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Leverage Purchasing Power to Save Billions on Medicines and Devices, NHS Urged

Posted 12 June 2015 | By Michael Mezher 

Leverage Purchasing Power to Save Billions on Medicines and Devices, NHS Urged

According to an independent report commissioned by the UK's Department of Health, the National Health Service (NHS) could save as much as £5 billion (GBP) per year by 2020 through medicines optimization and leveraging NHS buying power to save on medical devices and consumables.

Improving Efficiency

Last year, Health Secretary Jeremy Hunt appointed Lord Carter, member of the House of Lords (Labour) to chair the NHS Procurement and Efficiency Board. In his capacity as chair, Lord Carter was tasked with finding ways to save NHS money, which led him to conduct a review of NHS providers.

The review looked at operations at 22 hospitals providing NHS service to determine areas where efficiency could be boosted for the country's largest spending category. The review concluded that NHS could see massive savings by improving its workforce operations and optimizing medicines and medical device spending.

Optimizing Medicines Use

According to the review, savings for medicines and devices can be achieved through adhering to four principles:

  • Principle 1 – Aim to understand the patient's experience
  • Principle 2 – Evidence-based choice of medicines
  • Principle 3 – Make medicines optimization part of routine practice
  • Principle 4 – Ensure medicines use is as safe as possible

For example, the review says the Bolton NHS Foundation Trust saves £40,000 per year by limiting the use of soluble prednisolone (£1.50 per pill) to pediatric patients and patients with difficulty swallowing and using insoluble prednisolone (£0.02 per pill) for other patients.

While the review says there is "no single initiative that will deliver major efficiency savings in the pharmacy and medicines area," behavior changes across the board could lead to substantial savings.

Leveraging Buying Power

Outside of how medicines are used, the review finds NHS can save billions by leveraging its buying power in the procurement process.

Each year, NHS spends about £9 billion on procurement, £5 billion of which goes to consumables (such as syringes and dressings) and high-value medical devices (such as joint replacements and prostheses). Despite the similarity between hospitals’ needs for consumables and medical devices, the review found huge variances in the amount hospitals paid for different products.

The issue, according to the review, is that NHS allows hospitals to "make their own decisions about what they want to use – thus reducing the opportunity to use NHS purchasing muscle with suppliers. For some prostheses, the reviewers observed some hospitals paying more than double the price that other NHS providers paid for the same devices.

"If you look at it with medical devices … what we found was distinctly different prices paid by different organizations,” Lord Carter said in remarks to the BBC. “In a funny sort of way we failed to behave collectively enough to capitalize on the great strength of the NHS. In that particular area we have not used the buying power that we've got nationally effectively … we want to get the prices of many of these things down because we're one of the largest single buyers in the world."


Review of Operational Productivity in NHS Providers: Interim Report June 2015, BBC

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