PHARMAC awarded the Sole Supply for HML and Community  for Cetirizine Tab 10 mg 100 to Actavis on the 29th April 2016 as a result of the Invitation to Tender 2015/2016.

Zista Tab 10 mg 100 was the new brand name under the Actavis umbrella.

Zista Tab 10 mg 100 were listed in the Pharmaceutical Schedule and HML from 1 October 2016 at a price and subsidy of $1.01 which is 36.48% less that the existing price and subsidy.

However stock was not being supplied by Actavis until all existing stocks of Zetop had been sold through from the distribution centre.

Zetop was to be reference priced to Zista from 1 December 2016 in the Pharmaceutical Schedule and Delisted from the HML.

In our usual efficient manner we sent a request to Actavis for price support on the 14th September 2016 believing that because it was the same company and it was Cetirizine that won the tender they would be obliged to provide price support in the normal manner. That was refused as follows with absolutely no consideration for pharmacy at all: –

We will drop our price to the reference price on the date that PHARMAC has specified (see below).  To aid you we can make this the 12th of November rather than the 1st of December.  As I understand things price relief only applies to products that retain the tender at a lower price.  In this case we aren’t retaining the tender so the tender agreement doesn’t direct us to offer it.

ProPharma continued to try to order Zista Tablets but supply was not available until all existing stock of Zetop had sold through from Actavis.

On the 16th September 2016 we requested clarification from PHARMAC on this situation to be told it was being treated as a normal brand change.

We have exhausted all avenues to obtain support for our customers going forward.

Until Friday 18th November 2018 when the following was sent to PHARMAC.

Hi folks

We have a real issue resulting from the awarding of the above mentioned product in the April 2016 Tender Awards.

The product was listed 1 October 2016 at which time we tried to order and have subsequently tried to order every month since.

Reference Pricing is to apply from 1 December 2016, but because Pharmac see this as a different brand we cannot obtain Price Support under the Tender Agreement.

That one issue needs to be addressed for the future as suppliers could all change their product name and avoid supporting the market.

Surely it is Cetirizine that was tendered and awarded – to the same company, but simply different brand name.

Situation as we stand right now is that we still cannot purchase Zista and Actavis still have a large volume of Zetop they need to move through before they will release the Zista.

We cannot simply take a lose based on the process and will not reduce our pricing until all our stocks have sold through.

Based on that Pharmacy will have to apply a part charge and have the absolute right to do so under their contract because the product is not available at the new schedule price from the supplier. Then DHB Hospitals will not be able to purchase at the new lower price for the same reasoning and that will have an effect on the budgets which are very closely managed.

H4.5 Product Premiums

(a) If the price of a Pharmaceutical charged by its manufacturer is more than the subsidy set out in the Pharmaceutical Schedule for that Pharmaceutical, then you may charge a Service User a Product Premium for the difference between the manufacturer’s price and the subsidy, plus any mark-up, in addition to any Co-payments in accordance with clause H4.4.

It is unfortunate that this has to come to this point where we are requesting Pharmac to intervene to avoid embarrassment to all and sundry.

Look forward to hearing from you

Have a great weekend

Unfortunately there has been no response directly to this email but I hear in the background that something may be happening. 

AS IT STAND RIGHT NOW

What Pharmacy need to be fully aware of is that currently when you dispense Cetirizine 10 mg  90 currently your reimbursement is $0.048 plus $0.1521 per pack (proportionally) giving a margin of  $0.2001 (leaving out all other payments because they come to you regardless)

If you have stock remaining of Zetop going into December 2016 (most of you will have as it is that type of product and seasonal) then it all changes dramatically. Your stock will have been purchased at $1.59 Schedule Price but you will be reimbursed at new schedule price $1.01 due to reference pricing.

So you are going to be reimbursed at $0.0303 plus $0.1521 per pack (proportionally) giving a margin of $0.1824 (leaving out all other payments as they come to you regardless)

Your margin is reduced by $0.0177 or 8.845% and you have incurred a direct loss of $0.58c per pack due to the inability of the supplier to provide the new product from date of listing or price support at a time that would prevent pharmacy from incurring these losses.

More reason to avoid direct trading and support your wholesaler at all times. We fight for you on every occasion.

 

 

 

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