wales and Northern Ireland). CMU’s aim is to achieve best value for the NHS on the goods and services it purchases. As part of a reorganisation the NHS Logistics (or stores) side of NHS supplies was split from the contract administration section which now operates independently (as NHS Supply Chain outsourced to DHL). Docsity.com There are three types of OJEC adverts available Open Procedure – Must allow 52 days for tenders to be completed, all suppliers requesting a tender must be allowed to participate. Restricted Procedure – Allow 37 days for request to tender and then a further 40 days for the tenders to be completed and returned. We can be selective about which suppliers receive a tender. Negotiated Procedure – No notice following an unsuccessful open/restricted procedure, otherwise 37 days from despatch to closing date. Used for R&D, technical or artistic reasons for sole supply. Extreme urgency due to unforeseen circumstances. Docsity.com Tendering Procedure • All Tenders must be issued at the same time with the same closing date • All tender exercises are operated under a closed tendering system and opened by the NHS CMU Offers Administration team • Tenders are then input into Phate/Pharos and adjudication documents issued at Trust level. PHATE is a national tendering and contract management software package developed by CMU. It allows electronic interchange of information between suppliers CMU and trusts and the development of market intelligence by CMU. • Samples of lowest offers are assessed • Regional adjudications take place at consortia level first, then at a regional level • One representative from each consortia, QC, Drug Procurement Specialist and NHS CMU attend the final adjudication. • Awards are then issued to suppliers • Contract information on CD Rom issued to Trusts • Trust savings information provided back to the Trusts (only if the Trust has provided usage information at the beginning of the tendering process) • OJEC award notice issued • Debrief suppliers if requested Docsity.com Question 4 Why should we worry about destabilising the market? Can’t we just award to the cheapest tender? Answer A market is a term used in a commercial sense to define a discrete area of sales within which products compete. An example might be the market for anaesthetic inhalation anaesthesia although this may be broken down into day stay and conventional anaesthesia (or by geography) depending on how the market was being segmented. For many products (e.g. oral antibiotics), the secondary care market is a small part of the whole (typically around 6%) and as such our influence on the totality is small. However for some products (mostly injectables) secondary care is the majority of the market and hence our actions have a big effect. It has been shown that our behaviour has directly contributed to product shortages (see “Intelligent Procurement” Article - document linked on Procurement Training page of PDIG website). How can this be so? Docsity.com Questions 1. Which types of products are likely to be considered as critical by the PMSG? 2.Why does a concentration on price alone tend to reduce the number of suppliers in the market? 3.Define “supply risk”. Additional resources Intelligent Procurement article - document linked on Procurement Training page of PDIG website PMSG Webpage http://cmu.dh.gov.uk/pharmaceutical-market-support-group-pmsg/ PDIG Presentation on PMSG and NPSG Andy Alldred Nove 2011 http://www.ghp.org.uk/ContentFiles/PDIG%20Andy%20Alldred%20Presentation%20-%20Nov%202011.ppt Docsity.com Question 5 Can we sell pharmaceuticals to GP’s or the community, other hospitals or to abroad? Answer Selling to the community or to GP’s There are often different prices offered to hospitals compared with elsewhere. As a result it may appear superficially to be attractive to sell on products to GP practices for example. This would save money for the NHS and (if a surcharge is made) make money for the trust. There are several reasons why this should not be done however. Docsity.com • Normally the prices offered are to the hospital alone. Thus selling on would be defrauding the company and could be a criminal offence. At best it would be breaking the contract and could lead to its cessation by the supplier. • If the practice became widespread then the offering of preferential prices to hospitals could well cease. • Companies are very concerned about this “grey” market as it eats into their profits and distorts their sales information. • The returns to the trust are likely to be small. • The Chief Pharmacist has written to trusts saying we should not undertake this sort of activity. Docsity.com Question 6 How does licensing work? Answer Before 1968 there was no licensing of medicines or of the manufacturers of medicines. However the impact of Thalidomide and the tragic effects on pregnant mothers lead directly to the Medicines Act. Under this legislation manufacturers and wholesalers of medicines as well as the individual medicines themselves have to be licensed to assure the public of their quality and safety. Docsity.com Manufacturers and Wholesale Dealers Licences. In order to manufacture and supply medicines, it is necessary to obtain the appropriate licence. The Medicines and Healthcare products Regulatory Agency (MHRA) inspect against standards that are drawn from The Medicines Regulations 1971 (SI 1971 No 972) as amended by Amendment Regulations 1972 (SI 1972 No 1226), 1977 (SI 1977 No 1053) 1983 (SI 1983 No 1730), 1992 (SI 1992 No 2846 and 1993 (SI 1993 No 883). Extracts from these Regulations are found in the ‘Orange Guide’ (Rules and Guidance for Pharmaceutical Manufacturers and Distributors 1977, MCA, 1977, The Stationary Office ISBN 0-11-321995-4). Specials There are certain exceptions to the licensing rules. Products can be dispensed (Section 10 exemption) as specials. That is they are designed specifically for an individual patient. These medicines need to be dealt with in a different way to licensed medicines and trusts require a specific policy (6 below and 4 below). Docsity.com a) National Licensing The MHRA is an executive agency of the DoH, safeguarding public health by ensuring that all medicines on the UK market meet appropriate standards of safety quality and efficacy. The medicines require a licence (product licence). The Committee on Safety of Medicines (CSM) is a section within the MHRA which advises the licensing authorities on issues relating to the quality, safety and efficacy of medicines to ensure appropriate public health standards are met. They make the decisions about which drugs merit a licence and which do not. Details of the licence approval are available in the SPC. Use outside this specification is unlicensed (and often termed “off label”). The MHRA or CSM decision is made totally independent of the cost of the medicine. b) European Licensing The European Medicines Evaluation Agency (EMEA) mirrors the MHRA in the UK. Products passed here can be marketed within the EU. Within the EMEA, the equivalent to the CSM is the Committee for Proprietary Medicinal Products (CPMP). Docsity.com