21 February 2002 Media Statement

National hospital drug buying strategy agreed

Health Minister Annette King says a national pharmaceutical purchasing strategy will provide consistency and equitable access to hospital drugs throughout New Zealand.

Ms King has approved the National Hospital Pharmaceutical Purchasing Strategy, which will see Pharmac, the Government’s drug-buying agency, authorised to work collaboratively with individual DHBs to purchase hospital drugs.

Currently, most DHBs negotiate separately with pharmaceutical companies for the drugs they require, spending $140 million a year. Under the finalised strategy, Pharmac will act as the sole central negotiating agent, and annual savings from this approach are expected to be several million.

Ms King said Pharmac’s pharmaceutical negotiation skills meant there would be nationwide consistency and more equitable access to hospital drugs, and an opportunity for savings to be made.

“Pharmac will be able to eliminate much of the variation in prices that individual DHBs currently pay for hospital drugs, and this will free up funding for other service areas.”

Pharmac chief executive Wayne McNee said the Minister’s acceptance of the purchasing strategy was excellent news.

Pharmac consulted with the health sector late last year over the purchasing of hospital drugs, and feedback highlighted the need for a fair and equitable system across the country, he said.

“We have taken into account the particular needs of the hospital sector, compared with community pharmaceuticals. We have also made it as easy as possible for hospitals to move from their current arrangements to the national approach. The strategy gives individual hospitals discretion over the use of new drugs, while still working within a national framework.”

Work on implementing the strategy has already begun, and it will be progressively rolled out over the coming months.

ENDS

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