Understanding the changing NHS procurement landscape

Source: NHE Mar/Apr 17

Understanding the current and future NHS procurement landscape for supplies and medical equipment is critical. Paul Clarke, head of supplier management at NHS Business Services Authority (NHSBSA), tells us about what was covered at their latest series of stakeholder events with NHS and Department of Health (DH) colleagues working in the procurement community.

It’s universally acknowledged that the NHS faces financial pressures and must change the way it operates to continue delivering high levels of patient service. Thinking and working differently, identifying and standardising best practice, organisational collaboration and the successful utilisation of data and technology are key requirements in achieving this, and are particularly true for NHS procurement. 

With £5.7bn (circa 4% of the overall NHS budget) currently spent on procurement of general supplies and medical equipment, any efficiencies that can be made will have a significant role in meeting the financial challenges as outlined in Lord Carter’s recent operational productivity review. 

The purpose of Supplier Management’s sessions is to ensure those working at the frontline of NHS procurement can understand current policy and saving initiatives, provide system and service feedback and give valuable input into future policy design and implementation. 

The primary future focus is establishing single national product pricing with suppliers and reducing product variation. This will increase standardisation and enable greater savings to be achieved through aggregation. 

Our sessions highlighted the various initiatives and programmes already established to achieve these aims. This included: 

  1. The Nationally Contracted Products (NCP) programme led by NHS Improvement, where a list of everyday healthcare consumable products has been highlighted for purchase by all NHS organisations. This will create higher demand and deliver greater overall savings through the aggregation achieved. For instance, we estimate that the purchase of couch rolls alone through the NCP programme will achieve overall savings of over 15% to the NHS, worth over £1m a year 
  1. The roll-out of the High Cost Tariff Excluded Devices programme by NHS England, which centralises the procurement of a range of specialist commissioned devices through NHS Supply Chain to achieve national transparency of pricing and combine future purchasing power through aggregation 
  1. The establishment of the Trusted Customer programme, where senior NHS procurement experts work closely with NHS Supply Chain and the NHSBSA to evaluate and optimise the strategy for specific priority product categories to better meet the needs of the NHS 
  1. The work of the independent NHS Clinical Evaluation Team to undertake robust central clinical evaluation within various product categories to identify quality products that are clinically acceptable to facilitate procurement initiatives and reduce the requirement for local evaluation activities 

The sessions concluded by looking at the DH’s Procurement Transformation Programme, which will implement new centralised procurement arrangements for the NHS when the current NHS Supply Chain contract with DHL finishes at the end of September 2018. 

The aim is to achieve £2.4bn savings in the first five years through increased utilisation of a central NHS procurement system, which delivers lowest product prices through national aggregation. 

The current NHS Supply Chain model will be disaggregated from a single contractual entity into a number of separate specialist contracts overseen by the NHS. These contracts are planned to be: 

  • Logistics provision
  • Transactional services, including invoice management
  • ICT systems
  • Specialist category towers covering medical equipment, capital medical equipment and non-medical supplies

These sessions set out the implementation timetable for this transition to ensure these services are in place from 1 October 2018, to enable a smooth transfer of service provider.  

We think it’s important to keep both the healthcare and procurement community up to date with developments in NHS procurement, and aim to undertake another round of sessions across the country in September. Make sure your organisation is represented.

For more information

The presentations given at the Supplier Management’s event, and summary of discussions, will be posted on the NHSBSA website when available.

If you are interested in the work of NHSBSA, visit:



Clara King   29/03/2017 at 15:37

It can be quite confusing to get your head around the NHS' procurement strategies so this is really handy to read through - thanks! I came across this great company recently who cover procurement news too which is great

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