2017/18 invitation to tender (medical)

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 2017/18 Tender process would be similar to the 2016/17 Tender.  A copy of the draft 2017/18 Invitation to Tender is available on our website: www.pharmac.health.nz(external link), 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 2021 for all Tenders awarded from the 2017/18 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 2021 for all tenders awarded from the 2017/18 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 2017/18 Tender

The proposed timelines for the 2017/18 Tender are as follows:

Contractual obligations for suppliers

Linked is a copy of the draft terms and conditions which would form the terms of the 2017/18 Tender contract [PDF, 896 KB].

Proposed inclusion of the following provisions in the 2017/18 Invitation to Tender

Matters for evaluation

Further information that will be considered in applying the Factors for Consideration by the Evaluation Committee when evaluating products included in the 2017/18 Tender will include;

1. alternative manufacturers of the finished product and active ingredients (if any); and
2. other markets in which you currently supply the Pharmaceutical.

Tender Submission Form

PHARMAC propose to include a provision in the 2017/18 Tender relating to information that must be supplied regarding a Tender Item.

The provision will state that, as well as the existing information required to be submitted in the tender submission form, additional detail and information regarding pharmaceuticals which do not require consent from Medsafe will be required as follows;

1. Evidence and justification as to why Consent from Medsafe is not required for the Tender item(s);
2. Confirmation that the Tender Items(s) you are submitting a Tender Bid in respect of meet the relevant standards and/or regulatory requirements for its intended use and details on what those standards and/or regulatory requirements are; and
3. Details on the Tender Item(s) including excipients and shelf life.

In addition, further information regarding other markets in which the pharmaceutical or medical device is currently provided by you, may be included in the tender submission form at the supplier’s discretion.  

Price Change

PHARMAC propose to include a provision in the 2017/18 Tender that amends the terms and conditions relating to price changes in the event of award of a tender item for sole supply and/or hospital sole supply as follows. Where your brand of the pharmaceutical is currently listed on the Pharmaceutical Schedule, if the price would result in a price increase for your brand of the pharmaceutical you must supply the pharmaceutical at the new price from the 22^nd day of the month prior to the start date, and the pharmaceutical will be subsidised at the new price from the start date (as defined in the 2017/18 Tender).

PCTs

PHARMAC propose to include a provision in the 2017/18 Tender relating to a preference for PCT products that have post-compounding stability data greater than 48 hours.

Stock Reporting

PHARMAC proposes the inclusion of a provision in the 2017/18 Tender relating to a supplier providing reports to PHARMAC on pharmaceutical stock levels upon PHARMAC’s request during the sole supply and/or hospital supply status periods.

PHARMAC proposes to include a new schedule in the 2017/18 Tender relating to special terms for the supply of somatropin as follows.

A tenderer who submits a tender bid for somatropin, should note that special terms will also apply to the supply of somatropin. In this respect, successful tenderers shall provide the following resources and related products at no cost:

• The provision of education, training and support Resources to endocrinologists, paediatric endocrinologists, pharmacies and patients in respect of the use of somatropin.
• The Resources shall be provided to all endocrinologists, paediatric endocrinologists, pharmacies and patients in New Zealand or upon request by any relevant party.
• The Resources shall be provided to patients when their prescription is filled and directly to all endocrinologists, paediatric endocrinologists and pharmacies before the commencement of any sole supply period.
• The provision of Related Products for your proposed brand of somatropin for the benefit of patients, in respect of the use of somatropin. The Related Products shall be delivered to the nominated delivery address of the prescribed patient.

For the purposes of this paragraph:

“Resources” shall include but not be limited to the:

• provision of patient training and medical education and support for endocrinologists, paediatric endocrinologists and pharmacies on the use of somatropin devices, including a preference for clinical educators to talk specifically with patients and for an 0800 number to be available for patients to contact with any further queries;
• provision of training materials (DVDs, pamphlets, leaflets, brochures) to new patients; and
• provision of presentations and/or demonstrations on the use of somatropin devices to patients and/or healthcare professionals.

“Related Products”, which shall be inclusive of the replacement of any defective Related Product, shall include but not be limited to devices, needles, needle clippers, sharps bins, vials and other products which are required for the safe treatment of your brand of somatropin.

PHARMAC may request tenderers to provide a proposal and evidence of the Resources and Related Products after the submission of a tender bid for somatropin.

Unresolved Tender Bids

PHARMAC would review any unresolved Tender Bids from the 2015/16 Tender and the 2016/17 Tender prior to issuing the 2017/18 Tender, and may close the tender for some of these items, and reissue them as part of the 2017/18 tender. The following Tender Bids remain unresolved, and may potentially be added to the 2017/18 Tender following consultation:

2015/16 Invitation to Tender

2016/17 Invitation to Tender

Should any unresolved Tender Bids be declined prior to the release of the 2017/18 Tender, PHARMAC would consider including those pharmaceuticals in the 2017/18 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 in the consultation section under news on our website). 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 [PDF, 896 KB]

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 in the .pdf 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	10
Blood and Blood Forming Organs	11 - 12
Cardiovascular System	12 – 15
Dermatologicals	15 – 17
Genito-Urinary System	17 – 18
Hormone Preparations – Systemic excluding contraceptives	18 - 19
Infections – Agents for Systemic Use	19 – 21
Musculoskeletal System	22
Nervous System	22 – 26
Oncology and Immunosuppressants	26 – 28
Respiratory System and Allergies	28
Sensory Organs	28 – 29
Various	29

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 2017
• the number of subsidised or partially subsidised units sold in the community in the year ending 30 June 2016
• 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 2016 by the relevant listed unit subsidy as at 1 July 2016); 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 2018 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.