Proposal to list a range of orthopaedic implants and associated products supplied by Johnson & Johnson (New Zealand) Limited

In summary, this proposal, subject to consultation and approval, would result in:

Schedule listings for around 13,300 orthopaedic implants and associated products, which are already supplied to DHB Hospitals, being supplied by J&J under the terms and conditions of their current suture agreement.

• The products being available for DHBs to purchase at the PHARMAC negotiated prices from 1 August 2017.
• DHBs continuing to be able to purchase other suppliers’ brands of orthopaedic implants and associated products, as the agreement would not be a sole supply agreement.
• J&J continuing to provide educational services that would be tailored to suit the needs of individual DHB Hospitals in formats and times as required by DHB Hospitals.
• A total national DHB saving of approximately $940,000 per annum, with the opportunity for DHBs to access further savings based on a commitment level.

Feedback sought

PHARMAC welcomes feedback on this proposal. To provide feedback, please submit it in writing by 4 pm 23 June 2017 to:

Maree Hodgson
Senior Devices Category Manager
PHARMAC

Email: maree.hodgson@pharmac.govt.nz

Fax:     04 460 4995
Post:   PO Box 10254, 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.

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.

Details of the proposal

PHARMAC entered into an agreement with J&J for the supply of sutures to DHBs dated 20 April 2016. This agreement has been provisionally amended, subject to consultation and approval, to include a range of orthopaedic implants and associated products.

The range of products offered in the agreement are J&J’s DePuy range of orthopaedic implants and associated products in the following sub-categories:

J&J’s range of orthopaedic implants and associated products would be listed in Part III of Section H of the Pharmaceutical Schedule from 1 August 2017.

The exact product list, pricing and specific arrangements in the proposed amendment have not been included in this consultation for brevity. A full detailed list of products is available on request. The proposed orthopaedic implant and associated products ranges would have tiered prices that could offer further savings to the Schedule listed prices based upon DHB volume commitment. DHBs would choose the level of commitment they wish to make to determine the pricing tier they would be on in each of the ranges above. Where a DHB currently meets a volume commitment level they would automatically qualify for the corresponding tiered price.

The details of this tiered pricing arrangement and commitment levels would remain confidential and would only be made available to the appropriate DHB personnel.

If the amendment is approved by PHARMAC’s Board or its delegate, J&J’s range of orthopaedic implants and associated products would be listed in Part III of Section H of the Pharmaceutical Schedule, under their national agreement with PHARMAC.

DHBs would be able to continue to choose which orthopaedic products they purchase.

Background

In April 2016 an orthopaedic implants and associated products request for proposal (“RFP”) was released requesting proposals for non-exclusive national agreements for medical devices, to PHARMAC for a listing on the Pharmaceutical Schedule and J&J responded to this request.

PHARMAC has been working with a number of suppliers in order to reach an agreement with them and will be continuing to do so with others until the RFP process is concluded. The proposed agreement with J&J is the fifth provisional agreement for the supply of orthopaedic implants and associated products that PHARMAC has consulted on, with further expected over the next few months provided we can reach agreement with suppliers.