Sustagen Hospital Formula list price increase and change to part charge

Medicines

Decision

We’re notifying of an increase to the list price of oral feed powder (Sustagen Hospital Formula) in Section D and Part II of Section H of the Pharmaceutical Schedule from 1 April 2018.

What we’re doing

We’re notifying of an increase to the list price of oral feed powder (Sustagen Hospital Formula) in Section D and Part II of Section H of the Pharmaceutical Schedule from 1 April 2018.

There will be no change to the current funding criteria. Full subsidy will continue for patients who meet Special Authority and endorsement criteria. A rebate will apply.

Patients who currently pay a part charge and do not meet criteria for full subsidy will need to pay more for each can of Sustagen Hospital Formula.

Any changes to the original proposal?

This decision was subject to a consultation letter dated 19 February 2018. No changes have been made to the original proposal.

Who we think will be most interested

This decision will be of interest to:

  • Patients currently taking Sustagen Hospital Formula
  • Dietitians, gastroenterologists, community and hospital prescribers and general practitioners.
  • Hospital and community pharmacists, DHBs, suppliers and wholesalers.

What will the effect of this decision be?

Patients who access Sustagen Hospital Formula fully funded will experience no change in access or cost.

This decision will significantly increase the part charge that patients pay when collecting a prescription for Sustagen Hospital Formula.

Patients that access partially funded Sustagen Hospital Formula should speak with their prescriber to check if the endorsement criteria fits their clinical situation. ‘Fat intolerance’ may be applicable to some patients who cannot tolerate the fat content of currently listed oral feed powders. Patients who do not meet the endorsement criteria may be able to change to another funded oral feed powder such as Fortisip or Ensure. Patients should check with their prescriber.

There will be no cost impact on the funder as a rebate will reduce the net price for fully funded patients.

Details of this decision

From 1 April 2018, the list price of Sustagen Hospital Formula will increase from $14.90 to $26.00 per 840 g can in Section D and Part II of Section H of the Pharmaceutical Schedule as per below (ex-manufacturer, excluding GST):

Chemical

Presentation

Brand

Pack size

Current Subsidy and Price

Proposed Subsidy and Price

Ora Feed Powder (Vanilla/Chocolate)

Powder

Sustagen Hospital Formula

840 g OP

$9.54
($14.90)

$9.54
($26.00)

A rebate would apply to reduce the net price to the funder for fully funded patients.

In the community

There are no proposed changes to the current Special Authority criteria for Standard Supplements (SA1554), these can be found on PHARMAC’s website.

There will be no changes to the higher subsidy by endorsement criteria to enable full community subsidy as per below:

‘additional subsidy by endorsement is available for patients with fat malabsorption, fat intolerance or chyle leak. The prescription must be endorsed accordingly’.

Patients who meet both the Special Authority for Standard Supplements criteria and the endorsement criteria, will continue to access fully funded Sustagen Hospital Formula and will not be impacted by this proposal.

Patients who access partially funded Sustagen Hospital Formula:

  • will pay a significantly larger part charge per can due to the increase in manufacturer’s price. This is based on the difference between the price and the subsidy, plus any additional pharmacy charges.

In DHB Hospitals

DHB Hospitals will purchase Sustagen Hospital Formula at the new price and will receive a rebate on all purchases making the impact of this proposed change cost neutral.

Our response to what you told us

We’re really grateful for the time people took to respond to this consultation. All consultation responses received by 6 March 2018 were considered in their entirety when making the decision. The table below summarises the main themes raised in feedback, any changes we have made after listening to you, and other comments on the feedback.

Theme

PHARMAC Comment

The substantial increase in price is of concern but it would only affect a very small number of people.

Noted.

For partially funded patients, the change will make Sustagen Hospital Formula more expensive than ‘supermarket’ versions of supplement drinks. These products are considered inferior in nutrient content and would disadvantage patients who have a preference for Sustagen Hospital Formula over other subsidised products.

PHARMAC sought clinical advice to ascertain if there was a group of patients that would be clinically disadvantaged by this change. The Special Foods Subcommittee considered that patients who access Sustagen Hospital Formula without endorsement do so for flavour preference and did not consider there was additional patient groups where Fortisip and Ensure could not be used. PHARMAC notes that some patients may be intolerant to Fortisip or Ensure as a result of the fat content, those patients would be eligible under the current endorsement criteria of ‘fat intolerance’. We do not consider full subsidy is appropriate for patients with a preference for non-clinical reasons.

Some patients during the current ‘Ensure’ stock shortage have had to transition to Sustagen Hospital Formula in a ‘partially funded’ capacity as they do not tolerate Fortisip. This increase in part change would be unaffordable for these patients.

PHARMAC is aware of stock issues relating to Oral Feed Powders in the community. Suppliers have had to manage their stock levels in New Zealand due to exporting. This has meant that some pharmacies have experienced difficulty with supply of Ensure and Fortisip.

PHARMAC has been working with wholesalers and suppliers to ensure that stock is available for patients that need it. Stock issues should now be returning to normal with Nutricia (Fortisip) moving their manufacturing site closer to New Zealand, which will reduce lead time. Abbott (Ensure) are still managing stock in New Zealand. Pharmacies are able to call them directly with any stock requests not being met by their wholesaler.

Support the proposal, considered that the current Special Authority criteria for Standard Supplements is adequately permissive for patients in clinical need. Recommended further criteria be included that encourages food as a priority source of nutrition.

PHARMAC note this feedback and will take it to the Special Foods Subcommittee for consideration at their next meeting.

Responding DHBs indicated use of Sustagen Hospital Formula is usually within the current funding endorsement criteria and the price increase is unlikely to affect patients. Fortisip or Ensure powder are the preferred standard supplements based on cost.

Noted.

 

Concerned that pharmacies already lose money on Special Food dispensing and would lose more due to the higher wholesale price. Would like PHARMAC to consider a mechanism to recover these additional procurement costs which risk Special Foods distribution supply through pharmacy.

PHARMAC consider that this feedback relates to the current CPSA contract between pharmacy and DHBs and not this proposal specifically. PHARMAC has provided this feedback to DHBs for their consideration in the CPSA development.

 

Requested that PHARMAC provide pharmacy with the appropriate resources to help explain the increased part charge to patients. This will help educate patients that the increase comes from a change in cost to PHARMAC, and not a pharmacy driven price increase. Processes also need to be established on how PHARMAC deal with customer complaints, with guidance needed on the procedures for pharmacy to refer complaints.

PHARMAC consider it would be appropriate to share the consultation and notification with customers that are disadvantaged by this proposal. PHARMAC intend to provide communications on this change via Schedule update and information on the PHARMAC website. 

PHARMAC has a number of channels for receiving feedback, including written enquiries to enquiry@pharmac.govt.nz and freephone 0800 66 00 50.

 

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