Proposal to list a range of Sutures supplied by Johnson & Johnson (New Zealand) Limited

Hospital devices Consultation Closed

PHARMAC is seeking feedback on a proposal to list a range of suture products in Part III of Section H of the Pharmaceutical Schedule as the result of a provisional agreement (“Agreement”) with Johnson & Johnson (New Zealand) Limited (“J&J”).

In summary, this proposal would result in 1,199 suture products being made available for DHBs to purchase from 1 July 2016 subject to consultation and approval by PHARMAC’s Board (or its delegate). Some of these sutures are already supplied to DHB Hospitals.

The Agreement is not a sole supply agreement, and DHB hospitals may choose to purchase other suppliers’ brands of suture products.

PHARMAC estimates that the proposed pricing would offer approximately $800,000 in savings per annum to those DHBs that currently purchase the products. We understand J&J made the pricing in the PHARMAC proposal available to DHB hospitals in February 2016 in anticipation of a provisional agreement being reached with PHARMAC.

Feedback sought

PHARMAC welcomes feedback on this proposal. To provide feedback, please submit it in writing by Friday 27 May 2016 to:

Rob Turner
Devices Category Manager
PHARMAC      
PO Box 10254
Wellington 6143

Email: rob.turner@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 decisions on these proposals.

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

If the Agreement is approved by PHARMAC’s Board (or its delegate), J&J’s range of sutures would be listed in Part III of Section H of the Pharmaceutical Schedule from 1 July 2016.

Where a DHB hospital chooses to purchase suture products from J&J, they would be required to purchase at the price stated in the Agreement, effective from the date of listing on the Pharmaceutical Schedule.  

The exact product list, pricing and specific Agreement arrangements in the proposal have not been included in this consultation for brevity. Brand ranges include:

  • Ethibond Excel       
  • Ethilon  
  • Mersilene          
  • Mersilk               
  • Monocryl                                                                  
  • Monocryl Plus                                                          
  • Nurolon                                                                    
  • PDS                                                                         
  • PDS II                                                                      
  • PDS Plus
  • Perma-Hand
  • Prolene
  • Pronova
  • Stratafix
  • Vicryl
  • Vicryl Plus
  • Vicryl Rapide

Pricing for suture products in the Agreement, subject to any prior termination of the agreement, would not be increased before 1 July 2018.

The Agreement has a tiered pricing arrangement that could offer further savings to the price listed on the Pharmaceutical Schedule 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 Agreement includes terms for education services to be provided by J&J to DHB personnel on appropriate use of the sutures, which would be provided at times as agreed with individual DHBs.

Background

In the May 2013 PHARMAC consultation, sutures were identified as one of initial categories PHARMAC would be working on as part of the phased plan for PHARMAC to progressively take on the management of hospital medical devices.

In September 2013 a direct approach to the known suppliers in the New Zealand market, with comprehensive surgical suture ranges was made. This approach was in the form of a request for a submission to PHARMAC for a listing on the Pharmaceutical Schedule and J&J responded to this request.

This process has also resulted in the listing of sutures supplied by:

  • Covidien New Zealand Limited;
  • Intermed Medical Limited; and
  • Universal Specialities Limited (USL).