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Selling to Public Hospitals in Australia

Joe DoddSenior Trade Development Manager, UK Trade & Investment, Melbourne, Australia

9.00 am Friday 25th July 2014

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Selling to Public Hospitals in Australia

Overview of the Health System

Procurement processes in each State

Tips and other considerations

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Australia – Country Background

Population: 23.5 million

States: 6 states (parliaments are elected) and 2 territories (Chief Ministers are appointed by Federal Govt)

Cities: Sydney 4.6 millionMelbourne 4.2 millionBrisbane 2.1 millionPerth 1.8 millionAdelaide 1.3 million

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Australian Healthcare Overview

• Australia has well developed and well funded system, total expenditure around AU$140 billion per annum

• 11th largest healthcare market in the world with growing and ageing population.

• Rated as best healthcare market to do business in Asia Pacific looking at market size, opportunity & risk.

• Highest per capita spend in Asia Pacific (>Japan)

• Forecasted to grow at 3.5% for next 5 years.

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Public System Overview

Public System run by combination of Commonwealth and State governments.

Commonwealth – policy, research, information, major initiatives.

States – delivery of public health services

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Hospital Distribution

Expenditure by State

$ billion % of Australia

NSW 41.5 31.3

Victoria 32.7 24.7

Queensland 26.7 20.2

Western Australia 13.8 10.4

South Australia 10.3 7.8

Tasmania 3 2.3

ACT 2.5 1.9

Northern Territory 2 1.5

Hospitals by State

Public Private

NSW 226 173

Victoria 150 161

Queensland 170 106

Western Australia 95 55

South Australia 80 56

Tasmania 24 8

ACT 3 12

Northern Territory 5 2

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Funding System

“Medicare” – major part of funding system

Medicare Benefits Schedule provides fee for service to health professionals at point of care.

Public hospitals funded jointly by federal and state governments – managed by state governments.

Medicare levy surcharge 1% additional bill for individuals / families earning over certain level if they don’t take out private health cover.

Funding SystemMedicare

Is funded from taxation and subsidises healthcare for all Australians• Prescribed drugs, Rx from Doctors & Dentists, access to public hospitals

Private Health Insurance

Patients choose Clinician and HospitalImplantable Device reimbursement – Prostheses ListSelected extras - Optical, Dental, Well being

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Funding System

Consumable medical technology

Number of funded schemes for people with chronic disease including:Rehabilitation Appliances, National Diabetes services, Continence Aids

Implantable Devices

Public Hospitals provide implantable, provide surgery, both restricted by Hospital / State budgets

Prostheses List – private insurers are required by law to pay benefits for a range of prostheses.There are over 9,500 prostheses on the list including prostheses and human tissue

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Pharmaceuticals

Subsidised through Pharmaceutical Benefits Scheme ($9.6 billion)

Application to Pharmaceutical Benefits Advisory Committee (PBAC) to get on the scheme. www.pbs.gov.au

Medicines free in hospital

Patient contribution for pharmacy prescription• General $35.40; Concessional $5.80

Special Access Scheme for unlicensed medicines

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Regulation

Therapeutic Goods Administration (TGA) – www.tga.gov.au

Regulate medicines, biologicals and medical devices

Australian Register of Therapeutic Goods – ARTG

Regulation generally harmonised with EU, although there are some differences.

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Regulatory Responsibilities

Sponsor located in Australia (legally responsible)

Procedures & agreement with Manufacturer

Ensure manufacturer:

complies with Essential Principles (declaration)

Applies an appropriate conformity assessment procedure

Holds current conformity assessment evidence

TGA eBS (e Business Services) account

Regulatory Applications to TGA

Pay fees and annual charges

Post market requirements

Costs and Timelines

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Item Cost Timeline

Manufacturer’s Evidence Nil 1 to 4 weeks

TGA Conformity Assessment

$920 plus $20,500 to $54,000

6 to 12 months

Class 1 inclusion Nil Automatic

Class 1 m/s to AIMD Inclusion

$940 to $1210 4 weeks to decision or audit request

Application audit (IVDs) Nil or $6330 30 or 60 days

Substantial variations $410 plus $12,400 to $32,500

Varies with change

Annual Charges $80 to $1210 N/A

The National Product Catalogue

Single repository of product, pricing and healthcare data for all Health Industry Product Categories for the purpose of data synchronization.

Categories include pharmaceutical, medical devices (including orthopedics, implants, dental, imaging, etc), catering and food services, cleaning products, etc.

Secure sharing of item master information such as product identifiers and descriptions, units of measure, package contents, product classification, pricing and related healthcare information.

State, Territory and Federal Health Departments now require suppliers to populate the NPC with item master data for the purposes of tenders and contracts and to ensure this information is maintained up to date.

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The National Product CatalogueThe NPC is hosted by GS1 Australia on GS1net™.

There are three steps for suppliers to provide data to their trading partners via the NPC:

1.Register with GS1 Australia. Information about membership and the benefits is available at www.gs1au.org

2.Register for the NPC (GS1net). GS1 Australia membership is a prerequisite for registration with GS1net. For more information refer to www.gs1au.org/services/gs1net

3.Become NPC Ready. This involves understanding the NPC data requirements, gathering and validating your product data, loading this to the NPC and publishing it to your trading partners. Information about the NPC Ready process is available in the NPC User Guide located at: www.gs1au.org/services/gs1net/industry/npc/user_guides.asp

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States

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New South Wales

226 public hospitals, $41.5 billion spend, 31.3% of Australian total

There are 15 Local Health Districts in New South Wales that are responsible for providing health services in a wide range of settings, from primary care posts in the remote outback to metropolitan tertiary health centres.

Eight LHDs cover the Sydney metropolitan region, and seven cover rural and regional NSW. In addition, two specialist networks focus on Children's and Paediatric Services, and Forensic Mental Health. A third network operates across the public health services provided by three Sydney facilities operated by St Vincent's Health

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NSW Metropolitan Health Districts

Central Coast (4 hospitals)

Illawara Shoalhaven (9)

Nepean Blue Mountains (6)

Northern Sydney (9)

South Eastern Sydney (7 + 1)

South Western Sydney (7)

Sydney (4)

Western Sydney (5)

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NSW Regional Health Districts

Far West – 7 Hospitals

Hunter New England – 38 Hospitals

Mid North Coast – 7 Hospitals

Murrumbidgee – 33 Hospitals

Northern NSW – 14 Hospitals

Southern NSW – 12 Hospitals

Western NSW – 40 Hospitals

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Hospital Procurement in New South Wales

NSW Healthshare manages standing offer contracts for a variety of product areas, which must be used by the Local Health Districts.

Outside of these product categories LHDs are free to make their own purchasing decisions, although they may ask NSW Healthshare to assist.

For goods costing less than $3000 no quotation is required, for goods costing between $3000 and $30,000 one written quotation is required and for goods between $30,000 and $250,000 three quotes are needed.

For goods costing over $250,000 a public tender process must be adhered to. The tenders are published on the NSW Health e-tenders website (www.tenders.nsw.gov.au/health). Tender respondents are also required to submit their tenders electronically through this web site.

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NSW Health Standing Offer Contracts

Managed by HealthShare NSW using a tender process.

The tenders are published on the NSW Health e-tenders website (www.tenders.nsw.gov.au/health)

LHDs and Hospitals must use the standing offer contracts to purchase products in these areas.

Normally cover a number of different suppliers and last for a period of 3-5 years.

The current standing offer contracts in use by NSW Health are shown at this link https://www.procurepoint.nsw.gov.au/before-you-buy/buying-contracts-and-prequalification-schemes/health

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NSW Health Standing Offer ContractsAnaesthetic Consumables

Beds, matresses and accessories

Clinical protective apparel

Collection and Disposal of Clinical, Cytotoxic, Anatomical and Reusable Sharps Container Waste

Continence and sexual health products

Contrast media

Dental consumables and sundry items general

Electromedical equipment and accessories

Enteral Nutrition Support and Services

Food Rethermalisation Carts for NSW Health

Healthy workforce program

Intravenous (IV) administration equipment

IV and irrigating solutions

Laboratory consumables

Medical gases (bulk and compressed), industrial gases, refrigerants and home oxygen service

Medical imaging film, processing, chemistry and associated equipment

Miscellaneous Medical & Surgical Consumables

Moist wound care products

Needles, syringes

Operating theatre consumables

Pharmaceuticals

Radiopharmaceuticals for nuclear medicine

Removal, burial / cremation of deceased persons without means

Respiratory Consumables and Medical Gases

Sterilisation consumables

Supply of general linen, medical apparel and textiles

Surgical dressings

Surgical sutures

Uniforms for NSW Health personnel

Urology

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HealthShare NSW Clinical Product Evaluation Registry (CPER)

In order for companies to submit products for use in the NSW Health standing offer contracts they must be included in the NSW Clinical Product Evaluation Registry.

CPER is a central repository of clinical product evaluation data inclusive of product information as submitted by suppliers AND

Product evaluation outcomes as submitted by clinical product evaluators / clinical product specialist / clinical product committees.

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HealthShare NSW Clinical Product Evaluation Registry (CPER)

To access the CPER suppliers must make contact with Local Health District Clinical Product Specialists and obtain agreement to evaluate clinical products. After an agreement is established the supplier is emailed the following information:

- The URL (Web site address) of the CPER supplier gateway

- The User ID

- The password; and

- A copy of this information document: http://www.healthshare.nsw.gov.au/__data/assets/pdf_file/0004/221764/cper-information-for-suppliers-and-faq.pdf

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Steps to Sell to Hospitals in NSW

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Register product with the TGARespond to tenders placed on www.tenders.nsw.gov.au/health

If included in NSW Health Standing Offer product categories Go through

HealthshareNSW or the LHDs to contact LHD Clinical Product Specialists

If not included in NSW Health Product Categories approach hospitals directly.

List product on the CPERRegister product on National Product

Catalogue

Victoria150 Public Hospitals, $32.7 billion spend, 24.7% of Australian total

The Department of Health delivers services through its eight geographical regions.

There are three metropolitan regions and five rural regions.

Rural Regions manage the full range of health services in their jurisdictions including public hospitals.

There are nine Area Health Services in Metropolitan Melbourne which look after multiple hospitals, along the lines of the Local Health Districts in NSW

Websites and contact details for each of Victoria’s public hospitals can be accessed here: http://health.vic.gov.au/hospitals/pubwebs.htm

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VIC Regions

Rural

Barwon South Western Region

Gippsland Region

Grampians Region

Loddon Mallee Region

Hume Region

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MetropolitanSt Vincent’s HealthWestern HealthNorthern HealthEastern HealthAlfred HealthMelbourne HealthPeninsula HealthSouthern HealthAustin HealthRoyal Children’s Hospital

Health Purchasing Victoria

Health Purchasing Victoria achieves ‘best value’ outcomes in the procurement of health related goods, services and equipment via more than thirty contract categories.

A Product Reference Group (PRG) is convened for each tender. A PRG consists of hospital and health service representatives who have specific and significant expertise and knowledge of the products or services HPV will be tendering for.

Tenders normally cover a number of suppliers and last 3 – 5 years.

HPV uses its web site (www.hpv.org.au) to keep suppliers up to date and also publishes tenders on the Victorian Government website, www.tenders.vic.gov.au

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HPV Contract Categories

Infusion Pumps

Interventional Cardiology

Interventional Radiology

IV Access Devices & Admin Consumables

Medical and Industrial Gases

Monitoring Products

Natural Gas (>5TJ pa)

Nurse Agency Services

Office Requisites

Operating Room and Wound Drainage Consumables

Orthopaedic Prostheses

Pathology Consumables

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Beds and Mattresses

Catering Supplies 2012

Cleaning Products, Equipment & Consumables

Continence Management Products

Contrast Media & Non Radioactive Kits

Drapes and Clinical Protective Apparel

Electricity

Enteral Feeds

Examination and Surgical Gloves

Hand Hygiene and Domestic Paper Products

Haemodialysis

Hypodermic Needles & Syringes & Oral Dispensers

HPV Product Categories

Pathology Services (Gippsland Region)

Peritoneal Dialysis Products

Pharmaceutical Products and IV Fluids

Radiopharmaceuticals

Respiratory Products

Sterilisation Consumables

Surgical Dressings Tapes and Bandages

Surgical Instruments Open and Laparoscopic

Sutures, Skin Staples and Tissue Adhesives

Trauma Implants

Victorian Product Catalogue Technology Solution

Wound Care

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Steps to Sell to Hospitals in Victoria

Register product with

the TGA

Respond to tenders published on the

www.tenders.vic.gov.au

website

If included in HPV Product Categories approach HPV to

lodge product details

If not included in HPV Product

Categories approach hospitals directly.

Reference group determine whether product will be in scope for tender

Register product on National

Product Catalogue

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Queensland

170 Public Hospitals, $26.7 billion spend, 20.2% of Australian total

Through a network of 16 Hospital and Health Services and the Mater Hospitals, Queensland Health delivers a range of integrated services including hospital inpatient, outpatient and emergency services, community and mental health services, aged care services and public health and health promotion programs.

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Queensland Health Regions

Cairns and Hinterland (9 Hospitals)

Central Queensland (7)

Central West (5)

Children’s Health QLD (2)

Darling Downs (17)

Gold Coast (2)

Mackay (8)

Metro North (5)

Metro South (6)

North West (9)

South West (6)

Sunshine Coast (5)

Torres & Cape (2)

Townsville (7)

West Moreton (5)

Wide Bay (9)

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Queensland Procurement

Queensland Health Services Support Agency manages standing offer arrangements through a tender process around a number of product categories.

Hospital networks must use equipment specified in these contracts when purchasing in these categories.

Companies with equipment outside these categories are able to approach hospitals and health services directly. However a tender process is required for purchases above $100,000.

Details of the tenders are published on the Queensland Government tender website: www.etender.qld.gov.au

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Queensland Health Standing Offer Contract CategoriesX-ray Units, Digital Radiography, Fixed  

X-ray Units, Digital Radiography, Mobile

Patient Warming Products  

Diagnostic Equipment

Intravascular Systems, Access & Accessories

Patient Trolleys

Mammography Units, Digital Radiography

Oxygen Therapy and Airway Management  

Compression Products for Circulatory Support

Infant and Maternity Care

Syringes, Needles, Regional Access, Skin Preparation & Accessories

Bandages, Surgical Sponges, Tapes, Surgical Pens, Scalpel Blades and Stitch Cutters

Ct Scanners

Flushers-Sanitisers, Bed Pans

Lights, Examination-Procedure

OPGs

Cardiac Angiography Systems

Tube & Drainage, Wound Suction Equipment & Accessories

Disposable Surgical/Procedural Drapes and Clinical Equipment Covers

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Steps to Sell to Hospitals in Queensland

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Register product with the TGAIf included in QLD Health Contract

Product Categories respond to tenders on www.etender.qld.gov.au

If not included in QLD Health Contract Product Categories approach hospitals

directly.Reference group determine whether product will be in scope for tender

Western Australia

95 Public Hospitals, $13.8 billion spend, 10.4% of Australian total

WA Health manages 10 metropolitan hospitals in Perth as well as the WA Country Health Service.

Major metropolitan hospitals include; Fremantle Hospital, Royal Perth Hospital, Sir Charles Gairdner Hospital, Fiona Stanley Hospital.

WA country health service itself is organised into seven regions:

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Kimberley (6 Hospitals)Pilbara (7)Midwest Health (11)Goldfields (9)Wheatbelt (28)

South West (13)Great Southern Health (9)

Western Australia Procurement

Health Corporate Network in Western Australia manages contracts around a number of product and service areas for Western Australia hospitals.

Contracts involve a number of different companies supplying a range of different products and usually last for a period or 3 – 4 years.

Use of products on these contracts is mandatory.

Outside of these companies can contact hospitals and health districts directly.

Above $20,000 HCN will manage purchase. Above $150,000 a tender process is used.

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WA Health Contracts

Electromedical Equipment (Category A - General Equipment)

Electromedical Equipment (Category B - General Monitoring Equipment)

Electromedical Equipment (Category C - Transport Ventilators)

Electromedical Equipment (Category D - Audiology Equipment)

Electromedical Equipment (Category E - Maternity Equipment)

For the Supply of Flexible and Rigid Endoscopes to Western Australian Public Healthcare Units

Hospital Beds and Bedding Equipment

Infusion Pumps and Sets

Maintenance of Auto Immunostainers (including Reagents and Consumables)

Medical Imaging Equipment

Phacoemulsification Systems

Volumetric Infusion Pumps and Administration Sets

Airway Maintenance and Oxygen Therapy Consumables

Antiseptics and Disinfectants (including HCNS110809A)

Autoclaveable Handpieces to Dental Health Services

Bandages, Cotton Products, Splints & Braces

Breathing Circuit Filters

Cardiac Catheterisation Devices

Central Venous and Thermodilution Catheters

Clinical Protective Apparel

Compression Hip Plates, Lag Screws and Cortical Screws

Continence Management Products

Critical Care Consumables

Deep Vein Thrombosis Intermittent Pneumatic Compression Systems and Consumables

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WA Health Contracts

Dental Consumable Products

Dental Prosthetic Services

Dental Restorative

Denture Teeth (On Consignment)

Diagnostic Electrocardiograph (ECG) Electrodes

Disposable Surgical Instruments

Enteral Feeding Systems & Associated Consumables

For the Supply of Anaesthetic Volatile Agents and Vaporisers to Western Australian Public Health Care Units

Forced Air Warming Units and Consumables.

General Medical Products

Haemodynamic Monitoring Kits

Implantable Cardiac Pacemakers

Intra-Aortic Balloon Catheters

Laboratory Consumables

Large Volume Fluids

Maxilofacial, Neurosurgery & Small Bone Instruments Sets, Plates & Screws

Needleless Intravenous Access Systems

Nutritional Products

Organ Imaging Contrast Media

Patient Dispersive Electrodes and Diathermy Pencils

Pharmaceutical Products

Ready Made Anti-Embolic and Compression Stockings

Rotary Cutting and Polishing Instruments

Sharps Consumables, Packaged Injecting Equipment Kits and Disposable Biohazard Containers

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WA Health Contracts

Single Use Procedure Packs

Single Use Procedure Packs - Cardiac Catheterisation and Radiology

Single-Use Theatre Drapes and Covers

Sterile Blood Oxygenators

Sterile single use ward instruments, instrument packs, plastic-ware and procedural kits

Sterilisation Consumables

Supply and Delivery of Topical Negative Pressure Wound Therapy Equipment and Consumables.

Supply Dental Instruments and Minor Equipment to Dental Health Services

Supply of Blood Glucose Monitors, Associated Accessories and Consumables to Western Australian Public Health Care Units

Supply of Intraocular Lenses to WA Public Health Care Units

Supply of Sterile and Non-Sterile Laboratory Consumables, Glassware and Plasticware for Western Australian Public Health Care Units.

Supply of Sterile and Non-Sterile Medical Gloves to Western Australian Public Health Care Units

Supply of Suction Consumables and Accessories to Western Australian Public Healthcare Units

Sutures and Skin Adhesive Glue

Tapes and Dressings

Theatre, Surgical Products and Consumables

Ureteral Stents and Associated Medical Devices

Vascular, Cardiac and Renal Access Grafts and Patches

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Steps to Sell to Hospitals in WA

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Register product with the TGAIf included in WA Health Contract Product

Categories respond to tenders on https://www.tenders.wa.gov.au

If not included in WA Health Contract Product Categories approach hospitals

directly.Reference group determine whether product will be in scope for tender

South Australia

80 Public Hospitals, $10.3 billion spend, 7.8% of Australian total

SA Health is responsible for the Women’s and Children’s Health Network, 3 metropolitan Health Networks and country Health Network.

Central Adelaide (3 hospitals)

Northern Adelaide (2 hospitals)

Southern Adelaide (3 hospitals)

Country Health SA (65 hospitals)

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South Australia Procurement

Tenders required above $50,000, although tenders may also be used below this figure.

Hospitals typically run tenders for their own requirements and the Strategic Procurement Unit (SPU) for whole of the state.

SPU contracts are typically over $1M.

SPU contracts tend to cover more capital items and software.

To register for notification of tenders: https://www.tenders.sa.gov.au/

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SA Health ContractsProvision of Linen and Associated Services

Supply and Distribution of Pharmaceuticals and Large Volume Fluids

Provision of Blood Collection Consumables

Supply of Sterile Procedure Packs

Enteral Feeds, Feeding Pumps & Consumables

Continence

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Steps to Sell to Hospitals in South Australia

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Register product with the TGAIf included in SA Health Contract Product

Categories respond to tenders on https://www.tenders.sa.gov.au

If not included in SA Health Contract Product Categories approach hospitals

directly.Reference group determine whether product will be in scope for tender

Steps to Sell to Hospitals in Australia

TGA Registration – must do

National Product Catalogue Registration – almost must do

Check State contract and standing offers to see where your product fits. If it is included then you need to plan to respond to tenders.

Victoria – go through HPV, NSW – register on CPER

Respond to contract tenders

AND/OR

Approach hospitals directly

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What else do you need to do?

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What else do you need to do?

Know the rules on promoting to Healthcare professionals - governed by industry codes of practice.

Medicines Australia - Pharmaceuticals

MTAA - Medical Technology

IVD Australia – In Vitro Diagnostics

Promoting to Healthcare Professionals

Behave ethically. No inducements. Claims substantiated & consistent with intended product purpose. Training in a learning environment Modest incidental hospitality and travel expenses Sponsor conferences, not individuals No travel or hospitality for family or friends

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Promoting to Healthcare ProfessionalsConsultancies OK for legitimate needs at fair value. eg SAB, R&D. Fellowships, research or educational grants OK if legitimate Gifts should be educational and modest. No cash gifts. Samples OK for education or evaluation Market research not for product promotion Consumer requests for medical advice referred to medicos

Know the rules in the operating room.

The Australian College of Operating Room Nurses (ACORN) standards define standard of practice for perioperative nurses and healthcare facilities, and also requirements for all visitors including medical company representatives.

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Know the Market

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Number of potential cases Current treatment / competitors Clinical and market trends Decision makers, influencers and stakeholders Key centres / users User expectations Pricing

Knowledge sources

AIHW data cubes – number of hospital procedures https://www.aihw.gov.au/procedures-data-cubes/

Industry associations, clinical associations, consultancies, networking

Experienced staff

Develop the message

Customers want evidence and data. ( previously surgeons were “try one / buy one”)

Raised bar for clinical evidence – randomised studies / meta-analysis / registries

Not just one person’s decision. Now Product Review Committees and Clinical Teams - The rise of cost-effectiveness and guidelines

Focus on:

Technology benefits – should be useful for clinicians

Clinical benefits – patient outcomes

Cost effectiveness – savings to hospitals/health system

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Deliver the message

Pick specific targets

Be consistent

Ensure the medium matches the message no cheap promo items for premium message

no out of date website for innovation message

choose the right people

Peer to peer works great chose carefully – they are not all friends!

take care to maintain integrity

beware the early adopter who moves on quickly

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Access the Customers

Selling medical devices in Australia is a people business and products don’t sell themselves.

Need to identify and get access to the key customers

Get salespeople with established relationships

Customer lists

Clinical conferences

Use publications and presentations to open the doors

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Direct or Distributor?

Direct

Capture the Margin – double sales

Develop future markets

Big Investment

Higher Risk

Takes time to get going

Distributor

Established sector knowledge

Sales infrastructure and customer relationships – “hit the ground running”

Buy and stock. Do logistics and invoicing.

Can be reluctant to invest

Lack long-term commitment

Stray off-message

Reluctant to share information

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Service the Customers

The customers don’t just want a product, they want a solution.

If they don’t get it they will blame your product even if they are the problem

Must get involved in ensuring clinical solution via training, workshops, visiting surgeons, OR presence.

Instructions unlikely to be read.

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What can UKTI do?

Introductions to potential distributors

Introductions to regulatory consultants / follow up with TGA

Introductions to KoLs

Market reports

Help set up Australian company Accountants

Lawyers

Visas

Product Launches

Travel, Market Research Grants – Talk to your local ITA

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Thank you and good luck!

Joe Dodd

Senior Trade Development Manager

UK Trade & Investment, Melbourne, Australia

P: +61 3 9652 1605

M: +61 435 134 935

E: joe.dodd@mobile.ukti.gov.uk

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