Nearly half a billion pounds will be cut from the NHS drugs budget as part of the QIPP savings agenda, according to a new DH report.

Forecasts included in The Quarter, a report which reviews NHS QIPP targets, predict that up to £477m will be saved from the prescribing budget by April 2013.

Savings will be generated by a number of treatments losing patent protection in 2011/12 allowing the NHS to purchase cheaper generic alternatives.

AstraZeneca’s Seroquel (quetiapine) and Pfizer/Eisai’s Aricept (donepezil) are two products used throughout the NHS which recently lost patent protection. Pfizer’s Lipitor (atorvastatin), one of the biggest components of NHS drugs expenditure, came off-patent in May and will also contribute to the savings.

The report shows that the NHS saved £1.2bn in the first quarter of the financial year and is on track to meet its £5bn savings target this year. Cutbacks on drugs spend are predicted to be the second biggest saving behind efficiencies coming from acute services.

The expected £477m savings is down on the £700m saved on the medicines bill the year before – when the NHS made £5.8bn of savings through the QIPP agenda.

NHS Croydon Clinical Commissioning Group is struggling to meet the NHS Commissioning Board’s (NHS CB) deadline for authorisation, its chair has admitted.

Dr Anthony Brzezicki said the December deadline set by the NHS CB was “ridiculously tight”.

The CCG is in the fourth and final wave of the authorisation process and should be fully authorised next February.

At the first open board meeting of the Group, commissioners also revealed they are struggling to meet NHS savings targets.

Mike Sexton, Finance Director, said that Croydon PCT was £4m short of reaching a £25m target to break even by the end of the financial year.

“Our objective is to still as far as possible to achieve the break-even position by the end of the year,” he said. “That is an incredible challenge but we want to be able to do it in a way that does not affect patient care.”

Commissioners also outlined plans to reduce the number of patients visiting A&E outside of working hours. Research found that parents are taking their children to emergency services for minor treatments such as doses of Calpol or Nurofen.

Around 150,000 people visit local emergency departments in the area each year. That figure could rise by another 20,000 if services are cut at St Helier Hospital in Sutton. It’s estimated that each A&E visit costs a minimum of £59.

The CCG is now developing a partnership with local pharmacies and educational facilities to raise awareness of alternative treatment options.

The NHS maintained or improved performance in 2011/12 against a range of indicators outlined in the NHS Operating Framework, the Secretary of State’s Annual Report says.

The report noted that the “NHS has performed well” over the last twelve months whilst meeting the first stage of its efficiency savings target.

Health Secretary Andrew Lansley said NHS staff across England have “maintained or improved quality while making significant cost savings and preparing for the transition to the new system”.

The annual report has been published a year earlier than required by law. The move was made by the Health Secretary to allow Parliament and the public to see the “direction the NHS is heading”, the Department of Health said.

It found that 212 CCGs are now on their way to being authorised by January next year. Also, as of April this year, there were 144 Foundation Trusts (FT), with 104 trusts remaining in the FT pipeline. Of these, only 18 trusts were not making progress towards gaining FT status and were in discussions with the DH to “develop recovery plans and progress towards sustainable, high-quality services”.

In future, the report will analyse the performance of the NHS against the three outcomes frameworks – NHS, public health and adult social care. As these are still being developed, it focused on “key achievements” during 2011/12.

It found that the QIPP agenda had generated savings of £5.8 billion; more than 12,500 patients had accessed the Cancer Drugs Fund; maximum waiting times for diagnosed and suspected cancer patients were met; and more people with diabetes are now being offered diabetic retinopathy screening than ever before.

Despite the structural reforms to the NHS, cost-cutting measures and the rationing of services, the report included data from a recent MORI poll which found that nearly three-quarters (73%) agreed that England had one of the best national health services – the highest level ever recorded.

Andrew Lansley said that performance data has “undoubtedly been positive”, but there were a number of “significant challenges” facing the health service. “Compared to other countries we continue to lag on performance on some key outcomes including life expectancy for women, cancer survival, and conditions related to obesity,” he said.

To meet “continued pressure” on finances, Lansley said there will need to be “sustained efforts to ensure that every penny of public money is spent as effectively as possible, delivering the best possible outcomes for patients.”

Future annual reports are expected to be published in October to allow Arm’s Length Bodies time to publish their own reports and accounts for the financial year.

Politicians should stop putting electoral interests ahead of helping the NHS meet its £20bn efficiency savings target, Mike Farrar, Chief Executive, NHS Confederation has said.

Mr Farrar warned the NHS could find itself in serious financial difficulty – which would affect standards of patient care – unless cost-cutting measures are taken seriously.

He said there had previously been a “chronic failure” by MPs to make brave decisions and warned the NHS is “like a super-tanker heading for an iceberg”.

The NHS Confed head added that the NHS was “doing well” in meeting the Nicholson Challenge but stronger leadership was required by MPs to ensure long term benefits to the health service.

Structural changes to the NHS outlined in the Health and Social Care Act have been widely criticised. However, Mr Farrar argued that the public needs to back the changes if services are to improve.

“The danger is clearly in view and looming ever larger,” he said. “It is clear that what the NHS desperately needs is public support for planned change to services.

“But politicians have consistently failed over many years at national and local level to put the long-term interests of their population’s health above their short-term electoral interests.”

Health Secretary Andrew Lansley insisted difficult decisions are not overlooked to maintain public support. “The NHS needs to change to match the needs of a changing population,” he said. “We will not shy away from difficult decisions involved in that.”

The NHS could save as much as £3.4 billion each year if procurement and commissioning teams within the health service improved their commercial skills, a new report says.

The CBI’s The right care in the right place claims that commissioning services closer to the homes of patients and utilising technologically advanced working measures would save billions.

According to the business lobbying group, “procurement and commissioning teams often lack commercial savvy” at a huge cost to the taxpayer.

The report found that issuing staff with the means to work remotely through the use of smart phones could contribute to annual savings of £1.9bn. It predicts the wider adoption of homecare would also contribute a further £1.3bn.

The report also advised commissioners to share best practice around England and conduct market testing to find the most effective private sector partners to deliver healthcare cheaper and more efficiently.

“Some commissioners are already working with the private sector to successfully put these advanced healthcare systems into practice, but there are still too many barriers preventing them from becoming widespread,” said Katja Hall, CBI Chief Policy Advisor.

Monitor, the independent regulator of NHS Foundation Trusts, the report advises, should also consult with private sector organisations to develop simplified financial and regulatory checks.

The Department of Health, the report recommends, should take its lead from the Cabinet Office and create a secondment team to develop improved commercial awareness in the public sector.

The NHS faces one of the most challenging 12 months in its history, Peter Carter, Chief Executive and General Secretary, the Royal College of Nursing, has said.

Mr Carter believes that cost cutting measures coupled with specialist nurses losing their jobs will put patients in the “firing line”.

Speaking in an interview with the Nursing Times, Mr Carter said Trusts would create “false economies” by reducing the number of nursing positions in an attempt to save money.

He predicted that Trusts would reduce their expenditure by around 9 per cent in 2012-2013 in an attempt to meet targets as part of the Government’s measure to make £20bn of savings.

“A majority of trusts aren’t thinking this through properly,” said the Chief Executive. “They are caught like rabbits in the headlights of the Nicholson challenge.”

“I believe next year is going to be the toughest year yet in the history of the NHS.

“A diabetic liaison nurse keeps people out of hospital, they prevent complications, they save their salary time and time again,” he added. “That’s the sort of post we are seeing cut. Mental health, along with the elderly and learning difficulties, are three services which are right in the firing line as part of the cuts.”

Up to £500 million a year could be saved by the NHS by conducting fewer ineffective or inefficient treatments, a report from the Audit Commission has found.

Reducing expenditure on low clinical value treatments says that a single approach by all PCTs could help reduce duplication and help ensure consistency across the country.

The report argues that by decommissioning treatments that are considered to be relatively ineffective or are potentially cosmetic procedures it would free up money for other uses.

For every person in a PCT’s population, an annual reduction in spending worth £10 can be made if efforts are focused to decommission low-value clinical treatments such as tonsillectomy, wisdom teeth extraction or orthodontics, says the report.

At present, there is no such national list of treatments which PCTs can follow, but a single evidence base and approach to defining which treatments are of low clinical value may reduce duplication of efforts by PCTs and bring consistency, the study adds.

It was found that, with the NHS facing the challenge of achieving £20bn worth of efficiency savings by 2015, PCTs have been developing their own lists of ineffective or inefficient treatments. Some PCTs are also grouping these into treatments which they will no longer pay for, or those for which patients have to satisfy specific thresholds.

Commenting on the report, Dr Gillian Leng, NICE’s Deputy Chief Executive (pictured), said the Institute’s recommendations for change and guidance would yield savings to the NHS, as well as bring benefits to patients.

“Implementing NICE guidance provides a way for commissioners to ensure that patients receive treatment that is proven to be both clinically and cost effective, and also free up resources and capacity that can be channelled into other services,” Dr Leng said.