2015/16 invitation to tender (medical)
3 August 2015
PHARMAC is seeking feedback from medical groups, DHB hospital pharmacies and other interested parties on:
- A proposal to tender certain pharmaceuticals for sole supply; and
- The draft process and terms and conditions for the 2015/16 Invitation to Tender (2015/16 Tender).
PHARMAC welcomes all feedback on the 2015/16 Tender. Feedback received by the deadline may be considered by the Tender Medical Evaluation Subcommittee of PTAC, and would be considered by the PHARMAC Board (or its Delegate) prior to making a decision on this proposal.
All responses are due by 5pm, Thursday 3 September 2015
Feedback should be provided by submitting an email or letter to the Tender Analysts:
PO Box 10254
Fax: (04) 460 4995
Laurence Holding: (04) 901 2844
Chloe Dimock: (04) 916 7263
Feedback we receive is subject to the Official Information Act 1982 (OIA) and we will consider any request to have information withheld in accordance with our obligations under the OIA. Anyone providing feedback, whether on their own account or on behalf of an organisation, and whether in a personal or professional capacity, should be aware that the content of their feedback and their identity may need to be disclosed in response to an OIA request.
We are not able to treat any part of your feedback as confidential unless you specifically request that we do, and then only to the extent permissible under the OIA and other relevant laws and requirements. If you would like us to withhold any commercially sensitive, confidential proprietary, or personal information included in your submission, please clearly state this in your submission and identify the relevant sections of your submission that you would like it withheld. PHARMAC will give due consideration to any such request.
Details of the proposed 2015/16 Tender
In accordance with PHARMAC’s objective (to secure, for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment and from within the amount of funding provided), PHARMAC is consulting on a proposal to tender certain pharmaceuticals for Sole Subsidised Supply to community pharmacies and/or Hospital Supply Status for supply to DHB hospital pharmacies.
Attached to this letter (as Schedule Two) is a list of pharmaceuticals that we are considering tendering for Sole Subsidised Supply and/or Hospital Supply Status. Pharmaceuticals are sorted into therapeutic groups and then listed alphabetically in each group by chemical, form and strength. Each pharmaceutical has a ‘C’ and/or ‘H’ next to it to indicate whether it is proposed to be tendered for community and/or hospital supply.
In general, the proposed Tender process would be similar to the 2014/15 Tender.
We are seeking feedback on the approach outlined in the following pages, in particular on:
- The proposed tender process and timeline;
- The actual or potential clinical implications of awarding Sole Subsidised Supply and/or Hospital Supply Status to the pharmaceuticals listed in Schedule Two, including the impact of a brand switch on patients and clinical staff; and
- For hospital pharmaceuticals, your views on the appropriate Discretionary Variance (DV) Limit for each pharmaceutical, in the event you consider a 1% DV Limit to be clinically unacceptable.
Since 1997 PHARMAC has been using the strategy of tendering pharmaceuticals for sole supply of pharmaceuticals for a fixed period of time. Regular tendering has proven to be an effective way to encourage competition among suppliers of pharmaceuticals. As in the past, the community and hospital tender processes would be run in unison, however, the pharmaceutical list for community and hospital supply may be different.
Key aspects of awarding a Tender for Community pharmaceuticals:
- For community pharmaceuticals, the tender winning brand would be the only subsidised brand for up to approximately 3 years. The Sole Subsidised Supply period would conclude on 30 June 2019 for all Tenders awarded from the 2015/16 Tender.
- No other brand of the pharmaceutical would be listed (or subsidised) in Section B of the Pharmaceutical Schedule during the Sole Subsidised Supply period.
- Other brands could continue to be marketed, sold and dispensed during the Sole Subsidised Supply Status period, but they would not receive a subsidy.
- Any pharmaceutical that currently carries a manufacturer’s surcharge (that is, the additional patient charge above that of the patient co-payment) would become fully subsidised if a tender was awarded for that pharmaceutical.
Key aspects of awarding a Tender for DHB Hospital pharmaceuticals:
- For DHB hospital pharmaceuticals, the Hospital Supply Status brand would be the only brand DHB Hospitals could purchase (subject to any allowance for alternative brands under the agreed DV Limits) for up to approximately 3 years. The Hospital Supply Status period would conclude on 30 June 2019 for all tenders awarded from the 2015/16 Tender.
- No other brand of the pharmaceutical would be listed in Section H of the Pharmaceutical Schedule during the Hospital Supply Status period.
The proposed timelines for the 2015/16 Tender are as follows:
|3 August 2015||Consultation with suppliers, medical groups and interested parties on the proposed pharmaceutical list and draft Invitation to Tender.|
|27 August 2015||Final date for receipt of Alternative Commercial Proposals (ACPs) to tendering by PHARMAC.|
|3 September 2015||Final date for all consultation to be received.|
|September 2015||PHARMAC considers feedback from consultation, negotiates with suppliers over any ACP proposals it considers would meet PHARMAC’s Decision Criteria and enters into provisional contracts with suppliers where appropriate.|
|September 2015||Meeting of the Tender Medical Evaluation Subcommittee of PTAC to consider clinical issues in relation to the proposed Tender list.|
|September/October 2015||Consultation and Board decisions on Alternative Commercial Proposals.|
|Early November 2015||Issuing of the 2015/16 Tender.|
|17 December 2015||Invitation to Tender closes.|
|From end of January 2016||Board decisions on the first Tender winners announced.|
Contractual obligations for suppliers
A copy of the draft terms and conditions which would form the terms of the 2015/16 Tender contract is available on the PHARMAC website: www.pharmac.health.nz, or by phoning PHARMAC on 0800 66 00 50.
Proposed inclusion of the following provisions in the 2015/16 Invitation to Tender
PHARMAC propose to include provisions in the 2015/16 Invitation to Tender that amend the terms and conditions relating to pharmaceutical price changes in the market.
In summary, PHARMAC propose to amend the price change date for a pharmaceutical that is currently listed and awarded a tender to the following:
- If the pharmaceutical is currently listed on the Schedule, then the price must change from the 12th of the month prior to the start date, and the supplier must provide price support to wholesalers (or other such distributors) to ensure pharmacy can purchase stock at the new price; or
- If the pharmaceutical is currently listed on the Schedule, then the supplier may reduce the price from the 1st of the month prior to the start date instead of price support to wholesalers (or other such distributors) provided there is more than 2 months lead time.
The incumbent supplier must note in its tender bid which of the above price change criteria would apply to its pharmaceutical. If there is no notification provided by a supplier then the price change on the 12th of the month prior to the start date with price support to wholesalers (or other such distributors) would be considered the default position.
If the pharmaceutical has a rebate, PHARMAC may at its option ask suppliers to reduce the price of the pharmaceutical on the 22nd of the month prior to the start date provided the supplier provides price support to wholesalers (or other such distributors) to ensure that pharmacy can purchase stock at the new price.
PHARMAC acknowledge that price support would require wholesalers (or other such distributors) to provide information on stockholding of a pharmaceutical to allow a supplier to provide price support which would include stock on hand of the pharmaceutical on the 12th of the month prior to the start date.
For pharmaceuticals that are not currently listed on the Schedule, the provisions stated in the terms and conditions of the draft 2015/16 Invitation to Tender will apply.
Unresolved Tender bids
PHARMAC would review any unresolved Tender Bids from 2013/14 Tender and the 2014/15 Tender prior to issuing the 2015/16 Tender, and may close the tender for some of these items, and reissue them as part of the 2015/16 tender. The following Tender Bids remain unresolved, and may potentially be added to the 2015/16 Tender following consultation:
2013/14 Invitation to Tender
|Chemical Name||Line Item|
|Aciclovir||Eye oint 3%|
|Ciprofloxacin||Eye Drops 0.3%|
|Hyoscine N-butylbromide||Tab 10 mg|
|Ornidazole||Tab 500 mg|
|Thiopental [Thiopentone] sodium||Inj 500 mg|
2014/15 Invitation to Tender
|Chemical Name||Line Item|
|Atorvastatin||Tab 10 mg|
|Atorvastatin||Tab 20 mg|
|Atorvastatin||Tab 40 mg|
|Atorvastatin||Tab 80 mg|
|Atropine sulphate||Inj 600 mcg, 1 ml|
|Baclofen||Inj 2 mg per ml, 5 ml|
|Bimatoprost||Eye Drops 0.03%|
|Bortezomib||Inj 3.5 mg|
|Brimonidine Tartrate with Timolol Maleate||Eye drops 0.2% with timolol maleate 0.5%|
|Buspirone hydrochloride||Tab 5 mg|
|Buspirone hydrochloride||Tab 10 mg|
|Calcipotriol||Crm 50 mcg per g (pack size 30 g or less)|
|Calcipotriol||Crm 50 mcg per g (pack size greater than 30 g)|
|Calcipotriol||Oint 50 mcg per g (pack size 30 g or less)|
|Calcipotriol||Oint 50 mcg per g (pack size greater than 30 g)|
|Candesartan with hydrochlorothiazide||Candesartan 8 mg, hydrochlorothiazide 12.5 mg tablet|
|Candesartan with hydrochlorothiazide||Candesartan 16 mg, hydrochlorothiazide 12.5 mg tablet|
|Caspofungin||Inj 50 mg|
|Caspofungin||Inj 70 mg|
|Celiprolol||Tab 200 mg|
|Chloramphenicol||Eye oint 1%|
|Chloramphenicol||Inj 1 g|
|Clonazepam||Tab 500 mcg|
|Clonazepam||Tab 2 mg|
|Clonidine||Inj 150 mcg per ml, 1 ml|
|Condoms||Latex-free 55 mm or greater (nominal width)|
|Dipyridamole||Tab long-acting 150 mg|
|Domperidone||Tab 10 mg|
|Eptifibatide||Inj 0.75 mg per ml, 100 ml|
|Eptifibatide||Inj 2 mg per ml, 10 ml|
|Famotidine||Tab 20 mg|
|Fludarabine phosphate||Inj 50 mg|
|Fondaparinux sodium||Inj 2.5 mg syringe|
|Granisetron||Inj 1 mg|
|Hyoscine N-butylbromide||Inj 20 mg, 1 ml|
|Ketamine||Inj 100 mg per ml, 2 ml vial|
|Latanoprost with timolol||Eye drops 50 mcg per ml with timolol 0.5%|
|Lidocaine [Lignocaine] Hydrochloride||Inj 1%, 5 ml|
|Lidocaine [Lignocaine] Hydrochloride||Inj 1%, 20 ml|
|Lidocaine [Lignocaine] Hydrochloride||Inj 2%, 5 ml|
|Lidocaine [Lignocaine] Hydrochloride||Inj 2%, 20 ml|
|Lidocaine [lignocaine] hydrochloride with adrenaline||Inj 2% with adrenaline 1:80,000, 2.2 ml dental cartridge|
|Metformin Hydrochloride||Tab immediate-release 1 g|
|Methadone hydrochloride||Inj 10 mg per ml, 1 ml|
|Midazolam||Inj 1 mg per ml, 5 ml|
|Midazolam||Inj 5 mg per ml, 3 ml|
|Milrinone||Inj 1 mg per ml, 10 ml|
|Mixed salt solution for eye irrigation||Eye irrigation solution calcium chloride 0.048% with magnesium chloride 0.03%, potassium chloride 0.075%, sodium acetate 0.39%, sodium chloride 0.64% and sodium acetate 0.17%, 15 ml|
|Mixed salt solution for eye irrigation||Eye irrigation solution calcium chloride 0.048% with magnesium chloride 0.03%, potassium chloride 0.075%, sodium acetate 0.39%, sodium chloride 0.64% and sodium acetate 0.17%, 250 ml|
|Mixed salt solution for eye irrigation||Eye irrigation solution calcium chloride 0.048% with magnesium chloride 0.03%, potassium chloride 0.075%, sodium acetate 0.39%, sodium chloride 0.64% and sodium acetate 0.17%, 500 ml|
|Naloxone Hydrochloride||Inj 400 mcg per ml, 1 ml|
|Nitrofurantoin||Tab 50 mg|
|Nitrofurantoin||Tab 100 mg|
|Nitrofurantoin||Tab modified release 50 mg|
|Nitrofurantoin||Tab modified release 100 mg|
|Oestradiol||TDDS 25 mcg per day|
|Oestradiol||TDDS 50 mcg per day|
|Oestradiol||TDDS 75 mcg per day|
|Oestradiol||TDDS 100 mcg per day|
|Oxycodone hydrochloride||Inj 10 mg per ml, 1 ml|
|Oxycodone hydrochloride||Inj 10 mg per ml, 2 ml|
|Oxycodone hydrochloride||Inj 50 mg per ml|
|Oxycodone hydrochloride||Tab controlled-release 5 mg|
|Oxycodone hydrochloride||Tab controlled-release 10 mg|
|Oxycodone hydrochloride||Tab controlled-release 20 mg|
|Oxycodone hydrochloride||Tab controlled-release 40 mg|
|Oxycodone hydrochloride||Tab controlled-release 80 mg|
|Propranolol||Cap long-acting 160 mg|
|Pyrazinamide||Tab 500 mg|
|Tobramycin||Inj 40 mg per ml, 2 ml|
|Travoprost with timolol||Eye drops 0.004% with timolol 0.5%|
|Trimethoprim with sulphamethoxazole [Co-trimoxazole]||Tab trimethoprim 80 mg and sulphamethoxazole 400 mg|
|Urokinase||Inj 10,000 iu|
|Urokinase||Inj 100,000 iu|
|Urokinase||Inj 500,000 iu|
Distribution of consultation documents
Although this consultation letter has been widely distributed, should you consider that a particular person, group or agency should receive this letter and/or future tender documents, please feel free to contact PHARMAC or refer it on directly (note, all tender documents and consultations are also available from our website at www.pharmac.health.nz/news#consultation). We also invite any person or group to contact PHARMAC should you wish to meet to discuss the proposals contained in this consultation letter.
Schedule Two: Possible pharmaceuticals for tender for sole supply
Order of pharmaceuticals in this Schedule
Pharmaceuticals have been listed in groups according to the therapeutic group classification system used in the Pharmaceutical Schedule. Below is a list of these groups, and the corresponding page numbers for your ease of reference. Pharmaceuticals with indications that may apply to multiple therapeutic groups will only appear in one group.
|Therapeutic Group||Page Numbers|
|Alimentary Tract and Metabolism||9|
|Blood and Blood Forming Organs||9 – 10|
|Cardiovascular System||10 – 13|
|Dermatologicals||13 – 15|
|Extemporaneously Compounded Preparations & Galenicals||15|
|Genito-Urinary System||15 – 16|
|Hormone Preparations – Systemic excluding contraceptives||16 – 17|
|Infections – Agents for Systemic Use||17 – 19|
|Musculoskeletal System||19 – 20|
|Nervous System||20 – 23|
|Oncology and Immunosuppressants||23 – 25|
|Respiratory System and Allergies||25 – 26|
|Sensory Organs||26 – 28|
Information provided for each pharmaceutical
For each pharmaceutical (as defined by chemical name, form and strength) we have provided the following information:
- the current ex-manufacturer subsidy per unit of measure as at 1 July 2015
- the number of subsidised or partially subsidised units sold in the community in the year ending 30 June 2014
- an estimate of the annual community market value at current subsidies (estimated by multiplying the volume of units subsidised in the year ending 30 June 2014 by the relevant listed unit subsidy as at 1 July 2014); and
- comments specifically relating to the Tender of the line item and/or its current listing on the Pharmaceutical Schedule.
Explanation of terms, symbols and abbreviations
Most terms and abbreviations used are self-explanatory: “tab” means tablet, “cap” means capsule, “liq” means liquid, “inj” means injection, “suppos” means suppository, “grans” mean granules and “OP” means original pack to be dispensed.
The following table explains the symbols used in the draft pharmaceutical list:
|Underlined||Pharmaceutical line items where a sole supply contract is in force are underlined. The price and subsidy for these pharmaceuticals are fixed until 30 June 2015 unless otherwise stated in the Comments column and a listing of a new brand could only occur after that date.|
|C||To be tendered for Sole Subsidised Supply Status (community pharmaceuticals).|
|H||To be tendered for Hospital Supply Status (DHB hospital pharmaceuticals).|
|PCT||A reference in the Invitation to Tender to allow Pharmaceuticals Cancer Treatments to be listed in Section B of the Pharmaceutical Schedule as part of PHARMAC’s Pharmaceutical Cancer Treatments project.|
|+||PHARMAC has been advised of the existence of a patent.|
|*||There is no fully funded product available for this line item (in relation to community supply).|
|@||Additional Stock Pharmaceuticals (ASP) means a Pharmaceutical, marked with an “@”, for which the supplier of the successful Tender Bid would be required to hold additional stock.|
|#||A rebate currently exists.|
Changes to PHARMAC’s decision making mechanism
PHARMAC is changing the way it makes decisions. Currently, PHARMAC uses Decision Criteria to identify pharmaceuticals which best help it achieve PHARMAC’s Statutory Objective:
“to secure for eligible people in need of pharmaceuticals, the best health outcomes that are reasonably achievable from pharmaceutical treatment within the funding provided”
PHARMAC has made a decision to move away from the Decision Criteria to the Factors for Consideration. More information on the Factors for Consideration can be found on the PHARMAC website:
The issues PHARMAC considers when it makes decisions is fundamental to PHARMAC’s work, so it’s important suppliers understand what the new Factors for Consideration are, and how the change is going to occur. PHARMAC has intentionally not specified a 'go live' date, in order to be confident of effective implementation. However, PHARMAC anticipates this change may mean that some decisions relating to the 2015/2016 Tender may be made under the Decision Criteria and others will be made under the Factors for Consideration.
At the time of the release of the draft 2015/2016 Tender, PHARMAC anticipates that further information will be available relating to the timing of the transition and the effect that this change may have on the 2015/2016 Tender and PHARMAC will keep suppliers informed in this respect.
Last updated: 9 March 2018