1. Portfolio/Number/Name:H/C 9 Drugs pricing |
2. Programme/Activity: This programme relates to supply side activities to improve value for money in national arrangements for the pricing of drugs by NHSScotland. |
3. Efficiency | 3.1 Current target; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 42.0 | 42.0 | 42.0 |
Time | 0 | 0 | 0 |
3.2 Efficiencies delivered; £m | | 2005-06 | 2006-07 | 2007-08 |
Cash | 38.0 | - | - |
Time | 0 | - | - |
4. Accountable Officer for delivery | Dr Kevin Wood |
5. Project Manager | Mr Chris Naldrett |
6. EGDD Portfolio Manager | Rowena Simpson |
7. Description of efficiency and actions to be taken | 7.1 What is the efficiency improvement? How will the efficiencies be made? The saving will be made, in the main, by implementation of a revised Pharmaceutical Prices Regulation Scheme negotiated on a UK basis with the industry. These impact on the prices of 'branded' products used in Primary Care, i.e. drugs still protected by licence. These account for around 2/3rds of Primary Care drug costs. Opportunities for savings in other areas will continue to be pursued. No changes are expected in the short term. The gross target of £42m is derived by applying an average 7% discount across all branded drugs. |
7.2 What are the main actions that are needed to secure the delivery of this efficiency improvement? PPRS arrangements are now largely in place, with only one small element, where the financial impact is marginal, relating to so called standard branded generics is still to be clarified. SEHD representative in negotiations on PPRS has been Prof. Scott, CPO. We are still waiting on DH to decide on Standard Branded Services. |
8. Associated costs | 8.1 Are there any development or redundancy costs associated with the delivery of this efficiency? There are no development or redundancy costs associated with this saving. |
9. Measurement | 9.1 What are the inputs that will be measured? The cost per unit of relevant branded drugs will be measured. There is extensive and reliable data available from NHSNSS Information Services to allow the costs of Primary Care prescribing to be monitored. Availability however lags prescribing by 3-4 months. |
9.2 What are the outputs that will be measured? To monitor the effects of the PPRS target 7% price cut across all branded drugs purchased in Primary Care. |
9.3 What is the baseline for inputs and outputs? The baselines are 2004/05 costs per unit and volume levels. |
10. Quality cross-check | 10.1 What quality indicators are being used to ensure that quality of service is maintained or improved? The immediate impact on quality of service provision is likely to be neutral |
11. Monitoring | 11.1 What are the arrangements for monitoring the delivery of efficiencies? Monitoring will be quarterly - after availability of data - and will be by NHSNSS |
12. Reporting | 12.1 What are the arrangements for reporting the delivery of efficiencies? Quarterly reports are being produced by NHS: NSS: ISD three months in arrears to reflect times to process prescriptions. |
13. Dependencies | 13.1 Explain if your efficiencies are dependent on legislation or other structural changes being achieved. There are no legislative implications. Reimbursement prices for drugs are set by Directions through the Scottish Drug Tariff which itself is enabled by the Pharmaceutical Services Regulations (Scotland) 1995. |
14. Use of efficiencies | 14.1 How are the efficiencies released from improvement activity being used to improve front-line services? This efficiency savings was assumed as part of the allocation made by the Scottish Executive to NHS Boards. This freed up resources for Ministers to allocate to their priorities through NHS Boards. |