Condom and NRT bulk distribution

Medicines

Consultation Closed

PHARMAC proposes changes to the way in which funded condoms and nicotine replacement therapy (NRT) pharmaceuticals are delivered in bulk to certain organisations.

This includes awarding a distribution and logistics service agreement to Pharmacy Retailing (NZ) Limited (Onelink).

Consultation closes at 5 pm on Friday, 19 May 2017 and feedback can be emailed to procurement@pharmac.govt.nz

What would the effect be?

Condoms

The New Zealand Aids Foundation (NZAF) and the New Zealand Prostitutes’ Collective Charitable Trust (NZPC) would be able to order condoms each month, via PHARMAC, to be delivered to any of their registered locations. This would reduce the administrative burden and costs for these charitable organisations.  

NRT

NRT Authorised providers would see a change in the delivery company after their July 2017 deliveries.

For listed suppliers of condoms or NRT

  • Suppliers would receive purchase orders from Onelink.

Not affected by this proposal

  • Patients
  • Prescribers
  • Community or hospital pharmacies
  • The proposal would not affect the funding of these products on a Practitioner’s Supply Order (PSO) or Bulk Supply Order (BSO), which will continue to be supplied by community pharmacies.

Who we think will be interested in this proposal

  • Ministry of Health Authorised Providers of NRT
  • Department of Corrections
  • New Zealand AIDS Foundation
  • New Zealand Prostitutes’ Collective Charitable Trust
  • Suppliers of condoms and NRT

Why we’re proposing this

PHARMAC has historically had a lead role in managing national-level direct distribution arrangements for community pharmaceuticals. Our direct-to-provider distribution arrangements have, to date related to bulk provision of funded pharmaceuticals to service providers who are generally not health practitioners, but are nonetheless providing a health-related service.

Our current distribution arrangements for condoms and NRT would benefit from rework. The management of these arrangements is very manual, with PHARMAC staff handling all orders and invoices; this limits our ability to scale or expand these arrangements any further. It also creates administrative burden and costs for the charitable organisations involved in these arrangements. 

The proposed changes would contribute to PHARMAC’s goal of widening the options for providing funded pharmaceuticals to patients, removing barriers to access and ensuring that the pharmaceutical funding system remains fit-for-purpose and sustainable.

Condoms

PHARMAC has agreements with the New Zealand AIDS Foundation (NZAF) and the New Zealand Prostitutes’ Collective Charitable Trust (NZPC) to provide funding for the bulk purchase of condoms for distribution within the community. This is in addition to the funding of condoms through community pharmacies on a prescription, PSO or BSO.

The NZAF and NZPC currently place separate orders with the suppliers for the condoms to be delivered to their respective Auckland headquarters. They pay for the condoms and are then reimbursed by PHARMAC. The organisations then need to arrange for their own distribution to their regional sites at additional cost.

Nicotine Replacement Therapy

NRT is listed on the Pharmaceutical Schedule and subsidised through a community pharmacy on a prescription, PSO, BSO or upon presentation of a Quit Card. They are also provided, fully funded by PHARMAC, directly to third party organisations in New Zealand (collectively referred to as “NRT Authorised Providers”). These include prison services, health service providers contracted by the Ministry of Health to provide smoking cessation services and public health units. Following a change to the Ministry of Health contracted service providers on 1 July 2016, there are now approximately 48 NRT Authorised Providers in total.

Orders from NRT Authorised Providers are managed via the PHARMAC Online website and distribution of funded NRT is currently arranged by the NRT supplier. Orders are distributed quarterly and the supplier invoices PHARMAC directly for the pharmaceutical cost (including cost of delivery).

Process

On 11 November 2016, PHARMAC released a Request for Proposals (RFP) for the supply of distribution and associated logistical services in respect of funded NRT and condoms to community health organisations in New Zealand. As a result of the RFP, PHARMAC has entered into a provisional agreement with Pharmacy Retailing (NZ) Limited (Onelink) and feedback to this consultation will help us decide if the agreement should be finalised.

Details about our proposal

If the proposal is accepted, the following would occur from 1 July 2017:

  • NRT Authorised Providers, the NZAF and the NZPC would have until the order deadline (usually the third Friday of the month) to submit their purchase order requests via PHARMAC. Condom orders would be monthly and NRT orders would be quarterly.
    • First orders for condoms would be submitted by 21 July 2017 for delivery before 18 August 2017.
    • The 2017 NRT Authorised Provider ordering schedule would not change. The first Onelink delivery would be October 2017.
  • PHARMAC staff would review the orders and submit corresponding summary order(s) to Onelink by the following Wednesday.
  • Onelink would purchase stock from PHARMAC’s nominated suppliers for funded pharmaceuticals. Suppliers would deliver the bulk order to Onelink in Port Chevalier, Auckland.
  • Onelink would then organise the logistics and deliveries to relevant distribution points around the country in accordance with the agreed period (usually four weeks after the order deadline).
  • Onelink would invoice PHARMAC for the cost of services and the subsidised cost of pharmaceuticals.
  • PHARMAC notes that there would need to be additional time built into the ordering and delivery deadlines around the Christmas period. Full order and delivery schedules would be provided to the stakeholders for planning purposes should the proposal be approved. 

To provide your feedback to this proposal

Send us an email: procurement@pharmac.govt.nz by Friday 19 May 2017.

All feedback received before the closing date will be considered by PHARMAC’s Board (or its delegate) prior to making a decision on this proposal.

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, where 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.