UK Diagnostics Industrial Strategy The route to a world-leading diagnostics sector Foreword – Building the diagnostics industry of the future

COVID-19 has seen unprecedented levels of partnership between industry, NHS and government, building the rapid expansion of the UK’s diagnostic capacity. The immediate crisis is still with us, and BD, as well as the rest of industry, continue to work productively with government and the NHS to provide the diagnostic tools and capacity that can provide a path out of this crisis. Yet, given BD’s legacy and expertise in diagnostics, we wanted to play our part in setting out a long-term strategy for where we go from here, and the steps needed to realise the government’s objective of creating a world-leading diagnostics industry in the UK. Long before COVID-19, we knew healthcare and life sciences were going to be key sectors for the UK in the 21st century. More and more, innovation and technology will enable individuals to take on responsibility for their own health, while making health systems more productive and resilient. The NHS can be the crucible of this revolution. True population health management, with prevention and early detection at the centre, can transform patient outcomes and drastically alter the way the NHS is able to operate. In delivering this vision, there is also an economic opportunity, which the UK is uniquely well position to lead. With the NHS’ unique and vast data sets, a highly tech enabled population and one of the most advanced ecosystems for cutting-edge medical research, the UK can become one of the hubs for digital diagnosis, based on AI and deep learning; an international leader in 21st century health management. Previous gov- ernment initiatives such as the Life Sciences Industrial Strategy, Sector Deal 1 and Sector Deal 2 have sought to realise these goals, but with insufficient focus on diagnostics. This report seeks to move the thinking on, into this critical area. BD has a long and proud history in the UK, and we can see the huge potential from this transformation. We have consulted widely - with other industry partners, with experts, and across the NHS, and this report takes in the breadth of those contributions. We hope this can be a solid platform for the government to build on - a first look at the ideas and policies that could consolidate and embed the gains we have made, and build them into something lasting and meaningful for patients, the NHS and the wider economy.

Mike Fairbourn General Manager, UK & Ireland Becton Dickinson Table of Contents

Foreword

Executive Summary

Overview: the vision for the future of diagnostics

Areas for action i. Building the UK as an international diagnostics hub ii. Strategic, coordinated system leadership to increase the role of diagnostics in population health iii. Consolidation and transformation of NHS pathology iv. Democratising access to diagnostics v. Broader diagnosis for better patient safety vi. Commissioning and procurement reform vii. Driving innovation and broadening uptake viii. Regulatory reform

Realising the vision for transformation

Appendix: full list of recommendations Executive Summary

In 2020, as part of the National Testing Strategy, the Secretary of State for Health, Matt Hancock MP, set the challenge for industry to build a diagnostic infrastructure capable of delivering the population scale testing required to respond to the virus.1 In response, industry, NHS and government mobilised at an unprecedented scale, enabling a huge expansion of diagnostic capability, supported by a new delivery infrastructure and unprecedented levels of diagnostic investment. At the time of writing, COVID-19 is still very much with us, and the structures and capabilities for our response are still developing. Yet the time is also right to look at how we can build a lasting legacy from this mobilisation, and harness it towards a sustained transformation in patient outcomes and patient safety. This paper sets out a path forward to do that - the result of consultation across the sector, the NHS and policymakers. It can form the basis for a lasting strategy to embed and expand diagnostic tools across the health system, enabling the shift towards true population health and the next leap forward in patient safety – a smarter, safer NHS. Delivering this will require a whole system approach to transformation, facilitated through national leadership and clear prioritisation. It means economic and commercial reform to build our domestic diagnostic industry, while reforming the NHS and its services to enable those innovations across the system. Whilst this appears a daunting task, we are also clear that meaningful and lasting progress can be achieved through a small set of practical and distinct actions within the main themes. First, we need to build the industry and capacity that can deliver the step change in our diagnostic capability, through a refocusing and retooling of our approach. Cultivating a domestic diagnostics industry, capable of competing internationally, requires a careful, strategic assessment of the role of government, NHS (as the largest customer) and industry. The mechanisms and infrastructure by which life sciences, construction and other industries have been supported by government should now be deployed to develop our diagnostic industry. This effort should be supported by a new programme of targeted support to attract international investment; capital loans or grants, as well as a best in class concierge system, modelled along the structures used by our closest international competitors. That economic plan must be accompanied by a health strategy, which harnesses those capabilities for the maximum public health benefit. National health leaders must set a clear strategy, informed by national clinical priorities (and enabled by the right incentives) for how to use this expansion in our diagnostic assets to deliver lasting health reform, dramatically progressing the goal of preventative population health, and a lasting step forward in-patient safety. That will require focused leadership; a national effort to build the workforce, infrastructure, and capabilities that will enable this shift, and prioritisation from the top to diffuse these changes across the system. Moreover, this expansion in the diagnostic industrial base can only be effective if tied to a modernisation and transformation of our public pathology assets. COVID-19 has shown that NHS pathology networks must be a strategic national asset, but they need national co-ordination and further consolidation to perform that role. That process, in turn, must be accompanied by efforts to reform and modernise those services – national funding should be provided to drive the process of digitalising and integrating our pathology networks, equipping them to play their full role in the modern NHS and make us more resilient to future threats. The steps to build our industrial capacity, provide the strategic leadership and equip our NHS structures should all be geared towards one, overarching goal - enabling the democratisation and personalisation of access to diagnostic tools across our health system. Indeed, it requires expanding our thinking about what constitutes our “health system”, particularly through point of care technologies and at-home testing. This can only be done through the delivery and diffusion of point of care testing across our health infrastructure, and at the core of care pathways. This will require national intervention, support and leadership, to break

1 Department of Health and Social Care. Coronavirus (COVID-19) Scaling up our testing programmes [Internet]. 2020. Available from: https:// assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878121/coronavirus-covid-19-testing-strategy.pdf down barriers between commissioning budgets. Alongside that, we need to lean into community diagnostic provision – testing better and broader in the community, supported by new facilities and further investment. Delivering change on this scale will require the whole system to adapt. Commissioning and procurement will have to adjust, with targeted measures to value and incentivise prevention across the system. We need to look again at how the system values diagnostic tools; how investment in diagnostics can be financially rewarded, rather than impeded. There has already been a huge amount of innovation in diagnostic capabilities over the past decade. That process needs to be further incentivised and sustained, but the benefits need to be realised for patients – national mechanisms and support needs to be enacted to ensure that uptake is rapid, but also broad – so that patients can truly realise the benefit. Enabling this shift will need a wider process of reform by our regulators. They will need to modernise their processes and adjust, both for this new reality and to wider structural changes, particularly Brexit. To do so, they should look to better integrate themselves into global efforts to harmonise MedTech regulation, and take advantage of existing global pathways and processes. These are the eight key areas of reform needed to realise the vision for transformation; a whole system approach. Taken together, we hope these ideas can form the basis for a national strategy to realise the potential of better, broader and faster diagnosis across our health system. The vision for the future of diagnostics

In recent decades, modern health systems have increasingly come to focus on the concept of population health as the underlying principle for their organising structures. Rather than systems designed to treat patients who present with sickness, they should be restructured to identify and engage patients upstream, with a focus on prevention of ill health, or early detection and diagnosis where ill health does arise. The benefits of this approach are now widely understood. Most health conditions are much more amenable to treatment at an earlier stage, with the speed of diagnosis and intervention one of the most significant variables in patient outcomes, particularly in the NHS’ largest disease areas – cancer, CVD and diabetes. That benefit for the patient brings a wider benefit for the system. Overwhelmingly, the burden of cost for our current NHS is in treatment of late stage conditions, be it bariatric surgery, heart surgery or high cost therapeutics for cancer. With an ageing population and rising cost of many treatments, stopping patients from progressing to that stage will be key to the system’s long-term sustainability. The new model of care, to which systems of all over the world are striving, will be based on prevention, proactive intervention, and personalisation. Better and broader access to diagnosis is the key to realising that vision. In recent years, the NHS has tended to lag European and international counterparts in providing the breadth and depth of diagnostic access that would support a true population health approach. Excepting the recent COVID spend, the ratio of NHS diagnostics expenditure to therapeutics over the past decade has been one of the lowest amongst international comparators. Yet recent changes - structural reforms to the NHS, as well as the breadth and scale of the COVID-19 response - mean there is a real opportunity for the NHS to realise that agenda, and accelerate the transition to prevention-based population health. COVID-19 expansion in diagnostic capacity The UK went into this pandemic with a fragmented network of pathology assets, containing pockets of excellence but little national structure or co-ordination. The process of pathology consolidation had been underway for some time, seeking to implement the proposals from a comprehensive review of NHS pathology by Lord Carter. Yet the pace of reform had been slow in the face of local and contractual obstacles to consolidation. At the time of the pandemic, the limited scale, capacity, and investment in NHS pathology provision meant that those networks were unable to respond on the scale required. Moreover, unlike other European counterparts, the UK was not able to rapidly leverage in capacity from a domestic diagnostics industry. While the UK is internationally renowned in life sciences and MedTech, the domestic diagnostics industry, while innovative and growing, was still in the earlier stages of development. A recognition quickly formed amongst policymakers that concerted action needed to be taken. NHS capacity needed to be expanded, supported by a broader and deeper diagnostic industrial base. In April, as part of the National Testing Strategy, Secretary of State for Health Matt Hancock MP formally set the challenge for life sciences, medical technology and services providers to come together and build up that national diagnostic industry,2 which could provide mass testing on the scale needed to meet the challenge. That led to a period of unprecedented partnership and mobilisation from government, NHS, and industry, which culminated in a massive expansion of diagnostic capability. The UK is now testing among the highest levels per capita in Europe.3 New pathology providers were formed with the Lighthouse labs. Huge private and state capacity has been created, backed by a trebling of diagnostic spend.4 Within several months, government, NHS and industry had created a mass testing infrastructure, new pathology structures and a fledging diagnostics industry; in short, a massive expansion in Britain’s diagnostic capabilities.

2 Department of Health and Social Care. Coronavirus (COVID-19) Scaling up our testing programmes [Internet]. 2020. Available from: https:// assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878121/coronavirus-covid-19-testing-strategy.pdf 3 Coronavirus (COVID-19) Testing - Statistics and Research [Internet]. Our World in Data. 2021 [cited 5 March 2021]. Available from: https:// ourworldindata.org/coronavirus-testing 4 Torjesen I. GPs order three times as many diagnostic tests as 15 years ago, study finds. BMJ. 2018;363:k5093. NHS restructuring around population health While COVID has seen the emergency formation of huge new diagnostic capacity, the NHS has, over the past five years, been engaged in a wider process of restructuring to enable more active population health management. The NHS Long-Term Plan formalised the new approach to delivering care through Integrated Care Systems (ICSs), and the new system by default assumption in local health planning.5 This goes alongside the formation of new Primary Care Networks (PCNs), which will see GP practices largely merge into networks of providers, building the scale and capacity to support an expanded approach to population health. These shifts in the way the NHS is structured means the health service is better equipped to make the system level, strategic investment in diagnostics needed to realise the vision of preventative population health. Rather than providers operating in silos - measured, incentivised, and rewarded individually – ICSs can work together to optimise care pathways based around early diagnosis and prevention. PCNs, as the gateway to the health system, can be the delivery mechanism for much of this expansion - their greater scale enabling investment in new diagnostic tools, and new ways to engage strategically with local populations. This is the major prize from this new system approach. For example, eradicating the UK’s problem in late stage diagnosis of cancer has been the focus of policymakers for some years. The traditional understanding of the problem focused on a reluctance in GP practices to incur the cost of substantial throughput of patients for diagnosis, limiting the scope for early detection. Breaking down the cost barriers between the system enables GPs to invest properly in diagnosis, supported by more sophisticated pathology management – for example, more pathology management resource made available through PCNs – and by an expansion of the diagnostic tests able to be carried out at the point of care.

The opportunity to embed prevention through diagnostics The confluence of these two shifts mean that now is the opportune time to look at the future role of diagnostics in our health system. The NHS already had ambitious goals for earlier detection and diagnosis across a range of conditions, set out in the NHS Long Term Plan. Yet, with the scale of the change brought by COVID-19, now is the time to look strategically at how to build a lasting legacy from these new capabilities, and look to the future with renewed ambition. Indeed, NHS leadership and government are already seizing on this, not just through the challenge laid out by the Health Secretary in April, but through initiatives like the recent report by Sir Mike Richards into diagnostic pathways and capacity.6 Once the UK is past the COVID challenge, the immediate need for pandemic scale emergency testing will have passed, and with it the need for current levels of emergency spending. But rather than gradual adjustment back to historic levels, we should press into the opportunity to recalibrate the level of diagnostic spending around our expanded capabilities. If the UK retained just half of COVID levels of diagnostic spend for the next five years, we could permanently re-orientate our health system around prevention and early detection, through system level, strategic investment in our diagnostic infrastructure.

Predictive prevention In cancer alone, a substantial proportion of the variance between UK and international outcomes is accounted for by the differing points of diagnosis and intervention. That gap could be eradicated by targeted investment in diagnostic capacity, calibrated by population risk tools. For example, a pilot programme in Manchester quadrupled the rate of early detection of lung cancers (typically one of the hardest to be diagnosed before significant progression), through a programme of screening in supermarket car parks, targeted at current or former smokers. After screening 2,500 people, it identified 46 cases of cancer - 80% of which were at stage 1 or 2.7 New innovations to deliver these sorts of non-invasive and rapid

5 NHS England. The NHS Long Term Plan [Internet]. 2021. Available from: https://www.longtermplan.nhs.uk/publication/nhs-long-term-plan/ 6 Richards M. The Independent Review of Adult Screening Programmes in England [Internet]. NHS England; 2019. Available from: https://www. england.nhs.uk/wp-content/uploads/2019/02/report-of-the-independent-review-of-adult-screening-programme-in-england.pdf 7 Greater Manchester Cancer. Annual Report 2018 [Internet]. 2019. Available from: https://www.gmhsc.org.uk/wp-content/uploads/2019/04/ GM-Cancer-_Annual-Report-2018_19-_Finalversion_march19.pdf diagnosis for other cancers, such as liquid biopsies, are coming on stream, and in some areas are readily available. Harnessing these new tools at a population level has transformative potential for cancer outcomes, as well as reducing the frequency, intensity, and cost of later stage interventions. In CVD, new diagnostic tools allow for much greater understanding of the risk markers of cardiovascular deterioration. Independent estimates commissioned by Public Health England show that a sustained shift to earlier diagnosis could mean at least 49,000 strokes and 31,000 heart attacks being prevented by 2029.8 With the deployment of new diagnostic tools, situated in high street community facilities, we could deliver much broader patient diagnostic throughput, particularly of the asymptomatic population. This form of intelligent screening is the key to transformation in patient outcomes. The potential in diabetes is equally significant. Better diagnostic provision enables earlier diagnosis, particularly important in young people, but also enhanced clinical oversight of patient management of their condition – key to long-term prevention and a transition away from costly, late stage interventions. These are three of the NHS’ main disease areas, impacting huge parts of the UK population, where the burden of cost is currently situated in expensive, late stage interventions. Building our diagnostic infrastructure could radically alter the patient and system cost across those areas.

The clinical and financial case for patient safety Just as this shift can transform patient outcomes, so it can transform patient safety. The clear lesson from international comparators is that better and broader use of diagnostic tools, available at the point of care, results in better clinical decisions and a reduction in errors. The NHS’ welcome focus on patient safety over the past decade has resulted in real improvements, much of which has been driven by the systemisation of processes – putting in place cultural, procedural and regulatory changes that, over time, minimise the scope for human error. The next stage of that journey can be to embed modern diagnostic capabilities across those processes. This can be delivered through an expansion in the use of point of care testing, enabling clinicians to reach an accurate diagnosis quicker and more often, but also, as the process of pathology rationalisation takes shape, by embedding modern technology and automation at the heart of our new mass-scale pathology structures. Accurate, timely diagnostic tools available for patient in clinical settings, supported by a modern, automated diagnostic infrastructure at the new super labs. Just as cultural and structural change in the NHS has already transformed the way staff approach patient safety, leveraging the benefits of technology and automation for accurate, timely diagnosis should be the next stage on the journey to be the safest health system we can possibly be. That systemisation of diagnostic use also equips the NHS to finally realise one of our key tools in the fight against antimicrobial resistance. The UK has taken many excellent steps, domestically and with international partners, to combat AMR. Yet prescribing rates for antibiotics remain stubbornly high in the NHS, some way above international counterparts.9 Just as recent months have demonstrated the importance of accurate, timely testing as a tool to combat COVID, so it illustrates the potential for accurate, timely diagnosis in bearing down on inappropriate prescribing.

8 Waterall J. Health Matters: Preventing cardiovascular disease [Internet]. Public Health England. 2019. Available from: https://publichealthmatters.blog.gov.uk/2019/02/14/health-matters-preventing-cardiovascular-disease/ 9 Review on Antimicrobial Resistance. Tackling drug-resistant infections globally: final report and recommendations [Internet]. 2016. Available from: https://amr-review.org/sites/default/files/160525_Final%20paper_with%20cover.pdf. A strategy for transformation The Health Secretary’s challenge to industry, to build the diagnostics industrial base of the future, therefore comes at a timely juncture. The NHS now has the emerging structures it will need to facilitate true population health management; local health systems that, through collaboration, can invest in and structure care around prevention and early detection. Private industry has mobilised and innovated, and public investment in diagnostic provision and capacity is at an all-time high. The building blocks for a lasting transformation of patient outcomes and population health management are in place, which could put the NHS on a sustainable financial footing for generations. Realising the potential of those shifts and diffusing them through the system is now the challenge before us. To realise transformation on this scale will require detailed thinking, consultation and reform across eight key areas. Some of these areas require national action by government; implementing the economic and commercial measures that will attract, develop, and retain a UK based diagnostics industry as a long-term strategic asset. This will require targeted investment and support, as well as new structures and institutions. Harnessing those capabilities, and realising their potential for our future health needs, will require fresh thinking from the NHS, and national system leadership. Our regulators also need to look at their role in this transformation. In some areas, it will require a willingness to do things differently, and look at novel approaches. In other areas, there are well established precedents – particularly in the way the NHS approaches therapeutic innovation or use – which should be extended to diagnostics. The prize is substantial. Realising it will require a whole system approach - a strategy for transformation that encompasses all the constituent parts of our National Health Service. These coming sections set out the basis for such an approach. i. Building the UK as an international diagnostics hub

The UK’s history of developing and sustaining world-leading industries points clearly to the role of international investment in driving transformation. From pharmaceuticals to financial services, the UK has excelled where it has been open and targeted in attracting international investment, which catalysed and built on our natural strategic assets. Transformation in the UK diagnostics sector will require the same approach. The UK retains unique and historic advantages over most international comparators. These include a highly developed ecosystem to facilitate advanced research and innovation, a centralised health system capable of acting both uniformly and adaptively, and crucially – a world leading life sciences sector, highly synergistic to better diagnostic provision, which policymakers have already done much to develop and support. Yet recent decades have seen increasing competition across the world for major inward investments. Capital is increasingly mobile, the playing field between the developing and developed world is levelling, and policymakers the world over are waking up to the agglomerative value of international investment in strategic sectors. Where the UK was historically an outlier in its openness and ability to attract international investment, it now faces a much more competitive environment. COVID, in turn, has increased the international focus on the tools and expertise underpinning a modern diagnostics sector. Our international competitors can also see the health security imperative of developing their own such domestic industries. The UK will need a clear and comprehensive strategy, leveraging the full range of tools at our disposal, to meet this challenge. The history of the UK’s pharmaceutical sector should serve as an example for us to follow. It will require the same careful collaboration with industry and the NHS, as well as a willingness to learn from international comparators who do this well.

A new diagnostics sector deal The past decade has seen an increasing recognition of the natural role of the state in shaping industries where it plays a dominant role, and consequently, the need for a coherent industrial strategy to best define its role in the sector’s development. This culminated in the agreement of several Sector Deals between government and key industries; formalising a strategic partnership that sets out the steps both parties will take to delivering the industrial strategy. We have seen this with the Life Sciences Sector Deals One and Two, the result of patient and careful collaboration across industry, NHS and government, which clearly laid the building blocks for continued transformation and success in the sector. The Life Sciences Sector Deals included some welcome provisions on diagnostics, but in many cases, these have yet to bear fruit. Moreover, the scale of change already taking place means that a dedicated approach for diagnostics will better calibrate policy to the potential prize before us. The process of agreeing a sector deal, the structure, clarity, and clear articulation of the responsibilities of each stakeholder that it brings, is highly valuable for organising each constituent part of the process behind a single goal. To that end, government should announce its intent to strike a new Sector Deal for Diagnostics, to bring about the vision for a transformation in the UK diagnostics industry which was set out by the Health Secretary. Government should set out its intention to have a Sector Deal agreed by July 1st 2021, covering key themes on business environment, infrastructure, places and people. We hope that many of the proposals subsequently set out in this report will be useful contributions to this.

Launch a capital grants regime and fund The UK already hosts a significant presence from most major international MedTech and life sciences companies, as well as a thriving ecosystem of innovative start-ups and SMEs. Yet delivering a step change in diagnostics capacity and use across the health system will also require a major expansion of our manufacturing base. Meanwhile, the COVID pandemic has demonstrated the value of diversity in our provider base, and the importance of SMEs to resilience in the supply chain. There is scope for a much more muscular approach from government to incentivise major international investments in the UK, and to support SMEs in developing commercial manufacturing capacity. Commercial manufacturing capacity in this space is almost uniformly high value, high skill and highly accretive for local economic output. Yet it is also highly capital intensive in the initial phase; requiring significant up-front investment – not just facilities and equipment, but the labour costs for a skilled workforce to operate them. Moreover, these costs all have to be borne in tandem with the costs of product development and regulatory approval, and have to be borne for several years in advance of product launch. Recognising the sustained economic benefits of these investments, international businesses now have a choice of an array of potential host locations, all operating some form of capital support programme to bridge the gap between investment and return, while the UK lags behind. We now have an opportunity to close the gap with these international competitors. This is also an imperative in terms of the UK’s health resilience. There are many immediate steps which could be taken to bridge the cost gap between investment decision and commercial product launch, through a more tailored programme of financial support. Much of this was recognised in the Life Sciences Industrial Strategy, which set out the basis for a new programme of support several years ago. It proposed an intervention rate of 10-15% of the total capital cost of the project,10 which would largely be delivered through state loans, leveraging the government’s ability to offer a more competitive interest rate than would be obtained on the open market. There is scope to go significantly further, recognising the new diagnostic landscape, as well as the opportunities from a new state aid regime outside of the European Union, which may afford greater flexibility in the future. There has already been significant new diagnostic innovation in response to the COVID challenge, much of it from smaller innovative start-ups and SMEs, which will need bespoke investment to sustain and develop into meaningful economic value. Moreover, many larger companies have made emergency adjustments or re- orientations of manufacturing capacity towards provision of diagnostics, which will require concerted investment if it is to be channelled towards a productive long-term expansion of diagnostic capacity beyond COVID. To deliver this, we believe a new government capital grant fund should be established, which would attract FDI in the diagnostics sector. In line with the Life Sciences Strategy we would advocate nationally available financial incentives – grants and loans, or capital allowances combined with regional incentives – to support capital investment in scale-up and manufacturing in the UK, or other related export activity. Government should consider setting goals for the number of commercial-scale manufacturing facilities or major research initiatives which it attracts in the diagnostics sector over the next five years. Recognising the gap between initial investment and product launch, government could further consider rolling out a programme of ten- year loans alongside this, in which repayment does not start until (at least) year 3. This would support manufacturing scale up and capital expenditure on equipment. Given the particular necessity and urgency on diagnostics which has emerged since the original publication of the Life Sciences Strategy, we propose immediate engagement with the UK and global diagnostics industry to determine what other specific elements to the new capital grants programme are needed for this particular sub-sector.

Tailored support for inward investments Many of these measures are already in place in other international competitors, particularly places such as Ireland and Singapore, both of whom have had significant success in attracting manufacturing investment. A particular feature of both of these countries approach has been their highly targeted ‘account management’ offer; a much more intensive programme to engage international businesses in target sectors, promoting their respective offers, and then providing granular support to facilitate the process of scoping, design and relocation. The UK should look to model its offer for inward investment on these international comparators, through a

10 Office for the Strategic Coordination of Health Research. Life Sciences Industrial Strategy - A report to the Government from the life sciences sector [Internet]. Available from: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/650447/ LifeSciencesIndustrialStrategy_acc2.pdf refreshed approach. This should be used to bring in both R&D activities but also manufacturing, situated in post-industrial towns in the North & Midlands. This means making support and incentives for manufacturing investment and exporting available to business through a single front door, with a senior national account manager accountable for delivery and simplifying the customer journey. Development of this body should learn from the best of international practice, but also consult deeply with industry and across the economy, to make sure that structures are best calibrated to the UK’s unique offer. As part of the Sector Deal, BEIS, HMT and DHSC should look to further enhance the UK's inward investment approach, modelled on Ireland's inward investment promotion agency, the IDA, with a much more proactive and energetic approach to engaging growth economies. The NHS should consider its offer as part of this, including access to clinical trials and data so that companies can come and get their innovations properly validated and tested early in the process. These investment and incentives should be targeted with the aim of creating a new diagnostics industry cluster in a suitable part of the UK. HMG should re-examine the actions which have driven the success of clusters such as Massachusetts, California and Israel and enabled us to grow the “golden triangle” as the third global bioscience cluster. It should have the explicit aim of supporting economic growth and development in a new region of the UK, enabling the benefits of growth to be shared more widely around the country. Government support in this area should focus on developing capacity within universities and co-located SMEs to manage and finance medical technology and digital spin-outs, and enable companies to learn from each other. The success of the MassBio initiative in the Boston Life Sciences cluster would be a useful model to emulate.

IDA Ireland IDA Ireland is one of Ireland’s largest and most powerful public bodies, with a footprint in all the fastest growing economies and an independent voice on business policy in Ireland. It is funded by the Irish government but ran independently, with its own board and constitution, and the freedom to publicly advocate for policies it supports. It is set targets by the Irish government on key metrics (for example, Gross Value Added, expanded payroll, growth in areas of deprivation) and operates and is measured against those targets. It met all the targets set of them for 2015-19 in 2017,11 well ahead of schedule. They are empowered to administer the full gamut of policy with respect to their role, particularly in grants. They take decisions on the allocation and quantum of capital and R&D grants, and are free to lobby central government for enhanced support if they feel it necessary. They offer various forms of support: a 25% R&D tax credit, training grants for companies who wish to locate and invest in skills and apprenticeships in underdeveloped parts of Ireland, as well as ‘business asset grants’ for companies who wish to upgrade technology or invest in new machinery. They hold a live register of all commercial property available in Ireland, so are able to have much quicker and more strategic discussions with companies about land and office requirements. In effect, they are a one stop shop for inward investment; capable of addressing all the commercial considerations for companies making investment decisions, empowered to make decisions across these areas, and listened to when those decisions have to be taken elsewhere in government.

11 IDA Ireland. IDA Ireland End of Year Results 2017 [Internet]. 2018. Available from: https://www.idaireland.com/newsroom/end-year- results-2017 Translational infrastructure for diagnostic innovation The Catapult Networks were set up earlier this decade as an institutional response to the widespread perception that, while the UK had a wide and varied science base which excelled in several areas, it often struggled to commercialise that output. They were designed to exist as a network of ‘translational infrastructure’ – a framework of support and expertise that would help bridge the gap between early stage science and the market. Each Catapult is provided with core public funding, then leverages in wider commercial funding and research grants to support the delivery of its objectives. They house significant commercial, financial and scientific expertise, alongside business development teams that engage intensively across the scientific community, and with SMEs seeking to grow and commercialise their technology. In that way, they have become hubs for innovation and growth in each of their areas of operation; linking together the disparate parts of the scientific ecosystem, then providing it with the tools to commercialise and build scale. We believe that same model of ‘translational infrastructure’ should now be applied to diagnostics, in order to coordinate and support the next wave of transformative diagnostics innovation, and to retain some of the pathways and expertise which has been established in recent months as part of the COVID-19 response. To that end, the government should introduce a new Diagnostics Innovation Centre and Catapult. This would include a UKRI-funded Diagnostics Centre of R&D Excellence, and a Catalyst for incubation/ acceleration, to improve early stage research in this area. It would also provide regulatory pathway support and commercialisation expertise. DHSC and BEIS should begin the design and scoping work to implement this as part of the Diagnostics Sector Deal, working with industry to set the parameters and remit of the Diagnostic Catapult centre.

Diagnostics manufacturing action plan Strategic weaknesses in the UK’s diagnostics manufacturing base have been highlighted by the COVID-19 outbreak. For example, greater scale is needed in the domestic manufacturing of good quality swabs and this has not yet been fully bridged. With such goals in mind, DHSC, with other relevant departments, should develop a Diagnostics Manufacturing Action Plan, in partnership with industry. This will set out a strategy to develop cutting-edge manufacturing technologies which will address current scale-up challenges and drive up productivity, specifically in diagnostics. As part of this, the government should optimise the fiscal environment for manufacturing investment, to drive investment in industrial buildings, equipment, and infrastructure for manufacturing and late stage R&D in diagnostics. HMG should also work with industry to assess how far up the supply chain the UK should be seeking to build domestic resilience – for example, the extent to which we need to ensure raw materials and inputs are developed here for PCR testing and other aspects. A specific review should be undertaken to consider the case for supporting flexible R&D sites, which could be repurposed for manufacturing as the need arises. This will require dedicated capital funding, or the promise of contract guarantees for providers. This approach to resilience and flexible capacity should be part of the wider manufacturing plan, and will need unique partnerships with providers. A further important element should be a new Diagnostics Manufacturing Innovation Centre, and the provision of a Diagnostics Fund equivalent to the Medicines Manufacturing Industrial Strategy Challenge Fund.

Access to capital and growth funding As noted, the UK has long played host to high quality research and innovation, but struggled to commercialise many of the applications. In this respect, a further obstacle to sectoral development is the difficulty in converting many of the smaller or medium sized enterprises into large scale businesses, or incentivising those that do develop to maintain a significant presence in the UK. Too often, those that do achieve success tend to move overseas or get acquired early on by larger companies, often based abroad. To develop and sustain a domestic diagnostics industry, the UK needs to ensure that high growth companies remain and grow here, and that economic policy is best calibrated to that objective. The government should look in depth at the range of fiscal and other tools available to support high growth companies, and how the tax system could enable or incentivise UK based companies to grow and remain in the UK. This should look at the full gamut of tax policy, and incorporate existing steps to improve the attractiveness of our tax system; the HMT review into patient capital, tax incentives for AMR research, the terms of the SME R&D Tax Credit and large company RDEC schemes. The review should also consult internationally and with industry, to better understand the relative impact of different measures on commercial investment and location decisions.

Chief Executive, a leading diagnostics industry trade association: “For many innovative diagnostic suppliers, the end game is to sell their IP to one of the larger players; we should be encouraging these companies to grow here in the UK.”

Given the accretive impact of public R&D funding across other parts of the economy, government should ring fence a proportion of the recently announced R&D funding target for diagnostics. The UK is at the cutting edge of much of this rapid progress, evidenced by the product development in response to the COVID-19 outbreak, including on point of care lateral flow tests. However, the urgency and return from discovery in diagnostics is clearly greater than anticipated and so HMG should set a target for the proportion of additional R&D spend which will be dedicated to this sector.

NHS Ventures With the NHS far and away the most dominant purchaser in the domestic MedTech market, we need to look more strategically at the role of the NHS in facilitating, supporting and commercialising early stage discovery. For all intentional businesses, the procurement and commercial environment in the UK (notably the NHS) will be a dominant factor and this came through in much of our consultation. This aspect is considered in a specific section on how the procurement and commercial environment should be reformed. However, there are other actions particularly pertinent to the economic and investment angle which should be pursued. Notably, DHSC should establish an NHS-branded venture fund to back early stage discoveries which are likely to be of strategic importance and resilience benefit to the UK and NHS, notably in diagnostics. At its launch, it should focus on two or three life sciences sub-sectors, notably diagnostics. NHS Ventures would identify the key technologies and provide both the incubator support function (similar to the existing NHS National Innovation Accelerator) but would also invest public money directly into the discoveries and proposals with the greatest commercial and strategic benefit to the UK and NHS. Where possible, DHSC and NHSEI may use its purchasing power to support such initiatives, within the confines of competition and state aid rules. Expertise from the private venture and corporate fund sector should be invited to contribute through an investment committee or advisory board to the fund. Backing from NHS Ventures would be a major asset to UK companies looking to export overseas, as well as a strong signal to the internal market about the clinical value of emerging technologies. It could prove particularly supportive for clinical entrepreneurs and other projects developed from with the NHS.

Recommendations in this section 1. Government should announce its intent to strike a new Sector Deal for Diagnostics, to be agreed by July 1st 2021. 2. Government should set up a new capital grant fund to attract FDI in the diagnostics sector, with nationally available financial incentives to support capital investment in scale-up or manufacturing in the UK. 3. BEIS, HMT and DHSC should agree a plan to enhance the UK's inward investment approach. NHSEI should be engaged to develop the specific NHS offer to supplement that approach. 4. Government should introduce a new Diagnostics Innovation Centre and Catapult to incubate the next wave of diagnostic innovation. 5. Government should consult and develop a Diagnostics Manufacturing Action Plan, in partnership with industry, to develop cutting-edge manufacturing technologies that will address scale-up challenges in diagnostics. 6. Government should commission a review of the UK’s taxation regime, to ensure it is optimally targeted to encourage companies to relocate and remain in the UK. 7. Government should ring fence part of public R&D funding spend to diagnostics 8. DHSC and NHSEI should establish an NHS-branded venture fund to back early stage discoveries, with a particular focus in diagnostics. ii. Strategic, coordinated system leadership to increase the role of diagnostics in population health

The economic and commercial steps set out to build our diagnostics industry are the pre-requisite for realising the shift to a modern, prevention-based population health system. Where the first section explored the steps needed to build the capacity and industry to support this transformation, this section explores the steps needed to equip the NHS to capitalise on that transformation. Realising the huge possibilities from point of care testing, from digital diagnostics and from enabled digital self-care will require system level change and national leadership. We need to focus on the mechanisms to bring them to fruition, but also on building the NHS capacity, workforce and infrastructure that supports their new role. We should note that this report focuses on pathology more than the other broad categories of diagnostic capability - imaging, physiology, endoscopy and genomics. This is in part due to the particular focus at the time of the Health Secretary’s challenge in April, and because other aspects of the diagnostic landscape are covered in detail by other reports (including the recent review by Sir Mike Richards, which has a substantial focus on imaging). Much of the wider diagnostic reform agenda, including the wider proposals in Richards Review, the expansion of genomics and increase in imaging capabilities are steps we profoundly support, and highly synergistic to expansion and diffusion of access to pathology services.

COVID-19 – system preparedness In the short term, while the elective backlog will be further strained by renewed capacity pressures across the acute sector amidst the recent increase in COVID cases, it must be a priority to limit the impact of system pressures on wider diagnostic targets. Where possible, creative ways to leverage new diagnostic tools – particularly digital tools, virtual consultations, as well as new community diagnostic facilities – should be sustained and expanded, with more national funding to support expansion or adoption of these services. The NHS has already displayed great flexibility and a readiness to adapt to new ways of working, particularly adoption of digital and virtual tools for patient engagement. In many cases, industry and technology providers stand ready to work with the system to innovate and develop these digital tools and platforms; system leaders should look at how this can be expedited and expanded as pressures build up again in the acute sector. In the face of those pressures, national leaders also need to signal their commitment to bearing down on any slippage in diagnostic targets. The next round of national guidance from NHSEI leadership should make some firm commitments on the recovery of waiting times for diagnostic testing to pre-COVID levels, and restate the various targets laid out in the Long-Term Plan related to early diagnosis. The supporting financial framework should provide the necessary blend of carrots and sticks to incentivise this, within the constraints of system pressures. We also need to ensure that appropriate resilience planning is in place to protect critical screening programmes, particularly in the face of a sustained resurgence in COVID-19 or another future pandemic. Where possible, we should look at how home testing could be expanded, or COVID secure screening sustained amidst increasing pressures in other parts of the system. When looking to the long term, much has been learnt in recent months about system preparedness and resilience in the face of future threats, which should inform our future approach to system preparedness. One of the key learnings has been the importance of scalability in diagnostic provision as an essential tool of health security. Much has already been done to put in place the expanded testing provision for COVID-19, some of it through emergency procedures, which has seen admirable levels of partnership between government and industry. As we look to put national testing provision on a more strategic footing, DHSC should seek to codify a single Testing Strategy, setting out the policies, priorities and protocols for COVID-19 testing, which can be used as the basis for testing strategies and manuals in any future pandemics. This Testing Strategy should provide absolute clarity on who is to be prioritised for which type of test, and how we are going to organise the supply chain and assets in order to deliver these objectives. This can look to take account of the massive expansion of diagnostic provision already taken place, and how that can be best sustained and utilised as an essential tool of system resilience for future threats. We should also seek to codify that in national policy, as an essential element of national security preparedness. Medical supply resilience of all kinds - including diagnostic capacity - should be added to the national risk register and national preparedness plan, with appropriate contingencies, contracts and resources put in place for rapid mobilisation in the event of sustained rise in COVID infections or other health security threats.

A new national diagnostics strategy Looking beyond COVID, the recent Richards Review12 set out some of the key steps the NHS needs to take over the coming years to capitalise on diagnostic innovations and embed an expanded diagnostic capacity across the system. We support the measures outlined, and believe these should be adopted as part of a wide ranging new NHSEI national diagnostics strategy. This new diagnostics strategy should set the system priorities for the coming years, in line with the NHS Long Term Plan and the emerging lessons and structures resulting from COVID-19. While national government are focusing on the economic steps needed to build up a national industry, the NHS leadership should set out a concerted national plan to equip the system to capitalise on this transformation. This strategy should set out a clear path to embed this new diagnostic capacity across the system, facilitating earlier detection and prevention across national clinical priorities, as well as better patient management and self-care for chronic conditions. The focus should be on redesigning NHS systems to drive more proactive, risk-stratified diagnostic programmes, underpinned by AI and better access to data. The role of new technologies and novel partnerships (including with the independent sector) must be clearly acknowledged and supported. Early detection and prevention should be our system goal, and this can only be enabled by access to digitally enabled diagnostics, not therapeutics. This is one of the major opportunities in healthcare globally and is something in which the NHS is well placed to show the lead. As such, the Diagnostics Strategy will be the underpinning for the future of public health, including the Prevention Green Paper and forthcoming government response, as well as the NHS Long Term Plan. It should articulate a future role for the new National Institute for Health Protection (NIHP) in this shift; a public health function closely linked to national clinical priorities and focused on early detection and diagnosis. It should look to build on the Richards Review recommendations, particularly on better use of newly established community diagnostic hubs and virtual consultations, and how these can better utilise new and emerging digital technology. It should look at new pathways to diagnosis, and better use of remote reporting and point of care testing, as well as many of the procurement and commissioning steps we go on to detail later in this report. As far as possible, this should seek to align with the steps taken by national government to build up a domestic diagnostics industry, putting in place the system steps to support that commercial objective, as well as the wider reform needed to realise their potential for health gain.

National diagnostics leadership As per the Richards Review, diagnostics needs new, empowered leadership at the centre if we are to realise the vision of moving to an NHS more focussed on prevention. We have seen the step-change in outcomes and prioritisation delivered in other areas by the appointment of a dedicated national director, responsible for driving change across the system. Such a role is now needed for diagnostics. This new National Diagnostics Director role may need to be operating jointly from DHSC and NHS England. Within this, there is a need to clarify the responsibilities of the various agencies and government functions,

12 NHS England. Diagnostics: Recovery and Renewal – Report of the Independent Review of Diagnostic Services for NHS England [Internet]. 2020. Available from: https://www.england.nhs.uk/publication/diagnostics-recovery-and-renewal-report-of-the-independent-review-of- diagnostic-services-for-nhs-england/ particularly given the new role of the NIHP. Greater work needs to be done to ensure close working between the devolved nations, so that learnings can be shared and there is greater signposting for companies and associated stakeholders. More importantly, the National Diagnostics Director should be empowered to lead on implementation of the National Diagnostics Strategy across the system. This should also include responsibility for reform and rationalisation of NHS Pathology Networks, which we go on to discuss in greater depth in the next section.

National leadership to realise the potential for patient safety The structural shift in use of diagnostic capabilities envisaged in this report can be the key enabler of the next step forward for patient safety. Rapid diagnosis can address some of the most common patient safety threats in primary care, while in secondary care, earlier diagnosis is one of the key variables in outcomes for the most common healthcare acquired infections, and can enable earlier identification and management of the spread of infectious disease. We also go on to talk about the potential from the use of automation and new technological tools in the NHS pathology infrastructure. Improving our diagnostic infrastructure, across these three areas, would be transformative for patient safety in the NHS. In all of them, the underlying enabler is technology; innovation means that automated devices, processes and solutions are now more suited to undertake a set of often discrete and mechanical tasks than human labour – which, in turn, is more suited and more needed in other areas of the system. This process of rationalisation – reducing scope for human error with technology, while freeing up workforce capacity to operate more productively elsewhere - is key to the modernisation of the health system, and to delivering the national step change in patient safety outcomes that is now possible. Yet to fully realise those benefits, each of these three separate processes of reform will require careful planning. It will require detailed consideration - in primary care, secondary care and in our pathology networks - about how to maximise their potential, and how to educate and support staff on the ground to make best use of new capabilities. Moreover, it will require prioritisation from the centre, and a concerted programme of education, support and promotion to ensure that take-up across the country is sufficient to deliver the systemic shift in patient safety outcomes hoped for. This effort should be a core component of the National Diagnostics Strategy, which should be the vehicle to plan, articulate and deliver this shift. In the process of formulation, the National Diagnostics Director should work closely with the National Director of Patient Safety to look across the range of existing initiatives, and ensure that any new steps are supportive, rather than duplicative, to existing programmes.

A new workforce plan for diagnostics Alongside a national strategy and national leadership, we also need to build the NHS workforce needed to support the expansion in diagnostic provision. The diagnostic workforce is currently under severe pressure; there are shortages across several key professions, which was causing capacity constraints and delays even before COVID. The NHS is not training the staff its need for a system which is better focussed on earlier diagnosis, nor is it supporting or rewarding current staff as well as it could be in order to deliver that objective. The time is right for strategic intervention to address this. In tandem with the development of a national strategy for diagnostics, NHSEI should develop and implement an NHS Diagnostics Workforce Plan to support that strategy. This should incorporate the lessons from COVID-19, the resilience of the wider service, and account for the new wave of technological developments. The Workforce Plan should focus on two overlapping objectives. First, it must expand the provision of qualified individuals to support the expanded role for diagnostics in patient pathways. That means a concerted focus on recruitment, both domestic and from overseas territories, learning from steps taken to expand the workforce in other medical professions. It could introduce appropriate incentives for staff to train in new methods of diagnosis, particularly those linked to national clinical priorities, as set out in the Long-Term Plan. The case for better workforce planning – expanding clinical science One area where expansion seems a clear necessity is in the clinical science workforce, in areas such as virology and microbiology. The Royal College of Pathologists (RCP) is championing the need for 66 new trainees every year in the UK – two per pathology network in the key disciplines. There are clinical scientist training posts available, but according to the RCP, there are a hundred applicants for every clinical science training post that is advertised, with 80 or so of these deemed qualified and appointable to the places.13 A major expansion of these, through new Clinical Life Science Training Posts, would be a key step forward for the medium term. A better trained, more numerous and more skilled clinical science workforce will strengthen NHS capacity, as well as supporting innovation and wider industry.

The second objective should be to develop the technical and professional capacity in the system to support the shift to earlier detection and diagnosis. This will require creativity in attracting new types of professionals into the system, particularly those with the technical proficiency to lead the step change to digital diagnosis and remote monitoring. For example, there is already a substantial digital reform agenda underway across the NHS – digitising patient records and realising their potential for earlier diagnosis through the application of big data tools and AI. Yet realising the potential of this agenda requires an expansion and tooling up of the NHS workforce. This could be done through the creation of a new cadre of NHS IT professional, delivered in partnership with NHSX. This could include an NHS IT apprenticeship standard, to support the flow of new entrants into the workforce, as well as a concerted focus on attracting senior IT professionals into the NHS from the private sector. The answer for both these objectives may lie in the establishment of new training facilities, with a particular focus on training the diagnostic workforce. We should also consider the relevant skills mix needed for each role, particularly where automation means other parts of the clinical workforce can take on less complex diagnostic processes, or expanding training on mass use diagnostic tools for the general workforce. All of this should be in line with the clinical and system priorities set out in the National Diagnostics Strategy. The history of technological development shows that no plan can perfectly legislate for where or how future innovation will impact the requirement for human labour. Yet we go on in this report to look at the huge potential of point of care testing in earlier diagnosis, or remote monitoring in management of chronic conditions, both of which could have long term implications for the optimal allocation of our diagnostic workforce. As far as possible, the Workforce Plan should take account of the path of technological innovation, consult deeply with industry and across other international health systems, to map out where the future NHS diagnostic workforce is best allocated. Where emerging technology means an expanded role for self-care or remote monitoring, or where a new service or diagnostic provision is most coherently delivered by industry, the plan should reflect the more limited role for the NHS workforce. Yet there will be key areas where the NHS is uniquely placed to provide and lead, and the workforce plan should be calibrated to provide the labour supply required for delivery on that scale.

System working and partnership Innovations across the system can often happen in isolation, which impedes the scaling up of best practice and adaptive learning across the system. There have been various initiatives to address this in the past decade, which have delivered some success, and provided a forum for innovation and new models of care delivery to be diffused around the system at relative haste.

13 National School of Healthcare Science. Number of applicants per direct entry post for the Scientist Training Programme (2020) [Internet]. 2020. Available from: https://nshcs.hee.nhs.uk/knowledgebase/number-of-applicants-per-direct-entry-post-for-the-scientist-training- programme-2020/ Yet, capitalising on the scale of change in diagnostic provision required will require new tools and new forums to ensure different parts of the system are able to translate innovation at a system level. Moreover, the wide array of regulatory authorities involved in this expansion – MHRA, NICE, as well as the new structures envisaged in this report – mean that new forms of collaboration will be required. A new model of ‘speed dating’ between different parts of the system to deliver collaborative and innovative projects should be established. This new speed dating model could be implemented by NHSEI through the diagnostics strategy, but could facilitate, for example, the digital expertise of NHSX (which may be absorbed in a transformation directorate in the near future) being brought to bear in the mass adoption of a new self-care tool, or being brought to bear in a NICE appraisal for a new diagnostic innovation. Careful thought should be given to the implementation, so that any new model is genuinely additive and brings no undue complexity to existing systems. The example of the Precision Medicines Catapult, which was ultimately seen to duplicate and rolled into the Medicines Discovery Catapult, is instructive. Rather than replicating existing structures, the focus should be on the areas where greater connections between the disparate parts of the system would facilitate the expansion and rapid diffusion of diagnostic innovation. A new National Diagnostics Director should play a key role in delivering this new model, and aligning it with existing initiatives. Better collaboration across the system also needs to be supported by better system collaboration with external partners. As well as a national strategy, leadership and workforce reform, we need to look at how industry and the NHS work together to facilitate this transformation. We would recommend a new diagnostics group, under the Health Technology Partnership, is formalised, which can bring together the different organisations in the system, and build supporting resource and capability within the Office for Life Sciences and broader government as necessary to support this transformation. As a priority, this new group should seek to identify a new grand challenge for an NHS-industry collaboration project on diagnostics.

Recommendations in this section: 1. In the next round of national guidance, NHSEI should make firm commitments to the recovery of waiting times for diagnostic testing to pre-COVID levels. 2. DHSC should codify a single Testing Strategy, setting out the policies, priorities and protocols for COVID-19 testing. 3. Medical supply resilience of all kinds - including diagnostic capacity - should be added to the national risk register. 4. In tandem with the agreement of a sector deal for diagnostics, NHSEI should develop a National Diagnostics Strategy to articulate the system priorities and plans in harnessing our new diagnostic capabilities. 5. NHSEI should appoint a designated National Diagnostics Director to lead this process. 6. NHSEI should develop a workforce plan to support the National Diagnostics Strategy. 7. A new diagnostics group be set up under the Health Technology Partnership, to facilitate. collaboration between NHS and industry on diagnostics. iii. Consolidation and transformation of NHS pathology

The process of NHS pathology reform has been several years in gestation, but now requires urgent acceleration and modernisation. This agenda should be more than simple consolidation or networking of existing NHS sites. We need to revisit the entire process, from how we select people for diagnostics, to where and how a sample is taken, to how those are processed and how data and results are disseminated. The goal should be to move the patient-service to wherever it makes most sense for the citizen, and the testing processing to wherever we can guarantee the best quality and productivity. This must be as much about decentralisation and distribution as it is about scale and industrialisation.

Former NHS England Chief Executive, Sir David Nicholson (October 2020): “Well organised, well-funded and well invested pathology networks could have responded to COVID to deliver in the pace and time that was needed, but they couldn’t so they didn’t. It’s not as if we didn’t know we needed to invest in pathology or reform how we do it, but individual organisations and professional boundaries have made it more difficult”.14

Reform of pathology networks will require a concerted focus on overcoming these barriers. It requires political prioritisation, in part from the new National Diagnostics Director, but also from Ministers and from system leaders. The integration of the Lighthouse labs into NHS pathology networks is a chance to look again at how we structure our pathology networks, and will require careful implementation. However, reform of structures must be accompanied by reform of processes – we need new investment to enable proper digitalisation and modernisation, so that NHS pathology networks are equipped to support the shift to true population health and the step forward in patient safety.

The future of the Lighthouse labs The creation of the Lighthouse labs demonstrated that we simply did not have a residual pandemic capability in the country. HMG must ensure that a resilient network is secured to protect against future threats. At the same time, NHSEI and DHSC must ensure that securing a pandemic response network does not happen in isolation from the need to transform existing NHS pathology capability. NHSEI should update its pathology transformation plans to establish a hub and spoke model using the Lighthouses, or equivalent high-volume sites. These high throughput diagnostic factories should undertake the bulk of the NHS workload in future. Urgent work would still go through the NHS laboratories based around the acute sector but the majority of volume, including those from GP clinics, would go through the new centres. This will support the expansion in diagnostic capacity, but also the necessary agility and responsiveness to changes in demand for particular diagnostic services.

Leadership and accountability in the new operating model How and where these arrangements are led will be an important decision for government. Today’s priority will be simply ensuring that new capacity coming on stream (including the additional “megalabs”) is effective and resilient for the pressing COVID challenge. Longer term, it will take a collective effort and clear strategy to ensure that the billions of pounds that the government is investing do not just address today’s challenges, but also support the creation of a modern, world leading UK diagnostics infrastructure. This infrastructure needs to support the UK Life Sciences Strategy, the national genomics healthcare strategy, the Richard’s report on diagnostics and previous Carter reports on pathology – these are all central to the ambition of radically improving the nation’s health and reducing health inequalities.

14 Carding N. NHS management 'seen as slow and inward looking', David Nicholson warns [Internet]. Health Service Journal. 2021 [cited March 2021]. Available from: https://www.hsj.co.uk/service-design/nhs-management-seen-as-slow-and-inward-looking-david-nicholson- warns/7028564.article#:~:text=Service%20design-,NHS%20management%20'seen%20as%20slow,inward%20looking'%2C%20David%20 Nicholson%20warns&text=Former%20NHS%20chief%20Sir%20David,'slow%20and%20inward%20looking This means supporting the NHS, public health, industry and academia to work in partnership to improve understanding of diseases, provide rapid local access to diagnostics, support greater integration of health and care services (including through improved sharing and use of data), develop and rapidly roll out new innovations, and give people greater control over their health. The challenges in doing this are varied and complex. They range from issues with quality and effectiveness, to value for money, resilience and flexibility, as well as the sustainability of services and risk of a lack of alignment with longer term objectives. There are various options for how this should be governed, ranging from centralised control by NHS Test & Trace to devolution down to individual pathology networks or trusts. There are risks and benefits in each of these approaches. A regionalised NHS led model would arguably help accelerate the objective of further consolidation of labs and supports the strategic approach for pathology set out in both the recent Richard’s and previous Carter reports. A strictly centralised model could help today in having a single interim organisation delivering one test (for COVID-19) at scale, meeting the short-term need. However, this does not fit the longer-term diagnostic vision described by Richard’s and Carter reports for pathology. The greatest strategic alignment would be through a regionalised NHS led model, but which sets clear standards, drives accountability and also looks to outside providers. There is a risk that this places too much reliance on the capability of a new regional system to handle the management and planning of this integrated test processing service. Therefore, it will require new regional planning layers and co-ordination between NHS, PHE, academia and industry, as well as clinical governance and operational management in the networks. In the short term, the priorities must be setting up the new high throughput “megalabs” (1-2 per NHS region), defining and allocating responsibilities within the system, (for example, with NHS staff, across care homes and in schools) as well as building capacity aligned to strategic demand planning. This must also be accompanied by a focus on clinical governance and logistical roll-out (likely through maintaining the current model through the winter demand peak, then transitioning), as well as the development of better IT systems and data reporting, and supporting the roll-out of new testing technologies across the laboratory network.

Using automation and technology to improve patient safety As this process of pathology transformation accelerates, there should be a concerted effort to incorporate and standardise automation as far as possible into the new laboratory structures and operations. There now exists a wide range of innovative tools and systems, which enable automated management of laboratory flows, while greater use of technology can aid the process of speeding up turnaround times. For patient safety, this brings two key improvements. Expanding the role of automation in the administrative process bears down on the scope for human error, such as mixing up of samples or incorrect labelling – which can result in delayed or incorrect diagnosis, and go on to result in incorrect prescribing. A report by the Universities of Sheffield, York and Manchester estimated that over 237 million medication errors occur in England every year, while avoidable adverse drug reactions cause 712 deaths a year.15 Beyond that, automation, and other modern technological solutions which improve working processes, are one of the key operational efficiencies that can be readily introduced to speed up turnaround times – vital in conditions such as sepsis and other healthcare acquired infections.

Modern pathology laboratories now deal with significant throughput of patient samples, with the emerging NHS pathology structures – such as the forthcoming ‘mega-labs’ – an example of the trend towards scale in sample management and assessment. Technology is the key enabler of safe operation at that level of sample throughput. It allows for significantly enhanced levels of productivity; automated systems can safely process samples at greater frequency and consistency, freeing up constrained human input to focus on more complex sample analysis. Yet the benefits

15 Elliot R, Camacho E, Campbell F, Jankovic D, St James M, Kaltenthaler E et al. Prevalence and Economic Burden of Medication Errors in the NHS in England [Internet]. Policy Research Unit in Economic Evaluation of Health & Care Interventions (EEPRU); 2021. Available from: http://www.eepru.org.uk/wp-content/uploads/2020/03/medication-error-report-edited-27032020.pdf for patient safety are equally profound. High sample throughput could, in the absence of automation, present a substantial patient safety risk – with multiple opportunities for human error to impact a larger volume of patient samples, and all the attendant risks for incorrect diagnosis and prescribing. BD has a complete microbiology laboratory automation solution, KiestraTM, which can dramatically reduce the scope for such error across the full sample pathway.16 Through automatic selection, barcoding and labelling of each sample, through to digital imaging and storage, the scope for human error is effectively automated out of the process. This allows for more optimal workforce allocation, such as the concentration of human input at the sample analysis stage, where it adds most value. Yet over the long term, the increased proportion of patient samples going through advanced, high-tech mega-labs is the wider prize for patient safety – bearing down on incidence of sampling, diagnosis or medication error across the health system.

Our fragmented network of pathology centres has largely been unable to capitalise on the innovation that has taken place over recent decades in this field; lacking the capital, critical mass and often the incentive to utilise the systems and solutions which are now widely used in other health systems. The process of integration of new mega-labs should be the platform to deliver transformation across the whole pathology network. Through this process of consolidation, as we look to plan our network of pathology assets more coherently and effectively, we should use the opportunity to utilise modern automation and technology at scale. Only a modern, co-ordinated network of pathology assets, leveraging the latest technological innovations across the breadth of operating sites, can deliver that national transformation in outcomes – a dramatic reduction in operating errors, and a system wide improvement in turnaround times to support quicker diagnosis and intervention. This should be a key focus of NHSEI pathology transformation plans. NHSEI should consult with industry and with international health systems, to look at the latest innovations and best practice, and how these could be adopted at scale across the system. In doing so, we should pay particular attention to those conditions where this expansion in technology and automation in laboratory settings can be most supportive of better clinical outcomes, particularly where accompanied by minor changes to clinical practice. This process of pathology transformation should be mapped alongside those clinical areas – particularly in acute settings - where turnaround times are of most importance, and it should inform a bespoke process of pathway transformation, supported by investment or a national programme of education if required.

Review of diagnostic assets to inform consolidation COVID-19 has highlighted the urgent need to accelerate the consolidation of the national pathology networks across England, and develop the proper IT infrastructure and connectivity needed to underpin their work. This is unfinished business, despite years of awareness and external reviews. The weaknesses in some networks were dangerously exposed in the early months of the COVID-19 response. The process of consolidation was originally intended to form 29 new pathology networks, and this process must continue. However, we would recommend that DHSC and OLS undertake a thorough stocktake of diagnostic assets and capabilities, from laboratories to workforce, to understand if this is still the optimal number of networks. This would map current diagnostic assets and how they are best utilised. It would assess the functions each asset or site had performed before and during COVID-19, including reviewing the systems asset management, equipment tracking, warehousing and logistics to maximise utility from that which already exists and has been built during the pandemic. Industry expertise could be used to complete this review. This review will form the basis of a thorough understanding of the optimal path of consolidation, which we believe may require fewer, larger networks – between 10 and 15. Rationalising the number of networks further, beyond the current ambition of 29 networks, would enable operation at greater scale, and aid the process of digitisation and transformation.

16 Burns J. Combining Lean with Lab Automation to get Impressive Results. The Dark Report. 2015;22(10). Consolidation accompanied by modernisation The principle underpinning this process of consolidation should not be cost containment, but modernisation, productivity, and innovation. Public-private partnerships can support this and help bring new capital and manage financial risk. Partnerships should be built in such a way as to bring in multiple suppliers, including SMEs, who provide significant innovation and resilience to the system. Lord Carter’s recommendations need finally to be implemented, in full, and this will require sustained commitment and prioritisation of pathology transformation from the top of NHSEI and DHSC. For many struggling providers and networks, making the leap will also require investment and support of various forms under a new Pathology Transformation and Resilience Fund. This should be enacted, and should facilitate three streams of reform: - Contractual and professional reform DHSC and NHSEI should provide up to £250 million of seed funding for the organisational change which providers must undergo. Networking should be a business imperative for them, but it may be that some challenged trusts require some element of seed funding to kick start change. Allied to this, NHSEI should complete the development, working with the devolved assemblies where necessary, of a UK-wide national, standard set of contractual requirements for Pathology Managed Services. These must be based on clinical needs and represent an equitable balance of the risk expected both for the NHS organisations and suppliers. Attentive management focus will then be required to ensure those standards are properly utilised and implemented. - Funding for digital transformation There remain significant shortfalls in the budgets that have been allocated to realise full digitisation across the UK in pathology. We very much welcomed the £50 million investment in the Centres of Excellence for Radiology and Digital Pathology and the associated competition that opened at the end of 2019 - we understand that this funding has been secured and will be available from early 2021. However, this falls far short of what would be needed to fully digitise glass slides and optimise the storage and sharing of data nationally - the Royal College of Pathologists have called for a £400 million investment in Digital Pathology.17 We would fully support further investment in this area. We would caveat this with the need for this to be co-ordinated UK wide through Centres of Excellence in a planned and progressive manner over the course of the next 5 years to realise the goal of a UK-wide fully integrated and digital histopathology service - Replacement of laboratory information systems around the country As we go on to set out in this report, there is huge potential from the use of digital diagnostic tools to improve health and optimise system working. Quality data and interoperability need to underpin the future laboratory provision. The further consolidation of the NHS pathology sites needs to incorporate the new capacity created for the COVID-19 response and integrated into a single national data network. They must also standardise the option of being able to log in and access results on mobile phones, as well as direct electronic access and transfer to the GP and other clinicians. Aligned to this, the standards which have been set for Test and Trace should be adopted and extended for other disease categories and diagnostics.

17 Royal College of Pathologists. Written Evidence Submitted by the Royal College of Pathologist’s Digital Pathology Committee [Internet]. 2021. Available from: https://committees.parliament.uk/writtenevidence/11168/pdf/ Recommendations in this section: 1. NHSEI should update its pathology transformation plans to establish a hub and spoke model, incorporating Lighthouse labs where appropriate. 2. DHSC/OLS should undertake a thorough stocktake of diagnostic assets and capabilities to inform the process of consolidation. 3. DHSC and NHSEI should provide up to £250 million of seed funding to enable trusts to enact the organisational change to support pathology consolidation. 4. NHSEI should complete the development of a UK-wide national, standard set of contractual requirements for Pathology Managed Services. Systems may then be managed in a regionalised NHS- led framework. 5. Up to £400 million of investment in digital pathology, coordinated UK wide through Centres of Excellence in a planned and progressive manner over the course of the next 5 years to realise the goal of a UK-wide fully integrated and digital histopathology service. 6. Digital enabling of NHS pathology labs, with patient capability to log in and access results on mobile phones. iv. Democratising access to diagnostics

Reform and modernisation of NHS pathology networks is necessary but not sufficient to realise the transforma- tion to population-based health management. That will require a broader shift to distribute and democratise access to diagnostics, bringing them closer to patients instead of centralisation through pathology networks. This shift will be enabled by opening up access to new point of care innovations, by expanding community diagnostic capacity away from hospitals, and by the application of artificial intelligence and digital tools to enable self-care, supported by and through the NHS. This is much bigger than one pandemic or one response to it. We need to replicate the achievements in other countries which provide quicker and more convenient access to a range of diagnostics. In France, for example, each citizen has access to dedicated diagnostic centres, empowering the patient and improving the overall quality of care. We should be thinking about diagnostics in terms of the entire journey. This means consolidation and industrialisation of big pathology volumes but then moving as much activity as close to the patient as possible. This also fits with changed citizen expectations and behaviours, not least the increased desire to avoid attendance at hospitals due to perceived infection risk. Furthermore, with NHS hospitals facing an elective care crisis, the NHS must strive to divert activity closer to the home, in line with ambitions in the Long- Term Plan on outpatient appointments. The consolidation of GP practices into Primary Care Networks is an opportunity to support this shift across primary care, enabling investment in new equipment and innovation in care pathways. Elsewhere the focus on better integrating and utilising the clinical skills of pharmacists provides another platform for high quality point of care testing in priority clinical areas such as flu.

Clinical and system value of point of care testing COVID-19 has brought point of care testing (POCT) firmly into the public consciousness, and provides a chance to look again at the potential from its application across a wider array of conditions. POCT is, in essence, the ability for a healthcare worker to test and diagnose the clinical problem in real time, in the care setting in which the patient presents. There are a wide range of technological interventions which already exist to facilitate this shift, as well as a range of further innovations coming onstream.

POCT case study in diabetes Greater diffusion of POCT could enhance and improve care pathways across a range of conditions. One of the most significant disease burdens on the NHS over the past decade – and set to increase in the coming decade – is the prevalence of diabetes among the general population. This is a condition where better management, better monitoring and more informed understanding of the progression of the condition would make a significant difference to patient outcomes and to the system; late stage interventions to treat complications from diabetes are one of the largest single areas of cost for the NHS. POCT can be a key enabler of this; enabling the diabetes carer to measure and monitor the quality of blood glucose control by the patient over a given timeframe, enabling better targeted intervention, support and avoiding many of the late stage complications which drive so much cost.

Diabetes is just one area where POCT has significant application. Accurate and timely diagnosis through POCT can improve outcomes in cardiological disease, various cancers and other high prevalence conditions, such as urinary tract infections or pulmonary embolism. POCT materially improves the patient experience, but the system value from better and more informed clinical decisions and pathways is similarly valuable.

Overcoming barriers to adoption of POCT The obstacles to greater diffusion of POCT have tended to lie in concerns about reliability, as well as a financial framework which tended to penalise those clinicians who committed to up-front investments which delivered savings elsewhere in the system. These now need to be addressed at a system level. Clinicians have tended to place greater faith in a system of laboratory testing with human oversight, because, in part, of largely historic concerns about inconsistent performance and reliability in some POCT devices. However, modern devices have substantially improved in reliability and accuracy, and allied to local verification of the device performance against the laboratory reference method before adoption, accuracy and consistency in performance can now be largely assured. The broader obstacle, relating to the way the system reflects and realises the value from POCT, will require more systemic intervention. The psychological value of POCT, from improvements in patient wellbeing from rapid diagnosis, are hugely significant, yet harder to capture with traditional methods of measurement. The value for the system, through enabling clinicians to make informed judgements about discharge, referral or monitoring, is more visible, yet needs to be better reflected in incentives and financial frameworks to realise transformation across a range of care pathways. Another consideration, largely arising from a desire from clinicians and GP practices to deliver tests at a lower unit cost, has been the drive to deliver testing through the perceived efficiency of national, high volume laboratory practices at centralised facilities. The consolidation of GP practices into Primary Care Networks should enable more strategic management of pathology flows, particularly through the recruitment of dedicated health professionals or in-house laboratory resource. This can lead to greater uptake of POCT and the system should support and look to further incentivise this in future rounds of guidance.

Pathway transformation support Yet we believe further, concerted intervention is also required at a system level, to support and realise the value of enhanced and earlier diagnostic access in transforming care pathways. This is a fundamental problem in diagnostics, which is different to access to therapeutics and care. Diagnostics, particularly when linked with digital, is arguably the most disruptive form of innovation in terms of resulting changes to care pathways. If you give a patient a drug in the same pathway there is a limited system transformation cost. POCT and other diagnostic tools prevent people going to hospital and deliver savings across the breadth of the care pathway, but the financial framework needs to adjust to drive that transformation, with new ways to measure and release and the savings. To remedy this, we believe two key steps should be taken at national level. First, the Pathway Transformation Fund currently run through the Accelerated Access Collaborative (AAC) needs to be increased, with a dedicated focus on diagnostics. A new Pathway Transformation for Diagnostics Fund should be established, owned by the AAC, to support the changes needed to implement transformative diagnostics. This will often be at the level of the individual clinical team or provider, but also needs to be able to back system wide transformations. An example of this may be in screening programmes, where the introduction of new diagnostic tools and AI will enable substantial streamlining of the pathway. This transformation will require co-ordination and funding across all those involved in the pathway, including PHE, NHSEI, individual screening centres and their clinical teams. Careful promotion and implementation of this shift can help realise the transformative impact of earlier and broader access to diagnostics across care pathways. Second, NHSEI should select three or four major disruptions and pathway changes with a goal of completing the transformation within two years, both demonstrating the system value of earlier diagnostic access and delivering material improvements in patient experience. These should reflect the opportunities for to progress the fight against AMR and the opportunity to support patient safety, as noted above. These could include: • Universal access to point of care flu testing at every hospital and GP practice • Ending any requirement to attend an NHS hospital for a routine blood test by providing services in the home or closer to it • Roll out of acute capacity for rapid blood culture analysis for sepsis • Direct sampling to do rapid bacterial identification in primary care These should be developed in consultation with industry and NICE, to make best use of the most transformative diagnostic capabilities, then driven and supported across the system. They could form the basis for a new diagnostic grand challenge with industry. NHSEI should then appoint dedicated clinical leads responsible for delivering each transformation, reporting to the National Director for Diagnostics.

Using POCT to support national clinical priorities Earlier diagnosis is one of the key priorities across all national clinical priorities, enabling earlier and more targeted intervention, and realising savings in some of the highest areas of cost – CVD, diabetes and cancer. Expansion and democratisation of access to POCT will a key enabler of earlier diagnosis across these, and one of the key tools to meet national targets for earlier diagnosis and detection in each condition. The National Diagnostics Director should partner with National Clinical Directors in each of these disease areas, working in depth to reimagine critical pathways through the incorporation of point of care diagnostic tools, and particularly through the Health Checks programme. As Cancer Research UK called for in their recent report on Early Detection and Diagnosis, the full infrastructure of existing patient touchpoints should be used as a mechanism to appropriately direct patients into screening or for POCT in an appropriate facility. These workstreams, across each of the highest national disease areas, could be commissioned through the National Diagnostics Strategy, and take account of the latest and most impactful diagnostic innovations in each disease area– working with NICE, industry and patient groups to inform their understanding of the latest innovations and technology. Where improvements in pathways are identified, these should be supported through the system by national leaders, with targeted funding and prioritisation where required. NHSEI should set itself the goal of identifying and delivering these over the next two years.

Expansion of community diagnostic provision The 2020 Richards Review set out plans for national expansion of community diagnostic hubs to enable faster and local access to diagnostic provision. These will have a marked impact on access to diagnostic tools, and we would encourage their rapid roll-out and implementation. These will have much broader application than pathology, which, as noted, is the particular focus of this report, but we encourage greater ambition in using community facilities as a tool for POCT roll out and for greater testing of the asymptomatic or general population. The changes in the retail sector and the impact on our high street are increasingly recognised by policymakers, and they create scope for a much more ambitious programme of community diagnostic provision. These already exist in some areas, with POCT already used for sexual health screening to great effect in many high street settings, while the roll-out of POCT in public facilities for COVID-19 has further demonstrated the potential of community diagnostic provision. The National Diagnostic Strategy should set out a more ambitious programme for community provision of diagnosis, allied to an expansion of the health checks programme through POCT and more concerted and broader community screening programmes. Building this capacity in community settings will be one of the key enablers of the population-based health management, and key to earlier diagnosis and detection. Not only would community diagnostic provision avoid activity and cost in more expensive, acute settings, it would support much expanded patient engagement and interaction with the system. It enables care in a more convenient, high street setting, but also avoids the stigma or perceived risks associated with a trip to a GP surgery or hospital facility (particularly since COVID-19, as public survey data shows). As Cancer Research UK noted in their Early Detection and Diagnosis report,18 expanding diagnostic provision so that a much greater proportion of the population – including those who may be asymptomatic or only have mild symptoms – can easily, conveniently and rapidly be detected and diagnosed, is key to the national transformation in health outcomes. Generating patient awareness is crucial to maximising

18 Cancer Research UK. Early Detection and Diagnosis of Cancer - A Roadmap to the Future [Internet]. 2020. Available from: https://www.cancerresearchuk.org/sites/default/files/early_detection_diagnosis_of_cancer_roadmap.pdf return, with a recent survey showing 74% of respondents were not aware of local diagnostic centres in their community. Local hospitals and doctors can recommend and explain the purpose of different types of diagnostic centres to their patients.19 This is already the case in many other international health systems, where community diagnosis is one of the bedrocks of earlier intervention. The relative affordability and availability of high street capacity, as well as the NHS’s shift to local system working, make this an opportune time to invest in such expansion. In turn, the value to the system – from improved patient outcomes and more optimal care pathways – should ensure that the up-front investment costs are quickly returned.

Professor Sir Mike Richards: Chair, Richards Review on Diagnostics (October 2020): “Many countries provide elements of this community diagnostic approach. The NHS has the opportunity to go further, by establishing a new service model which takes account of the impact of Covid-19, is fit for the future and will be responsive to new innovations in diagnostics.”

To achieve this, DHSC and NHSEI should work together to identify and appraise possible locations for community diagnostic facilities, particularly focused on areas with poor health outcomes, and mapping them alongside PCNs to ensure optimal community coverage. Community provision should be tailored in line with local health plans, and account for local health incidence. example, in areas of high deprivation or particular incidence of conditions, more targeted or proactive measures should be taken to engage the community at scale, and encourage them to use the community facilities. This should dovetail with the health checks scheme, where possible, and delivered in partnership with local ICSs.

Bringing diagnosis closer to the home COVID has seen a revolution in new methods of patient engagement with NHS services. There has been a dramatic increase in the use of virtual GP appointments, while the process to order COVID-19 test kits online has proven that different models for providing diagnostics can, and should, be implemented. There is now an opportunity to facilitate more diagnosis to be conducted in an equally convenient and efficient manner, without the need for patients to attend a physical consultation. We should retain the infrastructure built to support COVID-19 testing to accelerate adoption of new diagnostic delivery models, as well as embedding the option for virtual consultations and use of other digital platforms as a standard option for patients to choose. This should be enabled through a wider programme of work by NHSEI to look at all areas where diagnosis can be enabled and facilitated closer to the home. This could include developing and supporting industry-NHS-academia accelerator programmes that identify innovations to deliver diagnostics in different locations closer to the patient, as well as identifying a new range of diagnostics tests that can be distributed and delivered as home testing kits by default.

Enabling and supporting digital tools for self-care There has already been a proliferation in the availability of digital diagnostic tools, many of which can be self-administered by patients with minimal oversight from clinicians. The UK has one of the most tech-savvy populations in Europe, with estimates by OFCOM that up to 80% of the UK population use a smartphone every day,20 and rapidly increasing use of wearable devices. Moreover, there are emerging opportunities from the use of implantable devices for monitoring of diabetes and cardiovascular function, as well as for the tracking of cancer progression or symptom management, and as a tool for early detection.

19 Siemens Healthineers. Can the doctor see you now? Attitudes to healthcare and the need for a new patient focus [Internet]. 2020. Available from: https://cdn0.scrvt.com/39b415fb07de4d9656c7b516d8e2d907/ca87e3d4aa8fd5e5/32cdf0d233cd/SIEMENS-Healthineers-report- FINAL.pdf 20 OFCOM. A decade of digital dependency [Internet]. 2018. Available from: https://www.ofcom.org.uk/about-ofcom/latest/features-and-news/ decade-of-digital-dependency COVID has also shown the potential of digital platforms to facilitate population level health engagement, demonstrated by the high download rates for the COVID tracking app. As an immediate step, we should seek to complete data and IT connectivity so that data capture and test analysis by Lighthouse labs can be linked to digitised personal health records, which would facilitate the wider aim of patient engagement with personal health records. In turn, this would provide for much greater patient adoption of digital health management tools. The NHS has already made some progress on this agenda, with the creation of a bespoke digital function in NHSX and a significant expansion of digital tools available to track and measure patient activity, fitness, and linking into a broader array of bespoke digital health management tools. NHSX also accredit health apps and host an NHS app library. Yet patient awareness and engagement has been limited or inconsistent with the NHS app library, and there is scope for greater integration of digital tools in prescribing and across care pathways. There is also significant variation in the availability and commissioning of implantable devices for different conditions, and in different regions. We support the call from CRUK21 for NHSEI to commission a review to identify and capitalise on opportunities for wearable, implantable and mobile technologies, and for this to look across the range of national clinical priorities – diabetes, CVD as well as cancer. It should work with industry through the new industry/NHS group described in section 2, and the results should inform latest NICE standards on best practice care. NHSEI should also identify the most transformative interventions from this review, and uptake and promotion of these should be the basis of a major programme of patient education and enhanced system adoption.

Recommendations in this section 1. A new Pathway Transformation for Diagnostics Fund should be established, owned by AAC, to support the changes needed to implement transformative diagnostics. 2. To speed up the adoption of POCT, NHSEI should select three or four major disruptions and pathway changes with a goal of completing the transformation within two years. 3. The National Diagnostics Director should partner with National Clinical Directors to reimagine critical pathways through the incorporation of Point of Care diagnostic tools, and particularly through the Health Checks programme. 4. DHSC and NHSEI should work together to deliver the recommendations of the recent review by Prof Sir Mike Richards, including to identify and appraise possible locations for population scale expansion of community diagnostic facilities. 5. NHSEI should retain the infrastructure built to support COVID-19 testing to accelerate adoption of new diagnostic delivery models. 6. NHSEI should commission a review to identify and capitalise on opportunities for wearable, implantable and mobile technologies across the range of national clinical priorities – diabetes, CVD as well as cancer.

21 Cancer Research UK. Early Detection and Diagnosis of Cancer - A Roadmap to the Future [Internet]. 2020. Available from: https://www. cancerresearchuk.org/sites/default/files/early_detection_diagnosis_of_cancer_roadmap.pdf v. Broader diagnosis for better patient safety

Recent years have seen the NHS make great strides in patient safety, and a whole system focus on patient safety as a core principle of quality. In procedural terms, the organising principle of reform has been, as far as possible, to minimise scope for human error through the implementation of systems, processes and technology. Across the millions of care interactions happening daily in the NHS, what was previously left to clinical discretion is now tightly defined in procedure, universally understood across clinical teams, then rigorously measured and followed. That systemisation of process, sometimes supported by automation or technology, has led to a sustained improvement in patient safety outcomes over the past decade. The next wave of patient safety reform can embed that principle firmly in care pathways, enabled through the democratisation of diagnostic access discussed in this report. By building on the systemisation of care processes and diffusing them with modern diagnostic tools, we can bear down on the remaining scope for human error, equipping and informing clinicians to deliver the safest possible care. First, in primary care, where lack of rapid diagnostic tools is one of the main contributors to patient safety errors; secondly, in the acute sector, where better and broader use of modern diagnostic systems can be one of the main levers to control and combat HAIs; thirdly, in the fight against AMR, where, as Lord O’Neill has stated,22 mass diffusion of diagnostic solutions is the most effective tool modern health systems have to deploy.

Rapid diagnosis as an enabler of patient safety in primary care Much of the focus of patient safety reform has tended to be in secondary care, reflecting the greater complexity of care processes in that setting. Yet patient safety errors are still a major concern in primary care; the University of Nottingham’s Division of Primary Care found international evidence that errors occur tend to occur in 2% to 3% of primary care encounters, and one in 25 of those involved serious harm to a patient.23 Given the high patient throughput in primary care facilities (the typical GP has 42 patient interactions per day – one of the highest outside of accident and emergency), the volume of errors, many of which go unrecorded, can be substantial. Upon closer investigation of the profile and drivers of these errors, diagnosis is a key factor. Overwhelmingly, the most common reported patient safety errors are incorrect diagnoses, delays in referral of patients to hospitals (again, where a primary driver was failure or delays in diagnosis) and prescribing errors. Here one can clearly see the potential from the diffusion of POCT. It enables more accurate diagnosis, faster referral, and with increasing sophistication of medications management systems, diagnosis and prescription can be linked and automated through one digitally enabled system, effectively eradicating the scope for errors across the care pathway. The expansion of PCNs should enable much of this agenda, releasing the investment to embed this transformation at the heart of patient pathways. NHSEI should set national standards and guidance for use of POCT in primary care, and this should be a significant part of any forthcoming transformation funding for PCNs.

Better, broader diagnosis to support patient safety in hospitals In secondary care, again, the profile of many of the most pressing patient safety threats points to an expanded role for POCT. In secondary care, interactions with the wider pathology network become particularly important to diagnosis. We have noted already the steps needed to accelerate and improve turnaround times in public pathology networks, which can best be supported by modern diagnostic systems. These have particular impact across the most common healthcare associated infections (HAIs), where speed of diagnosis is frequently one of the most common factors in patient outcomes and mortality. Often, this

22 Review on Antimicrobial Resistance. Tackling drug-resistant infections globally: final report and recommendations [Internet]. 2016. Available from: https://amr-review.org/sites/default/files/160525_Final%20paper_with%20cover.pdf 23 Bell B, Campbell S, Carson-Stevens A, Evans H, Cooper A, Sheehan C et al. Understanding the epidemiology of avoidable significant harm in primary care: protocol for a retrospective cross-sectional study. BMJ Open. 2017;7(2):e013786. tends to rely on patient reporting of symptoms or the use of clinical judgement to spot and identify symptoms. In many HAIs, resource to enable speedy assessment of blood culture is the main tool for early diagnosis. Yet capacity to do this is constrained in many hospitals, despite the availability of modern tools to support the process, and further investment is required to enable mass use of these solutions. Here we see again the opportunity for the systemic use of diagnostic tools to identify and treat patients in the early stage of progression, and the contribution better and faster diagnosis can make in combatting the greatest patient safety threat in secondary care. As part of the National Diagnostic Strategy, NHSEI should identify the most transformative diagnostic interventions that can speed up identification and intervention across the most common healthcare acquired infections, and this should form the basis for a co-ordinated process of mapping and uptake across hospital trusts and Integrated Care Systems, to ensure ready patient access to these tools across.

Transforming outcomes in Sepsis Sepsis can be one of the most lethal healthcare associated infections. Annually, it’s estimated that sepsis kills more people than breast, bowel and prostate cancer combined in the UK. Where patients survive, often they do so with long term consequences – it’s estimated that around 40% of sepsis survivors suffer long term physical or psychological aftereffects.24 Early diagnosis is particularly important to mortality; each hour of delayed diagnosis increases the risk of death by around 7%.25 If identified early enough, most cases of sepsis can be treated with a simple course of antibiotics. Yet symptoms are often hard to spot, particularly in children, leading to many cases being diagnosed too late for effective intervention. There now exist a range of interventions along the patient pathway, both diagnostic tools and therapeutics, which can radically alter patient outcomes. If adopted fully and effectively across the system, these would lead to a system wide transformation in sepsis outcomes. Yet adoption is variable, and some of the tools that are available are often used incorrectly. BD has a developed a complete technological blood culture solution, BACTECTM, which offers the most sensitive, specific and rapid blood culture system available, giving microbiologists and clinicians the best information to pick the most effective treatment options. Yet the benefit of this sensitivity and speed are best released by taking the recommended two blood culture samples, rather than one – a recommendation to which adherence is highly variable. BD have developed the Vacutainer® UltraTouchTM needle, which improves patient comfort, but critically – improves sample fill volume, making it much easier to collect the required amount when collecting multiple sets of blood culture. In turn, the process of communication between laboratory, microbiologist and clinician is often left to human agency, which can result in delays or miscommunication. BD has developed the EpiCenterTM and SynapsisTM data management systems, digital laboratory systems which enables microbiology laboratories to efficiently and rapidly communicate and track all the information needed by every professional involved in infection control and patient treatment. These are an example of the sort of full spectrum technological solutions which now exist across the Sepsis pathway. With proper adherence to procedure, they enable earlier and more rapid intervention, more tailored understanding of the path of progression of sepsis, as well as faster and more reliable communication between different parties involved in diagnosis and treatment.

24 Rettner R. Sepsis Has Long-Term Impact for Older Adults, Study Finds [Internet]. Live Science. 2010. Available from: https://www.livescience. com/8831-sepsis-long-term-impact-older-adults-study-finds.html 25 Kumar A, Roberts D, Wood K, Light B, Parrillo J, Sharma S et al. Duration of hypotension before initiation of effective antimicrobial therapy is the critical determinant of survival in human septic shock*. Critical Care Medicine. 2006;34(6):1589-1596. Potential of diagnostic tools to combat AMR Antibiotic resistance is predicted to kill 10 million people every year by 2050 without concerted action.26 The UK government has played a celebrated and internationally recognised leadership role in confronting AMR, including the work set out in O’Neill review, and the subsequent DHSC led strategy to combat AMR globally and through the NHS. Yet several years on, the UK is still prescribing notably higher rates of antibiotics relative to many of our European counterparts. 1 in 3 patients in an NHS acute facility are on a course of antibiotics at any one time, and 1 in 3 individuals in England takes at least one course of antibiotics each year. Indeed, some independent estimates put mis-prescribing of antibiotics in the NHS at around half the total level of antibiotic prescription26. The key to closing that gap, as proposed in the O’Neill review, and reaffirmed in the subsequent DHSC strategy, is expanding access to diagnostic tools. Inappropriate prescribing generally comes in two forms; a mis-diagnosis of the condition, resulting in the prescription of an antibiotic which may not be appropriate, or ‘over-prescribing’, where an antibiotic is prescribed where none is needed or the condition can be managed with OTC treatments or, indeed, without any medicinal intervention. In both of these cases, the situation arises because a diagnostic tool is not readily or rapidly available to the clinician to inform their recommendation or prescription. We have touched on several reasons underpinning the lack of diagnostic penetration into care pathways and processes across this report, driven in part by the relatively high up-front cost of diagnostic intervention relative to antibiotic prescription. In this context, the issue tends to be particularly acute given that the standard of care in the most common areas of inappropriate prescription – bacterial infections, cold, flu and other common conditions- are very low-cost generic medicines.

VeritorTM – rapid testing for flu Flu is one of the greatest areas of inappropriate prescription. Treatment can be important to relieve symptoms, yet treatment is different for flu A from flu B, and the progression and severity of the condition are significant factors in whether treatment will be effective. Moreover, given the commonality of symptoms, doctors often struggle to differentiate between viral flu (against which antibiotics are ineffective) and bacterial infections (where antibiotics can be highly effective). All these variables are very difficult to determine without proper diagnostic tools, resulting in a tendency amongst GPs to over- prescribe simply to err on the side of caution. BD’s rapid point of care test, VeritorTM, can deliver results within fifteen minutes, through a simple, easy to use process.27 It can differentiate between Flu A and B, accurately diagnose Respiratory Syncytial Virus (a flu-like condition, but which can prove particularly serious for children), as well accurately diagnosing Group A Strep – enabling the clinician to differentiate between a viral and bacterial infection, and better judge the effectiveness of any antibiotic treatment. Providing this information to the clinician, at the point of care, is key to avoiding unnecessary antibiotic prescription. It also aids the process of GP patient consultation – patients can be more easily persuaded to avoid unnecessary antibiotic use if supported a clear diagnostic result.

Many of the other recommendations set out in this report, particularly national interventions to optimise and support transformation of care pathways around new diagnostic capabilities, will have particular effect here. Yet more concerted steps are needed to combat the threat of AMR, linked to the expansion of POCT. Much work internationally has gone on, led by the WHO and supported by the UK, to incentivise industry to develop the diagnostic tools that will enable clinicians to make these judgements. In response, a wave of

26 Review on Antimicrobial Resistance. Tackling drug-resistant infections globally: final report and recommendations [Internet]. 2016. Available from: https://amr-review.org/sites/default/files/160525_Final%20paper_with%20cover.pdf 27 BD Veritor™ Plus System [Internet]. BD Veritor. Available from: https://www.bd.com/en-uk/products/diagnostics-systems/point-of-care-testing/ bd-veritor-plus-system new diagnostic tools have come on stream in the past five years – enabling much quicker and more targeted diagnosis, with applications across primary and secondary care.

Lord Jim O’Neill, Chair of the Review on Antimicrobial Resistance: “I find it incredible that doctors must still prescribe antibiotics based only on their immediate assessment of a patient’s symptoms, just like they used to when antibiotics first entered common use in the 1950s.”28

The recommendation in the O’Neill review, that prescription of every antibiotic must be supported with a recognised diagnostic test, should be a clear system-wide goal. While this is an ambitious objective, this wave of diagnostic innovation, as well as the system level expansion of our diagnostic infrastructure, mean that many of the tools to realise that ambition are now available. As a first step to delivering this, NHSEI should map out - with NICE, industry and through the new structures and forums envisaged in this report - the most common areas of mis prescribing by volume, and the most effective diagnostic interventions for each of those conditions. The results of this should inform a process of concerted roll-out across those care pathways, supported by the Pathway Transformation Fund for Diagnostics. Within three years, the ambition should be to realise the O’Neill target for diagnostic availability across the five most common areas of mis-prescribing. As a wider goal, and through the National Diagnostics Strategy, NHSEI should set out a pathway to realise the O’Neill target across the NHS. This should include concrete timelines and targets, so that progress can be measured.

Recommendations in this section: 1. NHSEI should set national standards and guidance for use of POCT in the roll-out of Primary Care Networks, and POCT should be a priority in any forthcoming transformation funding. 2. NHSEI should identify the most transformative diagnostic interventions that can speed up identification and intervention of HAIs, and this should form the basis for a co-ordinated process of mapping and uptake across hospital trusts and Integrated Care Systems, to ensure ready patient access to these tools across the system. 3. As a first step to delivering the O’Neill target for every prescription to be supported with a diagnostic test, NHSEI should map out the most common areas of mis prescribing by volume, and the most effective diagnostic interventions for each of those conditions. This should inform a process of concerted diagnostic expansion across those care pathways, supported by the Pathway Transformation Fund for Diagnostics. Within three years, the ambition should be to realise the O’Neill target for diagnostic availability across the five most common areas of mis-prescribing. 4. As a wider goal, and through the National Diagnostics Strategy, NHSEI should set out a pathway to realise the O’Neill target across the NHS. This should include concrete timelines and targets, so that progress can be measured.

28 Review on Antimicrobial Resistance. Tackling drug-resistant infections globally: final report and recommendations [Internet]. 2016. Available from: https://amr-review.org/sites/default/files/160525_Final%20paper_with%20cover.pdf vi. Reforming commissioning and procurement

The development of a domestic diagnostics industry as a strategic arm of health security cannot be viewed in isolation from the development of a robust diagnostics supply chain. A domestic industry and manufacturing base provide some surety, but supply chain resilience should also be the strategic goal. Nor can we ignore the powerful pull which the commercial and procurement context in the UK has for companies who are making decisions about research or manufacturing investment. The central role played by the NHS in our domestic market affords it particular scope to use procurement to shape industrial outcomes and build resilience across the supply chain. Just as procurement and commissioning can be strategic tools to drive upstream resilience, they are also key tools to drive diffusion of diagnostics across the system, and one of the most effective levers to broaden and democratise access. Both need to be considered in tandem; to build resilience and security for future health threats, as well as to drive and expand the role of diagnostics in the provision of 21st century health management.

Strengthening the diagnostic supply chain NHS procurement of diagnostics needs to better prioritise reliability, sustainability, and value, learning the lessons from COVID. Buyers should move away from simple unit cost comparisons to a wider appreciation of supply line resilience and domestic manufacturing capability. To that end, future procurement should secure plurality of supply and a multi-vendor approach in critical areas. We cannot have further examples of unreliable overseas suppliers being entrusted with provision of critical supplies. A value-based approach clearly demands significant strengthening of domestic and more resilient supply chains which are: • More reliable, both in terms of product quality and timelines of delivery • More sensitive to demand • Can reduce reliance in overseas suppliers, thus minimising the risk of slow distribution, international competition and profiteering in the event of a surge in demand. • Creates jobs and contributes to the UK economy Part of the supply chain will inevitably remain global, in large part due to a dependency on raw materials. Using a similar approach to PPE procurement, the government must assess international suppliers of diagnostics and develop a value-based list of preferred suppliers, taking cost, safety and reliability into account. The Department for International Trade and Chief Commercial Officer could set up specialist cross- functional teams to examine international supply chains for diagnostics according to product category Where products are packaged up in bigger services and managed service models, the balance of risks and incentives needs to change. KPIs within tenders have become too burdensome and too risky for many providers. Contracts which pile all the risk on to the companies with little guarantee that the NHS will deliver its part of the deal should not be proposed. Instead, the way in which domestic supply or resilient supply protects the NHS from risks needs to be better factored into value judgments and purchasing decisions.

Senior executive, a leading UK diagnostics firm: “Too often in procurement, there’s a lowest price wins approach. COVID has shown us that this is not the right model, given the dependence of our economy and society on the resilience that the best products offer.”

The goal of ramping up UK manufacturing is not complete self-sufficiency, as supply chains will remain partly global. However, focusing on domestic manufacturing will add resilience to the supply chain and facilitate more effective planning in the event of a sudden surge in demand. To this end, the government should set up a pandemic/public health focused taskforce within government which focuses on future planning for diagnostics. The taskforce should consider: - the key diagnostic competencies, capabilities and skills the UK requires to support the NHS in future pandemics or health emergencies - the current domestic supplier landscape: who can produce diagnostics in the UK, at what volume, how quickly and at what cost. The government should create a table of costings, with raw materials increasing in price in the event of a surge in demand and international competition. - linked to the Sector Deal and industrial strategy elements, consider what incentives are needed to bridge the gaps Equipped with this information, the taskforce should develop flexible and expert capacity in the UK that can be repurposed at pace and at scale if required, triggered by a formal mechanism. The taskforce should also be part of pandemic/health surveillance schemes at national and international levels, and could minimise deaths of common diseases such as the seasonal flu. The establishment of a National Diagnostics Registry, discussed in the regulation section, would be helpful for both diagnostics planning and health surveillance. The government must carefully consider the balance between establishing a flexible, pandemic-ready diagnostic manufacturing and the normal operation of the competitive market. In order to build and retain domestic manufacturing, the government should be aware of the manufacturing incentives provided in other global locations and extend a competitive offering. Skills, costs, regulation and technology are central to the attractiveness of a manufacturing location, alongside trading and the ability to export to global markets. More detail on encouraging inward investment is included above. Strategic stockpiling of diagnostics, reagents and other crucial components will ensure continuity of supply in times of emergency and as a contingency for any unexpected events. The design and governance of this process needs reform, in light of weaknesses exposed in the early weeks of COVID-19. A new government strategy for appropriate UK stockpiling should be put in place, based on an agreed list of critical diagnostics. This approach should take into account the potential impact of exiting the EU at the end of the transition period. The introduction of a National Diagnostics Registry would be useful to track uptake of diagnostics, plan stockpiling and manage data. In many cases, government will want line of sight to supplies, even if it does not yet wish to receive and store the units themselves. Once again, these kinds of procurement decisions cannot be made simply on a lowest cost basis. Government, potentially through Crown Commercial Services, should strengthen advice to public sector buyers about the need to account for the reliability and sustainability of supply chains in their decisions. This will be particularly important within the NHS, where local buyers such as individual trusts will need to be bound to the same standards.

Strategic commercial partnerships Linked to the above, NHSEI and OLS should state their intention to move more diagnostic commercial awards onto longer term strategic partnerships based on genuine risk-share, value and population health. Rather than procurement on unit cost for short term savings, the NHS and provider companies should look to emulate in diagnostics the kinds of novel strategic partnerships which have emerged in medicines. For example, ICSs would be empowered to account for population health and wider benefits in their investment decisions, with payments made on the effective management of diseases. There is also the opportunity to add clinical trials, access to data and other features into such partnerships, which in many ways will help reduce equivalent unit costs to the NHS through long term partnerships on products. Similar partnerships are now occurring in therapeutics, for example the breakthrough deal which NHSEI struck with Novartis over their product Inclisiran (used for the treatment of patients with atherosclerotic cardiovascular disease, ASCVD risk equivalents and heterozygous familial hypercholesterolemia). Manufacturers and payers should seek partnerships based on more than unit cost, instead adopting a wider interpretation of: • Cost-effectiveness of the intervention • Links to strategic targets and/or policy priorities • Policy goals and the NHS Long Term Plan (early intervention & disease prevention) • Post-COVID recovery • Major public health issues or high-impact diseases (cardiovascular, diabetes, asthma etc) Diagnostic companies and NHSEI ought to engage meaningfully, and work as partners to fulfil strategic goals and improve health outcomes. Government and NHSEI can help to encourage more flexible commercial arrangements by providing necessary funding and resources. Naturally, high-impact deals will be more likely to be approved for having significant and measurable benefits; these should pave the way for deals targeting smaller patient populations and be followed by a formal write up/consolidation of bespoke collaborative commercial arrangements in diagnostics.

Expansion of the UK-RTC As suggested in the Life Sciences Recovery Roadmap, the UK should develop similar consortia to the UK Rapid Test Consortium (UK-RTC) which was established to harness the UK’s capability to develop and manufacture high-quality rapid diagnostic technologies, in response to concerns of the poor quality of similar technology purchased overseas. The effectiveness of the UK-RTC has demonstrated it is possible to allow domestic innovative technology to respond to unmet needs, and the diagnostic industry needs further investment and scaling. There is great potential for collaboration between Innovate UK and industry to create national projects that focus on key unmet needs. Currently this approach in the UK is fragmented, so establishing more strategic partnership through this forum can overcome these gaps.

Recommendations in this section: 1. The Government should assess international suppliers of diagnostics and develop a value-based list of preferred suppliers. 2. Central guidance should be issued to NHS and other relevant buyers in the public sector to apply a greater score/weighting to reliability and resilience in purchasing decisions. 3. Government should set up a pandemic/public health focused taskforce within government which focuses on future planning for diagnostics. 4. The UK should develop similar consortia to the UK Rapid Test Consortium (UK-RTC) for diagnostics. 5. NHSEI and OLS should state their intention to move more diagnostic commercial awards onto longer term strategic partnerships based on genuine risk-share, value and population health. vii. Driving innovation and broadening uptake

DHSC, NHSEI and industry can look to several decades of innovation in monitoring and improving uptake for medicines and therapeutics as an exemplar for the sort of creative thinking needed to drive transformation in diffusion of diagnostics. These include better data collection on uptake across the system, with more granular measurement and data collection on use. It will also require central intervention, building on the MedTech Funding Mandate to drive rollout, as well as new or enhanced funding and access mechanisms to bring through innovative diagnostic tools.

Addressing NHS barriers to swift technology adoption Accelerating the timelines for diagnostic adoption relies on the provision of technology—its availability & accessibility—and adaptive change by its adopters. So far, this document has discussed the infrastructure and processes needed for helpful diagnostics to be made more available and accessible through improved identification, funding, and commissioning practices. It is equally important to consider the adopters and users of diagnostics, who must integrate new technologies into their daily lives. Cultural barriers to speedy technology adoption have been well documented, and include: • a reluctance to decommission existing technology • a risk-averse culture, which sometimes translates as a preference for established diagnostics. This is partially explained by the high-stakes nature of healthcare, where slow or incorrect diagnoses can have a significant impact in people’s lives, including worse health outcomes and shorter life expectancy • lack of time or headspace to trial new technologies, partially driven due to workforce shortages and increasing demand for services • need for retraining and service redesign triggered by new diagnostic interventions • lack of experience in procurement, particularly in combined diagnostics linked to rapidly evolving areas such as digital or AI UK professional bodies representing clinicians, such as the NHS Confederation or Royal College of General Practitioners, could help to drive a culture to harness new technology in the NHS. Clinical champions have the potential to encourage the uptake of diagnostics in their clinical specialty, and support other clinicians to trial new technologies (even if they are not successful). NHS England and diagnostic companies ought to explore the introduction of Best Practice Tariffs in specific therapeutic areas to incentivise behaviour change. Beyond willingness to trial new diagnostics, clinicians must also be given the time, headspace and resources to do so. This is particularly important in diagnostics, where retraining and service redesign may be needed. NHS England must address workforce challenges to create capacity; although new diagnostics can help to improve health outcomes and capacity problems in the long term, they may require increased capacity in the short term (e.g. as trusts pilot new patient pathways alongside traditional ones).

Senior executive, a leading UK diagnostics firm: “There isn’t a slick pathway for innovation to be mandated and adopted in the UK. We put huge amounts into developing innovation from studies in the UK, but the innovations which come out of those studies are not rapidly adopted within the health system here.”

To address disinformation and inexperience in procurement, it would be advisable for all trusts to receive training on up-and-coming regulation on diagnostics and related areas (e.g. information governance for combined products using AI or digital). This should be reinforced by the appointment of at least one diagnostic expert to each procurement team and leadership board. AHSNs and NHSX are well placed to provide resources and guidance in this area. Addressing industry barriers to swift technology adoption It is also important to provide more accessible guidance and advice on market access landscape and NHS procurement for diagnostic companies. More open lines of communication with industry are needed about evidence requirements to bring products to market. Innovators must understand what options are available to them, and plan market access strategies early to expedite uptake and spread at later stages of product development. For example, diagnostics relying on software or AI will need to invest in appropriate cloud- storing and hard-ware solutions to ensure they can rapidly scale up services if commissioned nationally. It would also be advisable to encourage partnership/skill sharing schemes between smaller businesses and established diagnostic companies. Established companies can help smaller businesses navigate the complex procurement landscape and develop market access skills. NHSX and AHSNs are also well placed to help innovators navigate the evolving regulatory requirements for diagnostics.

Enhancing the national funding mandate DHSC and NHSEI should remove the separation in commissioning budgets between diagnostics and medical pathways, so that GPs and others are incentivised to use early diagnosis to reduce care costs. Part of this should include a new national funding mandate for diagnostics which is far more closely aligned with that which exists for drugs. The new mandate for medical devices should be strengthened and include a new specific allocation and pathway for diagnostics. In-year savings or cost-neutrality should not be required as this is an especially prohibitive threshold for diagnostics which deliver benefits for the longer term. Changes to the forthcoming mandate should include an instruction that the use of AAC-approved diagnostics tools will guarantee automatic reimbursement for NHS providers. The goal should be the full implementation of a stronger MedTech Funding mandate for all NICE approved diagnostics within 2 years, starting with those related to flu and COVID-19. The funding mandate must also be supported by the necessary infrastructure, data and monitoring to expand adoption and diffusion. This will be essential if we are to see a significantly greater number of diagnostic technologies than the few it currently allows.

Innovative Diagnostic Fund (IDF) NHS England and NICE should explore the establishment of a similar scheme to the Cancer Drugs Fund or Innovative Medicines Fund, that is, to provide ring-fenced funding for potentially promising diagnostics while they generate more evidence to address clinical uncertainty. Candidates from the new Early Access Scheme for Diagnostics (EASD) should be considered. The criteria used by the CDF should be adapted to serve diagnostics and expanded outside of oncology. The CDF has not been without criticism; NHSEI and the government should assess the critiques to the CDF and the innovative medicines fund in Scotland, and incorporate learnings from their approach. NHSEI and NICE ought to be mindful that not all therapy areas will have good data collection infrastructures. In practice, the IDF may be rolled out in therapy areas that have cemented data collection practices and be expanded to others in collaboration with the National Diagnostics Registry. This should be introduced through the new MedTech Funding Mandate, through the work of the Accelerated Access Collaboration. It would introduce compulsory central funding for an innovative medical device, diagnostic or digital tool with a proven clinical and economic proposition. As such it would have two components. The first, a development fund which creates a platform for diagnostic technologies aimed at agreed priority areas (for example, AMR, diabetes, cardiovascular health or cancer) to go through laboratory and clinical validation, and then receive support to be piloted. Subsequent to successful completion of stage 1, it would then provide an expedited route through the AAC to get MedTech Funding Guidance so that any CCG or Trust could adopt or purchase the diagnostic without incurring the cost, which would be borne by NHSEI. NHSEI should also look at wider payment levers to increase adoption. This could include widening the Innovation and Technology Payment (ITP) programme and seting a goal for half of the technologies it supports to be diagnostics, as well as other payment incentives – CQUINs (Commissioning for Quality and Innovation payment) and the Innovation and Technology Tariff.

National registry for diagnostics NHSEI and NICE should work to implement a National Registry for Diagnostics, which would track the uptake of diagnostics at a national, regional, and local level in a transparent and regular way. This could be akin to the innovation scorecard operated to track uptake of new medicines, providing transparent, up to date information to measure uptake of innovation across the system. A registry would also improve data management and facilitate planning for access to essential diagnostics. It will also be particularly useful in understanding and addressing health inequalities. Government, industry and the NHS must then develop mechanisms to support healthcare organisations that are poor at adopting diagnostic innovations at local and regional levels. Interoperability and common data standards will expedite the usage and efficacy of such a diagnostics registry. The government should consult local trusts, diagnostic hubs and data companies prior to developing a National Diagnostics Registry, to ensure it is easy to use and compatible with IT systems across the UK. Involving HCPs (or the individuals that will have to use the registry on a regular basis) from the beginning will facilitate buy-in and prevent technical issues later. Efforts should be made to build public trust in the usage of diagnostic-related data and understand patient concerns.

Early access or emergency use schemes for diagnostics MHRA should develop an early access scheme for diagnostics equivalent to that for medicines. The equivalent in medicines is now well established and a diagnostics format would allow for early access to innovative testing. The aim would be to provide patients and the health system with faster access to breakthrough diagnostics which currently do not have marketing authorisation. A “Promising Innovative Diagnostic” (PID) status should be introduced to send a positive early signal to investors, clinicians, and other stakeholders about a new technology. PID applications should be affordable, with the MHRA to approve or decline applications after reviewing the PIM application (which includes non- clinical and clinical data on the therapy). This will need backing from DHSC and NHSEI to ensure effective commissioning – a process which should run in parallel with positive PID designation and scientific opinion. MHRA should also introduce an equivalent to the Emergency Use Authorisation (EUA), which allows unapproved medical devices or unapproved uses of approved medical devices to be used in an emergency to diagnose or prevent life-threatening diseases or conditions when there are no adequate, approved or available alternatives. The criteria for an EUA must be developed with input from public health experts and triggered by a formal mechanism.

Commitment to existing reform agendas NHSEI should renew the commitment to moving to Integrated Care Systems. As planning and financial controls are released back to local organisations as the emergency subsides, the default should be that they are re-established with the features outlined in the NHS Long Term Plan. Local NHS systems can facilitate change and adoption of innovations in diagnostics by moving to whole system, outcomes-based payments that recognise the value and benefits of diagnosis across the entirety of a patient pathway. Local system leaders must be empowered to undertake this task. Progress to date has also been strong with the Accelerating Detection of Disease programme and other initiatives contained within the Life Sciences Sector Deal and other government efforts. This needs sustained political and financial support through COVID-19 and beyond in order to realise their potential. Recommendations in this section 1. All trusts should receive training on up-and-coming regulation on diagnostics and new diagnostic tools. 2. There should be an expectation of least one diagnostic expert to each trust procurement team and leadership board. 3. NHSEI and regulators should encourage partnership/skill sharing schemes between smaller businesses and established diagnostic companies. 4. DHSC and NHSEI should remove the separation in commissioning budgets between diagnostics and medical pathways, so that GPs and others are incentivised to use early diagnosis to reduce care costs. 5. NHS England and NICE should explore the establishment of a similar scheme to the Cancer Drugs Fund or Innovative Medicines Fund. 6. NHSEI and NICE should work to implement a bespoke National Registry for Diagnostics, which would track the uptake of diagnostics, akin to the Innovation Scorecard. 7. MHRA should develop an early access scheme for diagnostics equivalent to that for medicines. 8. MHRA should introduce an equivalent to the Emergency Use Authorisation (EUA). 9. NHSEI should renew the commitment to moving to system working, and prioritise the expansion of the Accelerating Detection of Disease programme. viii. Regulatory reform

The UK has a rich heritage of regulatory excellence, but there are profound structural changes and new innovations coming through that our regulatory system will have to change and adapt to if we are to realise their potential. This means supporting the new and amended organisations (such as the NIHP) to establish themselves and setting up the reformed MHRA to be a world-leading sovereign regulator. Regulators need to reform their own internal processes to enable greater diagnostic innovation, but also seek to work with and through international regulatory co-operative structures post Brexit, to broaden and harmonise regulatory processes.

Evolution of international MHRA processes As part of the innovative regulations project, we should consider opportunities, for both medical device and in-vitro diagnostics regulations, as to how MHRA can develop as a next generation, world leading regulatory body building on its existing international standing and agility demonstrated during the pandemic. This is an opportunity for the UK to influence the global regulatory framework, a desirable outcome given the size and opportunity presented by international markets. Establishing the MHRA as innovation-friendly and encouraging uptake and spread of technologies could make the UK a first-choice market for new diagnostics – MHRA should avoid unnecessary, expensive or admin-heavy additional requirements from other established regulators to maintain the attractiveness of the UK market. New regulation should be aligned with international regulatory authorities and be based on international standards and best practice. International cooperation and mutual recognition on diagnostics regulation and quality standards will be essential for movement of medical goods as the transition period ends. In particular, the MHRA should consider: • membership of the International Medical Device Regulators Forum (IMDRF), which aims to accelerate harmonisation in medical device regulation across all major markets (Australia, Brazil, Canada, China, EU, Japan, Russia, Singapore, South Korea and the US). • participation in the Medical Device Single Audit Program (MDSAP), which allows recognised organisations to conduct a single regulatory audit of a medical device that fulfils the requirements of all participating regulatory jurisdictions (Australia, Brazil, Canada, Japan and the US).

Evolution of national MHRA processes The government should focus on evolving regulatory science and provide sufficient resource to address the shortage of regulatory workforce, develop and implement new tools, and improve efficiencies. New regulatory approaches introduced should be reflected in the Medicines and Medical Devices Bill. In addition, the government should reassess funding streams for MHRA, to ensure it maintains its independence from the sector it regulates. MHRA ought to embrace an iterative process of development so that diagnostics regulation can evolve on par with technological developments. This will entail a dynamic and ongoing process, in addition to fixed annual reviews. In addition, it would be beneficial for innovators to receive regulatory input across the lifecycle of a diagnostic.

Evolution of NICE methods Learnings from the pandemic should be factored into a rapid evolution of NICE methods to support faster assessment and access to diagnostics. NICE should be ambitious and develop a more flexible approach to diagnostics assessment, developed in conjunction with patients and industry. New guidance should be adequately supported and resourced to encourage consistent implementation. Ideally, this should be published and implemented as part of the NICE methods review. It should ensure: • NICE is fully resourced to manage increasing demand in diagnostics • Processes and methods adequately capture diagnostics value and are fit for the future. Methods to be developed and refined in partnership with industry and patients. Stakeholder engagement will future proof changes • Increased cross-sector collaboration to support the interaction and interdependency of medicines and diagnostics

Optimising routes to market NHSEI, NICE and MHRA should look to bring in new pathways for diagnostic tools to come to market, as well as optimise the efficiency of existing routes to market. These include • Optimise horizon scanning capabilities for diagnostics, which currently sit in HealthTech Connect. Improved earlier identification and access to support will expedite development, evidence-generation and launch of diagnostics. This could be achieved through a better communication around the platform to potential users, and integration into other areas of the NHS. • Potentially breakthrough diagnostics identified through HealthTech Connect should receive funding and be fast-tracked to launch. The AAC is well placed to do this. NHSEI should expand its scope, by mandating a specific number of diagnostics to be reviewed annually. The AAC should be resourced to manage an increase in diagnostics. • Faster and more flexible appraisals and reimbursement negotiations for diagnostics. Part of this requires NICE to acknowledge the potential for diagnostics to transform patient pathways and improve health outcomes. The ongoing NICE Methods review will assess whether medical devices and diagnostics require different considerations, although drastic changes are not expected. Therefore, we need greater transparency about the consideration of the diagnostic assessment pathway in the NICE methods review, and a statement on how the future single methods and process guide will improve speed and access to diagnostics. The government should also consider setting up new routes to market for diagnostics: • AHSNs to expand support to diagnostic companies across lifecycle of product. It will be particularly helpful for AHSNs to set up regional pilots to help businesses validate assumptions, collect evidence and refine their value proposition. • Non-NICE uptake mechanism: Introduce uptake thresholds, whereby products that reach coverage in a pre- agreed percentage of trusts (e.g. 50%) automatically triggers a formal recommendation to all remaining trusts, following a review. A recommendation could be formally codified as a “seal of approval” and should be publicised in the NHSEI and AHSN websites. This is a grassroot approach to incentivising diagnostic adoption, based on sharing best practice, which ought to soften clinician scepticism of new technologies. • It is worth noting that MHRA has plans to introduce a new route to market for medical devices from 1 Jan 2020. This may refer to the National Accelerated Licensing route, which aims to ensure innovative products can be authorised with a shorter timeline in the UK. Not much is known about this route or its scope. It is crucial that it includes diagnostics, and MHRA remains responsive to industry and patient input during its implementation.

Commercial flexibility NICE should consider formally including diagnostics into existing access schemes, such as PAS, to expedite patient access. More transparent funding streams, commercial flexibility, and risk-sharing schemes between NHSEI, NICE and industry will encourage uptake of diagnostics. This is related to the proposed strategic partnerships that may be formed between companies developing and commercialising novel diagnostics but would link in specifically with a NICE appraisal of a new diagnostic. NICE currently offers some flexibilities to diagnostics, under “access proposals from the sponsors of diagnostic technologies”, with stringent criteria. For example: • Full transparency is preferred under existing schemes for diagnostics, meaning proposals including a confidential NHS access price are considered only in exceptional circumstances at NICE’s discretion. On the contrary for medicines, the Patient Access Scheme Liaison Unit (PASLU) considers confidentiality essential, and acknowledges “companies may suffer commercial harm if information on the detail of proposed schemes were made publicly available” ; the PASLU does not share details of scheme proposals to those who have not signed the PASLU confidentiality agreement and there are no public consultation steps. • In diagnostic assessments, cost-effectiveness analysis incorporates the entire treatment pathway facilitated by the diagnostic test, and not the direct cost of the diagnostic test alone. However, current access arrangements are limiting to diagnostics that require pathway re-design, that is,“ where the acquisition cost of the technology is a minor component of the care pathway cost” meaning potentially transformational diagnostics are not eligible for flexible commercial arrangements. • If diagnostics were able to make use of complex PAS’ or flexible commercial arrangements as part of their appraisal then it would allow NICE to make a recommendation with greater flexibility by accounting for some uncertainty in the specifics of the recommendation, and allowing for more confidentiality in commercial discussions. This is something that should be pursued through the NHSEI Commercial Directorate’s Commercial Framework, the publication of which has been delayed due to COVID-19.

Recommendations in this section 1. MHRA should, in partnership with industry, consider membership of the International Medical Device Regulators Forum (IMDRF) and the Medical Device Single Audit Program (MDSAP). 2. MHRA should develop an iterative process of development so that diagnostics regulation can evolve on par with technological developments. 3. NICE should look to develop an ambitious and flexible approach to diagnostics assessment, developed in conjunction with patients and industry. 4. NHSEI, NICE and MHRA should look to bring in new pathways for diagnostic tools to come to market, as well as optimise the efficiency of existing routes to market. 5. NICE should consider formally including diagnostics into existing access schemes, such as PAS, to expedite patient access to innovative diagnostics. Realising the vision for transformation

There are few precedents for the national mobilisation seen in recent months to expand our diagnostic infrastructure. The scale of that expansion is testament to the innovation and flexibility of our research and industrial base, and the enlightened role the NHS can play – as a customer and as a partner - in steering and shaping the wider health ecosystem. Those fundamental strengths, uncommon amongst our closest international competitors, can be the crucible for this new diagnostics industry, and the platform to remould our approach to health for the 21st century. That goal is widely shared, across government and the NHS, and the building blocks for lasting transformation are now firmly in place. Yet realising the vision will not be straightforward. It will require the same careful and diligent collaboration, from industry and from policymakers, that has characterised the national effort seen over recent months. Yet more than that, it will require leadership - from government and from the NHS. From government, leadership to commit to the sustained increase in our public diagnostic investment, and put in place the policies and infrastructure that will build the modern diagnostics industry. From the NHS, leadership to realise the potential of that expansion in our diagnostic capabilities, and diffuse it across the system. Just as our pharmaceutical industry stands as a major national asset, producing life-saving treatments and innovations, so can our diagnostics industry become a 21st century platform for early intervention and prevention across the country. This report charts a path towards that goal. It sets out detailed strategies, mechanisms and proposed structures, across the eight key components of reform. In turn, we hope it can form the basis for a concerted national approach from policymakers, calibrated around these components, which will realise the opportunity before us. Appendix – full list of recommendations

Building the UK as an international diagnostics hub 1. Government should announce its intent to strike a new Sector Deal for Diagnostics, to be agreed by July 1st 2021. 2. Government should set up a new capital grant fund to attract FDI in the diagnostics sector, with nationally available financial incentives to support capital investment in scale-up or manufacturing in the UK. 3. BEIS, HMT and DHSC should agree a plan to enhance the UK's inward investment approach. NHSEI should be engaged to develop the specific NHS offer to supplement that approach. 4. Government should introduce a new Diagnostics Innovation Centre and Catapult to incubate the next wave of diagnostic innovation. 5. Government should consult and develop a Diagnostics Manufacturing Action Plan, in partnership with industry, to develop cutting-edge manufacturing technologies that will address scale-up challenges in diagnostics. 6. Government should commission a review of the UK’s taxation regime, to ensure it is optimally targeted to encourage companies to relocate and remain in the UK. 7. Government should ring fence part of public R&D funding spend to diagnostics 8. DHSC and NHSEI should establish an NHS-branded venture fund to back early stage discoveries, with a particular focus in diagnostics.

Strategic, coordinated system leadership to increase the role of diagnostics in population health 9. In the next round of national guidance, NHSEI should make firm commitments to the recovery of waiting times for diagnostic testing to pre-COVID levels. 10. DHSC should codify a single Testing Strategy, setting out the policies, priorities and protocols for COVID-19 testing. 11. Medical supply resilience of all kinds - including diagnostic capacity - should be added to the national risk register. 12. In tandem with the agreement of a sector deal for diagnostics, NHSEI should develop a National Diagnostics Strategy to articulate the system priorities and plans in harnessing our new diagnostic capabilities. 13. NHSEI should appoint a designated National Diagnostics Director to lead this process. 14. NHSEI should develop a workforce plan to support the National Diagnostics Strategy. 15. A new diagnostics group be set up under the Health Technology Partnership, to facilitate. collaboration between NHS and industry on diagnostics.

Consolidation and transformation of NHS pathology 16. NHSEI should update its pathology transformation plans to establish a hub and spoke model, incorporating Lighthouse labs where appropriate. 17. DHSC/OLS should undertake a thorough stocktake of diagnostic assets and capabilities to inform the process of consolidation. 18. DHSC and NHSEI should provide up to £250 million of seed funding to enable trusts to enact the organisational change to support pathology consolidation. 19. NHSEI should complete the development of a UK-wide national, standard set of contractual requirements for Pathology Managed Services. Systems may then be managed in a regionalised NHS-led framework. 20. Up to £400 million of investment in digital pathology, coordinated UK wide through Centres of Excellence in a planned and progressive manner over the course of the next 5 years to realise the goal of a UK-wide fully integrated and digital histopathology service. 21. Digital enabling of NHS pathology labs, with patient capability to log in and access results on mobile phones.

Democratising access to diagnostics 22. A new Pathway Transformation for Diagnostics Fund should be established, owned by AAC, to support the changes needed to implement transformative diagnostics. 23. To speed up the adoption of POCT, NHSEI should select three or four major disruptions and pathway changes with a goal of completing the transformation within two years. 24. The National Diagnostics Director should partner with National Clinical Directors to reimagine critical pathways through the incorporation of Point of Care diagnostic tools, and particularly through the Health Checks programme. 25. DHSC and NHSEI should work together to deliver the recommendations of the recent review by Prof Sir Mike Richards, including to identify and appraise possible locations for population scale expansion of community diagnostic facilities. 26. NHSEI should retain the infrastructure built to support COVID-19 testing to accelerate adoption of new diagnostic delivery models. 27. NHSEI should commission a review to identify and capitalise on opportunities for wearable, implantable and mobile technologies across the range of national clinical priorities – diabetes, CVD as well as cancer.

Broader diagnosis for better patient safety 28. NHSEI should set national standards and guidance for use of POCT in the roll-out of Primary Care Networks, and POCT should be a priority in any forthcoming transformation funding. 29. NHSEI should identify the most transformative diagnostic interventions that can speed up identification and intervention of HAIs, and this should form the basis for a co-ordinated process of mapping and uptake across hospital trusts and Integrated Care Systems, to ensure ready patient access to these tools across the system. 30. As a first step to delivering the O’Neill target for every prescription to be supported with a diagnostic test, NHSEI should map out the most common areas of mis prescribing by volume, and the most effective diagnostic interventions for each of those conditions. This should inform a process of concerted diagnostic expansion across those care pathways, supported by the Pathway Transformation Fund for Diagnostics. Within three years, the ambition should be to realise the O’Neill target for diagnostic availability across the five most common areas of mis-prescribing. 31. As a wider goal, and through the National Diagnostics Strategy, NHSEI should set out a pathway to realise the O’Neill target across the NHS. This should include concrete timelines and targets, so that progress can be measured.

Commissioning and procurement reform 32. The Government should assess international suppliers of diagnostics and develop a value-based list of preferred suppliers. 33. Central guidance should be issued to NHS and other relevant buyers in the public sector to apply a greater score/weighting to reliability and resilience in purchasing decisions. 34. Government should set up a pandemic/public health focused taskforce within government which focuses on future planning for diagnostics. 35. The UK should develop similar consortia to the UK Rapid Test Consortium (UK-RTC) for diagnostics. 36. NHSEI and OLS should state their intention to move more diagnostic commercial awards onto longer term strategic partnerships based on genuine risk-share, value and population health.

Driving innovation and broadening uptake 37. All trusts should receive training on up-and-coming regulation on diagnostics and new diagnostic tools. 38. There should be an expectation of least one diagnostic expert to each trust procurement team and leadership board. 39. NHSEI and regulators should encourage partnership/skill sharing schemes between smaller businesses and established diagnostic companies. 40. DHSC and NHSEI should remove the separation in commissioning budgets between diagnostics and medical pathways, so that GPs and others are incentivised to use early diagnosis to reduce care costs. 41. NHS England and NICE should explore the establishment of a similar scheme to the Cancer Drugs Fund or Innovative Medicines Fund. 42. NHSEI and NICE should work to implement a bespoke National Registry for Diagnostics, which would track the uptake of diagnostics, akin to the Innovation Scorecard. 43. MHRA should develop an early access scheme for diagnostics equivalent to that for medicines. 44. MHRA should introduce an equivalent to the Emergency Use Authorisation (EUA). 45. NHSEI should renew the commitment to moving to system working, and prioritise the expansion of the Accelerating Detection of Disease programme.

Regulatory reform 46. MHRA should, in partnership with industry, consider membership of the International Medical Device Regulators Forum (IMDRF) and the Medical Device Single Audit Program (MDSAP). 47. MHRA should develop an iterative process of development so that diagnostics regulation can evolve on par with technological developments. 48. NICE should look to develop an ambitious and flexible approach to diagnostics assessment, developed in conjunction with patients and industry. 49. NHSEI, NICE and MHRA should look to bring in new pathways for diagnostic tools to come to market, as well as optimise the efficiency of existing routes to market. 50. NICE should consider formally including diagnostics into existing access schemes, such as PAS, to expedite patient access to innovative diagnostics.

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