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 UK pharmaceutical market is expected to experience growth of just 0.4% until 2015, a new report says.

Research and Markets’ The Pharmaceutical Market: UK predicts growth of less than one per cent in real terms due to the effects of the recession, cuts in public spending and NHS savings targets.

The report says that tighter healthcare spending could have a negative impact on the market with the NHS having less capital to spend on new or expensive drugs.

The NHS has been challenged with making a total of £20 billion in annual efficiency and productivity savings by 2014.

However, despite these cost-cutting measures, the UK Government has released additional funding through its Cancer Drugs Fund – which came into force in April 2011.

The report notes the impact of value-based pricing (VBP) in order to promote innovation and ensure better access for patients to new medicines when it is introduced in 2013.

A VBP system will be implemented for new active substances introduced from 1 January 2014 onwards. Existing medicines could be included in the system, but generics are expected to be excluded from the scheme.

As it would not be feasible to carry out a VBP assessment for each new medicine entering the market, the report says, interim arrangements are expected to run alongside the new scheme – which is likely to resemble the existing PPRS, the report predicts.

The introduction of the Government’s Patent Box is expected to generate growth in the industry, the report says. GSK has already confirmed it will invest more than £500m when the programme is introduced, which will lead to the creation of around 1,000 new jobs.

Despite the modest growth expected in the UK pharmaceutical market, the outlook is still brighter than the European counterpart. In a similar report, the European pharmaceuticals market had total revenues of $213.9 billion in 2010 – representing a compound annual growth rate of 4.6% from 2006 to 2010.

But the market is forecast to decelerate by a compound annual growth rate of 3.2% between 2010 and 2015, the report anticipates. This will result in the market value being approximately $250.3 billion by the end of 2015.

Pfizer, the report says, will lead the European pharmaceutical markets, with a market share of 6.7%.