The reforms outlined in the Health and Social Care Bill have been described as the most widespread and significant since the NHS’ inception in 1948. With change well under way, Michael Sobanja, Chief Executive of the NHS Alliance, and David Round, General Manager of Cegedim Relationship Management, piece together the implications for the industry.
While the Bill still awaits parliamentary approval, there are few significant changes to the original White Paper published in July last year. The time for waiting is over: for the pharmaceutical industry, the market environment is being significantly redrawn.
There are four key changes to consider: the transfer of the public health function to local authorities; the introduction of GP commissioning on a comprehensive and industrial scale; the broad development of an autonomous provider sector, from the creation of Foundation Trusts to the growing role of the private sector; and, the role of the newly created oversight bodies, including the independent National Commissioning Board, Monitor, the economic regulator, and the Care Quality Commission (CQC).
These changes undoubtedly create a far more fragmented customer base for the pharmaceutical industry. But that is not the only challenge. With the NHS’ shift away from measuring process indicators towards measuring outcomes, the industry will also need to think carefully about developing new product messaging which aligns with the changing needs of its customers.
Expanded customer base
The most fundamental change for pharmaceutical companies is the shift in commissioning. While this will continue to take place at multiple levels in the health service, as it does now, the number of organisations involved in commissioning is increasing, most notably in moving responsibility away from Primacy Care Trusts (PCTs) to local clinicians. A large number (141) of pathfinder GP consortia are already in place, providing coverage for approximately 50% of the population by April 2011; with numbers expected to reach 200-300 by April 2012.
However, there will still be national as well as local commissioning. The new National Commissioning Board will have a responsibility for specialised services commissioning, taking over that role from the abolished Strategic Health Authorities (SHAs). It is likely that some GP commissioning groups will team up with others and pool budgets, and some will act similarly with local authorities.
It will also be important for the industry to understand the new role of local authorities in the provision of public health. Whilst it would be easy to perceive the shift of public health responsibility to the local authorities as little more than a change in employers and accountability, there are other considerations.
The new Health and Wellbeing Boards, designed to bond local authorities and local GP commissioning consortia, will be relevant to the industry. Local authorities will retain an overview and scrutiny function for the health service – although it is far from clear how this will be carried out; and new health watch groups are being created to enable the local population to engage with the critical decision-making about local services.
Pharmaceutical companies, especially those that can link their products to the improved health of the population, must now consider local authorities and these associated mechanisms as critical customers.
While the pace of change across the NHS will be extraordinary, it cannot be consistent. There will be significant differences to understand, from the speed of creation of the 200-300 GP consortia, to the strategies these adopt. While many will be forced by the financial pressures on the NHS to take a cost first approach, all will look to follow the Government’s outcome led model as well. The precise mix will be a matter for local decision, leading to varying prorities within a widely drawn national framework.
For example, recent studies of diabetes patients in the south of England has revealed that despite the current process measures of care pathways and QOF, some people diagnosed with diabetes are much more likely to experience a lower limb removed today than others. In addition to the impact on the patient, this is a cost to the health service of an extended stay in hospital, significant drug requirements, plus the cost of community care post operation. There is also a knock-on effect on the local authority and overall economy, from a reduction in contribution to the treasury to the cost of disability benefits and social care provision, which is a key consideration for the new Wellbeing Boards. This is a good example of unwarranted variation in the outcomes of care which will be a prime focus in the future.
Taking an outcomes led approach, a GP consortia is likely to look for a diabetes care that, while possibly more expensive up front, significantly reduces the likelihood of amputation and therefore delivers a far better long-term outcome for patient and the wider public sector budget.
Pharmaceutical companies therefore now have to think about products and value propositions in new ways. Firstly, what is the real outcome of prescribing this product? Secondly, what is the implication of more patient choice and more emphasis on patient experience? Thirdly, how does this drug reflect the financial challenge that faces the health service – what is the system impact? These are three basic value propositions that may not be used currently by the pharmaceutical industry.
New skills and structure
The pressing issue for pharmaceutical companies planning to adapt to these extraordinary changes is how best to structure teams and what skills are required. Can the remit of the public affairs teams be expanded to support the new regulators such as the CQC and Monitor? And, from a representative perspective, can the same people successfully deliver the clinical messaging required to support outcomes focused consortia and also undertake tough negotiation with those concentrating primarily on price? Should pharmaceutical companies focus attention only on those GPs directly leading in the GP consortia – perhaps 1,000-2,000 out of over 30,000, or is there value in also working closely with their peers?
It is certainly unlikely that any company can afford to expand staffing numbers to meet these diverse requirements. Instead, the emphasis is likely to be on the creation of teams of multi-skilled personnel; individuals who are able to adjust their approach according to circumstances. Critically, these individuals will not only have to be able to pick and choose the most relevant messages from, perhaps, ten created by the company, but they must also be empowered to make local judgements as to how those arguments are deployed, to whom, when and how.
This is a very different model for the pharmaceutical industry and one that will demand not only new skills, confidence and responsibility, but also access to excellent local information. In this fast moving marketplace, there is a clear need to understand which consortia are leading the way, whether there is a geographic variance, which consortia have a cost focus, and which are prioritising long-term outcomes. Without this information, it will simply be impossible to enable empowerment or respond to the diverse approaches of these key GP consortia and local authority decision makers.
There is no doubt that over the next 12 to 18 months, large numbers of managers will leave the health service. But many of the existing relationships that pharmaceutical companies have built up over the years will still be of value. Some individuals currently working in PCTs and SHAs will undoubtedly reappear at GP consortia, national commissioning or regulatory level.
The key for pharmaceutical companies is to keep up to date with these changes, look for market intelligence and work on relationship management with this raft of new Key Opinion Leaders – some of whom will be new, others familiar. No company will be starting from a zero base of contacts, but it will be those companies that work hard to understand the pace of change within consortia and invest in re-messaging to support the outcomes framework, that will be best placed to proactively manage the transition.
David Round is General Manager of Cegedim Relationship Management. Cegedim provides value added information, CRM and marketing solutions to the pharmaceutical industry. Michael Sobanja is Chief Executive of the NHS Alliance – the only organisation that brings together PCTs and GP practices, clinicians with managers and board members, and NHS primary care with its patients.