Consultation on proposed 2021/22 Invitation to Tender: For health professionals

Medicines Tender Closed

Te Pātaka Whaioranga, Pharmac, is seeking feedback from medical groups, DHB hospital pharmacies and other interested parties on the proposed 2021/22 Invitation to Tender (ITT)

Pharmac is seeking feedback from medical groups, DHB hospital pharmacies and other interested parties on:

  • A proposal to tender certain pharmaceuticals for principal supply;
  • The implications of awarding Principal Supply Status; and
  • Commercial proposals as an alternative to tendering.

Pharmac welcomes all feedback on the draft 2021/22 Tender. Feedback received by the deadline may be considered by the Tender Medical Evaluation Subcommittee of PTAC and would be considered by the Pharmac Board (or its Delegate, where applicable) prior to making a decision on this proposal. 


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.

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 PSS to the pharmaceuticals listed in Schedule Two, including the impact of a brand change on patients and clinical staff;
  • Your views on which chemicals included in Schedule Two (or associated medical conditions) might have a particular need for funding of an alternative brand, and what the criteria for funding an alternative brand should be; and
  • Your views on whether any product included in Schedule Two might have more than 5% of patients needing to access an alternative brand.

Download a PDF version of this consultation

Feedback should be submitted by the following dates; late feedback may not be considered:

All responses are due by 4 pm (New Zealand Time), Monday 16 August 2021

Feedback should be provided by submitting an email to the Tender Analysts:


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.

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. All tender documents and consultations are also available from the Pharmac website. We also invite any person or group to contact Pharmac should you wish to meet to discuss the proposals contained in this consultation letter.

Details of the proposed 2021/22 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 Principal Supply Status (PSS) to community pharmacies and/or DHB hospital pharmacies.

Schedule Two is a list of pharmaceuticals that we are considering tendering for Principal Supply Status. [XLSX, 32 KB]

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 2021/22 Tender process would be similar to the 2020/21 Tender in that the 2021/22 Tender would result in awarding Principal Supply Status instead of Sole Supply Status or Hospital Supply Status.

Download the 2021/22 draft Invitation to Tender [PDF, 601 KB]

Key Aspects of Principal Supply Status

  • PSS can apply across community and/or hospital markets (as detailed in Schedule Two).
  • The tender winning brand will be the only brand subsidised in the community and/or purchased by DHB hospitals (subject to any alternative brand allowance) for up to approximately 3 years. The PSS period will conclude on 30 June 2025 for all Tenders awarded from the 2021/22 Tender.
  • Other brands can continue to be marketed, sold and dispensed during the PSS period, but they would not necessarily receive a subsidy in the community.
  • Any pharmaceutical that currently carries a manufacturer’s surcharge in Section B (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.

Alternative brands

  • The shift to PSS that we implemented in the previous Tender enables Pharmac greater flexibility to fund alternative brands for those who may experience, or are at heightened risk of, adverse clinical outcomes as a result of a brand change.
  • DHB hospitals continue to be able to purchase alternative brands up to a certain percent of volume, similar to the Discretionary Variance provisions of Hospital Supply Status.
  • PSS allows Pharmac the flexibility to fund alternative brands in the community:
    • In some cases, this would be through listing (or maintaining the listing of) other brands under Special Authority criteria.
    • In others, we would manage case-by-case approvals through our exceptional circumstances framework.
    • Regardless of the mechanism used, we intend to develop and communicate clear clinical criteria for funding of alternative brands.
  • Brand changes are generally well-tolerated, and we expect that the need for funding of alternative brands will vary by product and will not always be predictable. With that in mind, we are interested in receiving feedback on:
    • Which chemicals (or indications for a chemical) or patient groups might have particular need for funding of an alternative brand (and why), and
    • For those situations, whether you consider that clinical destabilisation can be objectively determined, and if so, how.
  • The draft contractual terms for the 2021/22 Tender do not put a cap on the number of patients for whom Pharmac might fund an alternative brand, however the draft contractual terms include a threshold (indicated by the “ABA Limit” in Schedule Two) above which suppliers would be reimbursed for lost market share. Accordingly, we are interested to understand if you consider that there are any products that we are proposing to tender where more than 5% of patients might need access to an alternative brand.
  • Note that although PSS would give Pharmac the option to fund alternative brands, continued supply of a particular alternative brand cannot always be guaranteed.

Key dates and timeframes for the 2021/22 Tender

The proposed timelines for the 2021/22 Tender are as follows:



19 July 2021

Consultation with suppliers, medical groups and interested parties on the proposed pharmaceutical list and draft 2021/22 Tender.

11 August 2021

Final date for receipt of Alternative Commercial Proposals (ACPs) to tendering by Pharmac.

16 August 2021

Final date for all consultation to be received.

August/September 2021

Pharmac considers feedback from consultation, negotiates with suppliers over any ACP proposals it considers would meet Pharmac’s Factors for Consideration, and enters into provisional contracts with suppliers where appropriate.

September 2021

Meeting of the Tender Medical Evaluation Subcommittee of PTAC to consider clinical issues in relation to the proposed Tender list.

September/October 2021

Consultation and decisions on Alternative Commercial Proposals.

Early November 2021

Issuing of the 2021/22 Tender.

16 December 2021

Invitation to Tender closes.

From end of January 2022

Announcements on 2021/22 Tender decisions will commence.

Contractual obligations for suppliers

A copy of the draft terms and conditions which would form the terms of the 2021/22 Tender contract is in the draft Invitation to Tender document linked above.

Additional Special Terms

Intra-uterine copper devices

Additional Special Terms have been included in the draft 2021/22 Tender contract for intra-uterine copper devices (Schedule Seven). This clause requires any potential suppliers to offer education, training and support resources to patients and healthcare professionals. This clause also outlines the additional information suppliers must provide relating to their Tender Bid. The full Additional Speci