NHS News – Major Challenge on Medicines Procurement And More

While I was away last week, a couple of interesting NHS procurement stories hit the press.

We wrote about the problems at social care provider Allied Healthcare back in April – last week the health regulator, the CQC, warned councils that the firm might run out of funding shortly. Over-reaction or sensible risk management? We’ll see, and suspect we will come back to this story.

Then we heard that NHS England/NHS Improvement (the two are merging) is recruiting a Chief Commercial Officer, a “pivotal national role that will ensure the future sustainability of the NHS. As Chief Commercial Officer you will provide commercial leadership across the NHS landscape, driving the improvement of NHS procurement, building commercial capability and capacity through the provision of expert commercial advice across the system. You will set and execute the national strategy that will transform the way in which the NHS utilises its resources”.

Definitely more on this to come!

Then we saw US pharma company Abbvie issue a legal challenge against the Department of Health relating to contracts for drugs to treat hepatitis C. According to the HSJ, “Abbvie is claiming NHS England breached procurement rules … The Illinois based company launched proceedings in London’s Technology and Construction Court this summer. NHS England has denied the allegation”.

The UK aims to eliminate Hepatitis C by 2025, five years earlier than the World Health Organisation’s target. This was a huge procurement, described by NHS England as the single largest medicines procurement ever done by the NHS, (worth “hundreds of millions of pounds”), was launched earlier this year with the aim of treatments being available by October. There was also not surprisingly the aim to reduce the cost of treatment, by encouraging competition between the various firms in the market - Abbvie, Gilead Sciences, and MSD Pharmaceutical.

The contracts were for three years with a two-year possible extension. Abbvie are claiming that NHSE failed in their duty to treat all suppliers fairly, but NHSE respond that the legal claim is “embarrassing for lack of particulars”. That is a surprisingly strong statement to come from the buy-side in these cases, which may suggest NHSE are pretty confident.

It’s not clear exactly what stage in the process the procurement has reached, but our assumption would be that NHSE announced the provisional results, entered the standstill period at which point Abbvie challenged. These days, that means the process is generally halted.

We’re also seeing more challenges generally these days. Suppliers are less nervous about “upsetting” contracting authorities, they are also more aware of the rules and how they might frame a challenge, and sometimes they might challenge just to delay contract award, even if they are not sure their case is that strong. The treatments do not appear to be available yet so there is certainly a delay in this case.

You may remember the recent case with DHL and the Department of Health, which DH won, so despite the increased number of challenges, there is no assumption that suppliers will win such cases, and it’s obviously far too early to judge what has happened here. One would hope that a competition of this size and importance had the crème de la crème of NHSE, Department of Health and Cabinet Office procurement talent working on it.

We’ll watch with interest – and perhaps this is another issue that we might discuss at the Future of NHS Procurement conference that I’m chairing in Manchester on December 12th. You can still register, the agenda is looking good, and it is free of charge for NHS procurement practitioners.

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First Voice

  1. Michael Angel:

    It’s going to trial which suggests there must be a case. I can’t say I am filled with confidence when a doctor is describing the procurement as having complexity and uniqueness.

    I agree for the most part suppliers challenge more to try and(in my experience more in hope than expectation) find the slightest weakness in any OJEU procurement exercise. It doesn’t say much about the trust suppliers have the process or the buyer.

    Will be intrigued to see how this unfolds.

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