This is the text extract for Approval of proposal for funding of additional Abbott nutritional products; Contact: Notifications; Posted: 2012-06-18, browse documents here.

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18 June 2012

Funding of additional Abbott nutritional products (Special Foods) and price changes for Ensure powder, and Elecare and Neocate infant formulae

PHARMAC is pleased to announce the approval of a provisional agreement with Abbott Laboratories NZ Limited (this was the subject of a consultation letter dated 14 May 2012). As a result a number of additional Abbott nutritional products (Special Foods) will be funded and price and subsidy changes will occur for Ensure powder oral feed and the Elecare and Neocate brands of amino acid formula – please note all of these products will be/remain fully funded.

Summary  From 1 July 2012, the price and subsidy for the Ensure brand of standard supplement oral feed powder and the Elecare brand of amino acid formula will change (Ensure and Elecare will remain fully funded). From 1 August 2012, the price and subsidy for the Neocate brand of amino acid formula will reduce (Neocate will remain fully funded). From 1 September 2012, the following products will be listed fully funded: o o o o Pediasure powder (paediatric oral feed) Two Cal HN RTH liquid (enteral feed 2 kcal/ml) Nepro RTH liquid (renal enteral feed 2 kcal/ml) Jevity HiCal RTH liquid (enteral feed with fibre 1.5 kcal/ml)

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Details of the decisions Funding Change for the Ensure brand of standard supplement oral feed powder From 1 July 2012 the subsidy and price of Ensure powder (standard supplement) will change in the Community (Section D of the Pharmaceutical Schedule) as follows (note: it will remain fully funded and subject to the current Special Authority form):

Brand(s) Form Flavour Pack Size Current New Special Price/Subsidy Price/Subsidy Authority Form Standard Supplements (SA1104)

Ensure

Powder

Vanilla Chocolate

900 g OP

$9.50

$13.00

Note: A confidential rebate will apply to Ensure powder. Note: Ensure powder will have subsidy and delisting protection until 30 June 2013.

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Funding Change for the Elecare and Neocate brands of amino acid infant formula The subsidy and price for the Elecare and Neocate ranges of amino acid infant formula will decrease in the Community (Section D of the Pharmaceutical Schedule) as follows (note: both brands will remain fully funded and subject to the current Special Authority form):

Brand(s) Form Pack Size 400 g Current New price/subsidy price/subsidy Effective Date Special Authority Form Amino Acid Formula (SA1111) Amino Acid Formula (SA1111)

Elecare (original, LCP) Neocate (original, LCP, Advance and Gold)

Powder

$56.00

$53.00

1 July 2012 1 August 2012

Powder

400 g

$56.00

$53.00

Note: Elecare will have subsidy and delisting protection until 30 June 2013. Note: The Special Foods Subcommittee of PTAC considers Elecare and Neocate to have the same or similar clinical effect and that reference pricing between these brands is appropriate.

The changes in the funding for the Elecare and Neocate ranges of amino acid infant formula are the result of:    The agreement with Abbott (price and subsidy changes for Elecare); Reference pricing of the Neocate brands to the Elecare brands (subsidy change for Neocate); and, The supplier of Neocate notifying us that it will reduce its price so that Neocate remains fully funded.

Funding of Additional Abbott Products From 1 September 2012 the following additional products will be listed, fully funded in the Community (Section D of the Pharmaceutical Schedule subject to the following prices, subsidies and Special Authority access criteria:

Special Food Brand Form Flavour Pack Size Price/Subsidy Special Authority Form Paediatric Products (SA1100) Adult Products High Calorie (SA1195) Renal Products (SA1101) Standard Supplements (SA1104)

Paediatric oral feed

Pediasure

Powder

Vanilla

900 g OP

$20.00

Enteral feed 2 kcal/ml Two Cal HN RTH Renal enteral feed 2 kcal/ml Nepro RTH

Liquid Liquid Liquid

N/A N/A N/A

1000 ml OP 500 ml OP 1000 ml OP

$11.00 $6.08 $7.00

Enteral feed with fibre Jevity HiCal RTH 1.5 kcal/ml

Note: The Special Foods Subcommittee of the Pharmacology and Therapeutics Advisory Committee (PTAC) has previously considered the above products to be clinically appropriate.

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Hospital Purchase The above products and price will be included in Section H of the Pharmaceutical Schedule making these products and prices available for DHB hospital purchase at the DHB hospital’s discretion. Feedback received We appreciate all of the feedback that we received and we acknowledge the time people took to respond. All consultation responses received were considered in their entirety in making a decision on the proposed changes. The following comments/issues were raised in relation to specific aspects of the proposals:

Comments / Issue There was support for the funding of each of these products. Regarding Nepro RTH it was noted that:  it has a composition specifically for renal disease (protein:phosphate ratio);  it would remove the need for modular feed preparations; and,  it would reduce contamination risks from decanting renal supplements for enteral feeding. It was also noted that Pediasure liquid should not be reference priced to Pediasure powder. PHARMAC Comment

Funding of Nepro RTH, Jevity HiCal RTH, Pediasure Powder and Two Cal HN We appreciate this feedback.

We are not proposing to reference price Pediasure liquid to Pediasure powder.

Reference pricing of the Neocate brands of amino acid formula to the level of subsidy of the Elecare brands There was support for this proposal. The view was expressed that consultation should have occurred when the Special Foods Subcommittee considered reference pricing the two brands, not when a decision has all but been made. We appreciate this feedback. PHARMAC develops proposals relating to reference pricing, not the Subcommittee. The role of PHARMAC’s clinical advisory committees is to provide clinical advice to PHARMAC when required. This is part of the research and information gathering phase of PHARMAC’s decision-making process. PHARMAC believes public consultation on potential Schedule changes is most meaningful when a proposed change to the Schedule can be fully described. If it is described in detail, patients, clinicians and other stakeholders are then able to identify whether a proposal would affect them (whether positively or negatively). Consultation responses are an extremely valuable input into PHARMAC’s decision-making process and proposals frequently change as a result of the feedback we receive.

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Comments / Issue There was a concern that Neocate could incur a part-charge as a result of reference pricing.

PHARMAC Comment When reference pricing is applied, whether or not the reference priced product incurs a part-charge or remains fully funded is up to the supplier of the product. In this case Nutricia has notified of a price reduction and therefore Neocate will remain fully funded. Elecare, Neocate and Vivonex Pediatric will all remain fully funded.

The availability of two amino acid formulae is required as a small number of children are not able to tolerate one or the other another. Ensure Powder There are discrepancies in the subsidy of the products within the Oral feed (powders) category and a lack of reference price transparency. Other Comments Consistent supply is important.

The oral supplement powder products are not referenced priced - the subsidies and pricing have been individually agreed with the suppliers. We agree consistent supply is very important. When we are made aware of supply issues we work with the companies to resolve these and we welcome ongoing feedback on such issues. In April 2011 a decision was made to fully fund infant formulae (previous to this a part-charge similar to the cost of a supermarket formula applied). We continue to consider this appropriate although may not fully fund all brands of the same type of infant formula. PHARMAC must consider the health benefits for all New Zealanders not just specific patient groups. Accordingly the proposal increases the total health benefits gained for New Zealand patients while ensuring the funding of a clinically suitable amino acid based infant formula. It is not possible to have a specialist for every disease state on our clinical advisory committees. The committees are made up of senior clinicians with skills in appraising clinical evidence. Our consultation process provides an opportunity for other clinicians to provide feedback. For this proposal, a consultation letter was provided to the Paediatric Society and consultation responses were received from paediatric clinical immunologists and allergy specialists. These responses were fully considered in the decision making process. The length of consultation can be difficult as we have to balance the need for those wishing to respond to the proposal with the need to be able to consider their response while also not causing undue delay to the proposal. In this case we consider the consultation period provided to be appropriate and note that we received a number of comprehensive responses.

As a matter of principle infant formulae should continue to be fully subsidised as part-charges may potentially inhibit access.

The impression of the proposal is that reference pricing was proposed to reduce expenditure on amino acid-based infant formulae to re-allocate funding to list new products. In effect ‘robbing Peter to pay Paul’. The Special Foods Subcommittee does not have representation on it from a Paediatric Clinical Immunology and Allergy Specialist resulting in this area of clinical expertise not being given consideration.

A longer time frame for consultation could have been provided.

More information If you have any questions about this decision, you can call our toll free number (9 am to 5 pm, Monday to Friday) on 0800 66 00 50.

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