Proposal to award sole supply of leflunomide

• award Sole Supply Status in the community for leflunomide to Apotex NZ Limited (Apotex) for its Apo-Leflunomide brand of 10 mg and 20 mg tablets from 1 September 2017 until 30 June 2020.
• award Hospital Supply Status for leflunomide to Apotex for its Apo-Leflunomide brand of 10 mg and 20 mg tablets from 1 June 2017 until 30 June 2020, with a 1% DV limit.

In summary, this proposal would result in:

• the 10 mg and 20 mg presentations of Apo-Leflunomide brand being listed on the Pharmaceutical Schedule from 1 April 2017 without any restrictions.
• the Arava brand of leflunomide being delisted from Section B of the Pharmaceutical Schedule from 1 September 2017 and from Part II of Section H of the Pharmaceutical Schedule from 1 June 2017.
• a reduction in price across both strengths of leflunomide.

It is estimated that this proposal would provide discounted savings of approximately $9 million over the next five years ($7 million of savings over the sole supply period). These savings would then be available to invest in other pharmaceuticals.

Feedback sought

PHARMAC welcomes feedback on this proposal. To provide feedback, please submit it in writing by Wednedsay, 24 August 2016 to:

Matthew Wolfenden
Procurement Manager
PHARMAC

Email: procurement@pharmac.govt.nz
Fax:     04 460 4995
Post:    PO Box 10 254, Wellington 6143

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, 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.

Details of the proposal

• Apo-Leflunomide (leflunomide) 10 mg and 20 mg would be listed in Section B and Part II of Section H of the Pharmaceutical Schedule at the following prices and subsidies (ex manufacturer, excluding GST) from 1 April 2017:

• Apo-Leflunomide would be awarded Sole Supply Status for leflunomide from 1 September 2017 until 30 June 2020 and Hospital Supply Status for leflunomide from 1 June 2017 until 30 June 2020, with a 1% DV limit.
• The subsidies for the currently listed Arava brand of leflunomide would be reduced from 1 June 2017 via the application of reference pricing to Apo-Leflunomide as follows:

• If the suppliers of Arava tablets decide not to reduce the price of their products to match the subsidy, a patient part charge would apply on the brand.
• Arava 10 mg and 20 mg tablets would be delisted from Section B of the Pharmaceutical Schedule from 1 September 2017 and would be delisted from Part II of Section H of the Pharmaceutical Schedule from 1 June 2017.

The appearance of the Apo-Leflunomide tablets is similar to that of the Arava tablets:

• Both brands of 10 mg tablets are white and round. Apo-Leflunomide 10 mg is 5 mm in diameter as opposed to 7 mm for the Arava tablets.
• Both brands of 20 mg tablets are arc triangular shaped and are 7 mm in diameter. The Apo-Leflunomide 20 mg tablet is white whereas Avara 20 mg is pale yellow.

Background

Leflunomide belongs to the group of pharmaceuticals called DMARDs (disease-modifying anti-rheumatic drugs) and is used in the treatment of rheumatoid arthritis and active psoriatic arthritis.

PHARMAC currently lists and fully subsidises the Arava brand of leflunomide 10 mg and 20 mg tablets in Section B and Part II of Section H of the Pharmaceutical Schedule, without restriction. Arava has subsidy and delisting protection until 31 March 2017.

Current annual expenditure on leflunomide is $2.45 million in the community (financial year ending 30 June 2016). There are 4,230 people in New Zealand receiving leflunomide, 73% of whom are dispensed leflunomide over a period greater than four months.

In June 2016, PHARMAC invited tenders for the sole supply of leflunomide to DHB hospitals and/or community pharmacies. This proposal to award tenders to Apo-Leflunomide for Sole Supply Status and Hospital Supply Status for leflunomide is the result of this process.

Apo-Leflunomide has met Medsafe’s standards for registration in New Zealand, including a requirement that Apo-Leflunomide demonstrate bioequivalence to Arava, meaning that patients could expect to get the same clinical benefit from Apo-Leflunomide as from their current brand.

It is estimated that this proposal would provide discounted savings of approximately $9 million over the next five years ($7 million of savings over the sole supply period). These savings would then be available to invest in other pharmaceuticals.