Proposal to list a range of Orthopaedic Trauma Implants supplied by Smith and Nephew Limited

Hospital devices Consultation Closed

PHARMAC is seeking feedback on a proposal to list a range of orthopaedic trauma implants and associated products (“Medical Devices”) in Part III of Section H of the Pharmaceutical Schedule as a result of a provisional agreement (“Agreement”) with Smith and Nephew  Limited (“S&N”).

In summary, this proposal would result in S&N’s range of Medical Devices being available for DHBs to purchase at PHARMAC negotiated prices from 1 July 2016, subject to consultation and approval.

PHARMAC estimates that the proposal would offer at least $145,000 in savings per annum to those DHBs that currently purchase the Medical Devices and haven’t already taken up the pricing with S&N, and could offer further significant savings should any other DHBs decide to purchase the Medical Devices.

DHBs may continue to choose to purchase other suppliers brands of medical devices.                  

Feedback sought

PHARMAC welcomes feedback on this proposal. To provide feedback, please submit it in writing by 20 May 2016 to:

Maree Hodgson
Devices Category Manager
PHARMAC
PO Box 10 254
Wellington 6143

Email: maree.hodgson@pharmac.govt.nz
Fax:      04 460 4995

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

S&N’s range of Medical Devices would be listed in Part III of Section H of the Pharmaceutical Schedule from 1 July 2016. The product range includes:

Trauma Implants – Brand: S&N

  • External Fixation
  • Foot and Ankle
  • General Fragment
  • Paediatric
  • Hip Fracture
  • Intramedullary nails
  • Wrist, Hand & Elbow

The Agreement includes terms for access to instruments that are required to implant the Medical Devices. This can be accessed both on a consignment or loan set basis depending on the individual DHB hospital’s requirements.

The Agreement includes terms for education services to be provided by S&N to DHB personnel on appropriate use of its Medical Devices, which is to be provided at times as agreed with individual DHBs.  The service and education provided would be at the same level that is currently provided by S&N to DHB hospitals.

The exact product list, pricing and specific Agreement arrangements in the proposal have not been included in this consultation for brevity. The Medical Devices have a tiered pricing arrangement that could offer further savings to the Schedule listed pricing based upon DHB volume commitment. DHBs can choose the level of commitment they wish to make, to determine the pricing tier they would be on.

The details of this tiered pricing arrangement and commitment levels would remain confidential and would only be made available to the appropriate personnel at DHBs to work through with their clinical teams. Some DHBs would already qualify, based on current usage of S&N product, for the second or third tier pricing offered and they would be notified individually.

If the Agreement is approved, by PHARMAC’s Board or its delegate, the range of Medical Devices would be listed in Part III of Section H of the Pharmaceutical Schedule, which contains products with national agreements that DHBs are able to purchase under. We propose that the Medical Devices would not be individually listed in the printed Section H of the Pharmaceutical Schedule, but rather a reference made in Part III of Section H to an electronic source available on our website in an Excel spreadsheet format, and a PDF document.

Background

In September 2013 a direct approach to the known suppliers in the New Zealand market of orthopaedic trauma, spine and cranio-maxillofacial (CMF) implants was made. This approach was in the form of a request for a submission, for non-exclusive national agreements for medical devices, in those ranges, to PHARMAC for a listing on the Pharmaceutical schedule and S&N responded to this request.

PHARMAC had been working with a number of suppliers in order to reach an agreement with them. The S&N agreement will be the last one to be finalised as a result of that process.

PHARMAC has reviewed the initial approach to the orthopaedic implant market and will be releasing an RFP for the entire category. Current listing arrangements for orthopaedic implants or associated products, including this one if approved following this consultation would not be affected by the RFP unless superseded by a further arrangement with the supplier in question. The RFP would not offer exclusivity for the supply of orthopaedic implants or associated products in DHB hospitals.

Suppliers who currently have listing agreements with PHARMAC may choose to submit additional proposals via the RFP to amend their current agreement, to extend their product ranges or submit an entirely new proposal for consideration. 

DHBs would continue to be able to choose which medical devices they purchase.