Region/Countries: Europe, United Kingdom Industry: Biosciences / Medical Devices Date: April 2019

Why this is important to Wisconsin businesses: The agency is also making plans for possible Brexit scenarios.

Britain’s National Health Service (NHS) is renowned, not only as one of the world’s largest employers, but also because it provides free comprehensive health care treatment to more than 66 million people.  Its structure is complex, comprising four independent regional health service systems (England, Scotland, Wales and Northern Ireland) and various organizations working at the national and local levels. The combined overall budget in 2017-18 was £148 billion, of which around 20% was spent on drugs and supplies and 20% allocated to buildings, medical and other equipment, training, catering and cleaning. NHS England accounts for over 80% of the overall expenditure. Key product categories include orthopedic equipment, single-use devices, electronic monitoring equipment, cancer care technology and diagnostics.

Historically, the government-owned NHS Supply Chain has been the centralized NHS buying agency.  However, in 2017 the UK Department of Health launched the NHS Procurement Transformation Programme and published its future operating model (FOM), which marked a radical change to its procurement structure. The FOM is the design of a new NHS Supply Chain service. It calls for disaggregating the current service and establishing 11 category towers and three service categories, which will assume the medical products and consumables procurement function responsible for delivering £2.4 billion in savings within five years. This is scheduled to launch in 2019, and outsourcing contracts have been awarded to 11 category tower service providers (CTSPs), which will specialize in particular NHS commodities and equipment (e.g., cardiovascular, radiology, audiology and pain management) and will oversee the clinical evaluation of products and run compliant procurement processes on behalf of the NHS using teams of specialist buyers. One of the key benefits of the FOM is a streamlined procurement landscape and reduction in multiple tenders due to aggregation of demand and creating larger volume opportunities for suppliers. It is anticipated that 80% of the NHS’s £5.7 billion annual spending on everyday hospital consumables, high-value health care consumables and capital equipment will go through the new FOM towers—double the amount procured under the old NHS Supply Chain. Each category tower will have varying procurement strategies, e.g., a mix of framework agreements and commitment contracts.  Buying strategies have not been made public yet. Learn more about the procurement transformation program.

The FOM CTSPs will be supported by a new performance management and customer engagement function, the Intelligent Client Coordinator (ICC), a private company owned by the secretary of state for health. At present, all local and national tender opportunities are advertised on Contracts Finder and also published in the Official Journal of the European Union Tenders Electronic Daily.

The UK’s secretary of state for health and social care issued an update on “no deal” Brexit in December. One of the contingencies the department is taking is to increase stock holding at the national level, and NHS Supply Chain has been contacting suppliers that routinely import products from EU countries to establish the measures necessary to achieve this.