Decision to list anaesthesia small equipment and consumables devices

Hospital devices

Decision

We are pleased to announce the approval of three individual listing agreements for anaesthesia small equipment and consumable devices (“anaesthesia products”)

What we are doing

PHARMAC is pleased to announce the approval of three individual listing agreements for anaesthesia small equipment and consumable devices.

The agreements cover a range of anaesthesia small equipment and consumable devices (“anaesthesia products”) supplied by:  

  • MedXus Limited (“MedXus)
  • REM SYSTEMS Limited (“REM”)
  • Device Technologies New Zealand Limited (“Device Technologies”)

In summary, this will result in:

  • 462 Anaesthesia Products being listed in Part III of Section H of the Pharmaceutical Schedule from 1 April 2018.
  • National DHB savings estimated at $66,00 per annum on the purchase of these product based on current usage levels. The following table provides a summary of the listings and savings:

Supplier

Brands

Number of products

National Annual Impact on DHBs*

MedXus

KingVision, Ambu, VivaSight, KingSystems, and KingMask

123

$22,000 savings

REM

Airtraq, Medline, Nexus and Trident

153

Cost neutral

Device Technologies

Brite Blade Pro, Brite Solo, ProBreathe, Flexicare and Pharma Filter

183

$44,000 saving

*assumes no change to current usage levels or product mix

These Agreements would supersede any existing DHB contracts with these suppliers for the devices listed in the Schedule One of these Agreements. 

The list of products will be available on PHARMAC's website from 1 April 2018, in both a PDF document and an Excel spreadsheet.

Any changes to the original proposals?

This decision was subject to consultation. The consultation letter for the Device Technology proposal was circulated on 29 November 2017 and the consultation letter for the MedXus and REM proposals was circulated on 18 January 2018.

In response to consultation feedback received, PHARMAC and Device Technologies renegotiated specific terms and conditions of the proposed agreement as a result of feedback from DHBs. 

No changes were made to the MedXus or REM listing agreements as a result of consultation feedback.

Who we think will be most interested

  • Suppliers and Wholesalers
  • DHB Staff
    • Clinical Engineers
    • Anaesthetists
    • Anaesthetic Technicians
    • Clinical staff involved with airway management and emergency respiratory resuscitation
    • Procurement Officers 

Details about this decision

In March 2017 PHARMAC issued a Request for Proposals for Anaesthesia Products. The RFP was for non-exclusive national agreements for listing on the Pharmaceutical Schedule.

The scope of the Anaesthesia Products category was defined as:

  • Airway visualisation devices and associated consumables
  • Stand-alone depth of anaesthesia monitoring systems and associated consumables
  • Consumable medical devices used for the purpose of:
    • Acute airway management
    • Anaesthesia gas delivery

Consumable medical devices included both single use items and defined-life multiple use items.

PHARMAC has been working with suppliers to seek provisional agreements.

DHB hospitals would continue to be able to choose which Anaesthesia Products they purchase, however would need to use these agreements should they choose to purchase MedXus, REM or Device Technologies devices listed in the Pharmaceutical Schedule, effective from 1 April 2018.  

All of these companies have some products that are new to New Zealand DHBs and the Agreements would provide an increased range of Anaesthesia Products from which clinicians could choose.

Pricing for Anaesthesia Products, subject to any prior termination of the Agreements, would not be increased without prior consultation and approval by PHARMAC.

MedXus, REM and Device Technologies will provide training and education services that will be tailored to suit the needs of individual DHBs in formats and at times as required by DHBs.

We intend to consult on proposed agreements for Anaesthesia Products with other suppliers over the next few months. 

Our response to what you told us

We are really grateful for the time people took to respond to this consultation. All consultation responses received were considered in their entirety in making a decision to approve these three provisional agreements. 

A summary of the main themes raised in feedback and our responses to the feedback received are set out below:

Theme

Comment

Some detailed information about the products and proposals was requested by several parties

  • Additional information was provided.

Request for PHARMAC to consider environmental sustainability and ethical manufacturing issues when contracting medical devices.

  • PHARMAC is working on developing a better understanding of how these types of issues could be considered in our processes.
  • As national contracts do not restrict clinician/DHB choice of devices in any way, DHBs are free to engage with the supply companies to obtain information which may assist in determining which devices best meet the DHBs clinical needs, budget needs and environmental/ethical initiatives.

Positive feedback regarding savings

  • Noted.

Request for confirmation that PHARMAC is expecting to contract with other companies for Anaesthesia Products

  • PHARMAC is expecting to contract with other companies.

Recommendation that PHARMAC establish an advisory group well in advance of progressing this category to market share or investment management in the future.

  • PHARMAC would seek clinical advice in advance of considering market share procurement in this category.

Feedback that savings in the proposals are modest and that PHARMAC needs to be able to negotiate national contracts with lower prices than those already negotiated between individual DHBs. Concern expressed that some DHBs may be negatively impacted if national contracts increase equipment purchase prices.

  • Individual DHBs have been provided with an impact analysis for the products they purchase.
  • PHARMAC assesses the financial impact of all contracts at both an individual DHB and national level and aims to achieve savings and minimise price increases.
  • DHBs have the option of purchasing alternate devices if they do not wish to absorb any proposed increases in price.

Feedback identified specific terms and conditions in the Device Technologies proposal that would be problematic for some DHBs.

  • PHARMAC renegotiated the identified terms and conditions with Device Technologies.

Feedback that no technical or resource impacts are anticipated as a result of the proposal.

  • Noted.

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.