Guide for overseas investors on how to access NHS procurement channels.
The National Health Service (NHS) celebrates its 70th anniversary in 2018. It maintains its position as the top health system in the world amongst the 11 countries ranked in the Commonwealth Fund report which gave the NHS top marks for patient safety, efficiency, and affordability.
There are opportunities to work with the UK to:
- improve health outcomes
- propose new ideas, models, and partnerships to address important health challenges
NHS facts and figures
The NHS operates through different models in the UK under NHS Scotland, NHS Wales, NHS Northern Ireland and NHS England.
- accounts for around 80% of all healthcare spending in the UK
- is free to use for people who have lived in the UK for at least 6 months
- is the fifth largest employer in the world with 1.5 million employees in 2017
- deals with over 1 million patients every 36 hours
- is supported by UK health expenditure which was 9.75% of GDP in 2016
NHS procurement in England: background
The NHS spends about £27 billion every year on goods and services.
The Department of Health and Social Care’s (DHSC) strategy is to build a modern, effective and efficient procurement capability that is among the best in the world.
It aims to:
- deliver taxpayer value
- support innovation
- stimulate growth
- deliver the highest quality patient care
NHS England includes:
- over 200 Clinical Commissioning Groups (CCGs)
- 135 acute trusts
- 54 mental health trusts (including 42 foundation trusts)
- 35 community providers
- 10 ambulance trusts (including 5 foundation trusts)
- 7,454 GP practices
- 853 for-profit and not-for-profit independent sector organisations, providing care to NHS patients from 7,331 locations
- 15 Academic Health Science Networks (AHSNs) and 6 Academic Health Science Centres supporting research, innovation and adoption
Find more facts and figures for NHS England.
NHS Procurement Transformation Programme
The Procurement Transformation Programme (2017 to 2018) is transforming the NHS supply chain in a phased programme that will be fully operational by October 2018.
The Supply Chain Coordination Limited (SCCL) went live on 1 April 2018. It is the management function of the new NHS Supply Chain operating model, previously known as the Future Operating Model of the Procurement Transformation Programme.
This new operating model aims to improve efficiency by making the procurement process:
- easier to access through use of a series of procurement category towers focusing on medical products, capital expenditure and non-medical spending, each of which is a separate contract with the NHS
- use the full buying power of the NHS through demand aggregation
NHS organisations can currently buy from many sources within EU procurement regulations and national and local procurement policies.
Procurement considerations are:
- value for money
- meeting NHS England Business Plan targets which are part of the Five Year Forward View, that was updated by the Next steps on the NHS Five Year Forward View
How to access NHS procurement channels in England
The 5 main routes to market for companies interested in supplying the NHS are through:
- selling direct to trusts or primary care organisations
- selling through the new NHS Supply Chain (moving its procurement category towers in 2018)
- selling through collaborative purchasing arrangements
- national framework collaborations and contracts
- government tenders and contracts
Selling direct to NHS Trusts or to primary care organisations in England
A company which has a specific product or service easily matched to an NHS organisation can sell directly to the healthcare service provider of its choice. This process involves identifying the right contact (generally clinicians, the procurement team and the finance team) within the selected NHS organisation.
Service providers, which include all trusts, make their own purchasing decisions and can purchase directly from the manufacturer or distributor within purchasing rules and arrangements.
Selling directly means there is:
- less competition
- better awareness of trusts’ needs to supply the right products and services
- direct involvement of clinicians in purchasing
- more support for research and development (R&D) in emerging treatments
However identifying the right buyer or decision maker, and with each trust operating differently can make selling directly challenging.
Applications should be made to the NHS Business Services Authority to have devices included and reimbursed through part IX of the Drug Tariff. This applies to products prescribed in a primary care setting, such as by a family doctor (GP).
Selling through NHS Supply Chain (NHSSC)
The NHSSC provides a dedicated end-to-end supply chain service that meets the needs of every NHS healthcare organisation in England.
Currently, only 40% of the NHS’s nearly £6 billion spending on everyday hospital consumables, common goods, high value healthcare consumables and capital equipment goes through NHSSC. However, the aim is to increase this proportion to 80% as part of the transition to the new operating model for procurement.
A series of procurement category towers have now been contracts under the SCCL. They will focus on:
- medical products
- capital expenditure
- non-medical spending
Suppliers will have a single point of contact for each category of product with a service provider who has:
- specialist knowledge of that product category
- the ability to trade with larger volumes than the current NHSSC
Medical category towers
|Tower number||Category||Awarded to|
|1||Ward based consumables||DHL Supply Chain Ltd|
|2||Sterile based intervention equipment and associated consumables||NHS Collaborative Procurement Partnership (CPP)|
|3||Infection control and wound care||DHL Supply Chain Ltd|
|4||Orthopaedics, trauma and spine, opthalmology||NHS Collaborative Procurement Partnership (CPP)|
|5||Rehabilitation, disabled services, women’s health and associated consumables||NHS Collaborative Procurement Partnership (CPP)|
|6||Cardiovascular, radiology, audiology and pain management||Health Solutions Team Ltd|
|Tower number||Category||Awarded to|
|7||Large diagnostic, capital devices including mobile and consumables||DHL Supply Chain Ltd|
|8||Diagnostic equipment and consumables||Akeso and Company Ltd|
|Tower number||Category||Awarded to|
|9||Office Solutions||Crown Commercial Service (CCS)|
|11||NHS Hotel Services||NHS North of England Commercial Procurement Collaborative|
A supplier with an innovative product may qualify for market testing through a pilot agreement if both of the following apply:
- it does not currently fit on any existing framework
- the sales value does not exceed the Public Contracts Regulations value threshold
Selling through NHSCC means:
- there is a visible and accessible catalogue for companies to promote their products and services
- all NHS buyers have access to the database
Challenges of selling through NHSCC include:
- the need to stand out in a highly competitive market where there are lots of companies and hundreds of thousands of products
- having to go through an extensive tender process
Selling through NHS collaborative purchasing arrangements in England
Some local NHS organisations may choose to work together in a regional purchasing arrangement which:
- enables them to bulk buy and benefit from the economies of scale
- avoids duplication of work, such as on product assessments
Four procurement hubs have formed a collaborative procurement partnership. They will operate 3 of the new medical procurement category towers which include:
- Tower 2 - Sterile intervention equipment and associated consumables
- Tower 4 - Orthopaedics, trauma and spine, and ophthalmology
- Tower 5 - Rehabilitation, disabled services, women’s health and associated consumables
- NHS Commercial Solutions
- NHS North of England Commercial Procurement Collaborative
- East of England NHS Collaborative Procurement Hub
- NHS London Procurement Partnership
Other collaborative partnerships include:
There are also procurement ‘alliances and confederations’ which have been running for a number of years to encourage trusts to collaborate over their requirements, such as:
Advantages of selling through collaborative purchasing arrangements include:
- the ability of suppliers to reach a number of trusts (Acute and CCGs) at the same time
- stronger partnerships with suppliers through commitment to contracts
Challenges of selling through collaborative purchasing arrangements include:
- individual trusts retaining the responsibility for contractual sign off
- not all individual trusts within the group will have a budget to spend or the same level of interest in the product
NHS national framework collaborations and contracts in England
Collaborative purchasing contracts comprise groups of suppliers who have responded to tender notices and have had their credentials reviewed and approved. Such companies then contractually agree to provide a certain product or service at a given price to any NHS trust that uses them.
The Crown Commercial Service (CCS) leads on these. Its role is to provide procurement savings for government and the UK public sector, including health, but also local government, devolved administrations, education and not for profit organisations.
Find out how to become a Crown Commercial Service supplier.
Advantages of selling to the NHS through national framework collaborations and contracts include:
- the first stage of tender work is completed only once
- suppliers’ credentials are held on a database which NHS buyers can use as a reference for new suppliers
- they can help a new supplier understand the market and gain visibility in the NHS
Challenges of selling to the NHS through national framework collaborations and contracts include:
- there being no commitment is given for volume of business
- companies still having to undertake final local procurement paperwork
- not every product category having a national framework
NHS government tenders and contracts in England
The NHS complies with the EU Directive on public procurement. It advertises all large-scale contracts with a total value of over £118,133 (€144,000) for supplies and services or £4,551,413 (€5,548,000) for works in the Supplement to the Official Journals of the European Union (OJEU). All contracts appear on TED which is free to access. A number of commercial organisations will search OJEU and provide regular lists of contracts of specific interest.
Contracts Finder enables searches for NHS contracts worth over £10,000.
The NHS England eTendering Service provides a free, simple, secure and efficient access to tenders.
DHSC’s eProcurement Strategy mandates that all goods and services procured by an NHS acute trust must be compliant with GS1 and PEPPOL standards. Scan4Safety ensures compliance to ensure patient safety, clinical productivity and supply chain efficiency.
Suppliers can also register to increase their visibility to over 6,000 government buyers by registering on the Supplier Registration Service for Government.
Multiquote is a pricing and sourcing service that is used extensively throughout the public sector in the UK and increasingly by NHS trusts. Buyers use the service to enable them to buy at the best prices, find new suppliers and provide opportunities to local SMEs.
Advantages of selling through government tenders and contracts include:
- them being a very simple and effective way to see which companies have won tenders and who is buying what
- consulting databases regularly to see who is buying large scale equipment can provide advantages
Challenges of selling through government tenders and contracts include:
- strong competition as all suppliers use this route
- it can be a lengthy process
Innovation and adoption in NHS England
NHS England is committed to adopting beneficial, well evidenced innovations in products, services and care models to improve healthcare.
Within the Procurement Transformation Programme, providers will be required to identify and drive innovation throughout the life of their contracts. This involves working with the Accelerated Access Pathway (AAP) starting in 2018 and the AHSNs.
NHS organisations supporting innovation and adoption in England
Academic Health Science Networks
The 15 AHSNs, formed in England in May 2013, typically serve a population of 3 to 5 million people each. They are licenced to bring together academia, research organisations, local health industries and the NHS. They take the lead in their local areas to support innovation to meet the health priorities of their population.
The AHSN role, as set out in the Five Year Forward View, is to encourage speedier and more efficient adoption of innovation. Although they do not purchase supplies or deliver services they are regarded as important enablers and influencers.
- provide advice and support to companies with innovative products and services
- are a critical delivery partner for the Accelerated Access Pathway helping to identify local NHS needs and enabling evaluations
- work collaboratively looking at what works best locally and then scale nationally
- signpost to centres of excellence such as the DHSC accredited Academic Health Science Centres, those funded by the National Institute of Health Research (NIHR) and others
- work closely with national initiatives supporting innovation development, delivery and adoption that provide funding open to companies such as the Innovation Accelerator and SBRI Healthcare
NHS England has developed the Innovation Technology Payment (ITP). Successful innovation or technology themes are identified through a competitive process. NHS England then identifies ways of supporting adoption across the NHS, such as through introducing a reimbursement for usage or centrally procuring items.
Find out how to apply for ITP.
National Institute of Health and Care Excellence (NICE)
NICE’s role is to improve outcomes for people using the NHS and other public health and social care services by:
- producing evidence-based guidance and advice for health, public health and social care practitioners
- developing quality standards and performance metrics for those providing and commissioning health, public health and social care services
- providing a range of information services for commissioners, practitioners and managers across the spectrum of health and social care
NICE’s guidance includes technology appraisals. These assess the clinical and cost effectiveness of new and existing health technologies, such as pharmaceutical and biopharmaceutical products, also procedures, devices and diagnostic agents.
The NHS is legally obliged to fund and resource medicines and treatments recommended by NICE’s technology appraisals.
Not all products are reviewed by NICE.
Companies can find out more from NICE’s Office for Market Access.
The Medtech Early Technical Assessment developed by NICE helps product developers understand what evidence is needed to make a convincing case to payers and commissioners for their technology.
NHS procurement in Scotland: background
NHS Scotland is organised into 14 Territorial Health Boards supported by 7 ‘Special’ Health Boards.
There are 32 Health and Social Care Partnerships, (HSCPs), formed as part of the integration of services provided by Health Boards and Councils in Scotland. Each partnership is jointly run by the NHS and local authority.
NHS Scotland includes:
- more than 300 hospitals
- 4,900 GPs in around 1,000 GP practices
Find more facts and figures for NHS Scotland.
How to access NHS procurement channels in Scotland
NHS National Procurement provides advice for potential suppliers in Scotland.
All contracts and tenders are published on Public Contracts Scotland.
NHS organisations supporting innovation and adoption in Scotland
NHS Scotland has a Health Innovation Assessment Portal (HIAP) where individuals or companies can submit ideas for review by a panel of experts. This can support the trialling of new products and assist suppliers with gathering useful data on the use of their products.
Find out more about the HIAP.
NHS procurement in Wales: background
NHS Wales is organised by 7 local health boards and 3 trusts providing pan-Wales services.
NHS Wales includes:
- more than 100 hospitals
- about 440 GP practices
Find more facts and figures for NHS Wales.
How to access NHS procurement channels in Wales
Access contract opportunities through the NHS Wales eTendering Service.
Sell2Wales covers contracts offered by a wide range of publicly-funded organisations, including NHS Wales.
NHS procurement in Northern Ireland: background
Health and social care in Northern Ireland are provided as an integrated service.
The Health and Social Care Board works through its 5 local commissioning groups which cover the same geographical areas as the 5 health and social care (HSC) Trusts. A sixth HSC provides the ambulance service.
NHS Northern Ireland includes:
- nearly 40 hospitals
- over 340 GP practices
Find more facts and figures for NHS Northern Ireland.
How to access NHS procurement channels in Northern Ireland
The Procurement and Logistics Service, commonly known as PaLS, is the sole provider of professional supplies services to all public health and social care organisations in Northern Ireland.
Information for suppliers can found on PaLS.
Find e-tender opportunities on eTendersNI.