2016/17 invitation to tender (medical)

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.

Background

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:

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. 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

2015/16 Invitation to Tender

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.

Symbol	Explanation
Underlined	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.
C	To be tendered for Sole Subsidised Supply Status (community pharmaceuticals).
H	To be tendered for Hospital Supply Status (DHB hospital pharmaceuticals).
PCT	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.