Supply chain disruptions caused by COVID-19
21 May 2020
[Name and contact details redacted]
REQUEST FOR INFORMATION
Thank you for your email of 23 April 2020 requesting information about supply of medicines and supply chain disruptions due to COVID-19. Specifically, you asked for the following:
- All correspondence received by Pharmac from manufacturers and suppliers about disruptions to supply chains due to the effects of Covid-19
- All summaries or reports, including drafts, regarding the above information prepared for Ministers or the Ministry of Health
- From which countries does Pharmac source medicines and what is the proportion of products coming from each?
- What contingencies are in place in the case that contracted medicine suppliers are unable to source alternatives in the case of a supply chain disruption?
- How many and which products are currently below the minimum 2-month’s supply required by PHARMAC to be held by suppliers?
Each of your specific information requirements has been addressed in order below.
All correspondence received by Pharmac from manufacturers and suppliers about disruptions to supply chains due to the effects of Covid-19
PHARMAC has intensified its communications with its suppliers in recent months, to ensure that supply chain management and disruption of supply due to the effects of COVID-19 are actively communicated and managed. We will continue to work with our suppliers, District Health Boards, prescribers and pharmacists to manage any shortages of funded pharmaceuticals. We recognise that COVID-19 is likely to produce global impacts on medicine manufacture and supply chains for the remainder of 2020 and potentially beyond
The volume of this correspondence is very extensive and is spread across multiple files. Your request for this information is refused under section 18(f), on the grounds that it cannot be made available without substantial collation or research.
In relation to our reliance on section 18(f) of the OIA (substantial collation), we have considered whether charging, extending the time limit, or consulting with you to refine the request, might enable us to provide the information. We have concluded that these steps would not address the resource impacts of a request of this nature, particularly given that it would necessarily divert staff resources away from the Covid-19 response.
All summaries or reports, including drafts, regarding the above information prepared for Ministers or the Ministry of Health
PHARMAC has recently published its response to another OIA request for reports prepared for the Board or Ministers, between 1 January 2020 and 31 March 2020, concerning the effects of the Covid-19 outbreak on medicine supply. This information is relevant to your request and is publicly available on PHARMAC’s website at: www.pharmac.govt.nz/news/oia-response-effect-of-covid-19-on-medicine-supply/
Additional documentation prepared between 1 April 2020 to 23 April 2020, is enclosed with this response. Information has been redacted from these documents under the following sections of the OIA:
Section 9(2)(a), where the withholding of the information is necessary to protect the privacy of natural persons;
Section 9(2)(b), where the making available of the information—
(i) would disclose a trade secret; or
(ii) would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information;
Section 9(2)(ba)(i), to protect information which is subject to an obligation of confidence, where the making available of the information would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied;
Section 9(2)(g)(i), to maintain the effective conduct of public affairs through the free and frank expression of opinions by or between or to Ministers of the Crown or members of an organisation or officials.
From which countries does Pharmac source medicines and what is the proportion of products coming from each?
The pharmaceutical manufacturing chain has multiple steps. Manufacturing for active ingredients, excipients (inactive ingredients), and final products – as well as quality testing, primary packaging and secondary packaging – can all potentially take place in separate locations. Often suppliers have multiple sites registered for these steps, and even different batches of the same product can potentially come via different supply chains.
PHARMAC enters into contracts with suppliers of pharmaceuticals, not their manufacturers, and it does not generally hold information about the country of origin of imported medicines. Your request for this information is therefore refused under s18(g) of the OIA, on the grounds that the information requested is not held by PHARMAC and we have no reason to believe that the information is held by another department, Minister of the Crown or organisation.
The Medsafe website contains information about New Zealand’s manufacturing, packaging and testing sites for pharmaceuticals: www.medsafe.govt.nz/Medicines/manufacturing.asp(external link).
What contingencies are in place in the case that contracted medicine suppliers are unable to source alternatives in the case of a supply chain disruption?
PHARMAC maintains a solid focus on the continuity of supply of funded pharmaceuticals and medical devices used in New Zealand through the agreements we have in place with suppliers. The responsibility is on contracted suppliers to actively manage their supply chains to maintain robust stock levels, although PHARMAC will actively participate in this process if necessary.
PHARMAC has a number of strategies to manage supply issues. In the vast majority of cases, these interventions will ensure that no clinically-meaningful consequences will arise for patients. Information about these strategies can be found on PHARMAC’s website, at:
How many and which products are currently below the minimum 2-month’s supply required by PHARMAC to be held by suppliers?
PHARMAC only holds reliable information about shortages where the medicine is funded (subsidised) by the New Zealand government, where there is also a supply contract in place with a specific supplier. Data on shortages of medicines held by PHARMAC will therefore represent only a portion of medicines that are available for sale and use in New Zealand.
PHARMAC’s website lists funded medicines and devices that are experiencing stock shortages. See www.pharmac.govt.nz/medicine-notices for the current listing. Under PHARMAC contracts suppliers are generally required to keep a minimum stock in New Zealand equal to two months' demand. There is typically another four to six weeks’ worth of stock available across the wholesale and retail supply chain. Some medicines (for example, some oral antibiotics and, currently, hospital medicines used in intensive care) have a greater minimum stock holding requirement, such as four to six months.
PHARMAC relies on suppliers to keep it informed on a free and frank basis on specific issues in the supply chain and this information is generally supplied on a confidential basis. PHARMAC provides information publicly about stock issues where there is a public impact (see above). In relation to the full information about which medicines are known to have less than two months’ supply, this information is withheld under Section 9(2)(ba)(i) of the OIA. This section permits material to be withheld where it is necessary to protect information which is subject to an obligation of confidence, where the making available of the information would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied.
In compiling this response, we have considered whether the withholding of the information detailed in this letter is outweighed by other considerations which render it desirable, in the public interest, to make this information available. In this case we did not consider that the public interest outweighed the reasons for withholding the information.
Please note you have the right, by way of complaint under section 28(3) of the OIA to an Ombudsman, to seek an investigation and review of our decision.
We trust that this information answers your queries. We are making our information more freely available, so we will now publish selected OIA responses (excluding personal details) on our website. Please get in touch with us if you have any questions about this.
Manager, Policy and Government Services