How the service has developed

How the service has developed

The first hospital contracts

Regional pharmaceutical officers and supplies managers introduced some of the first hospital contracts for medicines during the 1970s in the days of the regional health authorities. At that time purchasing was organised on a regional basis. As branded medicines came off patent, and generic versions were introduced, these contracts were awarded to reflect a fall in price, as well as the additional benefits that came from competition between generic suppliers. Given that hospital pharmacists were able to dispense generically, the contracts delivered immediate cash savings that were then available to support the funding of newer, relatively more expensive and innovative medicines.

The impact of broader government policy and NHS reorganisations

The established contracting model has survived numerous NHS reorganisations that have otherwise fundamentally reshaped the procurement environment. NHS trusts continue to support collaborative procurement through their pharmacy purchasing groups that are, in England, now aligned to current strategic health authority boundaries. For the most part these groups use a national procurement organisation, the NHS Commercial Medicines Unit (CMU), as their contracting authority.

Perhaps the greatest impact has come as a result of a wider government initiative. The Gershon report, Releasing Resources to the Front Line, was published in 2004 with the aim of driving greater efficiencies across the whole of the public sector. Within the NHS this resulted, amongst other things, in the Supply Chain Excellence Programme (SCEP). SCEP, without changing the established pharmacy contracting model, forced through a more structured approach and enabled the development of new information systems that are described below. SCEP also introduced collaborative procurement hubs (CPHs). These CPHs, and equivalent organisations, are now able to offer the pharmacy purchasing groups additional local support, thus enabling them to extend the scope of their activities. To avoid confusion around their roles and involvement, and to avoid duplication of effort, a list of products and services allocated to CPHs for tender is maintained.