Smarter purchasing to deliver savings to Health

Health Minister Tony Ryall has confirmed Pharmac will extend its successful management of medicines to include hospital medical devices over the next few years.

‘The 20 district health boards currently buy about 250,000 types and brands of medical devices, ranging from cotton wool swabs and pregnancy test kits to surgical implants,” Mr Ryall says.

‘For example, they are buying 24 different brands of examination gloves, 13 different brands of disposable gowns and 28 different brands of cauterising instruments for surgery.

‘Costs for medical devices have been rising well above the rate of inflation over the last five years. Last year DHBs spent around $880 million.

‘Pharmac has a proven track record of controlling growth in the cost of pharmaceuticals, while at the same time increasing the number of medicines and treatments funded by taxpayers.

‘It will work closely with Health Benefits Limited (HBL) to make the new arrangement as seamless as possible.

‘HBL was set up by the government to help DHBs save money by reducing their administrative, support and procurement costs.

‘HBL has developed a Finance, Procurement, and Supply Chain business case for DHBs and that case is forecast to deliver significant net benefits to the New Zealand health sector. Medical device savings will be a significant portion of those savings.

‘Pharmac and HBL will also ensure that policies, procedures and plans are established with clinical input so that health professionals will know well in advance what the areas of focus will be and have an opportunity to feed into and influence that process.

‘Over time, we expect a national Pharmac procurement approach will achieve value for money as well as ensure national consistency so that patients get equitable access to these treatments wherever they are,” Mr Ryall says.