Hospital Medical Devices Contracts 101

Clause 1.4b

Suppliers need to obtain consent from Pharmac before bringing new products in a previously contracted product area to Health NZ.

Clause 1.4b states: You are not permitted to supply any medical device to a Health New Zealand | Te Whatu Ora Hospital that is not listed on the Pharmaceutical Schedule, if the therapeutic purpose of that medical device is similar to the therapeutic purpose of a Medical Device that is listed, without first notifying Pharmac and without Pharmac's express written consent, such consent not to be unreasonably withheld.

The intent of Clause 1.4(b) is to ensure that the Pharmac agreement comprehensively covers all hospital medical devices the contracted supplier offers within a hospital medical devices category.

Suppliers need to obtain consent from Pharmac before bringing new products in a previously contracted product area to Health NZ.

Once an item is delisted from the Pharmaceutical Schedule, it can no longer be sold to Health NZ without Pharmac’s consent. Pharmac must be reasonable when considering requests from suppliers under this clause.

These processes ensure Health NZ hospitals can purchase a supplier’s hospital medical devices without running a separate procurement process, and ensures all parties understand the terms under which each device is supplied.

Suppliers that need to obtain consent under this clause can contact their Contract Manager at Pharmac or email our contract management team.

Clause 9.3

Permits and standards

Clause 9.3, ‘Permits and standards' highlights a supplier’s obligations regarding the maintenance of rights and permits to supply medical devices to public hospitals.

Continuity of supply is key concern for Pharmac, and we expect suppliers to proactively inform us of changes to the distribution rights they hold for medical devices under contract with us. Until a supplier removes (e.g., by delisting or transferring to another supplier) medical devices listed in their relevant agreement with us, they continue to have obligations for supply of those products.

Suppliers should contact their assigned Pharmac Contract Manager or email our contract management team as soon as any change to their distribution rights is known, as this will allow us to manage those changes with minimal operational disruption to the affected supplier(s) and Health NZ. 

Clause 21.2

Offering Health NZ hospitals a lower price for medical devices listed on the Pharmaceutical Schedule

Suppliers may supply medical device(s) to Health NZ hospitals at a lower price than listed on the Pharmaceutical Schedule with Pharmac’s prior consent. 

The ability to offer reduced pricing is outlined in clause 21.2 of the agreement: ‘Price adjustment if one Te Whatu Ora Hospital is to be offered a lower price’. 

If Pharmac has agreed (in writing) to offer a reduced price, the supplier will need to notify all Health NZ hospitals and logistics providers of the reduced price and the period of time the price will be offered for. Supply of the medical device(s) must be available to all Health NZ hospitals.

The intent of clause 21.2 is to make sure that there is equitable access to the reduced priced medical device(s) for all regions across New Zealand. 

Should the reduced price of the medical device(s) be a permanent reduction, suppliers should notify their Pharmac contract manager, in writing, of the reduced-price offer and Pharmac may adjust the price listed on the Pharmaceutical Schedule. 

Suppliers can contact their contract manager or email the contract management team to discuss reduced pricing.

Clause 24 

Supplier Reporting and Change Requests

Pharmac agreements contain contractual requirements for suppliers to report sale and supply information.  Part 5, clause 24 of our agreement terms detail these requirements, including KPI Reports (KPI), Price and Volume Data (PVD) and Supply Issues notifications.
 
Regular reporting is an important part of our engagement with suppliers on Pharmac contracts. KPI and PVD reports are due on the last business day of January, April, July, and October in each year in respect of the previous three calendar months. When change requests (new listings, delisting, corrections, or other reviews) are considered by Pharmac, we expect all supplier reporting is up to date.
 
Up to date reporting allows Contract Managers to have all the information to consider the impact of supplier change requests. Delays in supplier reporting may lead to delays in change request processing.