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Improved price dynamics needed during the life cycle of a pharmaceutical product

TLV’s annual international price comparison of pharmaceuticals 2021

Sweden's relative pharmaceutical prices are the sixth lowest in the segment Pharmaceuticals without competition and the lowest in the segment Pharmaceuticals with competition compared with the 19 comparison countries. That is the conclusion of the annual international price comparison report 2021, published by the Swedish Dental and Pharmaceutical Benefits Agency (TLV). In the report Sweden’s prices on pharmaceuticals have been compared with 19 other European countries. The report has been published each year since 2014.

Prices in Sweden have fallen in relation to prices in other countries during the period studied (2014–2021). An important explanation for the falling prices, especially for pharmaceuticals without generic competition, is the weakened Swedish krona. As AIP (wholesale price) is set in SEK, a weaker currency exchange rate for the Swedish krona leads to lower Swedish prices in relation to other currencies. If the effect of the currency exchange rate is eliminated, Swedish prices are only marginally decreasing in relation to other countries.

Life cycle analysis of pharmaceutical products

A life cycle analysis shows that Sweden's relative pharmaceutical prices are slightly below average during the first five years after market introduction, but then end up above average between year 5 and year 15. After 15 years on the market, which roughly corresponds to the date of expiry of a pharmaceutical's patent, Sweden's relative pharmaceutical prices fall below the European average.

Sweden’s generic substitution system lowers the prices

Sweden's low prices, in relation to the average, on pharmaceuticals older than 15 years can to a large extent be explained by the Swedish system of substitutable pharmaceuticals with a ‘product-of-the-month’, which promotes price competition. A similar pattern, with falling prices after 15 years, can be seen in the Netherlands and Denmark, for example, which, like Sweden, apply a system for generic substitution of off-patent pharmaceuticals

During the entire period 2014–2021, Sweden's pharmaceutical prices in the Product-of-the-month system were the lowest in Europe, or among the lowest. In 2021, Sweden's prices for pharmaceuticals with competition were approximately 50 percent lower than the average for the other 19 countries.

About the report

TLV monitors and analyses the development of pharmaceutical prices in Sweden and internationally. The international price comparison report is part of TLV’s mandate to monitor the development on the Swedish pharmaceutical market from an international perspective and is the eighth report of its kind. The analysis is based on national list prices at pharmacy wholesale price. The analysis compares the price level of pharmaceuticals used in Swedish outpatient care with 19 other European countries: Belgium, Denmark, Finland, France, Greece, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Switzerland, Slovakia, Spain, the United Kingdom, Czechia, Germany, Hungary, and Austria.

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18 March 2022