• EU e-Privacy Directive

    This website uses cookies to manage authentication, navigation, and other functions. By using our website, you agree that we can place these types of cookies on your device.

    View Privacy Policy

    You have declined cookies. This decision can be reversed.

Introduction and overview


The NHS has been recognised since 2002 as a late adopter (Wanless report[1]) due to its procurement process, which is often slow and complex and may constitute a barrier to the adoption of innovative products in the UK. The UK government has realised that the NHS procurement can play a significant role in delivering the newly imposed and stringent efficiency targets for public services. Indeed, the procurement of goods and services from external suppliers can typically represent 30 to 35% of an NHS Trustsoperating costs. How this money is spent can affect both the financial performance of the Trust and the quality and efficiency of the services provided (through purchasing of appropriate goods and services). As a consequence, recent initiatives by the Department of Health’s Procurement, Investment and Commercial Division (PICD) are aiming to streamline and improve the NHS procurement process.

From the perspective of UK medical device manufacturers, although the UK may seem a small market on an international scale, it is still our home market; therefore it has the advantage of location plus the ability to demonstrate to overseas markets that sales are active in your home market. This document therefore focuses on helping Medical Device manufacturers sell their product and services to the NHS, with a particular focus on innovative products.

First and foremost, it is important to distinguish between two different terms used by the NHS with regards to buying products and services to third parties:

  • Procurement is the purchasing of goods and services used by the NHS.
  • Commissioning is the allocation of a long term contract that enables a third party to provide care services to NHS patients.

The budget spent on Health Technologies and Medicines in the NHS was as follow in 2008-09 (Table 2):


Table 2 Distribution of the NHS product expenditure 2008-09 amid the three main procurement routes (source Department of Health 2010).


Product expenditure in 2008-09 (£bn)

Overall proportion of the NHS product expenditure


NHS trusts









NHS Supply Chain









Collaborative Procurement Hubs









Total NHS expenditure in Health Tech and Med products





















The NHS is not the only buyer of Health Technologies and Medicines in the UK but it represents more than 80% of the UK healthcare expenditure (OHE Compendium of Health Statistics 2009). BUPA and AXA are two of the main UK private healthcare providers.

Many different procurement routes with different peculiarities

Suppliers need an understanding of the different routes and which is best suited to their particular product. The mapping proposed in this HTM KTN innovation support mapping (2009 and 2010 procurement routes) will help suppliers distinguish the range of commercialisation options:

  1. Local route (case by case engagement with hospitals)
  2. National framework contract route (through NHS Supply Chain)
  3. Regional framework contract route (through Collaborative Procurement Hubs)
  4. Opportunistic route (looking at published calls for tenders)
  5. ‘Servitisation’ route (through commissioning)

There are a number of generally acknowledged barriers that may slow down or even prevent adoption of new products in the UK health service. Even though those barriers are being addressed by recent initiatives led by the Department of Health, medical device manufacturers should be aware of them and prepare their selling strategies accordingly:

  • Reluctance to change of clinicians

Firstly, suppliers need to produce a strong evidence base for their product, through clinical investigations and other technology and health economics assessments. Then suppliers need to use clinical champions to facilitate the product adoption. This can be achieved by developing a knowledgeable and well-connected sales team that can build effective relationships with clinicians and convince them to champion the products within their organisation throughout the internal decision making process. Often, in SMEs this falls to the small business development team.

  • Short-term focused criteria used by procurement staff (eg upfront cost savings)

Suppliers need to understand the criteria used by the different stakeholders of the clinical procurement process. These criteria need to be considered as key product features very early in the new product development (eg at the product design stage). A comprehensive study of the stakeholders of the clinical procurement process and the associated internal decision making process was developed in a report[2] by Herbert (Jan 2009). In particular, one of the main criteria is upfront cost of acquisition savings.

Within the next sections of this chapter, medical device manufacturers are provided guidelines as to how they can best overcome those adoption barriers:

  • By understanding the different routes to market for medtech products.
  • By learning how to engage with clinicians for effective product ‘championing’.

[1] Derek Wanless (April 2002); ‘Securing Our Future Health: Taking a Long-Term View’

[2] Dr Christopher Herbert (Jan 2009); ‘NHS procurement: the first barrier to adoption of innovative products?’



The ‘traditional’ NHS procurement landscape


The Department of Health and the NHS in England had a combined budget of £104 billion in the 2009-10 financial year, of which around £34 billion was spent with commercial suppliers[1].

In England, medical device manufacturers have the choice between different options to sell their products to NHS hospitals and primary care trusts. The three main routes to market are as follow:

  1. Local contracts on a case by case basis with individual care providers: Hospitals and Primary Care Trusts (PCT).
  2. Regional framework contracts, through Collaborative Procurement Hubs (CPH)
  3. National framework agreements managed and negotiated by NHS Supply Chain (NHS SC).

Two less conventional routes are as follow:

  1. Opportunistic answer to a public call for tender.
  2. Servitisation of the product and adoption through winning a PCT commissioning contract.

The mapping overleaf (Figure 11) illustrates these different selling routes to the NHS. This mapping is based on information found in Dr Herbert’s thesis (2009)[2], complemented with latest information from the Department of Health with regards to the current organisational changes of the procurement process, in particular the closure of some former national procurement bodies and the creation of new regional bodies. The organisations highlighted in red were closed while those highlighted in green were created and were expected to be fully functional by the end of 2010. NHS Procurement has undergone further fundamental changes during 2012, and a new update of this section by the KTN is underway (2012).

 selling routes

Figure 11 Different selling routes to the NHS for Health Technologies companies as of 2010
(© Health Tech and Medicines KTN, 2010).

The local route is by far the most commonly used and should always be the first step for new product adoption. Then once the product is adopted at one site, it is worthwhile looking at opportunities offered by national and regional framework contracts.

In fact these framework contracts can be used as a second step adoption mechanism to introduce sales in new sites. This route can be effective for high volume offers that match NHS SC and CPH metrics (especially required savings of upfront costs of acquisition). However, this route is constrained by the lifecycle of framework contracts (those contracts are only updated every three to four years). In addition, a supplier being given a framework contract still has to engage with the local customer to create buy-in and motion if he wants the sales to be finalised in further sites.

Suppliers should also keep an eye on tendering opportunities published in the Official Journal of the European Union ( and on the UK government website supply2gov[3].

The last option is the servitisation of a product and sales through the commissioning process carried out by PCTs.

Key entry points of the procurement routes for suppliers of medical devices

NHS Supply Chain (NHS SC) - National Contract Negotiator

The NHS Supply Chain manages the purchasing and delivery of more than 620,000 products - from everyday supplies like stationery and bed linen to high-end clinical equipment, and distributes to over 600 healthcare organisations across the country.

Its main route to purchase is through the online catalogue (NHS Cat) which includes visibility of National Framework contracts and NHS Supply Chain stock items. The NHS SC can be useful to Medtech companies in two ways:

  • Medtech companies can search the NHS SC online catalogue (NHS Cat) and find out information about their competitors’ products.
  • Medtech companies wanting to sell high volume products nationally can be helped by the NHS SC through the negotiation of national framework agreements that can be used by individual hospitals which simplifies the negotiation and paperwork phase. A good entry point is the NHS SC category specialist covering the company’s product category.

Collaborative Procurement Hubs (CPH) - Regional Contract Negotiator

The creation of Collaborative Procurement Hubs was partly enabled by an effort by NHS Purchasing and Supply Agency (PaSA) to establish greater collaboration between NHS purchasing organisations[4].


CPHs can be useful to Med Tech companies in three ways:

  • Med Tech companies wanting to sell high volume products regionally can be helped by a CPH through the negotiation of regional framework agreements which can be used by individual hospitals in the region and hence simplifies the negotiation and paperwork phase. A good entry point in CPH for a Med Tech company wishing to set up a regional framework agreement is the NHS SC category specialist covering the company’s product.
  • Med Tech companies can get to know the key regional stakeholders of the procurement process. CPH are set up to have good connections to all the key regional stakeholders of the procurement process, from Commissioners to Clinicians, and even Clinical Procurement Specialists whose expertise covers both the clinical side and the procurement side.
  • Med Tech companies can get known by the regional stakeholders of the procurement process: CPH often produce and diffuse local databases of service providers for the regional hospitals and PCTs

There is a trend towards a more regional procurement process, with for instance the creation of Regional Commercial Support Units (CSUs) as shown in the section ‘Procurement process as it will stand by the end of 2010’.

Primary care trusts (PCTs) - Budget holders and commissioners

Primary care is the care provided by people you normally see when you first have a health problem. It might be a visit to a doctor or a dentist, an optician for an eye test, or just a trip to a pharmacist to buy cough mixture. All of these services are managed for you by your local primary care trust (PCT). There are currently 152 PCTs in England.

PCTs are now at the centre of the NHS and control 80% of the NHS budget. As they are local organisations, they are best positioned to understand the needs of their community, so they can make sure that the organisations providing health and social care services are working effectively[5]. PCTs are responsible for commissioning care in their region, as with all healthcare commissioning driving costs down is an imperative, so solutions that can demonstrate this are more likely to be seen favourably.

Engaging with commissioners is recommended especially for products that require re-designing patient pathways or using new health service providers (private sector or charities).

Public and Private Hospitals - Product users and buyers

Every hospital has varied needs and possibly different purchasing processes. Suppliers have to realise that even though public hospitals are all under the NHS brand they are all different. Therefore the selling process has to be local:

  • Even if national or regional framework contracts can help simplifying the bureaucratic burden, suppliers still have to run through each local procurement process and create buy-in for their products.
  • Even if nationally recognised independent technology assessment of the new product exists (such as those provided by NICE), hospitals may still want to carry out their own clinical investigations but improvements through Clinical Research Networks should reduce this.

Some general information regarding the internal purchasing process of hospitals is provided below.

Engaging with clinicians for effective product ‘championing’: understanding the purchase decision-making in hospitals

There are many different stakeholders that suppliers need to engage with if they are to create the buy-in that will lead to the adoption of their new products. Additionally, each stakeholder has very different requirements. As a consequence, it is crucial for a supplier to understand the internal decision making process of a hospital and to take adapted engagement actions (see Figure 12).

engagement route

Figure 12 Customer engagement route for new products adoption
(© Health Tech and Medicines KTN, 2010).

Firstly, the companies should contact the hospital’s procurement department as they have a range of policies which govern how companies can interact with clinicians and how they should go about trialling products (eg companies need to show they have £5 million public liability insurance prior to carrying out a trial).

It is worth building a close relationship with this department as they are often considered to be the money-keepers of hospitals and they will also be the main contact of suppliers for a long term relation in case the product is adopted. It is also valuable to try to gain inside information about their particular immediate needs (equipment that will have to be replaced in the short-term or mid-term).

Initial actions that suppliers should take are as follow:

  • Help them understand why your product is good for them (tailored to procurement staff agenda).
  • Use marketing pre-launch events to stimulate interest of clinicians.

Then, companies need to engage with clinicians. The procurement department should help companies get access to relevant clinicians. Actions that suppliers should take are as follow:

  • Help clinicians understand why the product is good for them (tailored to clinical staff agenda).
  • Help clinicians build the business case once they are interested. This assumes providing the right evidence support and sometimes even producing a pro-forma business case.

Finally, it is advised to contact the director level of hospitals and create buy-in as they have a strong influence on the acceptance or rejection of the purchasing business case. The existence of a national or regional framework contract can help speed up the decision making process.

If the purchase business case is validated by a particular hospital it then has to be publicly tendered if the contract value typically exceeds £25k. The existence of a national or regional framework contract can influence the award contract since it builds up the credibility of the supplier.

This public tendering process is mandatory for public hospitals and can be a barrier to SMEs since the Pre-Qualification Questionnaire (PQQ) discriminates competitors based on criteria such as company size, significant experience, and stable company accounts.

It is also time consuming for a supplier to put together a PQQ. This time can be saved if the supplier provides once and for all his information on the NHS-sid website[6].

The purchase decision making is generally quicker in private hospitals as they are smaller organisations and also because they do not have to comply with public institutions procurement regulation such as the tendering process.