Proposal to award market share for permanent coronary drug eluting stents in DHBs
14 November 2018
What we’re proposing
PHARMAC is seeking feedback on a proposal to award Hospital Supply Status for permanent coronary drug eluting stents (“DES”) in DHBs through a provisional agreement with Abbott Laboratories NZ Limited (“Abbott”).
It is proposed that:
- from 1 March 2019 Abbott’s brands of DES, Xience Xpedition and Xience Alpine would be available to DHBs at reduced prices;
- a transition period would apply from 1 March 2019 to 30 June 2019; and
- Xience Xpedition and Xience Alpine DES would have Hospital Supply Status from 1 July 2019 until 30 June 2022.
Consultation closes at 4 pm on Wednesday, 19 December 2018 and feedback can be emailed to email@example.com.
What would the effect be?
Hospital Supply Status
This proposal would result in awarding Hospital Supply Status (“HSS”) to Abbott for the supply of DES to DHBs, with a 35% Discretionary Variance (“DV”) Limit, for a term of 3 years.
If this proposal is approved, this means that DHBs for the term of the HSS:
must purchase a minimum of 65% of DES from Abbott, and
can choose to purchase a maximum of 35% of DES from suppliers other than Abbott.
35% DV Limit
The purpose of the DV Limit is to allow DHBs to purchase a proportion of products within the DES sub-category from suppliers other than Abbott, while setting a limit on this so that the DHBs’ market share obligations to Abbott are met. The DV Limit would be the maximum percentage of the total DES market allowed for discretionary purchasing.
DHB choice of a DV DES brand(s) would not be restricted in any way.
DHBs would be able to choose to purchase any of the DV DES listed in Part III of Section H of the Pharmaceutical Schedule, and/or DV DES not listed in Part III of Section H of the Pharmaceutical Schedule.
Under the proposal, if a DHB chooses to purchase a DV DES that is listed in Part III of Section H of the Pharmaceutical Schedule, the DHB would be required to purchase the DV DES at the price, terms and conditions stated in the national contract for that device.
DES purchased by DHBs for the purpose of registered clinical trials would not be counted as DV devices.
The date at which the Xience Xpedition and Xience Alpine DES would be available for purchase by DHBs at the new HSS price
1 March 2019
A 4-month period that would allow DHBs time to undertake any training and education that may be required and make the necessary changes to consignment stock of DES, before the HSS provisions are effective and compliance with the DV Limit is required.
1 March 2019 to 30 June 2019
HSS start date
The date at which DHBs must only purchase the HSS brands of DES, with 35% allowance for discretionary purchasing.
1 July 2019
HSS end date
The date at which HSS with Abbott would end. The term of the HSS Agreement is 3 years.
1 July 2022
Who we think will be interested
- Catheterisation laboratory clinical personnel including but not limited to:
- Interventional Cardiologists
- Radiography personnel
- Procurement personnel
- Service/Funding Managers
About the medical devices
A permanent coronary drug eluting stent (DES) is a non-bioresorbable metal scaffold, coated with a pharmacological agent known to suppress restenosis, that is placed at the site of a major blockage in a coronary artery to hold the artery open and restore blood flow to the heart muscle.
Why we’re proposing this
Market Share Procurement
By undertaking market share procurement activities for DES, PHARMAC expects to:
- generate a greater level of competition so that further savings can be realised for DHB Hospitals, while still providing access to clinically appropriate ranges of DES; and
- provide national consistency and equitable access to clinically appropriate DES across all DHBs with cardiac catheterisation laboratories.
Market share procurement supports the PHARMAC objective of improving the cost-effectiveness of public spending.
In 2017 PHARMAC sought clinical advice from our Interventional Cardiology Advisory Group to assist with the development of a market share RFP for the supply of DES under an HSS or Dual Supply market share procurement model.
Details about our proposal
Under the provisional agreement with Abbott:
- Abbott would hold a minimum of 3 months stock of the HSS DES in New Zealand and would provide consignment stock and consignment stock management services to DHBs;
- Abbott would provide relevant DHB personnel with training, education and clinical case support; and
- If new generations/models of Abbott DES are launched during the HSS supply period (1 July 2019-30 June 2022), national pricing would be negotiated with PHARMAC and DHBs would be able to purchase the new DES as part of the HSS portion.
In consultation with each DHB, Abbott would develop a transition plan for each DHB and would work with nominated DHB personnel to establish the requirements of the DHB, including but not limited to:
- consignment stock levels;
- stock-take intervals;
- transition timeframes;
- in-service requirements; and
- required outcomes for successful product conversion.
Monitoring compliance with the DV Limit
Throughout the HSS supply period (1 July 2019 to 1 July 2022) the 35% DV Limit would apply.
DV Limit compliance would be calculated at the end of each 12-month period.
If DV purchases are within the 35% DV Limit at a national level at the end of the 12-month period, the contract would be met.
If DHBs exceed the 35% DV Limit at a national level at the end of the 12-month period, Abbott would be entitled to seek compensation from any DHBs that exceeded the DV limit locally.
PHARMAC would contact nominated DHB personnel prior to 1 March 2019 to discuss their DHB’s support needs and would also regularly liaise with them to work through any issues that arise during and after implementation.
Nominated DHB personnel would be provided with an implementation pack to assist with the transition to the HSS model for DES.
PHARMAC would provide opportunities for nominated DHB personnel to collectively discuss emerging issues in relation to the DES market share agreement or areas where clarification is required.
In addition, PHARMAC would engage with the Procurement Operations Advisory Group, established as part of the DHB Procurement Strategy, regarding implementation issues that are not specific to an individual DHB.
A copy of the provisional agreement with Abbott has been provided to DHB Procurement Managers as part of this consultation process.
Questions to consider
Is the proposed 4-month transition period appropriate when considering any product changes and staff training and education? If not, what time period would be suitable and why?
What other implementation support would DHBs need to manage any change?
What, if any, other benefits or impacts should PHARMAC take into account when making decisions about the proposed change?
Do you have any other comments with respect to the proposal to list and award market share for DES in DHBs?
To provide feedback
Send us an email: firstname.lastname@example.org by 4 pm on Wednesday, 19 December 2018.
All feedback received before the closing date will be considered by PHARMAC’s Board (or its delegate) prior to making a decision on this proposal.
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.
Last updated: 14 November 2018