NHS Connecting for Health has confirmed that it has signed a £36m, four year deal with McKesson to continue to provide support for the patient administration systems used by 26 trusts across England.

A previous support deal, signed in 2006, provided support for 31 trusts using McKesson’s TotalCare and STAR patient administration systems until March 2010.

The 2006 deal became was necessary after it became apparent that the planned replacement of McKesson systems by strategic care records sysems wasn’t going to run to schedule.

In January, E-Health Insider exclusively revealed that the Department of Health had been planning to sign a further two-year extension, but was instead negotiating a four year deal to run until 2014.

EHI also understands that McKesson has taken the strategic decision to bring its Paragon electronic patient record product to the NHS market.

As first reported in March 2009, San Francisco-based McKesson has been deliberating for over a year over whether to re-enter the NHS EPR market.

In February 2009, the company began sounding out customers on their interest in taking a new EPR product.

A DH spokesperson told EHI: “An agreement which aims to provide trusts with the flexibility they want for managing their information priorities has been reached with McKesson.

“The agreement, which was signed on 31 March 2010, provides support for 26 NHS hospital trusts to continue to use their existing McKesson patient administration systems for the next four years. The overall value of the contract is £36m.”

The new four year contract throws fresh doubt over how many of the 26 McKesson trusts will ever migrate to either Cerner Millennium provided by BT or Lorenzo provided by CSC, under the Natioanl Programme for IT in the NHS.

McKesson failed to be selected as a systems vendor for NPfIT during its 2003 procurements, at which point it was the number two supplier to the hospital sector. Seven years on, although McKesson’s market share has declined, only iSoft has a larger number of installed hospital PAS customers.

Adrian Wookey, vice president of service delivery of McKesson UK, said: “McKesson is fully committed to meeting the healthcare and business needs of NHS organisations.

“Healthcare is our business and the NHS is our customer, and this depth of knowledge and understanding of the NHS has proudly earned us a reputation as a trusted provider of healthcare technology solutions and services.”

McKesson said that the company would be publishing its product strategy “imminently.”

Some trusts are looking to extend the life and value of their McKesson PAS systems. Doncaster and Bassetlaw Hospitals NHS Foundation Trust recently integrated its departmental systems to a McKesson PAS, using InterSystems Ensemble under a deal negotiated by NHS Yorkshire and the Humber.

The new deal is the second notable contract win for McKesson this year. Twelve NHS organisations in the South West recently signed a deal to continue using CarePlus Child Health for the next four years.