Agreement with Boston Scientific New Zealand Limited for the supply of Interventional Cardiology Devices

Hospital devices

Decision

PHARMAC is pleased to announce the approval of an agreement with Boston Scientific New Zealand Limited (“Boston”) for the supply of interventional cardiology devices.

PHARMAC is pleased to announce the approval of an agreement with Boston Scientific New Zealand Limited (“Boston”) for the supply of interventional cardiology devices. This was the subject of a consultation letter dated 1 February 2016 which can be found on PHARMAC’s website.

In summary, the effect of the decision is that:

  • A range of 1016 interventional cardiology devices will be listed in Section H, Part III, (‘Optional Pharmaceuticals’) of the Pharmaceutical Schedule from 1 April 2016.
  • DHB hospitals can purchase these items either directly from Boston or through a designated third party logistics provider under the national agreement.
  • For the DHBs that currently use these products the national agreement will deliver savings of approximately $1.5 million per annum nationally, based on current usage.

Details of the decision

Following a Registration of Interest document issued in April 2014, PHARMAC has entered into an agreement with Boston for the supply of a selection of interventional cardiology devices to be listed on the Pharmaceutical Schedule. This means that DHB hospitals that purchase these products should do so under the national agreement at the new pricing from 1 April 2016.

The list of products will be available on PHARMAC’s website  in both a PDF document and a series of Excel spreadsheets as of 1 April 2016.

There are estimated savings to DHBs that currently use these products of approximately $1.5 million per annum nationally, based on current usage.

The agreement is not exclusive. DHBs can continue to purchase other brands of interventional cardiology devices at their discretion.

Educational services will be provided by Boston to DHB personnel on appropriate use of its interventional cardiology devices and will be arranged in a format and at times as agreed with individual DHBs.

Left atrial appendage occlusion (LAAO) devices submitted by Boston have been excluded from the provisional listing agreement. On 23 October 2015 the National Health Committee (NHC) released a statement that the Minister of Health had signed a NHC recommendation that LAAO should not be publicly funded due to insufficient evidence on safety and clinical effectiveness. On this basis we made the decision to not include any LAAO devices in the provisional Agreement. This was discussed with Boston and they agreed with the exclusion.

Feedback received

PHARMAC appreciates all of the feedback that it has received and acknowledges the time people took to respond. All consultation responses received by 19 February 2016 were considered in their entirety in making a decision on the proposed changes.

A summary of the feedback received is provided in the table below:

Theme

PHARMAC Comment

Complexity of the contract makes it difficult for DHBs to analyse individually and against other contracts and to make purchasing decisions.

PHARMAC are aware that supporting DHBs analysis of such complex arrangements is important and we are working towards developing this capacity. Future PHARMAC work will focus on developing tools to assist DHBs in cross-matching interventional cardiology devices across suppliers and in determining the optimal mix of suppliers and products to maximise savings. We will be in contact with DHBs to determine how best to provide this assistance.

Accuracy of supplier data used to estimate savings

PHARMAC agrees that it is imperative to have accurate data to support good decision making. PHARMAC has consistently supported activity in DHBs to improve national data collections as good purchase data can only come from the sector systems. To date supplier data is the best data available, however we will continue to work with DHBs to address any shortcomings it may have.

If to gain the best savings DHB commit to one supplier, this will take out the competitor influence and may push suppliers to leave NZ.

PHARMAC note the concerns of DHBs of sole supply in the devices space and note we consider the impact of rationalisation of supply carefully when instigating competitive processes. PHARMAC consider that this proposal would not alter the risk profile of all DHBs independently choosing a single supplier and is unlikely to negatively affect the competitive situation in this market.

More information

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