NHS England (NHSE) was established by the Coalition Government as part of then-Health Secretary Andrew Lansley’s 2012 package of reforms. The primary aim of this policy was to ensure the NHS was operationally independent from the government and the political system, hence ‘de-politicising’ the NHS and ensuring decisions on its management were made with the long-term interests of the English healthcare system in mind. The body currently allocates £134 billion of funding across the NHS and is responsible various policies relating to new drugs, including the Innovative Medicines Fund and the Cancer Drugs Fund, as well as overseeing the implementation of NICE guidance.
The news that NHSE will be abolished, and its functions rolled in to the Department for Health and Social Care (DHSC), therefore poses several questions for pharmaceutical industry. This is not just a rebranding, nor a simple takeover of the body by DHSC – there will be significant changes to the fundamental structure of some elements of NHS management. The government has set a target of reducing the number of employees across DHSC and NHSE by 50%, on the basis that the two bodies were essentially running two bureaucracies in parallel. The abolition process will take place over two years, giving some time to plan how roles and responsibilities will be consolidated; nevertheless, given the scale of the cut in headcount it seems impossible to imagine there will not be at least some disruption.
Of specific concern for the pharmaceutical industry is how the commercial and commissioning aspects of NHSE will change as they come under the direct control of DHSC. NHSE currently sets out its policies for patient access (and defines its approach to engaging with pharmaceutical companies) through the Commercial Framework for New Medicines, but it seems sensible to predict that a government which has already engaged in such widescale changes in its first year in office will have further ideas for reform once key policy levers are under its control.
Cost-cutting measures beyond those achieved by reducing headcount are possible: the government estimates £500 million savings from the merger process itself, but others have warned of a £7 billion funding shortfall among NHS trusts. Politicians less concerned with long-term sustainability than solving a short-term political issue could look to find this money elsewhere. If the Innovative Medicines Fund and Cancer Drugs Fund are brought under the DHSC umbrella, rather than being under the control of NICE, one potential source of savings could be prices negotiated under these mechanisms.
Other responsibilities currently borne by NSHE could be handed to ICBs, a process which is currently underway with specialised commissioning and that has already happened with pharmacy, optometry, and dental services. This would create greater heterogeneity across England in approaches to service delivery and commissioning, affecting the rollout of new medicines. Also, a logical progression of the drive to eliminate duplication of work (such as that between NHSE and DHSC) could lead ministers to propose the merger of ICBs, again impacting the delivery of new medicines to patients.
The precise method by which NHSE will be folded into DHSC is currently unknown, and with two years to go until its formal abolition it may be a while before the implications for pharmaceutical companies become fully clear. As such it is vital that industry professionals keep abreast of the government’s positions on the issue, and those of the ‘transition Chief Executive’ Sir Jim Mackey.
Initiate will continue to drive thought leadership in this area throughout the transition process and beyond. If you have any questions on this issue and how it will affect your business, please get in touch with us at hello@initiateconsultancy.com.
