Additional listings on the Pharmaceutical Schedule of a range of orthopaedic joint implants, additional CMF implants, associated products and bone cement with Stryker New Zealand Limited

Hospital devices

Decision

PHARMAC is pleased to announce the approval of an amendment to the trauma, spine and CMF implants agreement with Stryker New Zealand Limited (“Stryker”).

This was the subject of a consultation letter dated 9 December 2016 which can be found on PHARMAC’s website [link no longer available]. 

In summary, the effect of the decision is that:

  • A range of orthopaedic joint implants, additional CMF implants, associated products and bone cement will be listed in Section H, Part III, (‘Optional Pharmaceuticals’) of the Pharmaceutical Schedule from 1 February 2017.
  • DHB hospitals can purchase these items directly from Stryker.
  • For the DHBs that currently use these products the national agreement will deliver savings to some and small increases to others.

Details of the decision

In April 2016 an orthopaedic implants and associated products request for proposal (“RFP”) was released requesting proposals for non-exclusive national agreements for medical devices, to PHARMAC for a listing on the Pharmaceutical schedule and Stryker responded to this request.

The purpose of the RFP was to secure national contracts for DHB hospitals to purchase from, and to provide replacement contracts for the current HBL suite of hip and knee contracts due to expire in April 2017.

Stryker’s proposal was to add additional schedules to its current Agreement for trauma, spine and CMF implants to incorporate all products in their orthopaedic implants and associated products portfolio in line with the scope of the RFP.

The list of products will be available on PHARMAC’s website in both a PDF document and an Excel spreadsheet.

There are a mix of cost and savings to DHBs that currently use these products with a net increase of approximately $4,000 per annum nationally, based on current usage.

The agreement is not exclusive. DHBs can continue to purchase other brands of orthopaedic trauma, spine and CMF implants at their discretion.

Educational services will be provided by Stryker to DHB personnel on appropriate use of its orthopaedic implants, bone cement and associated products and will be arranged in a format and times as agreed with individual DHBs.

The impact of this proposal on DHBs is relatively low as these products are already in use in DHB hospitals. Any individual DHB will only be using a limited number of these items, due to the nature of orthopaedic implant ranges and the need to accommodate all patient anatomical requirements, DHB Hospitals would only need to immediately update pricing for the products they use regularly, not load the entire range.

Feedback received

We appreciate all of the feedback that we received and acknowledge the time people took to respond. All consultation responses received by 22 December 2016 were considered in their entirety in making a decision on the proposed changes. Most responses were supportive of the proposal, and the following issues were raised in relation to specific aspects of the proposal:

Theme Comment
Consultation timeline was too short Consultation periods are carefully considered on a case by case basis. PHARMAC considered that the timeline in this case was sufficient as this is an amendment to a current agreement, and not expected to have any clinical impact as product choice is not affected.
Wish to see all proposals listed together to compare The terms of the RFP stated contracts would be listed as negotiated. The rationale for this is that waiting for all agreements to be listed together would delay implementation of all but the final agreement and would see DHBs missing out on savings opportunities. PHARMAC’s intention is to have all contracts in place by July 2017.
Wanted access to tiered pricing and discount levels This is confidential and commercially sensitive information and would not be released to any third parties.
Concern that preferential treatment was being offered to Stryker by listing them first and that not all respondents would be given the opportunity to list

This was the first of what was expected to be a number of contracts as we work through the negotiation process.

Further negotiations are underway and PHARMAC would continue to enter into agreements with suppliers as appropriate. DHBs can continue to use other products, so we do not consider there is a significant disadvantage to other suppliers that have participated in the process.

Concern that PHARMAC take into account safety requirements for both patients and DHB staff, particularly in relation to crate weights of products

All products require WAND registration and proof of international compliance certificates.

PHARMAC contracts require suppliers to comply with the DHBs policies and procedures when supplying products, and this includes observing all relevant health and safety requirements.

Concern that PHARMAC address supply chain sustainability, waste minimisation product rationalisation within DHBs, reduce costs and increase competition. PHARMAC considers these matters in its evaluation in the context of its statutory 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.

More information

If you have any questions about this decision, you can email us at enquiry@pharmac.govt.nz or call our toll free number (9 am to 5 pm, Monday to Friday) on 0800 66 00 50.