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Tender produces $23 million savings

Tender produces $23 million savings

Pharmaceuticals used in both hospitals and the community will cost about $23 million less over the next three years as a result of decisions from the latest PHARMAC tender.

PHARMAC has awarded tenders for about 200 products for use in both hospitals and the community from its 2002-03 tender. This was the first tender to incorporate products used in hospitals as well as the community and includes nearly $4 million savings for DHB hospitals.

In some cases, products have dropped in price by nearly 70 percent. The largest price drop in dollar terms is for the osteoporosis treatment etidronate (Etidrate), which produces savings of nearly $4 million over the next three years. Access to this treatment has recently been widened.

PHARMAC Chief Executive Wayne McNee says the savings reinforce the value of tendering as a key tool for managing pharmaceutical expenditure, and for ensuring continued access to medicines.

“Achieving price reductions is essential for effectively managing pharmaceutical expenditure,” Wayne McNee says.

“We’re continuing to see a rise in the volume of medicines being prescribed, and this means we need to make savings just to achieve our budget. So it’s pleasing that the tender continues to be an effective way of doing this.”

Companies who successfully bid for tenders are awarded up to three-year sole subsidised supply contracts for that medicine.

In addition to creating savings, contracting for sole supply also enables PHARMAC to ensure continuing supplies of essential medicines.

Medicines sourced through this method include the antibiotic amoxycillin, folic acid and hydrocortisone tablets. In some cases this includes paying more for some drugs to ensure supply is continued.

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