2016/17 invitation to tender (medical)

PHARMAC is seeking feedback from medical groups, DHB hospital pharmacies and other interested parties on:

  • A proposal to tender certain pharmaceuticals for sole supply; and
  • The draft process and terms and conditions for the 2016/17 Invitation to Tender (2016/17 Tender).

PHARMAC welcomes all feedback on the 2016/17 Tender. Feedback received by the deadline may be considered by the Tender Medical Evaluation Subcommittee of PTAC, and would be considered by the PHARMAC Board (or its Delegate) prior to making a decision on this proposal.

All responses are due by 5pm, Friday 2 September 2016

Feedback should be provided by submitting an email or letter to the Tender Analysts:

Email: tender@pharmac.govt.nz

Tender Analyst
PO Box 10254
Wellington 6143

Fax:     (04) 460 4995

Tim Nuthall:                  (04) 901 3233
Katie Brownless:           (04) 916 7522

Feedback we receive is subject to the Official Information Act 1982 (OIA) and we will consider any request to have information withheld in accordance with our obligations under the OIA. Anyone providing feedback, whether on their own account or on behalf of an organisation, and whether in a personal or professional capacity, should be aware that the content of their feedback and their identity may need to be disclosed in response to an OIA request.

We are not able to treat any part of your feedback as confidential unless you specifically request that we do, and then only to the extent permissible under the OIA and other relevant laws and requirements. If you would like us to withhold any commercially sensitive, confidential proprietary, or personal information included in your submission, please clearly state this in your submission and identify the relevant sections of your submission that you would like it withheld. PHARMAC will give due consideration to any such request.

Details of the proposed 2016/17 Tender

In accordance with PHARMAC’s objective (to secure, for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided), PHARMAC is consulting on a proposal to tender certain pharmaceuticals for Sole Subsidised Supply to community pharmacies and/or Hospital Supply Status for supply to DHB hospital pharmacies.

Attached to this letter (as Schedule Two) is a list of pharmaceuticals that we are considering tendering for Sole Subsidised Supply and/or Hospital Supply Status. Pharmaceuticals are sorted into therapeutic groups and then listed alphabetically in each group by chemical, form and strength. Each pharmaceutical has a ‘C’ and/or ‘H’ next to it to indicate whether it is proposed to be tendered for community and/or hospital supply.

In general, the proposed 2016/17 Tender process would be similar to the 2015/16 Tender.  A copy of the draft 2016/17 Invitation to Tender is available on our website: www.pharmac.health.nz, or by contacting PHARMAC.

We are seeking feedback on the approach outlined in the following pages, in particular on:

  • The proposed tender process and timeline;
  • The actual or potential clinical implications of awarding Sole Subsidised Supply and/or Hospital Supply Status to the pharmaceuticals listed in Schedule Two, including the impact of a brand switch on patients and clinical staff; and
  • For hospital pharmaceuticals, your views on the appropriate Discretionary Variance (DV) Limit for each pharmaceutical, in the event you consider a 1% DV Limit to be clinically unacceptable.


Since 1997 PHARMAC has been using the strategy of tendering pharmaceuticals for sole supply of pharmaceuticals for a fixed period of time. Regular tendering has proven to be an effective way to encourage competition among suppliers of pharmaceuticals. As in the past, the community and hospital tender processes would be run in unison, however, the pharmaceutical list for community and hospital supply may be different.

Key Aspects of Awarding a Tender for Community Pharmaceuticals:

  • For community pharmaceuticals, the tender winning brand would be the only subsidised brand for up to approximately 3 years. The Sole Subsidised Supply period would conclude on 30 June 2020 for all Tenders awarded from the 2016/17 Tender.
  • No other brand of the pharmaceutical would be listed (or subsidised) in Section B of the Pharmaceutical Schedule during the Sole Subsidised Supply period.
  • Other brands could continue to be marketed, sold and dispensed during the Sole Subsidised Supply Status period, but they would not receive a subsidy.
  • Any pharmaceutical that currently carries a manufacturer’s surcharge (that is, the additional patient charge above that of the patient co-payment) would become fully subsidised if a tender was awarded for that pharmaceutical.

Key Aspects of Awarding a Tender for DHB Hospital Pharmaceuticals:

  • For DHB hospital pharmaceuticals, the Hospital Supply Status brand would be the only brand DHB Hospitals could purchase (subject to any allowance for alternative brands under the agreed DV Limits) for up to approximately 3 years. The Hospital Supply Status period would conclude on 30 June 2020 for all tenders awarded from the 2016/17 Tender.
  • No other brand of the pharmaceutical would be listed in Section H of the Pharmaceutical Schedule during the Hospital Supply Status period.

Key Dates and Timeframes for the 2016/17 Tender:

The proposed timelines for the 2016/17 Tender are as follows:



3 August 2016

Consultation with suppliers, medical groups and interested parties on the proposed pharmaceutical list and draft Invitation to Tender.

29 August 2016

Final date for receipt of Alternative Commercial Proposals (ACPs) to tendering by PHARMAC.

2 September 2016

Final date for all consultation to be received.

September 2016

PHARMAC considers feedback from consultation, negotiates with suppliers over any ACP proposals it considers would meet PHARMAC’s Factors for Consideration, and enters into provisional contracts with suppliers where appropriate.

September 2016

Meeting of the Tender Medical Evaluation Subcommittee of PTAC to consider clinical issues in relation to the proposed Tender list.

September/October 2016

Consultation and decisions on Alternative Commercial Proposals.

Early November 2016

Issuing of the 2016/17 Tender.

15 December 2016

Invitation to Tender closes.

From end of January 2017

Decisions on the first Tender winners announced.

Contractual obligations for suppliers

A copy of the draft terms and conditions which would form the terms of the 2016/17 Tender contract is available on the PHARMAC website: [link no longer available].

Proposed inclusion of the following provisions in the 2016/17 Invitation to Tender

Pack size preference

PHARMAC propose to include a provision in the 2016/17 Invitation to Tender relating to pack size preference.

In summary, where a Tender Item is specified as being available for a Tender Bid for Sole Supply Status, it is the preference of PHARMAC that the pack size for such a Tender Item is a 30 or 90 day pack where the Tender Item is in a tablet or capsule form.

Notwithstanding the preference of PHARMAC for Tender Items to be in pack sizes as specified above, pack sizes may be specified in the comments column in the attached list or you may submit, and PHARMAC will consider and may accept, a Tender Bid for any pack size, including larger pack sizes, following its evaluation of Tender Bids under clause 5 of Schedule Three.

Matters for evaluation

PHARMAC propose to include a provision in the 2016/17 Invitation to Tender relating to matters for evaluation.

The Evaluation Committee will evaluate Tender Bids in light of PHARMAC’s statutory objective which is “to secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided”. In doing so the Evaluation Committee will be guided by the Factors for Consideration (Factors) that form part of PHARMAC’s then current Operating Policies and Procedures (OPPs), as published on PHARMAC’s website (www.pharmac.govt.nz), to the extent applicable. More information on the Factors can be found on PHARMAC's website.

The requirement for PHARMAC to pursue its statutory objective means that particular emphasis will be given to those aspects of proposals which demonstrate “health outcomes”, and those aspects of proposals which demonstrate the impact on the “funding provided” for pharmaceuticals. Those Factors which relate directly to these aspects will be given the greatest weight by the Evaluation Committee but all Factors are important.

Product identification codes

PHARMAC propose to include a provision in the 2016/17 Invitation to Tender relating to product identification codes.

The provision would require that, prior to the listing of a new pharmaceutical, the supplier must obtain and notify PHARMAC by submitting a notification of product changes form of the Pharmacode, the GTIN and the CTPP for the Pharmaceutical, no later than the earlier of:

    1. 10 business days following the Market Notification Date; or
    2. the 5th day of the month immediately prior to the Start Date.

For the avoidance of doubt, this requirement does not apply in relation to any Pharmaceutical that is a Medical Device.

Unresolved Tender Bids

PHARMAC would review any unresolved Tender Bids from the 2014/15 Tender and the 2015/16 Tender prior to issuing the 2016/17 Tender, and may close the tender for some of these items, and reissue them as part of the 2016/17 tender. The following Tender Bids remain unresolved, and may potentially be added to the 2016/17 Tender following consultation:

2014/15 Invitation to Tender

Chemical Name

Line Item

Atropine sulphate

 Inj 600 mcg, 1 ml


 Inj 50 mg


 Inj 70 mg


 Tab 200 mg


 Inj 1 g


 Inj 150 mcg per ml, 1 ml


 Tab 20 mg


 Inj 1 mg

Hyoscine N-butylbromide

 Inj 20 mg, 1 ml

Lidocaine [Lignocaine] Hydrochloride

 Inj 1%, 20 ml

Lidocaine [Lignocaine] Hydrochloride

 Inj 1%, 5 ml

Lidocaine [Lignocaine] Hydrochloride

 Inj 2%, 20 ml

Lidocaine [Lignocaine] Hydrochloride

 Inj 2%, 5 ml

Lidocaine [lignocaine] hydrochloride with adrenaline

 Inj 2% with adrenaline 1:80,000, 2.2 ml dental cartridge

Metformin Hydrochloride

Tab immediate-release 1 g

Naloxone Hydrochloride

 Inj 400 mcg per ml, 1 ml


 Cap long-acting 60 mg


 Inj 10,000 iu


 Inj 100,000 iu


 Inj 500,000 iu

2015/16 Invitation to Tender

Chemical Name

Line Item


 Tab 10 mg


 Tab 5 mg

Amiodarone hydrochloride

 Inj 50 mg per ml, 3 ml

Amoxicillin clavulanate

Grans for oral liq amoxicillin 250 mg with potassium clavulanate 62.5 mg per 5 ml

Amoxicillin clavulanate

Grans for oral liq amoxicillin 400 mg with potassium clavulanate 57 mg per 5 ml


 Cap 10 mg


 Cap 100 mg


 Cap 18 mg


 Cap 25 mg


 Cap 40 mg


 Cap 60 mg


 Cap 80 mg


 Inj 100 mg


 Inj 50 mg


 Tab 25 mg


 Tab 50 mg

Bacillus Calmette-Guérin (BCG) vaccine

 Inj containing equal to or greater than 500 million CFU


 Inj 2 mg per ml, 5 ml

Cetomacrogol with glycerol

 Crm 90% with glycerol 10%, 100 g


 Tab 0.5 mg - 1 mg


 Tab 2 mg


 Tab 500 mcg

Coal tar

 Soln BP

Codeine phosphate

 Tab 15 mg

Codeine phosphate

 Tab 30 mg

Codeine phosphate

 Tab 60 mg


 Tab 500 mcg

Condom lubricating jelly

 <200 ml


 Female condom


 Inj 1 g


 Inj 2 g


 Lotn 4%  head lice suffocant

Dorzolamide hydrochloride

 Eye drops 2%


 Inj 2.5 mg per ml, 1 ml


 Inj 0.75 mg per ml, 100 ml


 Inj 2 mg per ml, 10 ml

Fludarabine phosphate

 Inj 50 mg

Hexamine hippurate

 Tab 1 g


 Oral liq 20 mg per ml

Latanoprost with timolol

 Eye drops 50 mcg per ml with timolol 0.5%


 Inj 100 mg per ml, 5 ml


 Oral liq 100 mg per ml


 Eye drops 0.5 mg per ml

Liquid paraffin with white soft paraffin

 Liquid paraffin 50% with white soft paraffin 50% ointment (pack size 100 g or less)

Liquid paraffin with white soft paraffin

 Liquid paraffin 50% with white soft paraffin 50% ointment (pack size greater than 100 g)


 Tab 50 mg

Mycophenolate mofetil

 Cap 250 mg

Mycophenolate mofetil

 Tab 500 mg


 Tab 100 mg


 Tab 50 mg


 Tab modified-release 100 mg


 Inj 1 mg per ml, 4 ml ampoule


 Tab 4 mg


 Tab 8 mg


 Powder for infusion, 100 mg


 Powder for infusion, 500 mg

Piperacillin with tazobactam

 Inj 4 g with tazobactam 500 mg


 Tab 10 mg


 Tab 40 mg

Risedronate sodium

 Tab 35 mg


 Oral liq 2 mg per 5 ml

Sodium chloride

 Inj 0.9%, 10 ml

Sodium chloride

 Inj 0.9%, 20 ml

Sodium chloride

 Inj 0.9%, 5 ml

Sodium chloride

 Soln 0.9% for irrigation, 30 ml




 Tab 100 mg


 Tab 50 mg


 Tab 400 mcg


 Tab 100 mg


 Inj 200 mg

Water for Injection

 Purified for inj, 10 ml

Water for Injection

 Purified for inj, 20 ml

Water for Injection

 Purified for inj, 5 ml

Zinc and castor oil

 Oint BP (pack size greater than 30 g)

Should any unresolved Tender Bids be declined prior to the release of the 2016/17 Tender, PHARMAC would consider including those pharmaceuticals in the 2016/17 Tender. Currently unresolved Tender Bids have not been included in the draft pharmaceutical list set out in Schedule Two.

Distribution of Consultation Documents

Although this consultation letter has been widely distributed, should you consider that a particular person, group or agency should receive this letter and/or future tender documents, please feel free to contact PHARMAC or refer it on directly (note, all tender documents and consultations are also available from our website at www.pharmac.health.nz/newsconsultation). We also invite any person or group to contact PHARMAC should you wish to meet to discuss the proposals contained in this consultation letter.

Schedule Two: Possible pharmaceuticals for tender for sole supply

Order of pharmaceuticals in this Schedule

Pharmaceuticals have been listed in groups according to the therapeutic group classification system used in the Pharmaceutical Schedule. Below is a list of these groups, and the corresponding page numbers for your ease of reference. Pharmaceuticals with indications that may apply to multiple therapeutic groups will only appear in one group.

Therapeutic Group Page Numbers
Alimentary Tract and Metabolism 9
Blood and Blood Forming Organs 10
Cardiovascular System 10 – 11
Dermatologicals 11 – 13
Extemporaneously Compounded Preparations & Galenicals 13 
Genito-Urinary System 13 – 14
Hormone Preparations – Systemic excluding contraceptives 14
Infections – Agents for Systemic Use 14 – 19
Musculoskeletal System 20
Nervous System 20 – 23
Oncology and Immunosuppressants 23 – 24
Respiratory System and Allergies 24
Sensory Organs 24 – 26
Various 26

Information provided for each pharmaceutical

For each pharmaceutical (as defined by chemical name, form and strength) we have provided the following information:

  • the current ex-manufacturer subsidy per unit of measure as at 1 July 2016
  • the number of subsidised or partially subsidised units sold in the community in the year ending 30 June 2015
  • an estimate of the annual community market value at current subsidies (estimated by multiplying the volume of units subsidised in the year ending 30 June 2015 by the relevant listed unit subsidy as at 1 July 2015); and
  • comments specifically relating to the Tender of the line item and/or its current listing on the Pharmaceutical Schedule.

Explanation of terms, symbols and abbreviations

Most terms and abbreviations used are self-explanatory: “tab” means tablet, “cap” means capsule, “liq” means liquid, “inj” means injection, “suppos” means suppository, “grans” mean granules and “OP” means original pack to be dispensed.

The following table explains the symbols used in the draft pharmaceutical list:




Pharmaceutical line items where a sole supply contract is in force are underlined.  The price and subsidy for these pharmaceuticals are fixed until 30 June 2017 unless otherwise stated in the Comments column and a listing of a new brand could only occur after that date.


To be tendered for Sole Subsidised Supply Status (community pharmaceuticals).


To be tendered for Hospital Supply Status (DHB hospital pharmaceuticals).


A reference in the Invitation to Tender to allow Pharmaceuticals Cancer Treatments to be listed in Section B of the Pharmaceutical Schedule as part of PHARMAC’s Pharmaceutical Cancer Treatments project. 


PHARMAC has been advised of the existence of a patent.


There is no fully funded product available for this line item (in relation to community supply).


Additional Stock Pharmaceuticals (ASP) means a Pharmaceutical, marked with an “@”, for which the supplier of the successful Tender Bid would be required to hold additional stock.


A rebate currently exists.

Changes to PHARMAC’s decision making mechanism

The issues PHARMAC considers when it makes decisions is fundamental in order for PHARMAC to meet its statutory objective, so its important suppliers understand the new Factors for Consideration.

All decisions relating to the 2016/2017 Tender will be made under the Factors for Consideration.