COMMITTEE FOR HEALTH, SOCIAL SERVICES AND PUBLIC SAFETY
Generic Prescribing
2 April 2009
Members present for all or part of the proceedings:
Mrs Michelle O’Neill (Deputy Chairperson)
Mr Thomas Buchanan
Dr Kieran Deeny
Mr Alex Easton
Mr Tommy Gallagher
Mr Sam Gardiner
Mr John McCallister
Ms Claire McGill
Witnesses:
Dr Norman Morrow ) Department of Health, Social Services and Public Safety
Dr Mark Timoney )
The Deputy Chairperson (Mrs O’Neill):
The next item on the agenda is a briefing from officials from the Department of Health, Social Services and Public Safety on generic tendering. Members will recall that representatives of the Pharmaceutical Contractors Committee (PCC) gave evidence to the Committee in January and raised some concerns about generic tendering. We also met the Minister on 5 February to discuss the issue briefly. At that meeting, the Chief Pharmaceutical Officer agreed to come back and discuss the issue in more detail.
I welcome Dr Norman Morrow, the Chief Pharmaceutical Officer, and Dr Mark Timoney, who is also from the Department.
Dr Norman Morrow (Department of Health, Social Services and Public Safety):
I will give a brief presentation, if I may. As you said, we touched on this matter a little at the end of the meeting with the Minister, so this is an opportunity to spend some more time on the subject.
I will give the Committee some background on the issue of generic medicines and a sense of the direction in which we are trying to go. As members know, generic medicines are non-branded versions of a product that come on to the market approximately 10 years after the original. They are subject to the same licensing conditions as the branded products, and, therefore, we can be assured of their quality. The policy of the relevant Departments in England, Scotland and Wales is to prescribe generic medicines. That offers the best value to the Health and Safety Executive (HSE) without loss of quality, and because of the savings that are made, we are given some scope to fund new and emerging medicines.
In Northern Ireland, we set a target of 58% of dispensing to be generic to be reached by 31 March 2009. We reached that target in December 2008, but it does not stop there. We will extend that target in this comprehensive spending review (CSR) period.
Acquisition costs — the prices at which pharmacists buy generic medicines — are usually less expensive than buying original medicines. However, there is a lack of transparency in the process in that there is a differential in the prices that are paid by pharmacists for the medicines and the drug tariff reimbursement rates. Drug tariff reimbursement rates are the rates at which the Government, the Department and the boards reimburse pharmacists for their dispensation.
I will park that brief description of generic medicines and refer you to the pharmaceutical clinical effectiveness programme, which is mentioned in a previous Hansard report. The clinical effectiveness programme was set up after John Appleby’s report, which identified that £55 million of costs could be saved through better medicines management. I was handed the initiative to achieve those savings through that programme.
We took the view that it was a flawed concept to consider the whole issue from a mere economic point of view. We developed what we felt was a more compelling concept, which states that investment in quality and safety would improve health outcomes and gain efficiencies in medicines management. We have tried to move forward on the basis of the paradigm: quality plus safety equals improved health outcomes and efficiencies.
Over the three-year CSR period between 2005 and 2007, we developed a range of initiatives around that equation. Not all those initiatives were cash releasing, but they brought together a focus on the concept that I have just emphasised. We achieved savings of some £70 million in that CSR period, and the Minister referred to those savings in Committee. Over the same period, we also increased the number of prescriptions that were dispensed by more than one million per annum, which was another benefit to the service.
We are targeted to deliver a further £40 million of savings in the drugs budget in the current CSR period. That is the context in which we are working, and a focus on generic medicines is one strand of the approach. Over the past four years — and into the current CSR period — we have delivered a 15 percentage point increase in generic dispensing levels. Those levels were increasing at about only 1 % per annum previously, but we have now reached a 58% generic dispensing rate.
We have also been exploring the possibility of establishing a Northern Ireland-wide tender process for the procurement of generic medicines only. The idea is that we could derive further benefits from volume purchasing, make the prices completely transparent and ensure better continuity of supply to patients. The last time that I was before the Committee, I mentioned that we had all experienced colours, sizes and presentations of generic medicines changing and that that causes confusion. Creating greater continuity in the system will improve patients’ confidence, improve adherence to medication regimes and reduce wastage.
Our approach has generally received strong support from within the service, but community pharmacists do not support it. Their view is that our approach would lead to their losing the retained profit that is derived from their purchasing activities. They feel that the loss of profits that they gain from the prescribing budget would jeopardise the viability of community pharmacists. Put simply: community pharmacists gain an additional benefit if they buy at a lower price than that at which we reimburse them. However, I stress that it is not our intention to affect that sector adversely.
We anticipate that we would share the efficiencies in such a way that would enhance patient-focused pharmaceutical services. That would allow maintenance of the community pharmacy income and would also deliver on the efficiency programme, simply because we are taking Northern Ireland as a total package as distinct from 500 community pharmacies dividing it up and carrying out their individual procurement activities.
I want to highlight to the Committee the key issues that underpin our approach. The first and most important issue is that of safety. If we can provide continuity of supply to patients, that will overcome much of the existing confusion, which, as we have previously acknowledged, can lead to the potential for misadventure with medicines, particularly with elderly patients. Safety is an important issue.
The second issue is that of transparency. We are dealing with public money, and we need to know how it is being used to obtain the best value from our scarce resources. Evidence from the hospital sector, where we have been carrying out regional procurement for as long as I have been in practice, supports that. We can get better value through that approach.
The third issue is that of quality. We are not simply looking at the lowest price; that would be an inadequate measure of quality. We want to take account of the presentation of the medicines, the packaging and the labelling. A range of issues affects the way in which patients can use their medicines effectively. Price is the final issue that is taken account of in the tendering exercise, but it is part of the criteria. Safety, transparency, quality and continuity are the key issues.
The Committee has received some material that indicates that the generics market can be very volatile. We fully accept that. Last week, Mark and I met a generics manufacturer, who informed us that our approach has the possibility, opportunity and potential to provide stability in the marketplace because manufacturers will be able to plan the manufacturing process to deal with the needs that we can predict. We believe that our approach will create stability rather than breakdown.
We also believe that the process has integrity, not because it is a normal part of good practice in procurement but because we conduct the process under EC procurement rules. Therefore, it encourages, rather than excludes, real competition. Over 60 manufacturers or providers participated in the tendering process, which indicates that we are fostering, not limiting, competition.
The final issue is opportunity. The pharmacy model has changed very little in the 60 years since the National Health Service was set up. It is founded on a volume-of-dispensing model — in other words, pharmacists are remunerated largely on the number of prescriptions that they dispense. That is not an exclusive statement, but that is generally where the bulk of it comes from. When that model was set up, there was a relatively limited range of medicines available. Today, some 30 new and unique medicines are added into practice every year. Those medicines are considerably more specialised and represent the ubiquitous technology in our health system.
Some 27 million prescriptions are dispensed in Northern Ireland annually, so very few patients are not using medicines as part of their treatment plan. Our view is that, in the same way that therapeutics has been revolutionised, we need an equally modern, complementary pharmaceutical service to support that. We have highly trained pharmacists who are able to offer more patient-based, and long-term condition-management-based, services, and we believe that that is where the benefits of pharmaceutical services will lie in the future. The concept of reinvestment would, in part, achieve that. At the same time, it would offer the Minister some of his efficiency savings. We want patients to benefit from all our skills rather than pushing pharmacists in the direction of finding the best-costed medicine.
Perhaps that is expressing the issue in an extreme way. However, we can improve the medicines management process considerably by deploying our professional resources more appropriately. That has been done successfully in the hospital service. We think that we can do that and, therefore, benefit a much wider constituency.
Those are the primary issues driving our work. It is about safety, transparency and integrity; it is about ensuring that we maintain, and drive up, quality; it is about continuity of service and the creation of opportunities to employ highly skilled resources in a way that will benefit patients.
The Deputy Chairperson:
We agree that the role of the pharmacist is important in the community. Pharmacists provide a good service, usually over and above what they are contracted to do. Many Committee members represent rural communities, in which pharmacists are extremely important.
Representatives from the PCC raised concerns with the Committee about consultation with community pharmacists. When the Minister attended the Committee, we raised that issue, but we had only five minutes in which to discuss it. Since then, has there been any correspondence with the PCC to try to thrash out the outstanding issues?
Dr N Morrow:
Yes, on two counts. I dispute the fact that there has not been a great deal of consultation. We have had quite a lot of engagement, although we would have liked more. The PCC was reticent about participating in, and giving credence to, a process with which it fundamentally disagrees; I understand that. However, only last week, we had a meeting with the PCC and the Minister, which is part of the agenda. The Minister has agreed to meet the PCC again after Easter.
The Deputy Chairperson:
Did anything positive come out of that meeting?
Dr N Morrow:
It was an opportunity for the Minister to outline what he has to achieve, particularly concerning efficiencies. It was also an opportunity for the PCC to restate some of its concerns. The PCC said that it could offer ways forward that could help the Minister to achieve his efficiencies. We have not heard anything further on that issue, but the PCC has been given an opportunity to come back and make a presentation to the Minister.
The Deputy Chairperson:
Efficiencies must be achieved. When public money is involved, transparency is a key issue. Through your negotiations, you are raising the issue of a lack of transparency in the current system. You mentioned continuity of supply and safety. However, there are concerns that the system of central procurement could lead to a monopoly. That may never happen; but it could. Will people be in danger of a shortage of supply?
Dr N Morrow:
I will answer that by way of two examples. A few years ago, we decided to centralise our supply of flu vaccination, which, traditionally, had been procured through community pharmacies. That system fell apart somewhat, because a manufacturer was unable to supply what he had promised, despite the fact that the majority of the orders had been placed with that individual. We centralised the supply, and, over the past three years, we have had the most secure system for continuity of supply of the flu vaccine. We have also had the highest uptake of flu vaccination in any part of the United Kingdom.
That is simply one example to demonstrate how, through a procurement process, we can ensure continuity of supply. We do not put all our eggs in one basket, and we have split the contract over three manufacturers. It is not becoming a monopoly: we have shared contracts. As long as I have been in pharmacy practice, we have had a regional procurement system for the hospital service. The procurement of medicines for secondary care in trusts is carried out at a regional level in order to get best value and continuity of supply.
Mark will speak about wound-care products. In a major exercise, we have rationalised those and moved to a central procurement system.
Dr Mark Timoney (Department of Health, Social Services and Public Safety):
Some years ago, the wound-care products available in secondary care in modern wound-management techniques were not always available in primary care when patients were discharged for ongoing care. That was because the drug tariff was not quick on the uptake of modern wound-management techniques.
We reviewed what products the trusts were using and what patients needed when they returned to primary care. We engaged a panel of tissue viability experts and other representatives from the trusts and from primary care. In essence, we reviewed the available evidence for all existing wound-care products and those that were required to manage patients, regardless of which sector of the health and social care service they were being managed within. That resulted in the rationalisation of the number of wound-care dressings from some 600 to some 130 of evidence-based, desirable wound-care products available to patients wherever they were.
There was full engagement with the suppliers and manufacturers of those products and with stakeholders such as the PCC. As a result, we were able to agree a wound-care formulary for Northern Ireland with those expert stakeholders, which was put in place two years ago. We have demonstrated that it has been a success and has contributed to the reduction of wastage that is associated with some products, for which there was little evidence to support their use. It has allowed our patients, and the healthcare professionals who are looking after them, to manage more effectively the transfer from secondary care to primary care, with the type of intervention that those patients need.
We are currently reviewing that process. We recognise that there will be constant innovation and new products will come to market that deserve a place in therapy. We keep a watching brief on that, and we will launch a new formulary and contract over the next 12 months. That is another example of how the pharmaceutical clinical effectiveness programme has allowed us to assess quality, examine the safety of presentations and consider what is cost-effective for Northern Ireland on the basis of evidence.
The Deputy Chairperson:
The Committee was told that the change in the wound-care products formulary led to 95% of those products being unavailable to pharmacists in the North.
Dr Timoney:
When we launched the new formulary, we agreed that there might be circumstances in which patients might require dressings that are not listed on the formulary and would not be available on the drug tariff. Therefore, we put in place an exception protocol, in which a healthcare expert could liaise with a trust and be provided with a product that is not listed on the current formulary. That has been used on 100 occasions out of the 15,000 prescriptions written for wound-care products in the past two years. It has focused on a handful of presentations that are not available on the drug tariff. There have been limited examples of cases in which the current evidence-based formulary is not serving healthcare professionals and patients well.
The Deputy Chairperson:
Surely professionals should be able to access everything that they need to treat a patient. If something is not available, it should be available. We cannot have that situation.
Dr Timoney:
That is why the Department brings together an expert group of practising clinicians to tell it exactly what is needed in primary and secondary care. That group has the opportunity to outline exactly what presentations it needs to carry out its wound-care work.
Dr N Morrow:
Our view is that, if we can identify the best products for therapeutic outcomes, that is the single most effective and efficient way to proceed. It may not be the cheapest product, but, if it produces better management, care and cure , that is a much more effective and efficient way to use resources in the long term. The last time I examined the issue of wound management, the 100 questions that were raised concerned only 10 products.
We do not find that the more limited list, which has been developed in consultation with the stakeholders, is deficient. It covers the bases, and we believe that we are giving patients the best-quality products that they need to manage their conditions. The Department is not receiving complaints about what has been done. If anything, many people believe that it is a much better system.
The Deputy Chairperson:
That brings us back to the issue of a monopoly. I am not an economist, but surely the law of supply and demand suggests that the more suppliers there are, the lower the price. Is that not relevant to this situation?
Dr N Morrow:
I suppose, in principle, the view is that, the more competition there is in the marketplace, the more one can drive prices down. The Department has gone through an exploratory tendering process, in which over 60 manufacturers participated. It is a competitive process, in any case. What the Department is doing will not limit the competition, because that is the way in which the market operates. The process has been used in the hospital service for as long as I can remember, and it has not driven people out of the marketplace. It still continues to be a vibrant and competitive market for the products that they are seeking to purchase.
Northern Ireland is only a small part of the marketplace. The drug bill here is £500 million, but in the UK it is £8 billion. Medicines are a worldwide commodity, and we are only a small part of that market, trying to get the best for our patients and our health and social care service.
The Deputy Chairperson:
Is the English Health Service not moving towards a more decentralised tendering process?
Dr N Morrow:
That service has also employed the type of tendering processes that are used for secondary care here. There is no evidence of that service doing what we have been exploring — which is not to say that it is not interested in watching what we are doing.
The Deputy Chairperson:
I took some liberties as Deputy Chairperson; I will now allow other members to speak.
Mr Gardiner:
You are quite all right, Deputy Chairperson; I forgive you. I understand that the two largest generic manufacturers in Northern Ireland have withdrawn from the tendering process. What is happening about that? Is that fact being ignored? Has a risk assessment been conducted on the generic tendering proposal, specifically the risk relating to medicine supply, patients’ well-being and the viability of community pharmacy? What is your assessment of the risks involved in the transition from the current system to the proposed system?
Dr N Morrow:
You have asked many questions.
Three manufacturers have withdrawn. They have not all withdrawn from the hospital side of the contract; therefore, it is not necessarily a complete withdrawal. I am reluctant to speculate on the reasons that they have withdrawn. Some of them may have withdrawn because they prefer a different process.
Mr Gardiner:
Have you not asked them that question?
Dr N Morrow:
We have asked that question. One answer is that they felt that their participation in the process might affect their business. That is what we have been told; however, I am not sure whether that is right. That is the market, and we have to accept that that might be the case.
Ways in which to manage risk have been built into our processes. I gave the example of the flu jab, whereby we went out to tender with all the manufacturers of flu vaccinations. I met all the manufacturers, and we did not award the contract to one single manufacturer; rather, we shared the contract in order to spread the risk.
Last week, we also met the generic manufacturers. They said that, rather than creating risk, our approach could bring stability to the marketplace. There are clearly different views, which I understand. If we were to secure a contract and move in that direction, we would also share, and thereby limit, the risk across suppliers.
We can look at this issue in a different way: if one has a branded product, one has a monopoly. However, if something happens to the manufacturer of that product, one loses everything. There is less likelihood of risk with generic medicines, because of the range of providers, whereas if one relies on a branded product from a single manufacturer and something goes wrong, everything is gone. We have had situations such as that, whereby something has happened and the manufacturer’s supply has been limited.
(The Acting Chairperson [Mrs McGill] in the Chair)
Mr Gardiner:
I have my doubts about how successful that will be.
Mr Easton:
I agree about uniformity for the names and colours of generic medicines. That is important for the average punter. People do not like the names of tablets being changed, because that causes confusion about whether they have the right medicine. I am certainly not against generic medicines, but I do have some concerns. Do cheaper generic medicines mean that pharmacists will receive less income?
If you go ahead with the plans, how many suppliers do you envisage using to cover the demand in Northern Ireland, and for how long will those contracts run? I would be concerned about those contracts running for 10 years, because a contract that lasted that length of time could mean that you are losing out on the opportunity to switch, for example, after three years to another supplier that is a bit cheaper and just as good.
On a slightly different note, with regard to patients’ rights, what happens when patients are happy with their current medicine, which may not be generic? For example, if I were a doctor, I may have a patient come to me who does not want generic medicine — not because it will not do as good a job as the branded medicine, but because it is new and that person is fearful of it. Does that patient have the right to demand that they continue to receive their current medication? What is built into the system for purchasing medicines that are not generic in order to take account of individual cases when people want to stay on the branded medicines?
Dr Timoney:
We aim to increase patients’ confidence in generic medicines and to allay their fears about being moved to generic presentation. Yesterday, I spoke to a clinician who is less than confident about recommending generic medicines to his patients. That is because when he sees his patients to review their case, they pick one of 11 different preparations out of their brown bags, so to speak, to reflect what has been dispensed in primary care. Indeed, those medicines varied at each point, month to month, when patients returned to have their prescriptions refilled.
If there were to be greater consistency, and if pharmacists were, essentially, funded to deliver medicines-management services that retain the patient — as far as possible — on the same presentations each and every time that they go to a pharmacy, it is arguable whether confidence in those medicines would increase and whether patients’ concerns and fears about being moved to generic medicines would be assuaged to any extent. Indeed, when patients move between secondary care and primary care, they expect to recognise the medicines that they receive.
Throughout the pharmaceutical clinical-effectiveness programme, we have always recognised that we do not seek 100% of anything. Most prescribing policies that we put in place are for the initiation and maintenance of medicines for some 70% to 80% of patients, recognising that there will always be individual, idiosyncratic reasons that a patient should have a different therapeutic intervention at a particular time. That should be of their clinician’s choosing. We do not attempt to force clinicians into choices — enough are built into the system to allow clear, therapeutic goals to be gained in whatever way a clinician sees fit. Through making representations to patients and the public at large, we will continue to propagate the message of the quality and safety aspects that are delivered by the programme.
(The Deputy Chairperson [Mrs O’Neill] in the Chair)
Dr N Morrow:
You asked about the length of contract. Typically, it lasts for three years in the hospital service. Therefore, it is a short time, but there are opportunities to extend contracts within EC rules.
With regard to your point on loss of income, the answer is that it could happen. That is simply because if a community pharmacist buys a medicine at cost x and is reimbursed at cost y, which is more, he or she will make a profit.
My understanding of the community pharmacy contract was that it was never designed to make a profit on the procurement of drugs. Therefore, that is a loss to the prescribing budget. That is the issue. Therefore, we believe that by going for a volume approach, we will get better prices than can be achieved even through an individual community pharmacy. Furthermore, we are prepared to reinvest some of those savings back into community pharmacy in order to support clinical services. Therefore, we are not trying to negatively affect viability; we are trying to achieve transparency and ensure that the Health Service’s resources go into patient-care services.
I want to return to Mr Gardiner’s points and concerns. An important distinction that must be made involves the integrity of the procurement process. As far as I understand it, we have hit and met all the legal requirements for EC tendering under the process that we have carried out. We all appreciate that a tendering process is a normal part of good business practice — assuming that it is done under the proper rules and regulations. We can stand confidently on that process.
The Minister has not decided to go through with the process, but if he does, the implementation process must be equally robust. Two points must be remembered: first, we can stand on the integrity of the way in which we try to procure medicines; and secondly, if we carry that through, we must consider how we implement it in a way that ensures that we do not leave the system unstable, make it difficult for patients to access medicines, or create a loss of continuity. We believe that we can do that, and that is the reason that we have liaised with the PCC and other stakeholders — for example, wholesalers — to try to ensure that the implementation works in practice.
We must ensure that whenever Dr Deeny, for example, prescribes for a patient, that patient gets the medicine in a timely way and in a manner that is assured for the period in which the patient is in treatment. Many of the drugs in question are for patients with long-term conditions, meaning that they need continuity.
Mr Easton:
The pharmacists will no longer make such a profit, and some of the savings that you will make will be ploughed back into the pharmacists. Obviously, not all of it will go to the pharmacists, because then you would not be making a saving. How bad is the differential between what you will be putting back in and what the pharmacists currently get? Will it mean that some pharmacists may have to create job losses or even shut down their pharmacies? Will the situation become that bad, or are you not sure?
Dr N Morrow:
It is difficult to put a figure on that. Through the tendering process, we have some indication of the price at which it would be possible to buy medication if we were to accept those prices. That is part of the discussion that the Minister was having with the pharmacists.
Your question was about the size of the reinvestment and what it will be reinvested in. If I were a single community pharmacist, I could buy a medicine at price x. However, if I were to buy that medicine on a Northern Ireland basis at price y, I would expect — and this is borne out by practice — that its cost would be considerably lower than that of an individual purchase. In that kind of equation, it is possible to pay back the pharmacist what he would have made and put it into services and for there still to be additional money gained because of the volume purchase.
There must be discussion about the amount that is put back. My colleagues in Scotland and Wales, who have done slightly different things, have said that because the money that is going back is public money, it must go back in for services and that it cannot go back in for nothing. The issue is partly about how pharmacy services can begin to be reconstructed more appropriately to support patient benefits.
The Deputy Chairperson:
On Alex’s point, we have all been lobbied by pharmacists in our areas who are concerned about job losses and the effect that generic prescribing will have on the service that they provide. Local pharmacists have put that point to us strongly, and I put it to you strongly.
Dr N Morrow:
That point was also put strongly to us.
Dr Deeny:
Thank you, Norman and Mark. I am glad that we are having this debate. The more that it goes on, the more interested in it I become. As I said when the Minister was here, this issue is not about branded medicines or trade names versus generic medicines. That is not the issue at all: it concerns the supply of medicines versus generic medicines. Savings have been made already by generic prescribing. Many practices — including mine — have made major changes over the past number of years, thereby saving the Department a lot of money. That is a very important point to make.
My worry is that the measure is an attempt at further saving through centralisation. You mentioned procurement in hospitals and secondary-care settings. With all due respect, I heard that argument before, but you cannot compare what happens in secondary care with what happens in the community; that is not comparing like with like. For example, if patients are in a hospital or another secondary-care facility, they will not know people in the pharmacy. I was in my local pharmacist’s this morning, and that pharmacy is part of the community. That means that a different scenario comes into play. When you say that that worked in secondary care and you use that as an example of the reason that it should be extended to primary care, you are not comparing like with like.
Why do the PCC and the British Generic Manufacturers Association (BGMA) have major concerns? The British Generic Manufacturers Association is made up of 19 representatives of the generic manufacturing industry, and it accounts for 85% of the UK market by volume. Earlier, you referred to generic manufacturers. We are told that 85% of those people have major concerns. Why is that?
Protocols to which we adhere are in operation already. I have been in practice for over 22 years, and I now prescribe much more limited drugs than I did 10, 15 or 20 years ago, which makes sense. The result of going through those protocols is that we save money. We have been working hard at that in our practice, and we have done so for years. I know that a lot of practices are doing the same. We are one of the best-performing prescribers, and that includes generic prescribing. We are always in the top three in the west, and we have been for some time. We are also one of the best across Northern Ireland.
I do not want to pat myself on the back, because my younger partners were more involved in that initiative than I was. However, the point is that we feel that community pharmacists — and we work with three or four in the country and in some of the bigger towns — are part and parcel of community healthcare. I do not want that situation to end. Why should it, if the result is that we lose our community pharmacies? Is the centralisation designed to save further money even though it is established that savings can be made through generic prescribing and that that situation continues to improve?
Dr N Morrow:
There are two points to be made on that. The first is about the link with or drawing the analogy from the hospital sector. In many ways, the process is exactly the same as it was previously, because our trust pharmacies come together in that process. There used to be 14 trust pharmacies; now there are five. They came together and agreed a tender, and the manufacturer — or whoever the supplier was — then distributed into those 14 pharmacies to serve patients.
Therefore, to my mind, there is nothing intrinsically different in the methodology, albeit that instead of 14 pharmacies — we are now down to five trusts — we are dealing with 500. However, I accept fully that a certain level of complexity is involved, but the process is exactly the same as it was previously.
We accept that, if your practice and many others improve their rate of prescribing generic drugs, we save money, simply because of the price differential between the branded and generic products. At the same time as we continue to save, further prescribing money goes into community pharmacies because of the differential between their rate of reimbursement and what they pay for drugs.
Therefore, your good practice of generic prescribing continues to fuel the other side of the equation. We would like to make that transparent, and we are prepared to consider reinvestment models so that the community pharmacy infrastructure can be supported. We do not want that system to end. As I said the previous time that I appeared before the Committee, Northern Ireland has more community pharmacists for each person in the population than anywhere else in the United Kingdom and, therefore, has a good infrastructure. However, we must make that work better for us, as distinct from merely capturing profits from what doctors do as prescribers.
Dr Deeny:
Why are those two presumably highly respected associations having such serious concerns about the issue? We are talking about 85% of the UK market volume expressing concern, and the PCC is also expressing its major concern. Why?
Dr N Morrow:
We have heard various comments about that, and we have received correspondence from, for example, the BGMA, in which it stated that it supports fully what we are doing. Perhaps it was not quite as clear on the way in which we are doing it, but I can show the Committee the documentation in which the association’s full support is expressed. Last week, we spoke to one of the generic drug companies, at its request. That company told us that it supports what we are doing and that it wants to be part of it. We are getting mixed messages from the industry on the matter. That is all that I can say at the moment.
Mr Gallagher:
I am mindful of the different views on the participation in the consultation process. You told us that the Minister met representatives of the PCC. Although their view was clear, will there be a further meeting with that group before anything is finalised? Is that the clear understanding of all concerned?
Dr N Morrow:
The Minister has not made a decision on the application of the scheme to community practice. After Christmas, he invited PCC representatives to have further discussions.
Mr Gallagher:
Will that happen before he makes his decision?
Dr N Morrow:
I do not think that he has any intention of making a decision before having further talks with the PCC.
Mr Gallagher:
That is fair enough. I am trying to envisage how the new procurement exercise will progress, if it goes ahead. Many of public procurement exercises are not carried out by the Department of Health, Social Services and Public Safety but by the Department of Finance and Personnel. Will you clarify which Department will carry out the procurement exercise?
Dr N Morrow:
The exploratory procurement exercise has been carried out in conjunction with the regional supply service, which was part of the former Central Services Agency but which is now an arm of the Regional Business Services Organisation (RBSO). That body is responsible for public-sector procurement. We worked with that group and the regional pharmaceutical procurement service, which has traditionally been hospital-based. The nature of the process and the standards that the RBSO aspires to means that we must abide by EU tendering practice. We must abide by EU rules, which means that a formal system exists.
Although the Department has been involved in leading the whole clinical effectiveness programme — and Mark heads up that programme directly — we have embraced many other partners in that process. I stress to the Committee that the emphasis is on clinical effectiveness, and we have stated that we are concentrating on quality and safety. Procurement is a means to an end, in that it is part of that work. It is not the only thing that we do, and it would be wrong of me to give the impression that procurement is the basis of the whole programme that we are involved in. That is not the case. It is a clinical programme, of which procurement is a part. I assure the Committee that we have been working on procurement with the proper groups on behalf of the Health Service.
Mr Buchanan:
I share the concerns of Kieran and others about community pharmacists and the knock-on effect that this measure will have for them. The BGMA and the PCC have concerns regarding these proposals, and on that point, I do not think that Kieran’s questions were answered fully.
I have one simple question. Can you guarantee the Committee that your proposals will have no detrimental knock-on effect on community pharmacists, who already provide an excellent service for the rural communities such as that where I am from. They are concerned that those proposals will put them out of business, and that would put a community in West Tyrone in a much more vulnerable position than it is at present. Can you give the Committee a cast-iron guarantee that your proposals will not have a detrimental effect on those community pharmacists?
Dr N Morrow:
Let me put it to you this way: I stated categorically that it is not our intention to damage the community pharmacy infrastructure by implementing this measure. If we can agree with the PCC on an investment programme, that would answer your question.
I go further than that and speak as a pharmacist. In my view, if community pharmacy continues to base itself on an historical model, it will be vulnerable. We need to adopt a model that provides a much more patient-focused and long-term care-condition-focused service that provides a detailed medicines-management programme for patients in the community.
For example, a few weeks ago I spoke to the pharmacist who heads up the pharmaceutical division of Kaiser Permanente in the United States. I know that the system in the United States is different and that GPs work in it, but community pharmacists also work in it. That company has developed a programme whereby its community pharmacists are responsible for following up patients who have had illnesses such as myocardial infarction. Through the programmes that community pharmacists are delivering to those patients, that company has been able to demonstrate that it can improve greatly the mortality outcomes for those patients.
That is the area where we need to exercise the huge resource of skill and enthusiasm that there is in community pharmacy practice so that patients benefit. That will mean that when Dr Deeny, for example, issues a prescription for a patient who has had a myocardial infarction, he will know that his intentions will be carried out and that the patient will be monitored, followed up and will get the desired outcomes. My view is that this measure is opening up an opportunity for community pharmacists that they did not have previously. That is how I would allay your fears.
Mr Buchanan:
At the beginning of your response, you said that community pharmacists would be safe, provided that you could come to an agreement with the PCC. Are you going to stop the plans from going forward until you have such an agreement to ensure that community pharmacists are safe? I do not want to see community pharmacists going to the wall. In your presentation, you said that the changes were part of efficiency savings; I do not want to see community pharmacies being closed simply because of efficiency savings.
Dr N Morrow:
What we are doing should not lead to the closure of community pharmacies. There needs to be a reorientation of community pharmacy practice along the lines that I mentioned, and I have shared my views — in some ways my personal vision — on that with the PCC. If you look throughout the United Kingdom, you will see the same kinds of sentiments being expressed. As I said, in England, some of that reinvestment has been made, which has changed the profile of the work of a community pharmacy. It seems that there is much more merit in finding a collaborative approach in order to secure constructive ways forward. After all, we are dealing with independent contractors, and we have to get into negotiation — that is the nature of the situation, and it is the same in GP practice. We have to get into dialogue, because jaw-jaw is better than war-war.
The Deputy Chairperson:
I have a final question, which concerns Professor Yarrow’s report, of which I am sure you received a copy. In that report, Professor Yarrow warns that the proposed new system will be more monopolistic, will reduce competitiveness, and may pose a risk to the supply chain. That statement is from a professional, and it sums up our central concerns. You said that mixed messages are being sent out, but the PCC alone represents over 200 pharmaceutical contractors and 520 community pharmacies. Therefore, that represents a strong message of concern from all those pharmacies, and that is what we are trying to relay to you.
There is agreement from the Pharmaceutical Society on the direction that the Department wants to go, which Committee members would agree with. However, there is no agreement on the processes that are involved in taking the issue forward, which is what we need to iron out. One of the benefits of having a locally accountable Minister is that we can ask him to take on board the concerns that have been outlined by the pharmacy community here.
Obviously, we hope that there is a breakthrough in the investment programme and that there is a positive outcome to the discussions that are being held with the pharmaceutical contractors. The Committee would like the Department to inform it of developments.
Dr N Morrow:
May I ask a question?
The Deputy Chairperson:
Yes.
Dr N Morrow:
The Committee has expressed concerns about the viability of community pharmacies and about reinvestment issues. If our discussions with PCC yield the right reinvestment model, will the Committee support the direction that is being taken by the Department and what it is doing? Is that the issue?
The Deputy Chairperson:
In general, the Committee agrees with the direction in which the Department is travelling, and the Pharmaceutical Contractors Committee also agrees. Members want to see meaningful consultation with those who are affected directly and those who work in the sector. If that is taken forward, and there is proper consultation — not consultation for the sake of it — that is what the Committee is saying.
Mr Buchanan:
Once an agreement is reached that involves the PCC, the BGMA and the Department, I want to see this matter brought back to the Committee prior to the Minister’s taking anything forward.
Unless those three bodies reach agreement, the Committee cannot lend its support to the measure, and I will certainly not be giving mine. The PCC and BGMA have huge concerns about developments, and they must reach an agreement that reassures the Committee prior to anything moving forward. I could not give my support unless those two bodies were in full agreement.
The Deputy Chairperson:
Will the Department commit itself to doing that?
Dr N Morrow:
For clarification, none of the Department’s procurement processes involve agreements with any representative bodies per se. In other words, there is no agreement with the Association of the British Pharmaceutical Industry about putting medicines into any given sector. The Department has agreements with individual suppliers or wholesalers, that is, the commercial entities.
BGMA is not a commercial entity; it is a body that represents the interests of generic suppliers. Therefore, when I spoke about the group that the Department met, there may have been differences in views. Normally, contractual agreements are with suppliers, not with representative bodies. That is the way in which business operates, and the Committee would not expect the Department to have agreements with representative bodies. It is not the BGMA that submits the tender — it is one of its members, with whom there would be an agreement.
Mr Buchanan:
To come back on that point, perhaps I used the wrong terminology, but the PCC and BGMA must be satisfied with the direction in which the Department is going before the Committee gives its support to the measures.
Mr McCallister:
I agree with Tom. I believe that the Department will know when it has its approach right and when everybody is in general agreement. The Committee is making it clear today that it supports community pharmacies and wants to see these issues sorted out — hopefully — very quickly.
Dr N Morrow:
The Department will know when it is there.
The Deputy Chairperson:
Will the Department give a commitment to come back to the Committee on that issue?
Dr N Morrow:
I am happy to come back to the Committee at any time.