18 June 2021: OIA response | Information about performance-based risk-sharing arrangements (PBRSAs) in Pharmac contracts

18 June 2021

Dear [name and contact details withheld]

REQUEST FOR INFORMATION

Thank you for your request dated 31 May 2021 under the Official Information Act 1982 (OIA) for information relating to performance based risk-sharing arrangements (PBRSAs). You wrote:

Within the Operating Policies and Procedures of PHARMAC document, risk sharing is listed as a strategy used by PHARMAC (Section 3.2(d)). I wondered if you could provide any information on PHARMAC contracts/arrangements with risk-sharing properties.

Please find information related to your request provided below.

PHARMAC regularly enters into rebate arrangements with pharmaceutical companies. In the 2019/20 financial year, these rebates and other pricing adjustments totalled $625.2 million.

In general, rebate mechanisms are used by PHARMAC for one of two main reasons: either to confidentially reduce the price that New Zealand pays for medicines or to create financial risk-sharing arrangements between PHARMAC and the pharmaceutical supplier. These risk-sharing arrangements are not performance-based risk-sharing arrangements. Rather, they relate to managing uncertainty about the total expenditure on a new product.

We trust that this information answers your queries. We are making our information more freely available, so we now publish selected OIA responses (excluding personal details) on our website. Please get in touch with us if you have any questions about this. 

Yours sincerely

Rachel Read
Manager, Policy and Government Services