Exclusive! NHS suppliers under pressure from Cabinet Office and Department of Health heat treatment

One of UK Minister for the Cabinet Office Francis Maude's big ideas was engaging the top suppliers to government in a round of negotiations with the aim of achieving savings on their major contracts. Some £800 million a year in savings has been claimed, and whilst this is unverifiable by the public (commercial confidentiality), and much is what we might call demand management and cost avoidance, it has been a worthwhile initiative, and credit to Maude for his personal leadership of the programme.

We've learnt that a similar idea is now being pursued with major suppliers to the NHS,  in a joint initiative from the Department of Health and Cabinet Office. Dr Dan Poulter, Health Minister, has written initially to the ten largest non-pharma suppliers, including firms such as Johnson & Johnson, Olympus and Baxter Healthcare, inviting them to come in for a meeting and have a friendly - or perhaps not so friendly - chat about their contracts with different parts of the public health sector.

They've also been asked to provide information about their business with health organisations - we don't know whether that goes down to price information, which would be particularly sensitive as it would expose the range of prices that often get charged by the same supplier (see numerous previous reports from the National Audit Office and others).

And apparently not all the firms have responded positively, as you might expect. At least one major multinational has replied, mentioning concerns and issues such as confidentiality. Now, one thing that the recently departed CEOs of G4S and Serco will tell these health suppliers is that you don't want to get too far on the wrong side of Cabinet Office these days. They've proved their ability to make life difficult (at the very least) for suppliers who are perceived by Maude and his officials to be working against the tax payer and government's best interests.

There is no word yet as to whether this health initiative might extend beyond the top ten suppliers  - the likelihood is it will if this proves successful, we would suspect. Ironically, certain Pharma firms were recently complaining that they were singled out for tough negotiations with the Department of Health, so at least they will have the pleasure of seeing other healthcare suppliers getting the heat turned up on them too!

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