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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
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