Condom and NRT bulk distribution decision

Medicines

Decision

PHARMAC is pleased to announce the approval of an agreement with Pharmacy Retailing (NZ) Limited (Onelink) for the bulk distribution and logistics services of funded condoms and nicotine replacement therapy (NRT) pharmaceuticals to community health organisations.

This was the subject of a consultation letter dated 4 May 2017 and the proposal was approved as consulted on. A summary of the decision is provided below; for details of the change please refer to the consultation letter.

In summary, the effect of the decision is that:

  • The New Zealand AIDS Foundation (NZAF) and the New Zealand Prostitutes’ Collective Charitable Trust (NZPC) will be able to order condoms each month, via PHARMAC, to be delivered to any of their registered locations.
  • NRT Authorised Providers will see a change of delivery company after their July 2017 deliveries.
  • Suppliers of condoms and NRT will receive orders from Onelink.

Feedback received

We appreciate all of the feedback that we received and acknowledge the time people took to respond. All consultation responses received by 19 May 2017 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

Responders noted the additional touch points of the proposed supply chain model. They raised concerns about efficiency.

One responder proposed an alternative supply model, through community pharmacies via a mechanism similar to a Practitioner’s Supply Order (PSO) believing it would increase access and be less of an administrative burden to all parties.

We consider that this arrangement is preferable to a distributed supply network (e.g. pharmacies) for the volume of product that is distributed to these organisations.

Responders noted that the proposed changes to the distribution of condoms would make the distribution less flexible and agile by limiting orders to one per month.

Responders were concerned that the changes would also require organisations to hold more stock as well as increase administrative costs.

We consider that periodic ordering is a reasonable expectation, but note that more work may be required to fine-tune the system for some users. We will be working with the key stakeholders over the coming months to refine the ordering arrangements for them.

One responder was concerned about the impact to their users of the time between submitting an order for condoms and delivery.

We note the concern was based on the maximum delivery period of up to four weeks. We estimate that the likely delivery time for condoms is likely to be considerably shorter.

One responder requested the opportunity to obtain bulk supply of condoms from PHARMAC via the proposed distribution system.

We are happy to consider such requests and will be communicating directly with this responder.

One responder was supportive of a change but raised a concern that the proposal encourages ordering stock in bulk, which increases costs through expired stock and wastage.

We note that the ordering patterns and volumes for NZAF, NZPC and NRT Authorised providers have been established for many years, and we are not aware that they have led to significant product wastage.

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.