Sweden has Europe’s most effective system for the substitution of pharmaceuticals

The ‘product-of-the-month’-system creates incentives for companies to set competitive prices. A new analysis shows that it is not primarily the price ceilings that force prices down, but rather the system’s ability to create incentives for companies to offer competitive prices.

The analysis is a new addition to TLV’s International Price Comparison, which examines how official pharmaceutical prices—so‑called list prices—in Sweden relate to prices in other countries. TLV analyses both pharmaceuticals without generic competition that remain under patent protection and pharmaceuticals with generic competition as defined by being included in the substitution system. In 2025, list prices for pharmaceuticals with generic competition are almost 54 per cent below the international average.

– The aim of the ‘product of the month’-system is not achieve the lowest price possible, but stable access to pharmaceuticals at the best possible price. We see that competition within the system is functioning while we maintain good access to pharmaceuticals, says Jonas Nilsson, Head of Department at TLV.

During 2023, TLV adjusted certain price ceilings for pharmaceuticals with generic competition and is now reviewing the ceiling price framework as a whole in order to increase flexibility and reduce the risk of shortages.

Challenges in comparing pharmaceuticals without generic competition

For pharmaceuticals without generic competition, Swedish list prices are almost 18 per cent below the international average. For this segment, however, comparisons with other countries are more challenging. Since the analysis is based on list prices, it does not consider confidential discounts under Managed Entry Agreements. Such discounts exist in Sweden but are assessed to be more commonly used in at least some other countries included in the comparison. TLV considers it valuable to make these comparisons nevertheless, since list prices can still give some indication of relative price levels between countries. However, they provide limited information on what is actually paid for pharmaceuticals in the countries included in the comparison.

The most important explanation for the lower relative price levels is the weakening of the Swedish krona. Although there was some recovery during 2025, the impact of the weak krona still strongly affects international comparisons. The exchange-rate effect is especially significant for pharmaceuticals without generic competition, as prices in Sweden typically remain unchanged during the patent period.

About the price comparison

TLV’s international price comparison has been published annually since 2014 and aims primarily to assess how Swedish pharmaceutical prices relate to prices in other countries. The report forms part of TLV’s continuous monitoring of Swedish price dynamics and of how Swedish price levels compare internationally.