Portsmouth Hospitals NHS Trust Saves £640,000 in First Generic Drugs E-Auction

Posted on Mar 24, 2004

A pioneering initiative with Portsmouth Hospitals NHS Trust has demonstrated that the adoption of new public sector procurement models can achieve dramatic cost savings. The Trust saved £640,000 by holding the UK’s first reverse online pharmaceutical supplies auction, run on Oracle software, in addition to traditional procurement processes. The cost savings, announced today, will be ploughed into services that will more directly benefit patients.

In the reverse auction, 26 pharmaceutical suppliers submitted a total of 185 tender bids outlining their best deals for generic drugs. At the conclusion of the auction, Portsmouth Hospitals NHS Trust and the successful suppliers agreed the lowest mutually acceptable price. After using Oracle’s Exchange and Sourcing modules from Oracle E-Business Suite to automate the final stage of the procurement process, an overall saving was achieved that is equivalent to the annual funding required to run a 20-bed ward.

Bill Shields, Finance Director, Portsmouth Hospitals NHS Trust, said: “As the Government presses for increased efficiency in public sector spending, our successful procurement project will provide a model that can be replicated by Trusts and other bodies across the UK. Due to the success of the generic pharmaceuticals supplies e-auction, we will run several further online auctions this year.”

Munir Ismet, head of healthcare, Oracle UK, said: “This is a prime example of how the NHS can save money by partnering with the private sector. By using technology to strip costs from costly and laborious back office processes, NHS Trusts can redirect money and resources into patient care.”

A number of private sector suppliers worked with Portsmouth Hospitals NHS Trust on the reverse auction. As well as Oracle’s software underpinning the entire auction, UKprocure Systems hosted the auction event and provided online auction services, while PricewaterhouseCoopers provided overall project management, procurement advice and an independent assessment of the project.

Shish Lal, CEO, UKprocure Systems, said: “Portsmouth Hospitals NHS Trust’s auction demonstrates NHS’s ability to drive competition and realise savings. Even in a complex area like pharmaceutical supplies, the benefits of online auctions are clear. As the Government strives to implement public sector reform, we anticipate wider adoption of online auctions.”

Brian Pomering, director, PricewaterhouseCoopers, said: “It is crucial that the NHS continues to seek innovative procurement models to improve performance and increase efficiency. The procurement of generic drugs by Portsmouth Hospitals NHS Trust is an excellent example of how best practice business processes combined with effective use of technology can help an organisation meet its business goals.”

About Portsmouth Hospitals NHS Trust
Portsmouth Hospitals NHS Trust is a “two star” trust and one of the largest in the country, providing acute and specialist health care services for almost a million people throughout Portsmouth and South East Hampshire. Employing more than 7000 staff, it has an annual income of approximately £300 million.

The Trust provides the majority of clinical specialties including Obstetrics & Gynaecology, Maternity, Urology, Child Health, Genito-urinary Medicine, ENT, Maxillofacial, Ophthalmology, General Surgery, Oncology, Orthopaedics, Rheumatology, Intensive Care, Audiology, Cardiology, Haematology, Diabetes & Endocrinology, Dermatology, Respiratory Medicine, Neurology, General Medicine. Clinical support services include Pathology, Imaging, Pain Clinic, Dietetics, Infection Control and Neurophysiology. The Trust is also home to the Wessex Renal and Transplant Unit and holds the prestigious Cancer Beacon Status for Head and Neck Cancer Services.

ends

About UK Procure

UKprocure Systems (www.ukprocure.com) is the leading supplier of end-to-end procurement solutions to the UK public sector, with an emphasis on healthcare, local government and education. UKprocure Systems provides managed services and hosted solutions that support the full procurement process, from sourcing and managing to ordering and invoicing. Its industry-leading eSourcing and eMarketplace solutions, which are based on the robust Oracle platform, are reinforced by UKprocure Systems consultancy services and unrivalled knowledge of the public sector supplier base and business processes. UKprocure Systems enables its customers to achieve dramatic cost savings through the transformation of the procurement process, savings that can be re-deployed to improve front line service delivery. At the same time, UKprocure Systems innovative solutions help public sector organisations meet Government targets for Modernisation, Best Value and Collaboration.

For more information please contact:
Tara Williams
UKprocure Systems
T: 020 7936 9489
M: 07976 906673
E: tara.williams@ukprocure.com

<< BACK