08 Sep 2005
The NHS Confederation is calling for an urgent debate on rapidly increasing NHS drug costs following today's Audit Commission report about the financial implications of implementing NICE guidance on new medication and surgical procedures.
Dr Gill Morgan, Chief Executive of the Confederation which represents more than 90 per cent of NHS organisations, says: "The annual cost to the NHS of complying with NICE guidance on new drugs and procedures is £800 million, but that's just 10 per cent of the total NHS drugs bill.
"Prescribing drugs cost the NHS £8 billion last year, an increase of 46 per cent since 2000, and this rapid rise in the medication bill is a major cause of the financial pressures currently facing NHS organisations.
"Extra investment in the NHS is growing by an average of 7.4 per cent a year in real terms but drug costs are rising even faster.
"That is why 85 per cent of the NHS organisations who were questioned by the Audit Commission for its report said there wasn't enough funding available for them to fully implement NICE's guidance on new drugs and procedures."
The Audit Commission acknowledges that the NHS is not given specific funding to implement NICE guidance and that 'comprehensive implementation of all guidance across the NHS may not be possible as there may be competing priorities for funding locally'.
Dr Gill Morgan says: "Scientific advances mean that new and often expensive drugs are recommended for NHS use, which is clearly good news for patients and clinicians, but we urgently need a proper debate about how these drugs can be funded."
Weaknesses in NHS financial management, rather than cost, are identified by the Audit Commission as the major barrier to implementation of NICE guidance.
Dr Gill Morgan says: "financial planning and management can always be improved and we welcome NICE's proposals to help NHS organisations.
"NICE guidance is published throughout the financial year and so PCTs are in the difficult position of trying to second guess NICE's likely decisions when they are planning their annual budgets and set aside money they anticipate will be sufficient to implement their guidance.
"If the cost of implementation is greater than anticipated or if NICE issues unexpected guidance, that's when PCTs face financial issues."
Ends
The NHS Confederation represents more than 90 per cent of the organisations that make up the NHS throughout the UK. Its members include the majority of NHS trusts, foundation trusts, primary care trusts and health authorities in England; trusts and local health boards in Wales; NHS boards and special boards in Scotland; and health and social service trusts and boards in Northern Ireland.
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Last reviewed 9 Nov 2006