Request for feedback on additional Medical Device categories for PHARMAC

Hospital devices Consultation Closed

PHARMAC is seeking feedback on which categories of hospital medical devices it should focus on next as part of its medical devices programme of work. We expect to be able to begin work in new product categories in the next 12 months.

We have sought initial advice from DHBs via the Joint Procurement Authority established by the District Health Board (DHB) Procurement Strategy, which has helped us shape the proposed categories discussed below.

To assist input, we have created a short list of categories from suggestions received from DHB Procurement advisors, and our own work. These include:

  • Renal Dialysis
  • IV Equipment & Consumables
  • Ostomy & Continence
  • Urology
  • Interventional Technologies
  • Needles and Syringes
  • Endomechanical & Electrosurgical
  • Respiratory Consumables
  • Anaesthetic Consumables
  • Negative Pressure Wound Therapy
  • Enteral Feeding Devices

We seek your views on these and continue to be open to alternative suggestions. To assist feedback we have included some background on PHARMACs work, and the process to date we have used to identify these possible categories. We have also included some questions that may assist your response, however any feedback you have on categories/devices you would like to see PHARMAC expand into in medical devices is welcome.

Please share this consultation with others in your organisation that you feel may be able to provide useful information. We do not expect every respondent to answer all the questions, just those that are relevant or of interest to you.

Providing your views

You can provide your responses to this Request for Feedback in one of the following ways:

1.  Email:

2.  Fax: (04) 460 4995

3.  Post to:   

Medical Devices Consultation
PO Box 10254
Wellington 6143

We would like to start collating the feedback in September, therefore would appreciate all responses by Friday, 30 September 2016.

Information requested under the Official Information Act

Please note that your response and all correspondence you have with PHARMAC may be the subject of requests under the Official Information Act 1982 (the OIA). PHARMAC will generally omit your personal details (name, contact details and any other personally identifying information) from your response, before making it available as part of any request under the OIA, however in your response, please make it clear if you wish such information to be withheld.

If there is any other part of your response or correspondence that you consider could properly be withheld under the OIA, please include comment to this effect along with reasons why you want the information withheld.


In 2012, Cabinet asked PHARMAC to work towards managing hospital medical devices. The Minister of Health‘s expectation was that, “a national PHARMAC procurement approach will achieve value for money as well as ensure national consistency so that patients get equitable access to these treatments wherever they are.”

Given the scale of this task, PHARMAC has been taking a staged approach. We consulted in 2013 on possible areas to start in, and as a result is undertaking activity in the following:

  • Disposable Laparoscopic Equipment
  • Hand Hygiene
  • Interventional Cardiology
  • Medical devices used in the prevention of Venous Thromboembolism (VTE)
  • Medical Thermometer Products
  • Orthopaedic Implants
  • Single Use Instruments
  • Sterile Surgical Gloves
  • Sterilisation Packaging Products & Associated Consumables
  • Sutures
  • Wound care

Our first national contracts for hospital medical devices took effect in February 2014. By 1 August 2016, PHARMAC had negotiated contracts for about 20,000 medical devices, covering approximately $70 million of expenditure per annum. The savings to DHBs from PHARMAC’s contracted medical devices (this financial year and last) are estimated at over $20 million over five years.

PHARMAC has activity for all the initial categories underway, with contracting continuing until early 2017 in some areas. We are also considering procurement options to offer an assured share of the market for some wound care products, and intend to consider in the future what other standardisation opportunities might exist in our inflight categories.

The focus of this consultation is which areas we pick up next as part of our expanding programme.

DHB Procurement Strategy

NZ Health Partnerships and DHBs have identified a clear need for a nationally agreed DHB-wide Procurement Strategy to ensure the best value for money. Over recent months New Zealand Health Partnerships and DHBs have worked with PHARMAC, the Ministry of Business, Innovation and Employment and Ministry of Health to develop a DHB Procurement Strategy(external link).

In accordance with the Strategy, we have sought initial feedback from DHB Procurement Leads, the Procurement Operations Advisory Group, the Joint Procurement Authority, and healthAlliance on which areas PHARMAC should focus on next. The 11 proposed categories arise from that advice. We now seek wider input with a view to determining our next focus areas by the end of October 2016.

Feedback and next steps

Linked above is an outline of the categories we are proposing to undertake activity in and some specific questions about each. We appreciate your time is valuable and hope the detail in this document provides you with an adequate overview of PHARMAC’s current thinking. We do not expect every respondent to answer all the questions, just those that are relevant or of interest to you.

Once we have received feedback, the submissions will be collated and considered. We will use this information to inform which categories to focus on, and help inform the activity in each of these categories. We expect there will be a need for ongoing discussion with stakeholders over the following months as we develop our specific approaches in different areas.  This will be important to help achieve national consistency in managing medical devices, improve transparency of decision-making and improve the cost-effectiveness of public spending to generate savings for re-investment into the health sector.


Our initial activity in new categories is likely to be as follows, with the potential for some adjustment taking account of specific needs:

  • PHARMAC would seek national agreements that are aimed at simplifying the commercial arrangements for clinical products for DHBs. Typically this approach would not impact on availability of products.
  • While it is unlikely these arrangements would significantly impact on clinical practice, we would still want to have appropriate input from clinicians to ensure there is confidence in the processes and arrangements.
  • Contracted devices will be published on the Pharmaceutical Schedule. We will be working with DHBs to ensure negotiated pricing is attractive and any terms and conditions are appropriate. We would consult on any resulting arrangement before committing to them.

We may also consider the strategies contained in PHARMAC’s Operating Policies and Procedures and act on any of those options which could provide a better outcome in gaining benefits for the DHBs. Some of these strategies could include tiered pricing arrangements, or entering into arrangements which involve the sharing of financial or other risks between PHARMAC and the supplier. If you wish to view PHARMAC’s Operating Policies and Procedures document, it is available on our website. PHARMAC would consult with DHBs and others should it consider alternative approaches. 

Other medical device categories

While we are building our processes and clinical engagement models, PHARMAC recognise that sector procurement activity in areas we are not considering at this time will need to continue.  We will continue to work via the structures established under the DHB Procurement Strategy to ensure coordination of our work.

DHBs currently include clauses in agreements allowing them to exit if a national agreement is put in place. If you think it is helpful PHARMAC is prepared to provide an updated standard clause to DHBs.