Sole supply – it’s all about competition
Using competition to choose one supplier of a product is a recognised business strategy – and it’s the same at PHARMAC.
We use sole supply to get the best deal on off-patent medicines. Patients don’t see the competition – but we use it among suppliers, asking them to bid against each other to get the best price. This approach has long-term benefits. Since 1997 when we began tendering for off-patent (or generic) medicines, we’ve saved over $400 million which has then been available to reinvest in new medicines. Our experience is that using dual or multiple supply would lead to higher prices. In one recent competitive process, the average across all bids was 17% higher for dual supply than for sole supply. If this was the case across all tendered medicines, it would represent $17 million of extra spending, money we then wouldn’t have available to invest in new medicines. We think carefully about which medicines to choose for sole supply. This includes taking into account factors like taste, colour or shape of the pill, or the type of packaging the medicine comes in. We seek the public’s feedback on our tender list and advice from a committee of health professionals. These careful steps are all designed to ensure we make the best decisions we can, and implement them well so the change is as smooth as possible for patients and health professionals. Problems are rare but they can arise, but most brand changes go smoothly. In the past year we have changed the brands of three commonly-used medicines that have impacted on over half a million New Zealanders. We have watched these changes carefully, and overall they have gone well. What if people can’t take the new brand? We’ve looked at a mechanism that would enable some people to remain on the old brand (about 1% of patients), called Alternative Brand Allowance (ABA). But when we sought feedback on the ABA proposal, feedback was that it wouldn’t be workable. This was mainly because pharmaceutical companies said that there would be practical difficulties in managing stock and supply if one company only had a 1% market share.
We’ve also seen how difficult it could be to ensure such a scheme is targeted and used by doctors. So we have decided not to put an ABA in place. Instead we will continue to take care with which medicines to choose for our tender, and take appropriate steps to help people adjust to the change.
PHARMAC - November 2009 Newsletter
Last month we held the second PHARMAC Forum. The event was well attended by over 100 people who all brought different dimensions to the discussions during the day. As well as reporting back to people on the progress we have made putting in place the workplan we committed to from Forum 2007, we also sought people’s feedback on work we are undertaking around generic medicines, and consumer participation. Overall, the day was very constructive and gave us food for thought as we continue to improve the work we do for New Zealanders. Putting such a large number of people from a range of backgrounds in a room once again emphasised to us how passionate people are about pharmaceuticals and health. And in talking the issues through, we find we all have more commonalities than differences. We’ll be using the feedback we received from the Forum to assist with our work, and to form a further workplan which we will report back to people at a future Forum.
Consumer participation with PHARMAC what changes are needed? Demystifying PHARMAC’s economic assessments of medicines. How do we improve medicine brand changes for patients and health professionals?
One of the subjects we sought people’s views on at the Forum was our work in improving consumer participation at PHARMAC. We already interact with consumers and seek their views in a number of ways – including through consultation, face to face meetings or through our Consumer Advisory Committee. The work we’ve begun is looking for ideas to improve the work we already do. We’ve issued a discussion paper and are seeking feedback on it until 4 December. The paper outlines the work PHARMAC already does and puts forward seven options for improvement, and seeks further ideas. Broadly, the seven options involve providing more information for consumers, more and formal face to face meetings, and giving consumers greater opportunity to contribute to our funding decisions.
PHARMAC - November 2009 Newsletter
New medicines funded
A new financial year is underway and we’ve been hard at work funding new medicines, and widening access to some others. For the current financial year the Government has allocated an additional $40 million for pharmaceuticals, which has made many of these decisions possible. Overall, these and other decisions represent a major investment that will improve both New Zealanders’ quality and length of life. Medicines funded, and their uses (2009/10 financial year to date):
Medicine (brand) Bupropion (Zyban) Azithromycin Entecavir (Baraclude) Adalimumab (Humira) Dasatanib (Sprycel) Sildenafil Bosentan Iloprost Raltegravir (Isentress) Aprepitant (Emend) Rituximab (Mabthera) Mirtazipine
Used for Smoking cessation cystic fibrosis Hepatitis B
Decision type New listing Wider access (previously funded for chlamydia New listing
Auto-immune disorders including Wider access (previously funded for rheumatoid psoriatic arthritis and psoriasis, and ankolysing spondilitis arthritis) chronic myeloid leukaemia Pulmonary arterial hypertension Pulmonary arterial hypertension Pulmonary arterial hypertension HIV/AIDS Nausea associated with chemotherapy treatment Indolent non-Hodgkins lymphoma Depression New listing New listing New listing New listing New listing New listing Wider access (previously funded for some other types of lymphoma) New listing
Improving access to subsidised medicines
We’ve issued a discussion paper reviewing the ways people receive subsidised pharmaceuticals in New Zealand. At present, the main mechanism is for doctors (or other prescribers like midwives or nurse prescribers) to issue a prescription which is dispensed from a pharmacy. However, there may be other or better ways to give people access to funded medicines. Should a wider range of health professionals be able to access subsidised pharmaceuticals? Can delivery mechanisms to patients for some pharmaceuticals be improved? These are the types of questions we’d like people to turn their minds to in reviewing our Discussion Document (available at http://www.pharmac.govt.nz/ patients/haveyoursay/consultation). Feedback is being sought until 24 December.
Pharmaceu tical Subsidy Elig ibil and Delivery ity Review
PHARMAC - November 2009 Newsletter
Together with Plunket and the Paediatric Society, we’ve produced a new leaflet to give parents and caregivers advice on giving medicine to babies and toddlers. It’s a practical guide for a sometimes difficult but important task – making sure small children get their intended medicine. The leaflet is available free from pharmacies, doctors’ surgeries and Plunket rooms, or from www.pharmaconline.co.nz.
Pra c for tical t ips giv i to kids ng med icin e
Havin g trou ble g etting your child to tak e the ir me dicin e?
Guide to cost utility analysis (CUA)
Cost Utility Analysis (CUA) is an important but little understood part of our work. It is technical and complex, and not always easy for someone without expert knowledge to know what is included in it. So we’ve produced a new guide for people, written in Plain English, to help demystify this area of our work.
Cost-Utility Explained Analysis (CUA)
The guide was released at the PHARMAC Forum and is available from www.pharmaconline.co.nz.
Online resource centre
PHARMAC produces quite a few resources for health professionals, as well as for patients and as part of our information campaigns like One Heart Many Lives. So we’ve set up a dedicated website (www.pharmaconline.co.nz) – which is essentially an online `shop’ - to help people access information. Pharmaconline is replacing the fax-back service we previously used to enable health practices to order resources, and the resources will continue to be free. This should make it even easier to keep abreast of PHARMAC’s work and activities..
PHARMAC is the Government agency responsible for deciding which medicines are subsidised for New Zealanders. It manages spending on pharmaceuticals for the District Health Boards, and ensures that a comprehensive list of medicines (the Pharmaceutical Schedule) is subsidised for New Zealanders, and that the list of medicines continues to grow to meet the needs of patients. Contact: PHARMAC, Level 9, Cigna House, 40 Mercer Street, PO Box 10-254, Wellington 6143, New Zealand Phone: +64 (0)4 460 4990 - Fax: +64 (0)4 460 4995 - www.pharmac.govt.nz
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NOVEMBER 2009 Sole supply – it’s all about competition Using competition to choose one supplier of a product is a recognised business strategy – and it’s the same at PHARMAC. We use sole supply to get the best deal on…
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