Request for proposal for the supply of various wound care products to DHB hospitals

This request for proposals (RFP) letter incorporates the following schedules:

• Schedule 1 specifies the wound care productsfor which PHARMAC is requesting proposals and sets out the background to the RFP and the types of proposals sought;
• Schedule 2 describes the process that PHARMAC expects to follow in relation to the RFP;
• Schedule 3 sets out information about the estimated size of the current market for the various wound care products; and
• Schedule 4 contains the Supplier Form in which you are to provide key details of your proposal and basic supplier information.

All proposals must be submitted to PHARMAC via the Government Electronic Tenders Services (GETS) no later than 4.00pm (New Zealand time) on Tuesday, 27 October 2015.

If you have any questions about this RFP, please contact Marcus Kim, by email at marcus.kim@pharmac.govt.nz or by telephone on +64 (04) 901 3207 at PHARMAC. 

Schedule 1:  Wound care products, background to RFP and types of proposals sought

1.  Wound care products

2.  Background to RFP

The background to this RFP is as follows:

1. In August 2013, PHARMAC issued a Registration of Interest (RoI) for listing agreements for the supply of wound care products to DHB hospitals. This process resulted in the establishment of national listing agreements with nine major wound care suppliers for the majority of wound care products currently purchased by DHB hospitals. A list of the wound care products listed in Part III of Section H of the Pharmaceutical Schedule can be found on our website.
2. In April 2015, PHARMAC issued a discussion document on PHARMAC’s proposed approach to market share procurement (MSP) for hospital medical devices. Amongst other things, we consulted on a proposal to progress to MSP for a limited number of wound care products. The majority of respondents were supportive of the proposed approach and the wound care products selected for MSP. A summary of the submissions received and PHARMAC’s responses to the key themes can be found on our website.
3. In addition to consultation feedback, PHARMAC sought clinical advice from the Wound Care Advisory Group (WCAG) to assist with the development of the RFP. We expect to continue to seek clinical advice from the WCAG and other relevant stakeholders throughout the RFP process. The minutes of the previous WCAG meetings can be found on our website.
4. PHARMAC is now seeking proposals for various wound care products identified in Schedule 1, clause 1 above. This RFP is open to all suppliers of wound care products, whether or not currently supplying to DHB hospitals in New Zealand.
5. By undertaking this RFP process, we expect to:
   1. generate a greater level of competition so that further savings can be realised for DHB hospitals, while still providing access to clinically appropriate ranges of wound care products; and
   2. provide national consistency and equitable access to clinically appropriate ranges of wound care products across all DHBs.
6. The impact to DHBs for any RFP decision will depend on the nature of the decision and the current product mix at individual DHBs. It is possible that some DHBs may be required to make changes to the product mix or suppliers depending on the outcome. Where appropriate, we expect to provide support to DHBs to allow a smooth transition into any new arrangements.
7. Under the New Zealand Public Health and Disability Act 2000, as well as under DHBs’ Operational Policy Framework, DHBs are required to comply with the pharmaceutical schedule as determined by PHARMAC.

3. Product range and discretionary variance limit (DV Limit)

1.  We are seeking proposals for up to three suppliers for each of the product types outlined in Schedule 1, clause 1 above, with decreasing levels of discretion for DHBs to purchase outside the selected suppliers as the number of selected suppliers increases. The possible outcomes of the RFP process for each wound care product type are as follows:

PHARMAC anticipates the terms and conditions relating to DV limits will operate on the following basis:

2.  A DV limit applies separately to each product type described in Schedule 1, clause 1 above (eg combine dressings (sterile)).

3.  A DV product is any product that is not listed (including because it is delisted as a result of this RFP), but could otherwise be described as belonging to the relevant product type described in Schedule 1, clause 1 above. References to DV products could include references to branded products currently listed under PHARMAC contracts or similar products.

4.  DV limit usage for DHB hospitals will be reviewed to monitor compliance at least once every 12 months, with additional reviews at PHARMAC’s discretion.

4. Compression bandage kits

1. During the WCAG meeting in June 2015, PHARMAC received advice that it would be appropriate to seek proposals for a 2 layer compression bandage kit system to cover the entire compression bandage kit market, as long as there was a 5% DV limit so that other compression bandage kits could be used (ie 3 – 4 layer compression bandage kits). The WCAG also advised that if additional 3 – 4 layer compression bandage kits were clinically required, it would be possible to create this system using the various compression bandages.
2. As shown in the types of proposals being sought below, PHARMAC is seeking proposals for both 2 layer and 3 – 4 layer compression bandage kits. PHARMAC is also seeking proposals for 2 layer compression bandage kits to cover the entire compression bandage kit market (ie both 2 layer and 3 – 4 layer compression bandage kit market).

5.  Syndication - New Zealand Defence Force

This RFP process is led by PHARMAC on behalf of the DHBs in accordance with PHARMAC’s statutory functions. At the request of the New Zealand Defence Force (NZDF) PHARMAC also plans to secure the right for NZDF to obtain the same terms and conditions of supply as the DHBs under any agreement(s) entered into as a result of this RFP. This may be achieved by way of closed syndicated agreement(s), or by way of separate agreement(s) between NZDF and any successful supplier(s).

PHARMAC is willing to consider the following types of proposals for listing in Section H of the Pharmaceutical Schedule for use in DHB hospitals:

1.  Combine dressings (includes Gamgee dressings): simple cotton based dressings with absorbent layer with soft non-woven fabric cover and soft end seals.

2.  Compression bandages (includes compression bandage kits and layers used to create compression bandage system)

3.  Foam dressings (excludes antimicrobial foam dressings)

4.  Laparotomy sponges

5.  Low adherent dressings with adhesive border

6.  Securement bandages (excludes tubular bandages)

7. Proposals must include wound care products that meet all the mandatory requirements as set out in Attachment One. For example, proposals for combine dressings (sterile) market must include products that are sterile, low-linting and have non-woven covers.

Note that:

7.1  Where sizes are specified for products in Attachment One, preference will be given to proposals that offer product ranges that have the same or similar sizes to those specified.
7.2  Where the following specifications are stated for a product type, proposals should include product ranges that meet those specifications:

• • • ABPI levels (Low ABPI, High ABPI).
    • Stretch (None, Low stretch, High Stretch).
    • Adhesive border (With adhesive border, Without adhesive border).
    • Shape of foam dressings (Digit dressings, Heel shaped dressings, Oval shaped dressings, Sacrum dressings, Other shaped dressings for difficult body contours).
    • Tape (With tape, Without tape).

8.  Suppliers may choose to submit single, dual or three supplier proposals for each of the product types listed from (a) – (f) above. If a supplier chooses to submit only one type of proposal (eg single primary supplier with 20% DV limit for securement bandages (sterile)), that proposal will not be able to be accepted if PHARMAC decides to progress with other types of proposals (eg dual or three supplier proposals for securement bandages (sterile)).

9.  Proposals for dual or three suppliers may also include volume based tiered pricing. Tiered pricing proposals must:

9.1  be based on a percentage range of individual DHB purchasing volume for each product type described in (a) – (f) above; and
9.2  not include more than three tier levels for each product type (eg 0 – 30%, 31 – 80% and 81 – 100%).
Note that:
9.3  Suppliers that submit tiered pricing for dual and/or three supplier proposals must also provide flat pricing for the selected product type.
9.4  Tiered pricing if adopted would be published and made freely available to all DHBs, including individual DHBs and DHB staff.

10. PHARMAC is not willing to consider the following types of proposals:

10.1  Proposals that involve cross-bundling across different wound care subcategories (eg securement bandages and combine dressings) or other hospital medical devices (eg foam dressings and sutures).
10.2  Proposals for wound care products not listed under wound care subcategories listed in (a) – (f) above.

11.  PHARMAC expects there would be a transition period of at least three months where any successful supplier’s brand of wound care products would be listed in Section H of the Pharmaceutical Schedule along-side the currently listed brands of wound care products, prior to the currently listed brands being delisted (other than any successful brands).

12.  The transition period would be to allow DHBs to coordinate change to any new market share arrangements. The exact length and term of the transition period would be determined following consultation with DHBs and other stakeholders on any provisional agreements arising from this RFP, but would be no shorter than three months.

13.  PHARMAC anticipates that the duration of any exclusive listing agreement would be 36 months starting from the first day of the month of the exclusivity period as agreed between the successful supplier and PHARMAC. The exclusivity period excludes any transition period as described in (k) – (l) above.

14.  At the end of the exclusivity period, the successful supplier’s wound care products would cease to have any exclusive supply status in DHB hospitals, but would remain listed in Section H of the Pharmaceutical Schedule subject to the terms and conditions as agreed between the successful supplier and PHARMAC.

15.  Proposals should be submitted on the basis that there may be incremental changes or upgrades for the proposed wound care products during the life of the contract, and that if agreed between PHARMAC and the successful supplier, the changed or upgraded product would be made available to DHBs within a reasonable timeframe.

16.  Suppliers must complete the attached Supplier Form (Schedule 4) and submit proposals in accordance with the Proposal Form provided as Attachment Two (in Excel format). Proposals that do not include the completed Supplier Form or not conforming to the Proposal Form may be excluded for consideration.

Subject to the above, PHARMAC is open to considering any other types of proposals you may wish to put forward. For the avoidance of doubt, PHARMAC may vary aspects of the supply arrangements set out above and may consider, at its sole discretion, any other alternative supply arrangements.

Schedule 2:  RFP process

2.   RFP supplier meetings

PHARMAC may consult with you before deciding whether to disclose Confidential Information for the purposes described in sub-clauses (i) to (iv) above. You acknowledge, however, that it is for PHARMAC to decide, in its absolute discretion, whether it is necessary or appropriate to disclose information for any of the above purposes, provided that PHARMAC shall act in good faith in disclosing any Confidential Information.

Schedule 3:  Estimated DHB hospital market size for various wound care products

The following information relates to the estimated market size for the various wound care products in DHB hospitals over the period Q2 2014 – Q2 2015. This information has been sourced from DHB datasets provided to National Procurement Services. We note that in certain cases, there have been reports of either under or over-reporting of DHB purchases within these datasets.

The information is approximate and indicative only. PHARMAC makes no representation as to the accuracy of this information or as to the level of sales or likely sales of the various wound care products and, while PHARMAC has taken all reasonable care in preparing the information set out below, it accepts no liability for any errors or omissions in the information. PHARMAC is not obliged to notify you in the event of any change to the figures below.

An electronic version of this form and the Proposal form (in Excel format) is available on GETS (www.gets.govt.nz(external link)) or on PHARMAC’s website. You should expand the boxes as necessary.

You must complete both this Supplier Form and the Proposal Form attached as Attachment Two (in Excel format).

[Supplier to insert date]

Director of Operations
PHARMAC
C/- Marcus Kim
Procurement Manager/ Team Leader Procurement

By electronic transfer using GETS (www.gets.govt.nz(external link))

Dear Sir/Madam

Proposal for the supply of various wound care products

In response to your request for proposals (RFP) dated [insert date], we put forward the following Supplier form with the completed Proposal form (in Excel format):

Set out below is further information in support of our proposal.

(a)       Our contact details:

(a)       Key features of our proposal: [no longer available]

(b)       Information about our company structure: [no longer available]

(c)       Information about our management and technical skills: [no longer available]

(d)       Information about our financial resources: [no longer available]

(e)       Information about our current supply arrangements, supply volumes and relevant supply terms in other major markets including recent tenders awarded (in New Zealand and/or other countries): [no longer available]

(f)        Information relating to continuity of supply of wound care products in New Zealand. This should include information on stockholding, minimum order size, delivery frequency and lead times for a stable demand situation, in the event of supply disruptions and when there is an unexpected surge in demand for your wound care product. Please include any specific measures you will take to secure stock for New Zealand from international production.

(g)       Information about our previous supply performance and relevant expertise: [no longer available]

(h)       Information about our quality assurance processes (where applicable): [no longer available]

(i)         PHARMAC is not liable in any way whatsoever for any direct or indirect loss (including loss of profit), damage or cost of any kind incurred by you or any other person in relation to this RFP.

(j)         Information about current or proposed resources and activities we would make available or implement to support DHBs, clinicians and patients during and following a brand switch to our product (eg training, customer support and education resources): [no longer available](i)         Our proposed distribution and supply arrangements for the various wound care products (this includes any information regarding freight or delivery costs to DHBs): [no longer available]

(k)       Information on current or proposed complaints management processes, including ability to recall stock, refund or credit for damaged or faulty goods: [no longer available]

(l)         Any additional information that PHARMAC should consider when evaluating our proposal: [no longer available]

Signed for and on behalf of <insert name of submitter> by

____________________

<Insert name>
<Insert designation>