Recent changes to commissioning and contractual obligations make NICE guidance on developing local formularies essential reading, says Paul Chrisp

  • Local formularies are becoming more important in the drive to improve patient outcomes and reduce inappropriate variation in access to medicines
  • Providers must make medicines recommended in NICE technology appraisals available and publish their formularies online
  • NICE MPG1 on developing and updating local formularies is intended to help:
    • reflect local needs
    • reduce variation in prescribing
    • allow rapid uptake of innovative medicines and treatments
  • The scope of NICE MPG1 covers the systems and processes for developing and updating local formularies
  • The guidance recommendations for practice allow organisations to balance the benefits and risks of different models locally.

MPG=Medicines Practice Guideline


Read this article to find out more about:
  • the place of local formularies in implementing NICE guidance
  • the benefits of local formularies
  • recommendations for effective systems and processes for developing and maintaining local formularies.

A s a result both of changes to NHS commissioning arrangements and new statutory requirements, many local formulary decision-making groups have identified the need to review their structures and governance. Indeed, local formularies are taking centre-stage in the drive to improve patient outcomes and reduce inappropriate variation in access to medicines, and are a key component in effective medicines optimisation. The NICE Medicines Practice Guideline (MPG) 1 (formerly Good Practice Guidance) on Developing and updating local formularies (see www.nice.org.uk/mpc/goodpracticeguidance/GPG1.jsp and Box 1)1 has been produced to help organisations review their own local formulary and ensure that it:

  • reflects local needs
  • reduces inappropriate variation in prescribing
  • allows uptake of innovative medicines and treatments following positive NICE technology appraisals in accordance with statutory requirements.
Box 1: NICE Accreditation Mark
NICE Accreditation Mark

NICE Medicines Practice Guideline (MPG) 1 on Developing and updating local formularies has been awarded the NICE Accreditation Mark.

This Mark identifies the most robustly produced guidance available. See evidence.nhs.uk/accreditation for further details.

What is a local formulary?

Before NICE medicines practice guidelines were issued, the meaning of ‘local formulary’ had not been consistently defined in the published literature. The definition agreed on in NICE MPG1 was: ‘the output of processes to support the managed introduction, utilisation or withdrawal of healthcare treatments within a health economy, service or organisation’. 1

In some cases, the formulary is agreed across a health economy so that approved medicines and treatments delivered in secondary care, which are suitable for primary care prescribing by GPs, will continue to be prescribed in primary care after a patient is discharged from secondary care. In other cases, the formulary may be confined to secondary or tertiary care settings; a recommendation to continue appropriate treatment is provided, on discharge, to the patient’s GP who will make a separate clinical decision about which medicine(s) to prescribe to continue treatment.

Local formularies have become more important in recent years. As increasing numbers of medicines become available, it is not financially feasible or sustainable for hospital pharmacies to stock all medicines in the same therapeutic class or group. A robust selection process is therefore required to ensure that only the most appropriate medicines within a group or class are included on the formulary, on the basis of clinical and cost-effectiveness. Several decision-making criteria and methods for selecting medicines for formulary inclusion have been recommended. The potential benefits of local formularies are shown in Box 2.

Box 2: Potential benefits of local formularies

  • Local formularies improve:
    • patient outcomes by optimising the use of medicines
    • local care pathways
    • collaboration between clinicians and commissioners
    • quality—by reducing inappropriate variations in clinical care and facilitating access to cost-effective medicines
  • Local formularies support:
    • inclusion of patient factors in decision-making about medicines
    • supply arrangements of medicines across a local health economy
    • financial management and expenditure on medicines across health communities.

The need for guidance

Despite their increasing importance, processes for developing local formularies vary, and may not be transparent or inclusive. This has exacerbated the variation in the adoption of NICE-approved medicines across the country.

The NHS is legally obliged to fund and resource medicines and treatments recommended in technology appraisals issued by NICE. Furthermore, the NHS Constitution2 gives patients a right to be offered medicines and treatments that have been recommended by NICE for use in the NHS, if their doctor considers it clinically appropriate.2 Those medicines and treatments recommended in NICE technology appraisals as ‘options for treatment’ should therefore be routinely included in local formularies and adopted by local healthcare providers and commissioners.

The NHS Constitution2 also provides for medicines and treatments that have not yet been evaluated by NICE, or have not received a positive NICE recommendation for use in the NHS, to be considered for use by local medicines decision-making groups (such as Area Prescribing Committees), using a robust assessment of the best available evidence.

The report from the Department of Health on Innovation health and wealth, accelerating adoption and diffusion in the NHS (2011, updated 2012) sets out the Government’s aspiration to help the NHS embrace innovation in order to meet current and future healthcare challenges. 3 In particular, the NHS should ensure local systems and processes for accessing medicines support innovation, where appropriate. The report states that:3

Formulary processes should proactively consider the impact of new NICE technology appraisals, and all NICE technology appraisal recommendations should—where clinically appropriate—be automatically incorporated into local formularies. This process should take place within 90 days to support compliance with the three month funding direction and the NHS Constitution ensuring that these medicines are available for clinicians to prescribe, should they choose to, in a way that supports safe and clinically appropriate practice.

In the Innovation health and wealth report, 3 the Department of Health introduced a NICE ‘compliance regime’ for the funding direction attached to NICE technology appraisals, to support rapid and consistent implementation throughout the NHS of medicines receiving a positive appraisal. The NICE compliance regime aims to ‘reduce variation and assure patients of their access to the clinically and cost-effective technologies and medicines their doctors believe they need’. 3 Since 1 April 2013, all NHS organisations have been required to publish information setting out which NICE technology appraisal recommendations are included in their local formularies. From the same date, this requirement became a standard term and condition in NHS contracts.1,4

All the above legal and contractual requirements and initiatives clearly indicate a need for guidance around the processes used to develop and update local formularies.

Scope of the guidance

The scope of NICE MPG1 includes:1

  • systems and processes for developing and updating local formularies
  • recommendations for practice which allow organisations to balance benefits and risks of different models that work in their own setting.

It is important to note that the guidance does not include processes relating to the implementation and performance management of local formularies, nor does it seek to define an optimum population size, or the number of organisations that should be involved in developing local formularies. This is the responsibility of clinical commissioning groups as part of their commissioning framework, overseen by NHS England in terms of contractual obligations.

Guidance recommendations

Not surprisingly, a review of current practice during the development of NICE MPG11 revealed that many organisations have established groups for making formulary decisions, but the size, composition, scope, processes, and governance of these groups varied considerably. The guideline development group agreed on 16 elements that were fundamental to good-quality local formulary development, and recommendations were made for each of these areas (see Box 3).1 All these elements are important for the development and maintenance of up-to-date, reliable local formularies; however, six areas were identified as key topic areas for local implementation, as follows.

Formulary scope

A simple list of medicines or a formulary used in just one organisation or setting (such as a single secondary care trust) may limit the utility of the formulary because it may not integrate with or cover a whole health economy’s local care pathway. It is particularly important to ensure active clinical engagement in health economies covering large patient populations that may have different care pathways for the same condition.

The guideline recommends that the scope of the local formulary should be determined through stakeholder consultation, taking into account:

  • partner organisations expected to adopt the formulary
  • size of the population
  • range of medicines and treatments to be included.

In addition, it is recommended that local health economies consider the consistency of care pathway arrangements, the level of clinical engagement, and the resources required to implement and operate the formulary.1

Medicines adoption

There are variations in approaches to adopting medicines and treatments recommended in NICE technology appraisals, ranging from automatic inclusion of the medicine on the formulary and integration into the care pathway, to the requirement for additional evidence assessments, to having no systematic approach in place. In some circumstances, it will not be relevant to include a NICE-approved medicine or treatment on a formulary if it will not be used in that organisation (for example, a specialist cancer medicine will not be relevant for a local specialist mental health formulary).

To address these issues, the guideline recommendation was that medicines and treatments with positive NICE technology appraisals should automatically be included as options in local formularies within 3 months, if clinically appropriate and relevant to the services provided. However, the issue of clinical appropriateness has led some organisations to only make medicines and treatments available as an option, rather than automatically. The recommendation was therefore amended in August 2013 to clarify this, to remove the words ‘if clinically appropriate’.1

The phrase ‘option for treatment’ was also found to be open to interpretation by commissioners and providers and has led to variation in interpretation of the recommendation. The guideline recommends that this wording means that a medicine should be added to the local formulary and its place in the care pathway should be identified.1

Not all new medicines are subject to a NICE technology appraisal; in these circumstances, NICE Evidence summaries of new medicines (see www.evidence.nhs.uk) can be helpful in making informed decisions and to aid local planning on the introduction of key new medicines. Evidence summaries are quality-assured summaries of the best available evidence for selected new medicines, or for existing medicines with new indications or a new formulation, but do not represent formal NICE guidance.

Financial and commissioning impact

The financial and commissioning impact of new NICE guidance is an important consideration and already forms a central component of local formulary management. Recommendations in MPG1 reflect the need for routine engagement with financial and commissioning managers. They also aim to streamline decision-making and encourage effective planning to overcome barriers that may delay the adoption of medicines, for example if service redesign is needed.1

Communication and dissemination

A variety of methods and formats are used to communicate and disseminate local formularies. It is recommended that information should be:1

  • as easy as possible to access
  • published online using clear, simple, and transparent language
  • complemented by policies, minutes of meetings, and decisions.

A communications framework is recommended, taking into account professionals, patients, and members of the public. Sharing information and practice between localities is also recommended.1

Reconsideration and appeals

Most local formulary groups do not have a mechanism to reconsider decisions. The principle behind an appeals process should focus on instances when decision- making groups diverge from their stated processes. The guideline recommends that local formulary groups establish a robust and transparent process for appeals.

In some circumstances, significant new evidence will become available that may affect an earlier decision, or it might become clear that a decision has been made on inaccurate or incomplete information, in which case the decision may need to be reconsidered. It is recommended that clear criteria are developed and acceptable grounds defined, overseen by an independent appeals panel that includes individuals with the necessary skills and resources to operate effectively.

Review and updating

A range of approaches are taken to reviewing local formularies, including scheduled updates and responding to the publication of important new evidence. As before, it is recommended that a robust and transparent process is used to ensure that the following are all accommodated in a timely manner:

  • results of NICE technology appraisals
  • important new evidence
  • requests to reconsider the evidence appeals

A rolling schedule of routine formulary review is also recommended.

Box 3: Key recommendation areas in NICE MPG11

  • Relationship with other decision-making bodies
  • Formulary scope
  • The local formulary decision-making group
  • Stakeholder engagement
  • Processes for selecting medicines to be considered
  • Adoption of NICE technology appraisal recommendations
  • Setting decision criteria
  • Evidence and information gathering
  • Incorporating new information from regulatory authorities
  • Assessment of financial and commissioning impact
  • Deliberating and reaching decisions
  • Documentation
  • Decision outputs
  • Communication and dissemination
  • Reconsideration and appeals of decisions
  • Review and updating.

Conclusion

Local formularies are a key link in supporting the implementation of NICE technology appraisals and patient access to innovative new medicines. The recommendations in NICE MPG1 will help to provide a more consistent approach to the development and maintenance of local formularies, limiting variation while recognising local needs.

  1. NICE. Developing and updating local formularies. Medicines Practice Guideline 1. NICE, 2012 (modified February 2014). Available at: publications.nice.org.uk/developing-and-updating-local-formularies-mpg1/background
  2. NHS Commissioning Board. The NHS Constitution: the NHS belongs to us all. London: DH, 2013. Available at: www.nhs.uk/choiceintheNHS/Rightsandpledges/NHSConstitution/Documents/2013/the-nhs-constitution-for-england-2013.pdf
  3. Department of Health. Innovation health and wealth, accelerating adoption and diffusion in the NHS. DH, 2011 (updated June 2012). Available at: webarchive.nationalarchives.gov.uk/20130107105354/http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_134597.pdf
  4. Department of Health. Letter from the NHS Chief Executive. Innovation health and wealth, publication of NHS formularies. 9 August 2012. Available at: www.gov.uk/government/uploads/system/uploads/attachment_data/file/212909/NHSCE-formularies-letter-August-2012.pdfG