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Rebates and the law

Rebates and the law

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Clinical commissioning groups could benefit financially from primary care rebate schemes but they must be mindful of the law when negotiating an agreement

In response to a wave of queries about primary care rebate schemes (PCRS), NHS London Procurement Partnership (LPP) has published a series of principles designed to help GPs and CCGs to maximise any benefits and avoid potential pitfalls.

These schemes are contractual arrangements initiated by pharmaceutical companies or third party companies, which offer financial rebates on particular branded medicines.  

It was unclear to the London primary care medicines use and procurement QIPP group (which LPP hosts) if such schemes are permitted under current regulations and legislation. 

We were also concerned that a PCRS should offer genuine benefits to the NHS and patients, and not become an administrative burden. 

These schemes are cropping up in a variety of therapy areas such as haematology and diabetes. The potential financial benefit to be derived from any scheme is specific to each drug or therapy area, and we are currently working with clinical commissioning groups (CCGs) to gather more data, as these schemes are not yet up and running. 

As a result, it’s too early to put realistic numbers against particular schemes, and we have yet to understand whether the administration costs outweigh any potential financial benefits.

To help to manage the very real concerns, LPP obtained legal advice and principles of good practice in Primary Care Rebate schemes published it in a report for CCGs and GPs.

We are now satisfied that the schemes are not unlawful per se. However, they need to meet certain requirements to avoid falling foul not only of the Drug Tariff and the controls on pricing under the NHS Act 2006, but of a raft of other UK legislation including the Medicines Act, Human Medicines Regulations, the Bribery Act and EU laws.

The primary requirement is the duty to prescribe in a patient’s best interest. That is a prescriber’s first responsibility. All prescribing decisions must be clinically-based. Financial considerations always come later. Secondly, we advise that participation in any PCRS should be agreed at a statutory organisational level, not at GP practice level.  It is a CCG which holds the prescribing budget, not the GP. 

In addition, anything which could be considered an ‘inducement to prescribe’ is likely to create a far bigger conflict of interest for an individual GP or GP practice prescribing for their patients than it is for a CCG acting on behalf of its members or commissioning support units acting on behalf of its clients. 

Once agreed, a rebate scheme becomes a contractual agreement between the manufacturer and an NHS legal entity. CCGs are not legally bound to participate, but if they do we have produced good practice guidance for them on how to robustly scrutinise and implement any proposed scheme.

The overarching principles align with those identified in strategies to achieve cost-effective prescribing (Department of Health, October 2010). These include ensuring that decisions to initiate treatment or change a patient’s treatment regime should be based on up-to-date best clinical evidence or guidance, and that health professionals should base their prescribing decisions on individual assessments of their patient’s clinical circumstances.

Practical considerations highlighted in the LPP guidance include avoiding schemes which encourage the exclusive use of a particular drug, and only accepting volume-based schemes if clinically appropriate – it is very difficult to see how an agreement to volume and exclusive use can be in the best interests of an individual patient. 

Ensure, too, that a formal written contract is in place including an exit strategy to allow flexibility to respond to significant new clinical evidence or changes in market conditions, as that ensures an ability to be responsive too to patient needs. 

LPP is monitoring uptake and usage of rebate schemes with London’s CCGs. In the meantime, the legal principles established on behalf of LPP are freely downloadable from the LPP website. The full legal advice is available, on request, only to NHS organisations and is provided on the understanding that it is applicable to LPP – individual CCGs considering a scheme and requiring clarification of particular issues should seek their own legal advice. 

 

Resources

Strategies to achieve cost-effective prescribing - Government guidance 

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