Pharmaceutical Pricing and Reimbursement Policies in Sweden

Abstract

This paper examines aspects of the policy environment and market characteristics of the Swedish pharmaceutical sector, assesses the degree to which Sweden has achieved certain policy goals, and puts forth some key findings and conclusions. Thanks to low markups in the distribution chain and no VAT for prescribed medicines, Sweden's public prices for pharmaceuticals are relatively low, in contrast to average prices received by manufacturers, which are among the highest in Europe. Recent reforms have helped to restrain pharmaceutical expenditure growth, following a period of double digit growth in the 1990s. Pharmaceutical expenditure per capita in Sweden is lower than the OECD average. Only five OECD countries devote less of their national income to pharmaceuticals. What limited evidence exists tends to suggest that relatively low pharmaceutical expenditures in Sweden are due to its low public prices, rather than to low levels of consumption. Sweden introduced a new pricing and reimbursement scheme in 2002. Its main features are the use of cost-effectiveness analysis for determining the reimbursement status of new pharmaceuticals and mandatory substitution of the lowest-cost generic alternative. The use of cost-effectiveness analysis in reimbursement decisions helps to relate the reimbursement price paid to the social value of the product, but does not necessarily result in the lowest possible price. The generic substitution policy has enabled Sweden to achieve fairly high penetration of generic drugs into the market in terms of volume, with a considerably low share of the total value of the market. However, the requirement to substitute only the lowest-priced listed drug risks undermining the competitiveness of the generic drug industry. The Swedish pharmacy monopoly, Apoteket, is unique among OECD countries. Retail and wholesale margins are notably low, but pharmacy density is lower than elsewhere and other factors also limit consumer convenience. Consumer welfare would likely increase by opening the retail market for over-thecounter drugs (which are normally not reimbursed) to competition.

Assessing spatial inequalities in accessing community pharmacies: a mixed geographically weighted approach

“…The outcome was pharmaceutical accessibility, as measured by two proxies, namely the number of pharmacies per 1000 inhabitants (Ph/inhab) and the number of pharmacies per km 2 (Ph/km 2 ) (Moïse and Docteur, 2007).…”

“…This implies that many people do not access the closest pharmacy, perhaps owing to inconvenient opening hours, personal preferences or financial issues. Secondly, although it has been suggested that analysing potential accessibility to pharmacies at the municipal level and focusing on remote areas may be optimal (Moïse and Docteur, 2007), the minimum local level in Italy is, theoretically, the census tract. Indeed, dividing large municipalities with this in mind would provide useful, more detailed information.…”

“…As a result of the new legislative degree, the number of pharmacies is destined to grow (Farma.For, 2012), and Garattini et al (2012) have estimated that an increase of more than 20% pharmacy licenses can be expected. While the number of pharmacies per population is a well-recognised and widely used indicator (Xu and RojasFernandez, 2003;Moïse and Docteur, 2007;Amstislavski et al, 2012), the number of pharmacies within a certain geographical or administrative area provides additional useful insights into the accessibility to pharmaceuticals: the fewer pharmacies there are within a zone, the farther a consumer has to travel to purchase needed medicines (Moïse and Docteur, 2007).…”

Regional variation and adherence to guidelines for drug treatment of asthma

“…The cost of pharmaceuticals increased significantly in Sweden during the 1990s [4,5], and this rate of increase was relatively faster than that of other components of the healthcare system. This trend has continued, and in 2006, pharmaceuticals accounted for approximately 11.6% of the total healthcare expenditure [5,6].…”

“…This trend has continued, and in 2006, pharmaceuticals accounted for approximately 11.6% of the total healthcare expenditure [5,6]. Expenditure is expected to continue growing at approximately 4% annually during the upcoming years [6,7].…”