ABHI and MediWales Briefing Event

21 February 2012

ABHI

Advancing access to medical technology

Our mission

To champion the benefits and use of safe and

effective medical technologies in delivering high

quality patient outcomes

Who we are

1

What we do

2

STRATEGY

Advocating policies that allow members to operate in

a favourable business environment

UK MARKET

Policies that support the

rapid evaluation,

reimbursement and

adoption of medical

technologies by UK

healthcare systems

INTERNATIONAL

MARKETS

Policies to provide an

effective gateway to

foreign markets

REGULATION &

STANDARDS

Policies for simple and

smart regulation,

providing patients with

safe, effective, high

quality and innovative

medical technologies

ETHICS & PRINCIPLES

Policies to ensure

business is conducted in

the right manner

ABHI 2012 Priorities

UK Market

Create industry position on procurement and gain NHS agreement

Establish clear and structured relationship with NHS Commissioning Board

Adopt industry leadership role on implementation of IHAW key recommendations

International Develop industry position on trade support mechanisms and influence Government

Minimise barriers to trade with China, Brazil and India

Regulatory &

Standards

Ensure industry positions on MDD Revision reflected in UK input to “Formal Proposal”

Establish clear and structured relationship with MHRA Devices Division

Ethics &

Compliance

Establish ABHI CoBP as standard for all NHS interactions with suppliers

Develop member employee accreditation system for interaction with NHS

The Regulatory Landscape

Mike Kreuzer OBE

Executive Director, Technical & Regulatory

Medical Device Regulation and ABHI’s role

• ABHI founded 1989 to address the Medical Devices

Directives

• Today regulation is one of ABHI‟s four strategic pillars

• The system is under review - Some say under threat

Regulatory Activity in ABHI

• European dimension to all MD regulation

• Monitor developments in the medical device regulatory

system

• Provide a limited advisory role to members

• Influence the regulators both in the UK and at

European level

European Commission

MHRA /

Notified Bodies

UK Rep

UK Industry

(ABHI)

Eucomed

The Virtuous Circle

Top line regulatory issues today

• The Revision of the MDDs (was Recast)

–UDI (Unique Device Identification)

• MHRA Organisation / Capability / Funding

• Standardisation

• Environmental Legislation

The Revision (The future of device regulation)

• The regulatory regime has served society well over 20 years

• Patients have benefitted from products which are

– both safe and innovative

• Like all legislation the system needs periodic revision

• Will that revision be „industry friendly‟ or not?

• The Exploratory Process (Commission consults) suggests „YES‟

EU Council Conclusion - June 2011

The Conclusion signed by all 27 member States says:

„that innovation in medical devices should contribute to the

continued improvement of patient and user safety‟

And that there is a need to:

„...adapt EU medical device legislation to the needs of tomorrow

so as to achieve a suitable, robust, transparent and sustainable

regulatory framework, which is central to fostering the

development of safe, effective and innovative medical devices for

the benefit of European patients and healthcare professionals‟

The Recast – key issues

• The debate revolves around the following five key areas:

1. Novel Innovative Technologies – A speedy and effective system needs to be designed and agreed.

2. Notified Bodies (NBs) – Tighter control of designation and oversight essential. Intentional side effect: less NBs

3. PMS / Vigilance – Central reporting and coordination across the EU needed

4. Transparency – Central EU database with open access. Eliminate local databases (the „UDI effect‟?)

5. Management of the system. – Broad agreement for greater centralisation and therefore more administration. The options

are either EMA or JRC with „enhanced member state involvement‟

So is everything rosy?

• The „Establishment‟ agrees with Industry

• BUT some want a more prescriptive regime

–That „cause‟ has been greatly helped by PIP (and Hip)

• This could stifle an innovative industry and

–make the EU less attractive for innovation and investment

• Our advocacy work focuses on resisting this (particularly

centralised PMA) AND on keeping to a sensible reform

agenda

L’Affaire PIP

• The PIP scandal allegedly caused by criminal action

• Cosmetic Surgery „industry‟ under fire

• Regulators and regulatory system easy to blame

• Not good news when Revision proposal due

• Extensive „bad press‟ for MDs and the system

• BUT Commission and UK authorities standing firm on basic

direction

– ....while tightening up process in short term

The PIP Effect

Short term measures announced by the Commission

(February 2012)

• Reviewing NB designation and encouraging unannounced

inspections

• Reminding authorities of available powers in market

surveillance including making spot checks for certain types of

devices

• Enforcing the vigilance system, in particular on incident

reporting, analysis and action

• Taking steps to improve the traceability and monitoring of

medical devices using UDI and implant registers

UDI – A (rapidly) Emerging Issue

• UDI is cross-discipline – patient safety / supply chain

• New legislation likely in 2012

– FDA and EU (Recast)

• „All devices‟ to carry a machine-readable identifier

• Main purpose: patient safety (traceability)

• But will be used for „commercial‟ purposes

• ABHI can influence development through Eucomed & GHTF

• Programme will accelerate after PIP

• BUT key concerns are:

– Proliferation of systems

– „reciprocity‟ – will healthcare authorities and providers be equipped

to interact with industry?

The Recast of the MDD

How it will affect you

• High Risk Products – more evidence

– Pre market

– Post market

• Lower Risk Products

– More Notified Body involvement?

– Up classification?

• Fees payable to MHRA?

• Cost of UDI

• Enhanced control of imports & distribution (market surveillance)

• MDA merged with MCA to form MHRA in 2003

• Concern at lack of device focus 2003 – 2011

• Today a Device Division has been created

• This is good news but there are on-going concerns

MHRA

Standardisation

• Horizontal harmonised standards support the Directives

• ABHI has always had a specific involvement in Standards

– Standards management – visibility and control

• ABHI currently provides

– Chair and rapporteur of ABHS and chairs Eucomed SFG

• The Formal Objection

• Standards system remains key to EU 2020 objectives

Environmental Issues

• Packaging & Packaging Waste Directive

• Waste Electrical & Electronic Equipment (WEEE) Directive

• Restriction on use of Hazardous Substances (RoHS)

Directive

• Registration, Evaluation and Authorisation of Chemicals

(REACH)

And finally an up to the minute concern...

CMC Decision 3

• This requires all product to be labelled with manufacturers full

postal address

• Changes required by September 2012

• One major company has estimated a cost of € 2 million to

comply

• Not in line with EN 1041

• Possible Legal Challenge

• Possible compromise?

ABHI Code of Business Practice

Background

• Need for a Code recognised years ago but proved

difficult to achieve

• Prosecutions in the US and elsewhere forced the

issue

• ABHI Code developed in 2007/08

• In 2008 became a condition of membership for the

first time

The Code

Developed by Eucomed, adopted by ABHI

Covers: – Quality & Regulatory Compliance

– Interactions with Healthcare Professionals

– Advertising & Promotion

– Unlawful Payments & Practices

– Competition/Antitrust Procurement Laws – Dos & Dont‟s

– Export Controls Sanctions

– Environmental Issues

– Data Privacy

– Compliance & Enforcement – Dealt with by CoP Complaints Panel

Interactions with Health Care Professionals

• Addressed through

– Guidelines

– Q&A section

• Aim was to provide a practical document

• Q&A subject to periodic updating – latest September

2011

Future Developments

• Annex on Advertising and Promotional Materials – April

2012/January 2013

• Logo Scheme Pilot – from 29th September 2011

• Broadening „reach‟ of the code

• Continue publicising the code to the wider community –

HCPs, regulators, government etc

The “Logo Scheme”

Nishan Sunthares

Commercial and Market Access Director

NHS Procurement

21 February 2012

2011 activity

‒ NHS Supply Chain Direct From Manufacturer – Choice

for Health initiative

‒ Procurement intermediaries‟ Activity Based Income

business model

2012 focus

‒ NHS Procurement Strategy

Discussion points

28

All activity governed by Commercial Policy Group

Our focus:

‒ NHS Supply Chain Direct From Manufacturer

Choice for Health initiative

‒ Procurement intermediaries‟ Activity Based

Income business model

2011 Activity

29

Choice for Health (CfH):

‒ The provision of an “own-brand” product offering by NHS Supply Chain

Ongoing activity augmented by targeted legal analysis

Outcome: CfH now halted

Next steps: Continued engagement with DH to

ascertain future incarnation of “own-brand”

NHS Supply Chain Direct From Manufacturer – Choice for Health

30

Targeted legal analysis:

‒ Would the business model be construed as a facilitation

payment?

‒ Whether US legislation has any relevance in the UK?

‒ The aspects of public procurement law that have to be

observed?

‒ Whether there are any anti-competitive practices in the

service offering?

Procurement intermediaries‟ Activity Based Income business model

31

Conflict of interest

‒ De-facto commission or value-added service?

‒ Is the business model aligned to that of Trusts?

Exclusivity

‒ How would this generate value for money?

Operational risks to Trusts

‒ Most economically advantageous tender

32

Activity Based Income business model ABHI response

NHS “Procurement Strategy” – March 2012

Why?

‒ National Audit Office: “Procurement of consumables by NHS

Acute and Foundation Trusts”

‒ Public Accounts Committee tasked Sir David Nicholson

2012 Activity

33

The NHS Procurement Strategy Findings of the Public Accounts Committee

34

There is a need for clarity from the Department about how it will deliver

the necessary improvements in procurement by NHS hospitals when

trusts are independent of its control.

It is not clear how trusts will be motivated to deliver collectively the £1.2

billion savings required from procurement under the Quality, Innovation,

Productivity and Prevention (QIPP) programme.

Information on what products trusts buy and the prices they pay is poor.

NHS Supply Chain is not demonstrating its value to the NHS.

Regional purchasing structures are confused and lack transparency.

There is a risk that, faced with the need to make savings, trusts will not

identify procurement savings and will instead cut elsewhere.

There is a need for clarity from the Department about how it will deliver

the necessary improvements in procurement by NHS hospitals when

trusts are independent of its control.

It is not clear how trusts will be motivated to deliver collectively the £1.2

billion savings required from procurement under the Quality, Innovation,

Productivity and Prevention (QIPP) programme.

Information on what products trusts buy and the prices they pay is poor.

NHS Supply Chain is not demonstrating its value to the NHS.

Regional purchasing structures are confused and lack transparency.

There is a risk that, faced with the need to make savings, trusts will not

identify procurement savings and will instead cut elsewhere.

The bigger prize

Currently has an acute sector slant

Needs to be wider:

‒ shift of care

‒ clinical decision making (quality & outcomes)

‒ long term

ABHI feedback

35

Role of the Centre

‒ Performance benchmarking

‒ Consistent approach to data collection and information

management

‒ one size fits all?

‒ procurement channels?

‒ oversight (vis a vis intermediaries)

ABHI feedback

36

Effective local procurement

NHS Standards of Excellence

‒ People

‒ Process

‒ Leadership

‒ Partnerships

ABHI feedback

37

2011 activity

‒ NHS Supply Chain Direct From Manufacturer – Choice

for Health initiative

‒ Procurement intermediaries‟ Activity Based Income

business model

2012 focus

‒ NHS Procurement Strategy

Summary

38

Andy Taylor – Executive Director, Healthcare Policy

21 February 2012

Changes in the NHS – things to watch out for

“The NHS needs to plan for making huge efficiency savings”

NHS expenditure by year

70,000

80,000

90,000

100,000

110,000

120,000

130,000

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

£m

illio

ns

demand, pay & price

pressures

scenario with "flat cash"

from 2011/12

actual and planned spend

£15-20bn

productivity

challenge

•Money is tight in the NHS...

•„demographic pressures‟

•Ageing population, long term conditions

•Also expectations – private spend is down

•In Wales, Scotland, Northern Ireland – the NHS is still „of

the state‟

•In England, turbulence – leadership clear?

•Different responses to pressure on the service?

•Waiting times, activity

Wherever you are in the UK...

41

An emphasis on - economic/growth policy in each

administration and especially on „life sciences‟

•Some „UK‟, but also quite competitive across the UK

•Weakness or strength?

Potential for a different relationship:

"We need to establish new relationships with industry,

based on partnerships that deliver mutual value, rather

than simple transactional business."

....but also...

42

•Through the services it provides: a healthy population is more

productive, and more economically active

•By adopting innovation to improve its own productivity, it can deliver

more health benefit for a given public resource

•By accelerating adoption and diffusion of innovation throughout the

NHS it supports growth in the life sciences industry

•By exporting innovation, ideas and expertise, working in partnership

with UK industry, it provides new business opportunities abroad for

UK-based companies.

Health and the Economy: the NHS contributes to the UK economy in four important ways:

43 Innovation, Health & Wealth – December 2011

What is said at the centre of government(s) and what actually

happens on the ground

„It‟s like the wild west out there‟(Sir John Bell, Government life

sciences adviser )

NHS cash limits trump all other cards historically: the NHS balances

its budget (usually)

•tends to reinforce the silos

Is this time any different?

Though gulf persists between theory and practice

44

Move the dial on:

• adoption – role of NICE, learning from NTAC

• incentives – how to shift the point of care?

• in England, tariff

•Investment and silo budgets

“Developing and introducing a shared savings formula

to break down silo budgeting and encourage cross

boundary working”

• Is this a lost cause?

• Senior NHS leaders in England appear to believe it is not.....

Key objective for ABHI in 2012 is to shift the focus this time

45

Procurement

•Targeting 5% of the budget for what proportion of savings?

Regulatory changes in the spotlight

•But also: excessive variation in practice and in outcomes

•Need for more rational introduction/commissioning of specialised services

-issues for clinician skill development as much as for device

technology. This is a natural focus for innovation....

•England national commissioning likely to spotlight this. Audit Scotland

has...

Big challenges

46

Thank you!