Consultation has gone out today to health professionals and is available on PHARMAC’s website for anyone wanting to have their say about its annual tender process and a proposal to modify its contracting arrangements.

Every year PHARMAC invites tenders for the supply of certain medicines to DHB hospitals and/or to community pharmacies in New Zealand. This year, as part of the feedback it is seeking, it is considering a different approach to competitive procurement.

PHARMAC currently awards Sole Supply Status to community medicines, where it has only one brand listed in the Pharmaceutical Schedule for funding. In DHB hospitals it currently awards Hospital Supply Status, which means the medicine becomes the primary brand that DHB hospitals buy, and the supplier is guaranteed a certain share of the market by volume.

“We are proposing a new approach where we would instead award Principal Supply Status for a medicine in both community and hospital medicines,” explains Lisa Williams, PHARMAC’s director of operations.

“This would mean that the principal supplier’s brand would be the main brand funded in the community and/or bought by DHB hospitals, and there would be an allowance for a certain volume of other brands to also be funded and/or used by DHB hospitals.

Williams says that the principal supplier would have most of the market, but for some medicines PHARMAC would be able to fund alternate brands for a smaller portion of the market. She says this approach would allow PHARMAC to better support healthcare professionals when prescribing medicines for their patients.

“We have used this approach occasionally over the past 10 years where appropriate but implementing Principal Supply Status would allow us to consistently do it.

“Before we make a decision on this proposal, we want to hear from our suppliers, people working in the healthcare sector, advocacy groups and the wider public.

“Consultation is a very important step in our process. It’s how we check that what we are proposing can be implemented by the health sector and that it won’t have any unintended consequences.”

Williams says that PHARMAC is there to make more medicines available for more New Zealanders and is regularly looking to improve how it implements and manages its competitive procurement activity.

“It is a significant aspect of our business and we want to ensure that it runs smoothly and that we can achieve benefits for New Zealand while minimising any disruptions to people using pharmaceuticals and to the health sector.” 


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