Cabinet agrees Pharmac and Health NZ will share medical device procurement

Pharmac Minister David Seymour says inefficiency has been "the status quo" of medical device procurement and the public will notice the difference under the new arrangement. Photo / Mark Mitchell

Pharmac and Health New Zealand will now share the country’s medical device procurement responsibilities, a process one minister says has been “paralysed” for more than a decade.

Cabinet has agreed the two agencies will divide procurement duties for the more than 50 categories of medical devices in an attempt to resolve a debate that has long persisted in the health sector.

“Device procurement has been paralysed for at least 13 years. In 2012, it was recommended Pharmac take over device procurement. It never happened,” Pharmac Minister David Seymour said.

“Then the DHBs were merged into Health NZ, and there was a recommendation for them to take over. It was rejected. The industry has been exasperated by the uncertainty.”

Health NZ would lead procurement of items requiring lower clinical expertise such as beds, lights, gowns, gloves and needles.

Pharmac would be in charge of procuring more technically advanced equipment such as for dental and oral health, respiratory and cardiology treatment, renal dialysis and neurophysiology.

“Pharmac are experts at assessing more technical devices with a direct therapeutic impact on patients. Those devices often need a high level of clinical input,” Seymour said.

“For Kiwis this means better health outcomes, greater productivity, and a stronger future.

“Patients may not have felt the problem, because inefficiency was the status quo. They will feel the difference.”

Health NZ’s annual spending on medical devices totalled nearly $1.5 billion.

Health Minister Simeon Brown said Health NZ would use its ability to bulk-buy and re-tender contracts to ensure “every dollar is delivering good value for patients”.

“Health New Zealand is best placed to lead procurement for devices that are less therapeutic but have higher integration requirements with facilities and models of care – such as hospital beds, diagnostic machines, and imaging equipment."

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.