New retail margins for pharmacies apply from the 1st of November 2009

The new retail margin for the sale of prescription drugs will come into force on the 1st of November, 2009 and according to the TLV's estimations has already been successfully financed. In tandem with the introduction of the new retail margin the TLV's monitoring role for generic substitution will commence.

- Our task is to create the conditions for players who want to open pharmacies in Sweden so that service and availability increase. And this without an increase in costs for patients and county councils, says Magnus Thyberg, Project Manager for the TLV's pharmacy remit.

A component in the valuation of the Swedish pharmacy market is the fee paid by the state when pharmacies sell a prescription drug: the pharmacy retail margin. For this reason in April the TLV presented a proposal for a raised retail margin which was duly circulated for comments. Work also conducted during the spring was focused on finding financing for the new margin which costs approximately 400 million Swedish crowns annually.

During the spring the TLV, in close dialogue with LIF (the Swedish Association of the Pharmaceutical Industry), carried out a project to decrease the prices of original brand drugs which were exposed to generic competition. The prices for original brand drugs were decreased to the lowest generic price, but at a maximum of 65 percent. The prices came into being on the 1st of July, 2009.

An initial analysis shows the impact from the price decreases to be 400 million Swedish crowns per year. This is somewhat more than the estimations carried out when the new margin was presented. This means the future increase is already to a large degree financed.

The savings have already been realized well in advance of the introduction of the increase in the retail margin. The TLV will make the formal decision in regard to the coming into force of the new margin in October.

The new retail margin is connected to the sale of medicines exposed to generic competition. When it comes to substitutable medicines pharmacies may now only sell the generics which have the lowest price on the market. It is of great importance that the substitution system functions effectively and that pharmacies through this can contribute to low pharmaceutical costs.

The TLV is now gathering further resources for its role as monitor for out-patient pharmacies to ensure substitution rules and regulations are followed.

- We are providing this information to players interested in the Swedish market in order to create clarity in regard to the conditions attached and to create predictability. This is an important step in reaching our goal of increased service and availability of pharmacies in Sweden, says Magnus Thyberg.