This is the last in a trilogy of posts from the era of Big Government. A cautionary tale of NHS procurement.
Harold Wilson came to power in 1964, ending over a decade of Conservative Governments.
He inherited a long running dispute between the NHS and the Pharmaceutical Industry over the price of drugs, dating back to 1961 when the MacMillan Government tried to take Pfizer to court over the price of antibiotics.
Wilson initially increased spending on the NHS, scrapping prescription charges and increased the social security budget by a record amount that would only be exceed by Blair decades later.
He took a populist stance on drugs costs, and to strengthen his hand against UK and US companies he arranged for the NHS to import large amounts of Tetracycline from Italy and Poland in 1965. The NHS was encouraged to use these cheaper drugs, which became grossly over prescribed as a consequence.
Tetracycline has a notable side effect – it stains your teeth yellowy-brown. A whole generation of children born in the UK in the 1960s grew up with stained teeth due to the mass over use of Tetracycline. Including me.
These fights with the pharmaceutical industry continued until the Sainsbury report in 1968.
I mention this, not just as an example of Big Government and populist decisions having unforeseen consequences, but because the current administration are having problems of their own over NHS procurement.
There are 2 essential problems that are intersecting:
Firstly over the last few years NHS Procurement has been centralised to save money.
Jeremy Hunt commissioned the Carter Review of NHS Productivity which set out to find £5bn of overall savings. From the Carter review came the Procurement Transformation Programme, which in turn created the 2017 Future Operating Model for NHS Procurement.
The Future Operating Model aimed to save the service £615m pa by increasing the share of NHS consumables that go through the NHS supply chain form 40% to 80%, leveraging NHS purchasing power and ending variation in costs for the same time between different NHS organisations.
Central to the FOM are the 11 procurement category towers, consolidating existing frameworks into a single route to market. Each of the category towers will develop buyer specialists. Management of these category towers was let out to a mix of private sector and NHS JV organisations, which took over the contracts last year.
Individual NHS Trusts had their procurement budgets cut in anticipation of these savings. The entire NHS procurement system has been thrown up in the air over the last few years, with terrible timing.
The second problem is one of politics. The Government were slow off the mark realising the problem we were facing and delayed action, allowing the Cheltenham Festival and a large Stereophonics gig to go ahead among other large scale public events
When they did realise that they had blundered they panicked, and rushed out loads of announcements designed to get control of the media cycle
The problem was that announcements were made without a proper plan in place to deliver. 750,000 people volunteered to help the NHS, but DH didn’t have a plan for how they were going to deploy them, as a consequence the majority of volunteers are still waiting to be told what to do.
The same problems hit NHS procurement. Eye catching announcements were made including sourcing ventilators from a Formula 1 motor racing team which never went into service. Similar procurements from Dyson failed too.
When these announcements couldn’t be delivered Ministers dissembled rather than tell the truth about the shortcomings. Information was withheld from senior NHS employees for fear the truth would leak.
Even now we still have Ministers insisting that the NHS has adequate PPE when it hasn’t
In the midst of all of this one of my former employers has taken NHS PPE procurement into their own hands, and opened their own factory to make it themselves:
I don’t like to invent more management jargon than need be but this is vertically integrated NHS procurement, where Trusts directly control their own supply pipeline. I hope this continues and I would be happy to hand over my hand sanitiser facility to the NHS when we move into our new Distillery.
Despite all of the shortcomings of Government the NHS has performed remarkably. I spent over a decade in the NHS and DH and it frustrates me when people talk down the NHS and talk up the American, Spanish, French or Italian healthcare systems.
The NHS has performed better than all of those systems, and I wouldn’t swap it for any health care system in the world right now.
https://api.parliament.uk/historic-hansard/lords/1968/jun/24/the-pharmaceutical-industry-the