PHARMAC in hospitals
Getting ahead in hospitals
PHARMAC has had a foot in the hospital door since 2002, when its annual tender began negotiating national contracts for off-patent medicines used in DHB hospitals. At that time PHARMAC also began assessments of new medicines being used in DHB hospitals.
But our activity in hospitals has accelerated in recent years and PHARMAC now plays a significant role in helping DHBs manage their spending on medical products used in hospitals.
In 2013 PHARMAC completed the shift to managing all medicines used in DHB hospitals, including determining which new medicines can be added to the Schedule for use in hospitals. The list of medicines used in hospitals is binding, and PHARMAC manages the listing of new medicines using savings it has made from existing hospital medicines. Although there isn’t a national budget as yet, PHARMAC has taken steps towards that goal by working with DHB hospitals to improve the flow of data on hospital medicines.
And in the past year, PHARMAC’s work in managing hospital medical devices has really gathered pace. From negotiating our first national contracts in early 2014, by October 2015 PHARMAC had listed more than 14,000 line items on the Pharmaceutical Schedule classified as hospital medical devices. The 15 national contracts cover approximately $43-47 million of annual expenditure, with savings to DHBs estimated at $13.2 million over 5 years. The savings arise from price concessions achieved through national contracts.
Along the way, we’ve been keeping in touch with the DHB staff responsible for assessing, managing and using medical devices. We’ve created new communication channels to update them on our work, been out visiting DHBs, attended conferences, and run workshops and Forums to give DHB staff and other stakeholders opportunities to hear about and comment on our work.
We’re also providing regular updates to DHB senior executives, so they are aware of the value PHARMAC is providing through its work, which looks sure to increase as time goes by.
To date PHARMAC’s work has focused on negotiating national contracts in six categories – wound care, sutures, disposable laparoscopic equipment, orthopaedic implants (spine, trauma and cranio-maxillofacial implants), interventional cardiology, and sterile wrap and consumables. Contracting work in these categories is continuing, with other categories being scoped including thermometers, disposable instruments, mechanical compression devices and consumables, surgical gloves, hand hygiene and anti-embolism compression hosiery.
In the context of PHARMAC’s work with medicines, savings so far are modest. But the focus has been about building the foundations for future work where a greater emphasis on competition is anticipated to lead to greater price reductions, and savings to DHBs. By mid-2015 PHARMAC’s work on wound care products – items like bandages and dressings – had progressed to the next phase. This introduces greater competition through market share procurement – a step change in national contracting of medical devices which until now have been optional for DHBs.
Last updated: 10 December 2015