2004

Corporate information officers and industry experts agree that one of the biggest problems facing IT departments is controlling and managing their flow of information. The Medicines Control Agency (now known as the Medical and Healthcare products Regulatory Agency - MHRA) is the regulatory body responsible for the approval and licensing of all medicinal products sold within the UK. Its remit is to promote and protect public health and contribute to government policy on pharmaceuticals and other medicines. As well as approving new products, it monitors existing ones to maintain safety, quality and efficacy of drugs on the market.

Drug companies need to bring their new products from their research labs to doctors’ prescription pads as fast as possible. Each year the Medicines Control Agency evaluates approximately 1,000 product applications and up to 20,000 variations of existing licences. In addition, it has to deal with around 75,000 adverse drug reaction notifications annually. Under the weight of this responsibility, the agency was suffering from information overload.

It was clear that its working practices needed to change dramatically. Over half of its staff were involved in laborious clerical work associated with incoming drug submissions.

The agency recognised that it needed an entirely new system of working based on electronic sharing of information. The obvious solution that jumped out from the drawing board was to outsource the change process to a private sector supplier. But achieving it was going to present a mammoth challenge. The agency needed to see benefits within two years, that is half the time such projects normally take. Moreover, the information management strategy as defined by the Medicines Control Agency was set at a very high level to take to the outsourcing market.

The agency approached PA Consulting Group to help it resolve this complex issue and find a way to outsource the creation of an IM solution within the available time. PA was chosen because of its independent status and its track record with major IT change programmes in the public sector.

Graham Beck, heading the project for PA says, “The situation called for a completely new sort of outsourcing package, one where the client, a public sector organisation, could work with the private sector supplier in an open-ended fashion. This requirement meant sharing risk throughout the contract.”

PA was charged with turning the agency’s high-level strategy quickly into a meaningful specification of requirements. The consultants translated strategy concepts into outline system specifications and picked out the principal business changes to capture all future operating benefits.

Alongside the technical specification, PA also produced a commercial proposition that was attractive to outsourcing bidders. The contract was structured around risk sharing, but in a manner that allowed the agency to control expenditure without the need for upfront insurance premiums.

Graham Beck says: “This is a textbook example of an organisation that recognised the need to change and found the optimum sourcing solution. Design of an appropriate commercial framework required unusual openness from the agency when discussing such areas as budgets with stakeholders.”

PA worked closely with the agency and its lawyers, Simmons & Simmons, to design and evaluate a number of possible commercial solutions for the proposed outsourcing contract.

As a public sector organisation, the Medicines Control Agency was required to satisfy a range of scrutineers that included the Official Journal of the European Communities tendering process, the Department of Health’s formal review process and the Treasury. Even when negotiations entered a single-supplier phase, the agency had to show that the deal would meet the strict “value for money” criteria. The consultant resolved this by developing a control “reference bid”, with figures based on what it would cost to effect the step-change required in-house.

Selection of an appropriate outsourcing partner was crucial to the success of the project. and a 10-year strategic outsourcing contract was agreed in December 2002. Doreen Hepburn, head of information management at the MHRA, said “Thanks to our collaboration with PA, we have developed a successful private-sector partnership that will play a significant ongoing role in the development of our agency. The arrangement positions the MHRA to respond confidently to the needs of the pharmaceutical market, while safeguarding public health and meeting statutory requirements.”

The outsourcing contract is already delivering benefits and the agency will see its operating costs improve by 20% throughout the lifetime of the contract.

Separately, an independent study concludes that the NHS hospital costs relating to adverse drug reactions could be reduced by about 25%, saving the UK taxpayer around £26m per year.