The Swedish parliament has passed new regulations on pricing of drugs included in the same substitution group. New rules will also be implemented to ensure the availability of drugs in Swedish pharmacies.
IHS Life Sciences perspective | |
Significance | The Swedish parliament has introduced changes to the generic substitution legislation that regulates generic drugs included in the same exchange group. |
Implications | The new regulations introduce changes to the pricing system. Furthermore, manufacturers are required to confirm availability of drugs in outpatient pharmacies. |
Outlook | The amendments are likely to improve availability of drugs in Sweden, but manufacturers of drugs included in the exchange list may be affected by a tighter pricing competition. |
The Swedish Dental and Pharmaceutical Benefits Agency (TLV) has announced that parliament approved at the beginning of June new regulations for generic substitution. The new provisions amend the Act on Pharmaceutical Benefits and will have an impact on price setting for generics at the pharmacy level. Amendments introduced by the legislation include changes to the pricing of interchangeable drugs. In particular, the new provisions establishes that ceiling price will be set 30% lower following the month when generic competition has begun – defined as the month in which at least two medicines that are interchangeable in a given exchange group are first offered for sale to outpatient pharmacies in the Swedish market.
Furthermore, according to the legislation, the ceiling price for a pack included in the exchange group – defined as the group of drugs indicated as interchangeable by the Medicine Products Agency or the administrative tribunal – shall never be less than equivalent to a purchase price of SEK15(USD2.2). The new pricing regulation will enter into effect on 1 July. The full text of the legislation is available, in Swedish, here.
The rules introduce new responsibilities for pharmaceutical companies in the supply of drugs to outpatient pharmacies. In particular, pharmaceutical companies that have a marketing authorisation for drugs included in the exchange group are required to confirm if they can supply their products with sufficient durability to the entire market during the predefined period of time. In addition, the TLV has the power to fine pharmaceutical companies which do not supply sufficient products.
Furthermore, the manufacturer needs to confirm to the TLV that it is able to provide the drug included in the exchange group to the entire Swedish market throughout the price. Such confirmation must also ensure availability of the drug during the entire price period is sufficient for the patient population and at least additional two months. Amendments concerning availability of drugs will come into force between 1 October and 1 November 2014. The full text of the legislation is available, in Swedish, here.
Outlook and implications
The changes to the legislation are aimed at insuring availability of cheaper generic drugs at the community pharmacy level. A number of initiatives have been undertaken in Sweden recently to ensure improvement and simplification of the current system for the exchange of drugs in pharmacies (see Sweden: 9 January 2014: Swedish Pharmacy Association collaborates with TLV on access and safety of care). Measures to improve access to drugs at the community level have been implemented as the consequence of concerns raised in the past over supply disruption for medicines included in the exchange list (see Sweden - Netherlands: 22 March 2011: Stock Shortages at Pharmacy Level Affect Supply in Sweden, Netherlands). The legislative changes introduced, therefore, may have a positive impact on availability of cheaper drugs in pharmacies, allowing the Swedish system to save resources. However, the implementation of the new regulatory framework is expected to impose new pricing pressure on pharmaceutical manufactures.