Agreements for the supply of orthopaedic implants and associated products

Hospital devices

Decision

PHARMAC is pleased to announce the approval of agreements with Medtronic New Zealand Limited (“Medtronic”) and Lima Orthopaedics New Zealand Limited (“Lima”) for the supply of orthopaedic implants and associated products to DHB hospitals.

These agreements were the subject of consultations letters dated 18 August and 8 September 2017, respectively.

In summary, the effect of the decisions is that:

  • 6520 orthopaedic implants and associated products will be listed in Section H, Part III (‘Optional Pharmaceuticals’) of the Pharmaceutical Schedule on 1 November 2017.
  • The Medtronic agreement is cost neutral and the Lima agreement has a national cost increase of $14,000 per annum.
  • DHBs would continue to be able to choose which medical devices they purchase, however would need to use these agreements should they choose Medtronic or Lima products listed in the Pharmaceutical Schedule.

Details of the decision

In April 2016 PHARMAC released a request for proposal (“RFP”) for orthopaedic implants and associated products for non-exclusive national Pharmaceutical Schedule listing agreements; for medical devices.  The purpose of the RFP was to secure national contracts for DHB hospitals to purchase from.

Both Medtronic’s and Lima’s proposals met the RFP requirements and PHARMAC has entered into agreements with them for the supply their orthopaedic implants and associated products to be listed on the Pharmaceutical Schedule. This means that DHB hospitals that purchase these products must do so under the PHARMAC agreement at the listed pricing from 1 November 2016.

The list of products will be available on PHARMAC’s website in both a PDF document

The agreements are not exclusive. DHBs can continue to purchase other brands of orthopaedic implants and associated products.

Educational services will be provided by Medtronic and Lima to DHB personnel on the appropriate use of their orthopaedic implants and associated products and this will be arranged in formats and at times agreed with individual DHBs.

Feedback received

PHARMAC appreciates all of the feedback that it has received and acknowledges the time people took to respond. All consultation responses received, by 8 September for Medtronic and 27 September for Lima, were considered in their entirety in making a decision on the proposed changes. The following issues were raised in relation to specific aspects of the proposals:

Medtronic

Theme

Comment

Concern raised on how capital equipment, used in association with orthopaedic implants, is being introduced to DHB hospitals and the impact on a competitive environment.

Capital equipment in this area is currently managed by DHB hospitals and was out of scope for this RFP.  Impacts will be fully considered when PHARMAC undertakes work in this area.

Full list of products requested

 Supplied

Clarification on individual impact for a DHB

 Clarification provided

Clarification on inclusion of burrs

 Clarification provided that burrs are included.

Lima

Theme

Comment

Full list of products requested

 Supplied

Request to participate in tender process

 Directed to GETS website to receive notification on future processes as the RFP had closed.

More information

If you have any questions about this decision you can email PHARMAC at enquiry@pharmac.govt.nz or call our toll free number (9 am to 5 pm, Monday to Friday) on 0800 66 00 50.