Contestable fund for medicines for rare disorders

Medicines Consultation Closed

PHARMAC will be running a commercial process to fund medicines for rare disorders – a request for proposals (RFP). The objective of this process is to improve patients’ access to medicines for rare disorders.

PHARMAC will be running a commercial process to fund medicines for rare disorders – a request for proposals (RFP). A draft of the RFP is attached to this letter. The objective of this process is to improve patients’ access to medicines for rare disorders.

The release of the draft RFP and this consultation letter follows a discussion on the scope and shape of the fund, and the type of medicines it might cover. We now would like your feedback on the contents and process outlined in the draft RFP before we proceed to the next stage, which would be actively seeking proposals from pharmaceutical suppliers.

Contestable fund for medicines for rare disorders [PDF, 166 KB]

DRAFT Request for proposals - Supply of medicines for rare disorders [PDF, 114 KB]


Your feedback is important to us. You can provide feedback by answering the questions that follow, or by providing any other views or information to us. We would prefer this feedback to be in writing, and provided to us at: or

PO Box 10254
The Terrace
Wellington 6143

Your feedback should be provided to PHARMAC by 25 July 2014.

Key points

  • Up to $5 million is available for investment each year, from the 2014/15 financial year onwards, to fund medicines for rare disorders from this contestable process.
  • Any medicines funded through this process would be listed on the Pharmaceutical Schedule. We would expect to continue funding medicines for any patients receiving them through this process, for as long as they continued to benefit according to transparent and measurable clinical criteria. The measurement of this benefit may be subject to Special Authority criteria or assessed via a Panel or similar process.
  • “Rare” would be defined as the long term disorder having a prevalence of one in 50,000 people. This would mean that up 90 New Zealanders might be eligible for treatment with each medicine funded as a result of the RFP in any one year.
  • PHARMAC would be willing to consider a wide range of proposals from suppliers, including individual or multiple product proposals, and risk-sharing proposals to keep expenditure within $5 million per annum.
  • Proposals could be accepted for medicines not yet registered in New Zealand, but not for medicines in the experimental phase of development. Medicines would need to be registered in New Zealand before a Pharmaceutical Schedule listing occurred.
  • PHARMAC has established an expert Subcommittee of clinicians that will provide advice on whether any criteria for patients to be eligible for funding are clinically meaningful and can be implemented.
  • PHARMAC would assess proposals against its statutory objective using its Operating Policies and Procedures (OPP) at the time.


On 8 April 2014 we released a discussion document on the topic of high cost medicines for rare disorders. We announced our intention to test out a contestable fund to improve access to potentially effective medicines for people with rare disorders and sought comments from the public and industry to help iron out some of the detail of how the fund would operate. You can find that discussion document on our website. A summary of feedback received in response to the discussion document can be found in Section Four (p11).

We have decided that we will progress a Request for Proposals (RFP) to seek funding bids from suppliers, and we are now consulting on a draft version of the RFP. This is in line with our aim of making funding decisions in early 2015.

Purpose of this document

This consultation document seeks your feedback on the proposed prerequisites for the RFP (Section One). 

The letter also provides information on the commercial aspects of the proposed RFP process, outlines implications for Named Patient Pharmaceutical Assessment applications and seeks your feedback on proposed changes to the confidentiality clause in the RFP; and

Expressions of Interest are also sought from suppliers based on a draft version of the RFP (Section Three).

Potential funding and process

PHARMAC has identified funding of up to $5 million that will be available each year, from money that had previously been budgeted for the Named Patient Pharmaceutical Assessment (NPPA) Policy. The funding has become available because PHARMAC has listed 42 medicines (to date) on the Pharmaceutical Schedule that were previously being routinely assessed for funding through the NPPA Policy, reducing the expenditure budgeted for the NPPA Policy.

With the funding available, PHARMAC has decided to trial a new commercial approach to seek bids for funding for medicines for rare disorders.

We would require suppliers to submit bids that could be managed from within the up to $5 million we have available each year. This may require suppliers to propose a form of risk sharing or to cap expenditure. Pharmaceutical suppliers would also be able to define the patient population and to propose eligibility criteria for patients to access funded treatment. We will seek clinical advice on whether any patient population and eligibility criteria proposed are clinically meaningful and whether they can be implemented in practice.

Bids that meet the prerequisites outlined below would be evaluated and, depending on the number of bids received, prioritised using the decision criteria (or equivalent) set out in PHARMAC’s then current OPP. PHARMAC would then decide which, if any, bids it would fund in light of the decision criteria (or equivalent) and our Statutory Objective. Successful bids would be listed on the Pharmaceutical Schedule, using Special Authority criteria, restrictions, or access via a Panel or similar process if necessary.

Funding for listed treatments would be ongoing. People who receive medicines funded through the contestable fund would continue to have them funded for as long as they continued to benefit, in accordance with transparent and measurable clinical criteria.

PHARMAC has established a new Subcommittee of the Pharmacology and Therapeutics Advisory Committee (PTAC) – the Medicines for Rare Disorders Subcommittee - whose role is to provide objective clinical advice to PTAC and/or PHARMAC on medicines for rare disorders. The Subcommittee will remain in existence for 12 months to support this competitive process. The Subcommittee has advised PHARMAC that it considered the one in 50,000 prevalence was appropriate to use as a measure of rarity for the New Zealand population, and gave advice on the proposed prerequisites included in the draft RFP.

We also expect to seek advice from the Subcommittee on the bids received, including advice on:

  • Whether bids meet the fund’s prerequisites.
  • The quality of the clinical evidence (particularly regarding health need and treatment efficacy) submitted or otherwise available for any bids for medicines that have not already been assessed by PTAC.
  • Advice on any bids for medicines that have already been assessed by PTAC, to account for new evidence and / or pricing changes.
  • Clinical acceptability and measurability of possible or bidder proposed eligibility criteria and on-going eligibility for funding.

Decisions on funding will be made by the PHARMAC Board or its delegate.

Section One: Proposed prerequisites for the RFP

Prerequisites for medicines for rare disorders

We are proposing to include a set of prerequisites in the RFP to assess whether the bids we receive are eligible to be considered. If a bid meets the prerequisites it would then be assessed, alongside all other the eligible bids, using the decision criteria (or equivalent) set out in PHARMAC’s current OPP at the time. Products included in bids which do not meet the pre-requisites would still be eligible for consideration for Schedule listing, or NPPA funding for individual patients, in line with PHARMAC’s usual decision making processes.

The proposed prerequisites are listed below, followed by a description of each of the prerequisites and some consultation questions.

Disorder related

  1. There is a rare[1] but clinically defined long-term disorder that is identifiable with reasonable diagnostic precision.
  2. Epidemiological and other studies provide evidence acceptable to PHARMAC[2] that the disorder causes a significant reduction in either absolute or relative age-specific life expectancy or quality of life, for those suffering from the disorder[3].

Treatment related

  1. The medicine is regarded as a proven therapeutic modality for an identifiable patient population[4] i.e. the medicine has been approved by Medsafe or an international regulatory authority[5] for the identified indication.
  2. There is evidence acceptable to PHARMAC[6] that the medicine is likely to be clinically effective for the identified patient population[4].
  3. The patient’s absolute or relative age-specific life expectancy or quality of life could be substantially improved as a direct consequence of the treatment[7].

Alternatives related

  1. The medicine is not registered for the treatment of another, non-rare disorder, or if it is, the cumulative prevalence across all the indications still falls within the definition of rare[8].
  2. There is no suitable comparable[9] alternative treatment on the Pharmaceutical Schedule.
  3. There is no suitable[10] funded alternative non-drug therapeutic modality for the rare disorder.

Explanation of prerequisites

Prerequisites one and six – rarity

There is no universally-accepted definition of what ‘rarity’ is. A condition may be considered rare in one part of the world, or in a particular group of people, but be considered common elsewhere.

We are proposin