2018/19 invitation to tender (medical)

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 2018/19 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 Supply Status 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 2018/19 Tender process would be similar to the 2017/18 Tender.  A copy of the draft 2018/19 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 2022 for all Tenders awarded from the 2018/19 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 2022 for all tenders awarded from the 2018/19 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 2018/19 Tender

The proposed timelines for the 2018/19 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 2018/19 tender contract [PDF, 659 KB].

Proposed inclusion of the following provisions in the 2018/19 Invitation to Tender

Proposal to modify the transition between funded brands in the Schedule

On 13 July 2018 PHARMAC released a consultation to seek feedback on the proposal to modify the transition between funded brands in the Schedule. The proposal is to remove the reference pricing period during brand changes and would result in the alignment of transition arrangements in the community and DHB hospitals by increasing the transition time in DHB hospitals to five months.

The consultation is available on our website (www.pharmac.govt.nz/news/consultation-2018-07-13-brand-transition) and closes at 5 pm on Friday, 10 August 2018. Feedback can be emailed to consult@pharmac.govt.nz.

If the proposal was to be accepted it would result in changes to Schedule Three and Five in the 2018/19 Tender. Briefly it would result in the Second Transition Period being removed from the 2018/19 Tender which would result in the following changes;

• the Sole Supply Period would be modified to state that it relates to the period beginning on the day after the expiry of the First Transition Period and ending on 30 June 2022.
• the transition period in relation to community supply would be changed from three transition periods to two transition periods, this is the same as the current transition period for hospital supply.
• the subsidy payable for all other brands of the pharmaceutical will remain until the Sole Supply Period begins, this contrasts with the current process which decreases the subsidy to the price of the incoming brand on the first day of the Second Transition Period until the first day of the Sole Supply Period.

PHARMAC proposes to include a new schedule in the 2018/19 Tender relating to special terms for the supply of intra-uterine copper device as follows.

You shall provide the following information when submitting a Tender Bid for the Pharmaceutical intra-uterine copper device (“IUCD Tender Item”):

• the size of the IUCD Tender Item, including length and width measurements as well as the diameter of the inserter; 
• a description of the material the inserter is made of;
• the duration of the therapeutic effect of the IUCD Tender Item; and
• the metals which are contained in the IUCD Tender Item.

You shall provide the following Resources at no cost for the IUCD Tender Item:

• the provision of education, training and support to healthcare professionals in respect of the use of the IUCD Tender Item. 

For the purposes of this clause “Resources” shall include but not be limited to the:

• provision of training materials (DVDs, pamphlets, leaflets, brochures) to healthcare professionals;
• provision of an information sheet explaining the differences between the current brand of intra-uterine device and your IUCD Tender Item; and
• provision of presentations and/or demonstrations on the use of your IUCD Tender Item to patients and/or healthcare professionals.

Unresolved Tender Bids

PHARMAC would review any unresolved Tender Bids from the 2016/17 Tender and the 2017/18 Tender prior to issuing the 2018/19 Tender, and may close the tender for some of these items, and reissue them as part of the 2018/19 tender. The following Tender Bids remain unresolved, and may potentially be added to the 2018/19 Tender following consultation:

2016/17 Invitation to Tender

2017/18 Invitation to Tender

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/news/consultation). 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, 659 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 for your ease of reference. Pharmaceuticals with indications that may apply to multiple therapeutic groups will only appear in one group.

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 2018
• the number of subsidised or partially subsidised units sold in the community in the year ending 30 June 2018
• 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 2018 by the relevant listed unit subsidy as at 1 July 2018); and
• comments specifically relating to the Tender of the line item and/or its current listing on the Pharmaceutical Schedule.