Expansion of PHARMAC's medical devices scope

Hospital devices Decision

Following consultation feedback received in September 2016, PHARMAC has decided to expand its medical devices scope to include the 11 categories set out below:

Group 1

Group 2

Anaesthetic  consumables

IV equipment and consumables

Needles and Syringes

Negative Pressure Wound Therapy

Respiratory equipment & consumables

Endomechanical and Electrosurgical

Interventional Technologies

Enteral Feeding Devices

Ostomy & Continence

Renal Dialysis


  • PHARMAC expects to seek proposals for national agreements for the Group 1 categories in the first half of 2017, with Group 2 categories to follow later in 2017.
  • We are aware of the healthAlliance activity in some of these areas.  We will be coordinating with healthAlliance and New Zealand Health Partnerships to minimise overlap.
  • Following consultation feedback, we will include Respiratory equipment in addition to respiratory consumables.

Peritoneal dialysis

HealthAlliance is in the process of inviting proposals for peritoneal dialysis products, in order to replace contracts due to expire in 2017. PHARMAC will work with healthAlliance as part of their process and will plan its own activity for peritoneal dialysis to ensure resulting healthAlliance arrangements are effective until at least June 2019.  PHARMAC will also work with healthAlliance to align activity with haemodialysis.

Feedback received

We appreciate all of the feedback that we received and acknowledge the time people took to respond. All consultation responses received by 30 September 2016 were considered in their entirety in making a decision on the proposed categories.  PHARMAC received 61 responses providing a range of views on; relative priority of different areas, possible other categories to consider, and possible issues for PHARMAC to be aware of in these categories.  PHARMAC intends to use these responses as it develops its approach in each of the categories.

A summary of the key themes is set out below:

Category planning will consider potential rationalisation, product choice, and scope of activity. 

Theme PHARMAC comment
General support for most categories, with some differences of view around relative priority. PHARMAC has considered comments regarding priority when considering timing of the new categories.
Other device categories were suggested. Some of the suggested areas will be considered in the planning/scoping of the proposed categories e.g. Capnography devices will be considered in the scoping for the Anaesthetic Consumables category, and bariatric devices will be considered for each category.

Range of products that are contracted:

a. PHARMAC needs to carefully consider the balance of rationalisation in a category along with supporting product choice, and the impact on competition.

b. More market share procurement arrangements suggested.

c. Scope of categories need clarification.  Some feedback detailed suggestions for this. Some respondents noted that allowing capital and consumable bundles would be useful.

Category planning will consider potential rationalisation, product choice, and scope of activity.
Robust clinical assessment/evaluation of devices is important.  Some concern was expressed in PHARMAC's capability to undertake product assessment across these areas. DHBs continue to be responsible for product selection and the evaluation process associated with any changes they choose to make.PHARMAC will consider conformance to relevant international standards and any NZ legislative requirements, and will ensure suppliers have a credible offering for DHBs.
One supplier noted concern that contracting with many suppliers can be confusing and suggested no more than two suppliers per category. PHARMAC will consider DHB requirements and market dynamics when deciding how many contractual arrangements to pursue in a category.  

PHARMAC further consider healthAlliance’s activity with Renal Dialysis, IV Pumps, Endomechanical, Electrosurgical and Anaesthetic Consumables, in particular the:

a. Potential risk of delay to existing healthAlliance processes that would impact on DHBs.

b. duplication of effort would frustrate DHBs and suppliers.

c. less value to be gained following healthAlliance activity.

d. potential to go straight to market share following healthAlliance agreements.

PHARMAC will continue to work with DHBs, healthAlliance and New Zealand Health Partnerships to coordinate ongoing activity as medical devices transition to PHARMAC over the coming years.As with any transition, it is likely there will be times when duplication and/or delay is unavoidable. We will seek to minimise the impact of this should it occur.

Different funding structures for capital devices, with four main types identified:

1. Capital purchase

2. Free of charge placement/support, which requires purchase of same supplier’s consumables

3.Price Per Treatment (e.g. Renal Dialysis, includes equipment, maintenance, training and consumables)

4. Lease/Rental

Potential funding structures will be considered in the development of category plans.
Access to new innovations and technologies, including support for infrastructure projects such as WIFI integration, connectivity/interfaces with medical records, and Radio Frequency Identification technology for seamless introduction of future capability. Requirements for innovations and related technologies will be considered in the development of category plans. Suggestions received during consultation will be specifically considered in this process.

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.