PHARMAC moving to next stage of medical devices activity

Media release Hospital devices

PHARMAC is consulting on moving to the next stage in its hospital medical devices work – market share procurement.

This next stage of activity would see PHARMAC offering suppliers an assured portion of the market in return for competitive pricing and quality products in appropriate cases.

“Today we are launching a discussion document so we can seek feedback from our colleagues in the health sector on our proposed approach to market share procurement,” says Director of Operations Sarah Fitt.

PHARMAC is proposing to use market share as a way to encourage competition and to achieve the best health outcomes for patients from hospital medical devices spending. District Health Boards (DHBs) spend up to $1 billion per annum on medical devices used in hospitals.

“We want to improve the value for money we get from spending on medical devices and ensure that we are providing national consistency in access to medical devices,” says Director of Operations Sarah Fitt.

The Discussion Document proposes that wound care would be the first category to be considered for market share procurement. PHARMAC has completed most of the national contracting activity in this area and now has enough information about the market and clinical advice to enable it to run a market share approach.

“The feedback we receive from the Discussion Document will help us to refine and develop a well thought-out market share procurement process,” says Sarah Fitt.

In 2012, Cabinet asked PHARMAC to work towards managing hospital medical devices, with the goal of managing expenditure in a more sustainable way, and providing better value for money.

The first national contracts for hospital medical devices took effect in February 2014. By 1 April 2015, PHARMAC had negotiated contracts for about 14,000 medical devices, covering approximately $44 million expenditure. The savings to DHBs from PHARMAC’s contracted medical devices (this financial year and last) are estimated at $11.9 million over five years.

More information: 021 863 342