Financial risk

Financial risk

In 2009 the National Health Service (NHS) in England spent £12.3 billion on medicines. Hospital prescribing accounted for 30.9% of this expenditure, and whilst the total cost of medicines rose by 5.6% overall, in hospitals the cost rose by 13.2%. This is not surprising, as hospital patients are becoming older and have more complex health problems. Furthermore, newer medi-cines are more complex and expensive. Indeed, it has been estimated that there are now more biopharmaceuticals entering the marketplace than conven-tional medicines. In the author’s own hospital high-cost medicines excluded from tariff now account for over half of the total medicines budget. As a result, growth in hospital prescribing costs doubled between 2001 and 2007 compared with a 50% increase in primary care.

Therefore, medicines management can be seen as risk management. The author’s definition of medicines management is ‘influencing the availability and policies on medicines at an organisational level as well as the prescription, use and administration of medicines at an individual patient level’. This can be best described pictorially by the medicines management pyramid shown in Figure 11.1. As shown in this diagram, medicines management processes centred on the patient can be considered operational and those dealing with policies and guidelines are strategic. This chapter will focus on the strategic elements of this definition, with the emphasis on financial aspects. Chapter 12 will focus on the clinical risks.