Sweden: Setting the Pace for Global Pharma - Pharmaceutical Executive

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Sweden: Setting the Pace for Global Pharma


Pharmaceutical Executive


Sweden has also widened the threshold on drug cost-effectiveness, adding a strong "societal perspective" in the way it evaluates medicines for eligibility for reimbursement. A treatment's benefit, for example, is considered not just in relation to the patient, but also in relation to the patient's employers and the state. If a particular treatment means a patient is able to return to work and support himself—or manage without care services if he is elderly—then it could be considered cost-effective, not just for the healthcare sector but for society as a whole. This, of course, reflects tough modern realities as much as it strives for healthcare harmony. Sweden has not been immune to the healthcare implications of unemployment, an aging population, and the challenges of integrating different sections of society. Nevertheless, the Swedish precedent has put more pressure on the UK and other markets relying on strict metrics like the quality adjusted life year (QALY) to take these larger non-quantitative measures into account.

Sweden has also set a new paradigm on drug prices, where its standard of "contingent regulation" has helped set the framework for reimbursement in other markets. A pharma company sets its own price for a product and then TLV, the department responsible for drug reimbursement, either accepts it or rejects it. The Swedish view is that this is the fairest way to let the market work as freely as possible and to stimulate innovation. "TLV doesn't even ask for price information from other countries—that wouldn't be compatible with our philosophy," says Bergstrom.

In 2002, generic substitution became mandatory in Sweden for medically equivalent drugs. From that point, pharmacies have had to dispense the least expensive generic or parallel-imported drug, regardless of what a doctor has written on the prescription. In the first three years of mandatory generic substitution, off-patent drugs fell in price by more than 40 percent on average. Japan and many other countries—including China—have looked at the Swedish experience in evaluating their own evolving policy on generics.

Not all change in Sweden goes forward with the industry's imprimatur. One controversial reform has been a deregulation of the official pharmacy network. The state-run pharmacy monopoly is being broken up and partly sold off, a move opposed by LIF. Bergstrom says the country's healthcare model will eventually have to bring patient finances into the reimbursement equation. Still, if any country can implement a payment model responsibly and innovatively, Sweden can—so keep the country in your sights. "The payment model is the root cause of all the bad things in the US healthcare system," says Bergstrom. "But Sweden could learn from it." – Julian Upton


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