Global Insight Perspective | |
Significance | Pharmaceutical expenditure rose by 3.8% year-on-year (y/y) at retail prices to 17.1 billion kroner. Expenditure rose by 4.9% y/y in defined daily doses and by 3.4% y/y at pharmacy purchasing prices. |
Implications | Antineoplastic and immunomodulating agents drove growth as their sales expanded by 14.7% y/y last year. Nervous system therapies once again topped the expenditure league table, while cardiovascular treatments carried on their slow decline by value. |
Outlook | Norwegian pharmaceutical expenditure is expected to maintain its slow and upward trend. This will be driven by the availability of newer and costlier therapies together with the expansion of the over-45 age group, which is wealthier and consumes more medicines. Thus, the government may push for greater generic consumption to offset part of the rise in demand and expenditure. |
The Norwegian Institute of Public Health (Folkehelseinstituttet) has released analysis into medicines consumption in Norway in 2007. Last year, wholesalers sold 11.3 billion Norwegian kroner (US$2.2 billion) worth of pharmaceuticals to pharmacies, hospitals and non-pharmacy outlets, marking a 3.4% year-on-year (y/y) increase over 2006. The figure translates into an estimated 17.1 billion kroner's worth of human pharmaceutical products at retail prices, up 3.8% on the previous year. In Defined Daily Doses (DDD), the accepted daily maintenance dose in adults, sales were up by 4.9% y/y in 2007. In 2007, 35 new chemical entities entered the Norwegian market.
In 2007, prescription medicines accounted for 82% of the total pharmaceutical sales by volume and 88% by value. Over the same period, sales of over-the-counter (OTC) medicines accounted for the remainder, i.e., 18% of the total sales by volume and 12% by value. In 2007, Sales of OTC medicines rose by 3% y/y in volume and 4% y/y in value to 1 billion kroner at pharmacy purchasing prices. Last year, 38% of OTC medicines were sold in non-pharmacy outlets, up from 36% in 2006. In 2007, pharmacies retained 62% of the OTC market.
In 2007, sales of oncology drugs grew by 14.7% y/y by value to 2.6 billion kroner, fuelled by the growing use of newer and more expensive treatments. Increasing costs in this category accounted for over 50% of the 2007 extra spending on pharmaceuticals. Oncology drugs represented 15.4% of pharmaceutical spending in 2007. Despite booming oncology costs, Norway's largest pharmaceutical spending was on nervous system drugs, with sales growing by 5.2% y/y to 3.5 billion kroner and commanding 20.8% of the total market share. The market share by value of drugs used to treat cardiovascular conditions continued its slow decline in 2007, with sales dropping by 3.8% y/y to 2.1 billion kroner. This category now accounts for 12.5% of the total market by value. The steady decline in sales by value stems from a price-regulation system introduced in 2003 and amended in 2005, as well as the implementation of new reimbursement rules on statins. By volume, sales of cardiovascular drugs grew by 8% y/y.
Norwegian Human Pharmaceutical Sales 2007, by Therapeutic Group | |||
Therapeutic group | Sales (mil. kroner at retail price) | Y/Y Change (%) | % Total Market Share |
Nervous system | 3,553 | 5.2 | 20.8 |
Antineoplastic and immunomodulating agents | 2,629 | 14.7 | 15.4 |
Cardiovascular system | 2,132 | -3.8 | 12.5 |
Alimentary tract and metabolism | 1,828 | -0.3 | 10.7 |
Respiratory system | 1,797 | 1.2 | 10.5 |
Anti-infectives for systemic use | 1,218 | 6.7 | 7.1 |
Blood and blood forming organs | 1,074 | 4.9 | 6.3 |
Genito-urinary system and sex hormones | 872 | 6.1 | 5.1 |
Musculoskeletal system | 611 | -8.4 | 3.6 |
Systemic hormonal preparations | 398 | 3.5 | 2.3 |
Dermatologicals | 394 | 6.1 | 2.3 |
Sensory organs | 382 | 0.2 | 2.2 |
Various | 160 | -1.1 | 0.9 |
Anti-parasitic products | 55 | 9.8 | 0.3 |
Total | 17,103 | 3.8 | 100 |
Source: Norwegian Institute of Public Health, 2008. | |||
Outlook and implications
Despite the upward trend, the growth rate of Norwegian pharmaceutical spending in 2007 is well below that of Sweden and Finland, which reported respective y/y rises in expenditure of 6.8% and 6.2% for the same period. At pharmacy purchasing prices, Norwegian prices are among the lowest in Europe, on a par with that of Finland's. This has helped Norway contain its drug bill, as have the recent cost-cutting measures implemented by the government. In 2005, Norway introduced a new pricing scheme, implementing a series of consecutive price reductions for off-patent drugs. The year 2005 also saw the introduction of a "preferred product" policy, aimed at boosting generic consumption. Overall, these factors allowed for the growth rate of pharmaceutical expenditure to fall from double-digit rates towards the beginning of the decade to low-to-mid single digit rates since 2005.
Norway's pharmaceutical expenditure is expected to keep rising slowly in the future for a number of reasons. First of all, costs will be fuelled by the presence on the market of newer and more expensive therapies for the treatment of cancer or inflammatory diseases. Secondly, the over-45 age group, the greatest consumer of medicines, is expected to keep rising in numbers. In 2007, 40% of the Norwegian population belonged to this age group compared to 39.5% in 2005. Finally, standards of living are high in the country. This means that not only does the population expect expensive new therapies to be available but also that Norwegians can for the most part afford co-payments and out-of-pocket payments on drugs, meaning that the demand is unlikely to decrease on economic considerations. As it stands, pharmaceutical prices have fallen in Norway and expenditure is not out of control. As a result, it seems unlikely that future cost-containment measures are on the cards in the immediate future, although the government may push for further generic market penetration given that generics account for 11.7% of the Norwegian prescription-drug bill compared to 24% in the United Kingdom.