HSV supplementary tenders lead to statewide cost savings and increased surety of supply

Two HSV supplementary tenders for pharmaceutical products have led to cost benefits for 53 Victorian health services and improved surety of supply for patients.

The supplementary tender for Pharmaceutical Products and IV Fluids agreements, which commenced in January, provided an important opportunity to standardise pricing for health services.

HSV conducted negotiations with 14 suppliers across 38 subcategories to complete the Supplementary 25 and 26 tenders – the largest supplementary pharmaceutical products activity conducted by HSV.

HSV’s Head of Pharmaceutical Sourcing Jasmine Makin says market dynamics have changed in the five years since the original agreement commenced.

“We were able to achieve significant savings by standardising pricing across the state,” she says.

Since the last agreement commenced, new products , particularly in generic lines and those covered by the Pharmaceutical Benefits Scheme which HSV didn’t yet have on contract have become available, Jasmine says.

The supplementary tenders have also improved surety of supply for vital medications such as rocuronium – a neuromuscular blocker used to relax muscles during surgery – supplies of which had been affected by a 2023 tornado in North Carolina where manufacturing sites were based.

“We’ve extended our portfolio of suppliers to secure supply lines for certain products that could be impacted by weather events or geopolitical issues,” Jasmine says.

“The fact that we have more pharmaceutical products on contract also reduces risk for health services because if there are shortages, suppliers are obliged to find replacement stock as a priority.”

Specialist Medicines Strategy Pharmacist at Barwon Health Cale Padgett says the supplementary tenders resulted in a significant cost saving for Barwon Health.

“The fact that we have dual listings for certain high-volume product lines increases surety for us by providing options across different suppliers,” says Cale.

“In the current market any opportunity to save on medicines is a good thing and the mix of pharmaceutical products across different therapeutic classes is also positive because it means a lot of different areas get the benefit.”

Other recently completed activities by HSV’s Pharmaceutical Sourcing team include the addition of two health services to the HSV Compounded Chemotherapy and MAB Preparations Cluster contract, which resulted in significant cost savings for both health services. MAB preparations are a type of immunotherapy that work by triggering the immune system and helping it to attack cancer cells.

The Compounded Chemotherapy and MAB Preparations Cluster commenced in December 2023 with 12 health services joining the initial tender. Director of Pharmacy at Mercy Health James Dwyer says that prior to joining the HSV cluster contract earlier this year, Mercy Health had its own contract with a supplier.

“It required me to spend multiple days going through data and reaching out to providers. Even after doing that, I couldn’t come up with the same cost saving that HSV was able to negotiate,” he says.

“HSV’s Pharmaceutical Sourcing team was able to deliver a cost saving to Mercy Health that wasn’t previously available, which was very well received.”

“We still received the same high quality of service after the transfer of the contract to HSV. It allows us to keep providing treatment for patients locally and that’s very impactful for the community. Our patients would otherwise have to travel to Melbourne CBD for treatment,” says James.

Mercy Health treats around 15 cancer patients a day at Mercy Hospital for Women in Heidelberg and around 12 patients a day at Werribee Mercy Hospital.