Selling to hospitals in Australia
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Australia has an annual healthcare spend of $140 billion. This webinar will explain the processes that companies need to go through to sell their products into the Australian hospital system. The Australian health system is run through a combination of Commonwealth (or Federal) and State government management. Whilst the Commonwealth government sets the regulatory and policy agenda, each state and territory is responsible for the delivery and management of public health services. In order to sell products into the Australian public hospital system, companies need to understand the different routes to market and processes involved in each state. This webinar focused on providing UK healthcare & medical companies with an understanding of the different processes involved to sell into each state within the Australian public hospital system. It touched on regulation, reimbursement, procurement processes and advice on developing the market.
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Selling to hospitals in Australia
- 2. 2 Selling to Public Hospitals in Australia Joe Dodd Senior Trade Development Manager, UK Trade & Investment, Melbourne, Australia 9.00 am Friday 25th July 2014 2
- 3. 3 3 Selling to Public Hospitals in Australia Overview of the Health System Procurement processes in each State Tips and other considerations
- 4. 4 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 million Melbourne 4.2 million Brisbane 2.1 million Perth 1.8 million Adelaide 1.3 million
- 5. 5 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.
- 6. 6 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
- 7. 7 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
- 8. 8 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.
- 9. Funding System Medicare 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 Hospital Implantable Device reimbursement – Prostheses List Selected extras - Optical, Dental, Well being 9
- 10. 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 10
- 11. 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 11
- 12. 12 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.
- 13. 13 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
- 14. Costs and Timelines 14 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
- 15. 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. 15
- 16. The National Product Catalogue The 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 16
- 17. 17 States 17
- 18. 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 18
- 19. 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) 19
- 20. 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 20
- 21. 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. 21
- 22. 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 22
- 23. NSW Health Standing Offer Contracts Anaesthetic 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 23
- 24. 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. 24
- 25. 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 25
- 26. Steps to Sell to Hospitals in NSW 26 Register product with the TGA Respond 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 CPER Register product on National Product Catalogue
- 27. Victoria 150 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 27
- 28. VIC Regions Rural Barwon South Western Region Gippsland Region Grampians Region Loddon Mallee Region Hume Region 28 Metropolitan St Vincent’s Health Western Health Northern Health Eastern Health Alfred Health Melbourne Health Peninsula Health Southern Health Austin Health Royal Children’s Hospital
- 29. 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 29
- 30. 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 30 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
- 31. 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 31
- 32. 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 32
- 33. 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. 33
- 34. 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) 34
- 35. 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 35
- 36. Queensland Health Standing Offer Contract Categories X-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 36
- 37. Steps to Sell to Hospitals in Queensland 37 Register product with the TGA If 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 Register product on National Product Catalogue
- 38. WesternAustralia 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: 38 Kimberley (6 Hospitals) Pilbara (7) Midwest Health (11) Goldfields (9) Wheatbelt (28) South West (13) Great Southern Health (9)
- 39. WesternAustralia 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. 39
- 40. WAHealth 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 40
- 41. WAHealth 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 41
- 42. WAHealth 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 42
- 43. Steps to Sell to Hospitals in WA 43 Register product with the TGA If 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 Register product on National Product Catalogue
- 44. SouthAustralia 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) 44
- 45. SouthAustralia 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/ 45
- 46. SA Health Contracts Provision 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 46
- 47. Steps to Sell to Hospitals in SouthAustralia 47 Register product with the TGA If 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 Register product on National Product Catalogue
- 48. 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 48
- 49. What else do you need to do? 49
- 50. 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 50
- 51. Promoting to Healthcare Professionals Consultancies 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. 51
- 52. Know the Market 52 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
- 53. 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 53
- 54. 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 54
- 55. 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 55
- 56. 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 56
- 57. 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. 57
- 58. 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 58
- 59. 59 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 59
Editor's Notes
- Good morning everyone, thanks for tuning in., my name is Joe Dodd and I’m the Senior Trade Development Manager for UKTI here in Melbourne and I lead the team on Healthcare and Medical as well as biotech and pharmaceuticals in Australia. We’ve got a lot of people on the line so I can’t open up the sound for you to ask questions, so please ask anything you like through the chat box and we’ll go through them at the end. With regards to the slides, we’ll send around a link to the slides after the event. I also have a word document containing much of this information along with contacts for the various health procurement bodies, so if anyone would like that please email me. So, if anyone has been to Australia you’ll know it basically looks like this – a kangaroo on the beach, and in general the population is one of the healthiest in the world. However there are a few reasons why people occasionally need to go to hospital.
- The main aims of this webinar are to give some details around the procurement processes in the Australian public hospital system and how these differ in each state, but I’m going to start off with a bit of an overview of the system, the size of the market, etc, so we know what we’re dealing with, then move on to the states in detail before finishing on some other aspects you may want to consider when dealing with the Australian market.
- Canberra the capital only has 350,000 Great majority of the population on the south eastern seaboard – and these are the major commercial centres. Perth is it’s own little world, and this is true when it comes to doing business as well. Most healthcare companies are based in Sydney or Melbourne, with a few in Brisbane and a handful in Adelaide. They tend to partner with a secondary distributor for accessing WA faciliites.
- $140 billion is around 80 billion pounds – and growing spending at 3.5% per year over next 5 years. About 10% of Australian GDP. The UK’s expenditure is about £138 billion I think.
- Whilst the Commonwealth government sets the policy agenda each state will have their own specific focus on certain things. Telehealth is important in Queensland due to the size of the state, for example. Each state also has slightly different ways of doing business, due to size, number of facilities, or a whim.
- As you can see the break down of hospitals is really correlated with populations spread – although Queensland has more public hospitals than Victoria despite a smaller population, due again to its land size. Public hospitals are larger than private, with much larger scope of services. Public hospitals have 78% of hospital beds in Australia. It’s the public system we’re really going to focus on.
- The major part of the healthcare funding system is called Medicare – this is paid for by a levy or tax, generally 1.5%. The Medicare Benefits Schedule is an agreed amount that the government will pay for a medical consultation or procedure. In a great many cases this will be the exact amount charged to the patient, so the service is basically free – or what is called “bulk billed”. Some procedures – for example IVF – require co-payments. Medicare levy encourages people to take out private health cover. If a couple or family earns over $150,000 per year they receive an extra 1% tax bill if they don’t take out private health insurance. This has created a vigorous private system involving insurance companies and private hospital operators.
- Under the Private Health Insurance Act 2007, private health insurers are required to pay mandatory benefits for a range of prostheses that are provided as part of an episode of hospital treatment (or hospital substitute treatment) where a Medicare benefit is payable for the associated professional service (surgery). There are more than 9,000 products on the Prostheses List including cardiac pacemakers and defibrillators, cardiac stents, hip and knee replacements and intraocular lenses, as well as human tissues such as human heart valves, corneas, bones (part and whole) and muscle tissue. The List does not include external legs, external breast prostheses, wigs and other such devices, only surgically implanted prostheses.
- The PBS provides subsidies for about 600 kinds of drugs in nearly 1500 formulations which means patients can obtain reasonably priced medicines for most medical conditions. Additional drugs are added when assessed as meeting safety, quality, effectiveness and cost-effectiveness criteria. The PBS website allows you to browse through the list of subsidised medicines as well as containing instructions on how to apply to the scheme. Australia’s special access scheme is for named patients, and is pretty similar to the UK version. In hospitals these medicines will be without cost to the patient, although they will have to pay the full cost if they use them once discharged.
- All therapeutics and medical devices used in Australia must be listed on the ARTG under an Australian individual or company – called the sponsor.
- Europe and Australia have a Mutual Recognition Agreement on Conformity Assessments – so no need to pay for this if you have European Approval. Application audits apply for most In Vitro Diagnostics, and the TGA also carries out random application audits for other products, however the company does not need to pay.
- Another thing that you need to do. State governments now require suppliers to have populated the NPC before they can apply for tenders and contracts, and then use the NPC data in the application. We’ll get on to these later. Victoria has led the way on this and all Health Purchasing Victoria tender responders must use the NPC data. The other states haven’t quite got there yet, but probably only a matter of time. As such it makes sense to get yourself NPC ready right away.
- So how do you do that then?
- OK so getting your product registered with the TGA is a must do, and then listing on the National Product Catalogue is also worth doing and a must do in some cases. Let’s take a look at the states in Australia, how they are organised and buy things.
- First the highest spending state – New South Wales
- Plus 1 is The Gower Wilson hospital on Lord Howe Island – a good place to get a sales trip to. Most of the regional health districts have one or two major referral hospitals. In the metropolitan districts it is fairly similar but larger, and there will also be hospitals with particular areas of expertise for the state or city, in this case Sydney. I.e. major trauma centre, major cancer centre, etc.
- A group of NSW Health called NSW Healthshare manages standing offer contracts in various areas. Contracts normally include a handful of different companies and run for a period of 3 – 5 years. These are always advertised through tender. Tenders for the contracts are placed on the NSW tender website.
- Currently 30 standing offer contracts, which are in these areas. You can see the details on the NSW Healthshare website of which products are included, which should give you an idea of where your product would fit when the tender next comes around, and also the dates that the current contracts run to.
- One major requirement for submitting to NSW contracts though is lisiting on the Clinical Product Evaluation registry – which is distinct from the National Product Catalogue.
- So basically only products that have been evaluated in a clinical setting in NSW get to be on the CPER, and then be able to bid for the standing offer contracts.
- OK – so to round up, these are the steps to go through for hospitals in NSW.
- OK now Victoria, the smallest mainland state, but with the second largest population. The rural regions run the public hospitals in their areas, however the metropolitan regions don’t – just primary care, aged care, and other programmes etc.
- So these are the 5 rural regions, and the Metropolitan Health Districts. Again each region will tend to have a major referral hospital, then in Melbourne there are specialist hospitals that are the key centres of excellence for the city and state.
- Major contracts are managed by Health Purchasing Victoria. While use of HPV contracts is mandatory, HPV recognised that there are times when products available on HPV contracts do not meet hospital needs and therefore there must be a mechanism available to permit purchasing off-contract on clinical or exceptional grounds.
- These are the categories. You need to register as a supplier with HPV to be able to access the details of the specific products they cover through these contract categories.
- What HPV do is evaluate the products to be used for a particular contract prior to issuing the tender. This is slightly different from New South Wales with the Clinical Product Evaluation Registry, who assess the products for function and quality prior to being allowed to be listed on the CPER. HPV take a slightly more detailed approach in selecting the types of products to meet the needs of Victorian Hospitals prior to publishing their tenders.
- Second largest state and the third largest population and healthcare spend. Queensland has particular interest in telehealth due to its size and far flung population. Also there are larger numbers of elderly people up where it’s warm most of the year round.
- Again, similarly to NSW and Victoria, most of the rural regions have one, or perhaps two referral hospitals, with the rest being very small facilities.
- Similarly to the other two states we’ve covered, Queensland Health Services Support Agency maintains standing offer arrangements for various product categories. However they don’t have the pre-qualification of products that happens in NSW and to an extent in Victoria.
- QLD Health don’t do a similar level of pre-tender analysis that NSW and VIC do – they simply use reference groups to decide once the tender bids are in.
- WA is the largest state, but only has a relatively small population – just 10% of healthcare spend. Almost all of the country hospitals are small. Fiona Stanley is brand new, opening in October.
- WA works basically in a similar way to Queensland, although they have a really large number of products covered by contracts, as we will see:
- Everyone is very healthy in South Australia because they drink a lot of red wine. Adelaide holds the major referral hospitals and the country hospitals are small.
- SPU contracts are only over $1 million, so there are a lot less of them than in other states – particularly because SA doesn’t have a massive population. They are more likely to get involved in capital items and software, rather than standing offer contracts. There are a few though.
- OK – so just to round up. Those last 30 slides down into one slide.
- As most people are probably experienced in the health care field these next few slides might seem rather obvious – but I thought I’d reinforce some points about the “vibe” of the Australian market.
- You need to follow the rules on promoting to Healthcare professionals – these can be seen at the various industry body websites. Probably very similar to the UK.
- You also need to know how to act in the operating room if you are in hospital demonstrating the product. ACORN standards cover this behaviour and its worth getting in touch with them to get details.
- So those are the rules, what about accessing the market? First of all it helps to know what you are looking at. How would you find these things out? Australian Institute of Health & Welfare collects statistics on the number of hospital procedures carried out – both in public and private hospitals.
- Once you have targeted the potential customers you need to make sure that your message cuts through. As we’ve seen with the state governments putting together product review panels either before or after tenders for contracts go out there is a focus on expert review. Basically in Australia if you hit the three sweet spots of technology being useful, to the benefit of the patient and cost effectiveness you are in a good place. Then you need to communicate these when putting forward your message.
- Again – this is probably fairly obvious. Once you’ve got your message sorted, then you need to deliver it – so here are a few tips. Get a product champion, but pick carefully that it’s not someone that everyone else in the clinical community hates!
- You also need to access the customers! In Australia it is very much a people business.
- So, accessing the market – you really have a major decision – whether to go direct or through a distributor. If you are thinking about developing Australia as a major market and have some follow on products, direct might be the best way to go. Also if you are looking at developing the Asia Pacific region as a whole, Australia can be a good base with people experienced in dealing in the region.
- Finally, whichever way you decide to go, you need to service the customers.
- Right, what can UKTI do to help with all that?
- That’s it! As I mentioned we’ll send a link around to the slides, and I also have this in a word document with more contact information so please email me if you’d like a copy of that. We’ll just go through a couple of the questions – but if you have a more in depth one please feel free to email me that too – we can also set up an individual call if you’d like to discuss in more detail.