Contents:

Executive Summary 1. Market Background 1.1 UK 1.2 National Health Service 1.2.1 NHS England 1.2.2 NHS Scotland 1.2.3 NHS Wales 1.2.4 NHS Northern Ireland 1.3 NHS Funding 1.4 Pharmaceutical Use 1.4.1 Prescribing 1.4.2 Costs 1.5 Strategic Implications 2. Managed Entry of New Drugs 2.1 Horizon Scanning 2.1.1 Case Study: Anticancers 2.2 Formularies 2.2.1 Hospital Formularies 2.2.2 Area Formularies 2.3 Health Technology Assessment 2.3.1 England: NICE 2.3.1.1 Topic Selection 2.3.1.2 Technology Appraisal Process 2.3.1.3 Clinical Guidelines 2.3.1.4. Manufacturer Submission 2.3.1.5 Outcome 2.3.1.6 Appeals 2.3.1.7 Uptake 2.3.2 Scotland: SMC 2.3.3. Wales: AWMSG 2.3.4 Northern Ireland 2.4 Strategic Implications 3. Procurement 3.1 Product Differentiation 3.2 Procurement in England 3.2.1 NHS Bodies Concerned 3.2.1.1 DoH Commercial Directorate 3.2.1.2 NHS Supply Chain 3.2.1.3 NHS Purchasing and Supply Agency 3.2.1.4 National Pharmaceutical Supplies Group 3.2.1.5 Pharmaceutical Market Support Group 3.2.1.6 Collaborative Procurement Hubs 3.2.2 Public Procurement Directive 3.2.3 Contracting Process 3.2.4 Good Practice Guide for Contracting 3.2.5 London Procurement Programme 3.3 Procurement in Scotland 3.4 Procurement in Wales 3.5 Procurement in Northern Ireland 3.6 Strategic Implications 4. Product Selection 4.1 Price 4.1.1 Brands 4.1.1.1 PPRS 4.1.1.2 List Price 4.1.2 Generics 4.1.3 Overall Market 4.4.1 Price Comparator 4.2 Non Price Criteria 4.3 Parallel Imports 4.4 Unlicensed Medicines 4.5 Strategic Implications 5. Funding 5.1 England: Payment by Results 5.1.1 Coverage 5.1.2 Impact on Medicines 5.1.2.1 NICE Adjustments 5.1.2.2 High Cost Drug Exclusions 5.1.2.3 Pass Through Payments 5.1.2.4 Specialist Commissioning 5.1.2.5 Chemotherapy 5.2 Other Countries 5.2.1 Scotland 5.2.2. Wales 5.3 Risk Sharing/Discounting Schemes 5.3.1 Case Studies 5.3.1.1 Disease Modifiers in MS 5.3.1.2 Xolair in Allergic Rhinitis 5.3.1.3 Velcade in Multiple Myeloma 5.3.1.4 Tarceva in Lung Cancer 5.3.1.5 Sutent in Renal Cell Carcinoma 5.3.1.6 Erbitux in Colorectal Cancer 5.3.1.7 Alimta in Mesothelioma & NSCLC 5.3.1.8 MabThera in Follicular Lymphoma 5.3.1.9 Lucentis in Wet AMD 5.4 Patient Copayment 5.5 Strategic Implications 6. Distribution 6.1 Prewholesalers 6.2 Wholesalers 6.3 Shortline Stores 6.4 Stock Diversion 6.5 Hospital Pharmacies 6.5.1 Stock Control 6.5.2 Inpatient Supply 6.5.3 Outpatient/Day Care Supply 6.5.4 Accident and Emergency Supply 6.6 Homecare 6.6.1 Advantages 6.6.2 Homecare Providers 6.6.3 Services Offered 6.6.4 Potential Antitrust Concerns 6.7 Strategic Implications 7. Private Sector 7.1 Private Healthcare Providers 7.2 Private Health Insurance 7.3 Case Studies 7.3.1 General Healthcare Group 7.3.2 HCA International 7.4 Strategic Implications List of tables 1.1 Estimated expenditure on hospital medicines by country 1.2 Estimated cost of hospital prescribing by SHA, 2006 2.1 NICE decisions and cost per QALY 2.2. NICE and SMC on anticancers 3.1 Collaborative procurement hubs in England 3.2 Pharmacy purchasing groups 3.3 Example of typical contracting timetable 3.4 Responsibility for tendering by product/service type 3.5 Potential division of contracting arrangements in London 4.1 Phased price changes expected in 2009 PPRS 4.2 Risk assessment of unlicensed medicines 5.1 High cost drug exclusions from PbR, 200809 5.2 Pros and cons to NHS of risk sharing schemes 6.1 Products delivered by homecare companies, 2005 7.1 Leading private hospital groups

Author

Donald Macarthur: Donald Macarthur is an independent analyst, consultant and writer on international pharmaceutical business issues. Issues covered include drug cost containment policy worldwide, pricing and reimbursement, hospital access, European integration and enlargement, wholesale and retail distribution, mail order, homecare, orphan drugs, generics, parallel trade, Rx-to-OTC switching, and several aspects of the Japanese market and industry. He has written over 50 major reports and also founded, edited and published for four years the world’s first periodical on drug pricing and reimbursement, Pharma Pricing Review. Formerly with PriceSpective and also the first Secretary General of the European Association of Euro-Pharmaceutical Companies, consultancy clients include the European Federation of Pharmaceutical Industries and Associations - he was the very first consultant ever used by EFPIA - Pharmaceutical Research and Manufacturers of America (PhRMA), the European grouping of national full-line pharmaceutical wholesaling associations (GIRP), the UK’s Office of Fair Trading, other government agencies, and many major multinational biopharmaceutical manufacturers, legal and financial firms. Numerous presentations have been given at international conferences, and he has testified both at a US Senate Committee hearing and at the HHS Secretary’s task force hearing on prescription drug importation. His articles have appeared in many English language pharmaceutical business journals, with some translated into Japanese, German and Turkish. Qualifying as a pharmacist from the University of London, Mr Macarthur's early career involved community and hospital pharmacy practice, 16 years in development, regulatory affairs and medical department functions in the pharmaceutical industry in the UK (Fisons, 1969-72; Parke-Davis, 1972-75; Roche, 1976-78; Serono, 1978-82; Lundbeck 1982-84), one year in Japan, and four years with PJB Publications (publishers of Scrip).