New Value Based Procurement guidance for NHS buyers of medical technology: key points for procurement teams and suppliers

The Department of Health and Social Care has published the long-awaited guidance on Value Based Procurement (VBP) for NHS buyers of medical technology. The guidance sets out the issues and questions that NHS buyers should use to assess value when procuring medical technology, which we summarise below. 

The shift in focus from the initial purchase price to instead assess the value over the lifecycle of a medical product, and its impact across the healthcare system, has been a hot topic in the sector for many years. 

The new guidance now formalises the approach NHS buyers should take when assessing medical technology during procurement exercises. 

VBP is intended to focus on how a product or solution can best deliver improved outcomes, reduce total costs across the patient pathway, and provide long-term benefits to all partners in the health system. It moves beyond traditional price-focused procurement to consider the wider value that medical devices and related services can bring.

The guidance is intended to be applied by NHS buyers to procurement of medical devices, including services that use medical devices, at the assessment stage of the procurement process (that is, in relation to the evaluation of tenders). It has a broad scope and covers consumables, implantables, general medical devices, medical equipment, capital equipment, in vitro diagnostics and point of care testing, imaging products, digital products and AI products, in both primary and secondary care settings. 

The guidance is presented as a national standard and contains mandatory weighting requirements, but it does not cover the end-to-end procurement process. Buyers must still consider whether VBP is appropriate and proportionate to the value, complexity and risk of the requirement, as well as compliance with the applicable procurement regime (broadly speaking the Procurement Act 2023 for goods and the NHS Provider Selection Regime for healthcare services).

The five value domains

Under the new framework, value is assessed against five domains. Buyers should choose the domains that are most relevant to the medical product they are buying. Within each domain, buyers should choose from the set questions provided. The guidance provides example questions, validation bases and supporting information that buyers can adapt to the particular procurement:

1. Social value: generating wider social and environmental benefits, including carbon emissions reduction, sustainable packaging, product usage and disposal guidance, and modern slavery risk management. Questions in this domain align with the NHS Social Value Playbook and PPN 002.
2. Efficiency: improving the patient pathway by safely removing or simplifying steps, reducing duplication, and improving hospital and community productivity. Suppliers are expected to provide evidence of impact against a relevant baseline and explain how benefits will be measured.
3. Patient and staff: supporting patient experience, improving patient outcomes, reducing risk of harm to patients and staff, and helping to address health inequalities. Buyers should ensure clinicians are consulted and involved in validating supplier claims.
4. Supply chain: ensuring a resilient supply chain through circular economy practices (reuse, remanufacture and recycle), managing obsolescence, interoperability with complementary products and digital systems, and continuity of supply. Suppliers should provide risk assessments and business continuity plans.
5. Purpose: meeting the specification, ease of use for patients and clinical teams, implementation support including training, and aftercare services so that the technology can be adopted safely and effectively in the relevant NHS setting.

The guidance sets mandatory weighting requirements that NHS buyers must follow. The combined five value domains must have a minimum total weighting of 60%, with the social value domain requiring a minimum weighting of 10% in line with the NHS Social Value Playbook. Whole life cost (the total cost incurred over the lifetime of a product) should have a maximum weighting of 40%.

Legal compliance

Importantly, the guidance does not replace existing legal requirements. NHS buyers must seek their own legal advice to ensure that the application of this guidance to their procurement is lawful and fully compliant with the Procurement Act 2023 (or NHS Provider Selection Regime as relevant where healthcare services are also being provided). 

Implementation in practice

There is a clear tension between asking NHS buyers to move away from focussing on initial price, while also mandating budget reductions. The reality of this is that some recent NHS procurements still place a significant focus on initial product cost. Challenges also remain over the extent to which suppliers will have access to robust evidence from customers in relation to issues such as improvement to pathways and outcomes when that information is not always reliably available.

Procurement teams will also need to receive training in how to implement VBP, what products it is most suitable for and how the domains can be applied in practice.

The guidance recognises the challenge of properly measuring value and emphasises that it must be deliverable within the buyer’s operating environment and resource constraints, and that adoption support should be planned so value is implemented in practice and not only described at tender stage. The ability of procurement teams and suppliers to understand how this can be done in practice and design processes which incentivise it, will be important in determining how successfully the NHS can implement the shift to Value Based Procurement. 

Practical steps for NHS buyers

NHS trusts and healthcare providers will need to:

• Assess whether VBP is appropriate for each procurement and that the approach is proportionate to the value, complexity and risk of the requirement. Identify any mixed procurement issues where a clinical services element may require consideration of the Provider Selection Regime.
• Ensure legal, clinical, commercial, finance and operational stakeholders understand and agree how VBP will be applied.
• Conduct pre-market engagement to communicate clearly to the market that VBP will be used, explaining the likely value domains, evidence expectations and how whole-life value will be considered.
• Decide which value domains and questions are most relevant to each procurement, taking into account the market feedback.
• Establish baselines for cost, activity, outcomes, pathway steps, safety and experience to enable meaningful comparison of bids. Share baseline data with bidders where appropriate.
• Involve clinicians and patients in shaping requirements and clinicians in validating value claims.
• Build expected benefits, reporting requirements and review points into contract management arrangements.

Implications for suppliers

Medical technology suppliers should be prepared to provide detailed evidence and method statements addressing the value domains, including real-world data on outcomes. Suppliers will need to demonstrate how their products deliver measurable benefits against established baselines.

Taking an active role in pre-market engagement can provide an opportunity to set expectations about what data is available, what “good” looks like and how the VBP domains can be applied in practice to the relevant products (which can vary hugely depending on the type of product and characteristics of the market). 

How we can help

Our specialist healthcare team works with NHS bodies and suppliers on understanding and implementing Value Based Procurement principles, while ensuring compliance with the Procurement Act 2023 and/or NHS Provider Selection Regime. Please contact us if you would like to discuss how these changes may affect your organisation.

This article was written by Shauna McGinn and Rory Trust.