Snapshot: pricing of medicine and medical technology products in Sweden
Pricing and Refunds
Price regulation
To what extent is the market price of a drug or medical device regulated by law or regulation?
The pricing of non-prescription (non-prescription) drugs can be determined freely. The patient pays the full cost of these drugs. The prices are regulated for prescription drugs that receive a subsidy and that the patient himself pays (up to a fixed amount). The prices for inpatient medicines are determined in public procurement and the patient pays the patient fee that applies to the inpatient treatment in question. The Dental and Pharmaceutical Benefits Agency (TLV) decides to what extent an outpatient drug must be reimbursed, according to the Act (2002:160) on pharmaceutical benefits.
TLV’s decision can be appealed to the Administrative Court. For a drug to be covered by the reimbursement 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 based on the value that the medicine delivers in terms of improved health. The decision on whether compensation should 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 under a value-based ceiling price. There are only a few countries that apply value-based drug pricing. Instead, most EU countries apply international reference pricing in some form.
TLV also decides and determines the retail margin, which is the fee the government pays when pharmacies sell a prescription medicine. In addition, Sweden has a system for the substitution of generically equivalent medicines. 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 can also refuse reimbursement if he or she is willing to pay the difference between the prescribed drug and the generic alternative. Before June 2020, only subsidized medicines could be reimbursed. As of June 2020, the Act (2002:160) on pharmaceutical benefits was amended to enable substitution even of prescribed drugs that are not part of 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 statutory collection 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 lowers the price of medicines by 7.5 percent 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 between the government and the Pharmaceutical Industry Association in 2013 to lower the prices of certain older drugs.
The prices of medical devices procured by public healthcare providers are generally determined in public procurement processes. As of 2020, there is also a national board, the Medical Technology Committee, which makes recommendations regarding 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 reimbursement system, in which case TLV determines a price. Consumable medical devices are not subject to generic substitution.
Negotiations between manufacturers and suppliers
Do drug and medical device manufacturers have to negotiate the prices of their products with public health providers?
The pricing of medicines differs in outpatient and inpatient care. For outpatient care (pharmacy), TLV determines the pharmacy’s purchase price for medicines, which are reimbursed and included in the high cost threshold according to the Medicines Benefits Act.
There is free pricing for drugs that are not reimbursed, and drug manufacturers can negotiate 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 Act (2016:1145) on public procurement.
Replacement
Under what circumstances will the National Health Insurance Scheme reimburse the cost of medicines?
TLV has been appointed by the government as the competent authority to decide whether the costs of a medicine 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.
Price assessment
If applicable, which body is competent for decisions on pricing and reimbursement for medicines?
TLV is the competent authority for decisions on pricing and reimbursement of medicines.
Discount
Are drug manufacturers or distributors required by law to provide rebates to health insurance schemes or third parties?
No.