Pricing and refund
To what extent is the market price of a medicine or a medical device regulated by law or regulation?
The pricing of over-the-counter (over-the-counter) drugs can be determined freely. The patient pays the full cost of these drugs. Prices are regulated for prescription drugs that receive a subsidy and that the patient pays for himself (up to a fixed amount). The prices for inpatient medicines are determined in public procurements and the patient pays the patient fee that applies to the current inpatient care. The Swedish Dental and Pharmaceutical Benefits Agency (TLV) decides to what extent an outpatient medicine shall be reimbursed, in accordance with the Act (2002: 160) on pharmaceutical benefits.
TLV’s decision can be appealed to the Administrative Court. In order for a drug to be covered by the subsidy system, the company applies to TLV. In the application, the company states the price of the medicine and health economic documentation is attached. The application is granted if TLV finds that the health economic analysis shows that the requested price is justified on the basis of the value the drug delivers in terms of improved health. The decision on compensation to be granted is based on general principles such as cost-effectiveness and the principle of prioritizing patients with the greatest need. The reimbursement decision is thus based on value, which in Swedish terms is often described as applying “the value-based pricing of medicines. In fact, prices can be set freely below a value-based ceiling price. There are only a few countries that apply value-based pricing of medicines. Instead, most EU countries apply international reference pricing in some form.
TLV also decides and determines the retail margin, which is the fee that the state pays when pharmacies sell a prescription drug. In addition, Sweden has a system for substitution of generically equivalent drugs. The system requires pharmacies to dispense the cheapest generic product available to the patient, regardless of prescription, unless the prescribing physician has objected in writing to an exchange for medical reasons. The patient may also refuse compensation if he or she is willing to pay the difference between the prescribed drug and the generic alternative. Prior to June 2020, only subsidized medicines could be reimbursed. As of June 2020, the Act (2002: 160) on pharmaceutical benefits was amended to also enable substitution of prescribed drugs that are not included in the reimbursement system if there is an equivalent drug in the reimbursement system.
As of November 2014, certain rules apply to the pricing of certain older medicines (see TLV’s statute TLVFS 2014: 9, last amended by HSLF-FS 2018: 30). The change is based on amendments to the Act (2002: 160) on pharmaceutical benefits and means that TLV reduces the price of pharmaceuticals by 7.5 per cent when they are older than 15 years. The first price reductions according to these rules came into force on 1 January 2015. The intention is to contribute to a more cost-effective use of medicines in Sweden. The changes were initiated by an agreement on lowering the prices of certain older drugs, between the government and the Pharmaceutical Industry Association in 2013.
Prices for medical devices are generally set in public procurement. From 2020, there is also a national board, the Medical Technology Board, which provides recommendations for the procurement of new medical technology products based on health economic assessments. Manufacturers of consumables that are classified as medical devices can submit an application to TLV to have the product included in the compensation system, in which case TLV determines a price. Medical supplies for consumables are not subject to generic substitution.
Negotiations between manufacturers and suppliers
Do manufacturers of pharmaceuticals and medical devices have to negotiate the prices of their products with public healthcare providers?
Pricing of medicines differs in outpatient and inpatient care. For outpatient care (pharmacies), TLV determines the pharmacies’ purchase price for medicines that are reimbursed and included in the high-cost threshold according to the Pharmaceutical Benefits Act.
There is free pricing for medicines that are not reimbursed and pharmaceutical manufacturers can negotiate the prices with pharmacies.
The prices for medicines and medical devices used in inpatient care (hospitals) are determined in public procurement processes initiated by the regions and regulated by the Public Procurement Act (2016: 1145).
Under what circumstances will the national health insurance system reimburse the cost of medicines?
TLV has been appointed by the government as the competent authority to decide whether the costs of a drug should be reimbursed. Such a decision can be appealed to the administrative court. There are generally three principles that are taken into account when assessing a drug to be replaced: the principle of human value; the principle of need and solidarity; and the cost-effectiveness principle. Normally, only prescription drugs are subsidized by the system.
If applicable, what is the competent body for pricing and reimbursement of medicines?
TLV is the competent body for decisions on pricing and reimbursement of medicines.
Are manufacturers or distributors of medicines legally obliged to give a discount to health insurance systems or third parties?