Pharmaceuticals are more expensive in Finland than in Sweden
On average, non-prescription drugs are 37 per cent cheaper in Sweden than in Finland. Even in prescription drugs, the price difference is in Sweden’s favour, especially in general reference price pharmaceuticals. It is clear that by reforming the structures and operations of the distribution of pharmaceuticals and the pharmacy system, it would be possible to both support the purchasing power of Finns and achieve savings in the public economy.
In the autumn of 2023, Copenhagen Economics, a consulting company specialising in applied economics, was commissioned by the Finnish Commerce Federation to carry out a price comparison of pharmaceuticals between Finland and Sweden. The report’s data* was collected in October 2023. The price comparison also took into account the differences in VAT rates between the countries.
According to the results of the report, non-prescription drugs are on average 37 per cent cheaper in Sweden than in Finland, and the price difference is 48 per cent when compared to the online stores of Swedish pharmacies. For example, depending on the sales channel, the allergy medicine Kestine (ebastine, 10 mg tablet, 10 pcs) is 33–50 per cent cheaper in Sweden than the corresponding comparable product in Finland, and a painkiller containing ibuprofen (400 mg tablet, 30 pcs) is 46–56 per cent cheaper.
Prescription drugs are on average 11 per cent cheaper in Sweden, and pharmaceuticals with reference prices in both countries, that is, competing generic substitution drugs, are 20 per cent cheaper.
“Finns clearly pay more than Swedes for their medicines,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation, summarising the results of the price comparison.
The results of the price comparison are consistent with the annual international price comparison carried out by the Swedish pharmaceuticals authority, TLV, according to which Sweden’s competing generic substitution pharmaceuticals are 39 per cent more expensive in Finland than in Sweden in terms of wholesale prices. TLV’s annual price comparison also takes into account changes in exchange rates. In previous years, the study’s price differences between our countries have been even greater.
The results are also in line with the report published by the Ministry of Social Affairs and Health in 2020. It found that the price regulation of pharmaceuticals in Finland, that is, the drug tariff model, is more expensive than in the other Nordic countries: pharmaceutical reimbursement costs were 184–244 million euros and patients’ deductible costs were 37–94 million euros higher in Finland.
Consumers and society pay for competition problems in their pharmaceutical costs
In Sweden, the pharmacy system was reformed in 2009, when, among other things, the ownership of pharmacies was liberalised and the sale of non-prescription drugs was also expanded into shops. Online pharmacies have also grown rapidly, and the overall accessibility of pharmacy services has improved. In Sweden, the margin structure of pharmacy chains is efficient and the margin level is significantly lower than that of Finnish pharmacies. In Sweden, parallel imports are encouraged for pharmacy chains, and genuine competition keeps prices down. According to Sweden’s pharmacy association, Swedish consumers are very satisfied with the pharmacy system.
“In Sweden, a cost-effective and functional retail sales system for pharmaceuticals has been created, which, as one of the most effective systems in Europe, is also a good basis for the Finnish model,” Kiviniemi says.
In Finland, the prices of pharmaceuticals are regulated by the drug tariff set by the government. Since April 2022, pharmacies have been able to compete on non-prescription drug prices between a certain maximum and floor price. The report by Copenhagen Economics shows that, in the Finnish online pharmacies surveyed in October 2023, more than 95 per cent of non-prescription drugs are still priced according to the maximum price.
“The results of the report show that price competition is very low in Finland,” says Kiviniemi.
The Finnish Competition and Consumer Authority (FCCA) has also drawn attention to the competition problems of the Finnish pharmacy system. In both a comprehensive 2020 report on the pharmaceutical economy and a December 2023 report on pharmacy taxation, the FCCA finds that the profits of pharmacy owners are quite high. The state and consumers pay the pharmacists’ excessive profits through unnecessarily high pharmaceutical costs.
In 2022, Kela paid a total of 1.8 billion euros in pharmaceutical reimbursements, with an increase of 51 million euros from the previous year.
“A decrease in the prices of pharmaceuticals would directly reduce government expenses, while the purchasing power of consumers would improve,” Kiviniemi emphasises.
The liberalisation of non-prescription drugs is a good start
At the moment, the liberalisation of the sale of some non-prescription drugs outside pharmacies has been recorded in the Government Programme, and the reform work is starting in the Ministry of Social Affairs and Health. Liberalising the sales of non-prescription drugs into the geographically comprehensive network and extensive opening hours of commerce would expand and improve the accessibility of pharmaceuticals and streamline transactions in both cities and sparsely populated areas.
“The liberalisation of non-prescription drugs into shops initiated by the government is a good start, but the entire system of the distribution of pharmaceuticals in Finland should be reformed more thoroughly and extensively. For example, the ownership of pharmacies should be organised the same way as in other private healthcare, so that price regulation can lower the prices of pharmaceuticals,” Kiviniemi says, describing some of the reform needs.
“The reforms must be implemented in a manner that ensures drug safety and nationwide services,” Kiviniemi adds.
Appendix:
For further information, please contact:
Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, mari.kiviniemi(at)kauppa.fi
Further information regarding the price comparison report:
Kalle Kantanen, Senior Economist, Copenhagen Economics, tel. 0400 168 332,
kak(at)copenhageneconomics.com
*The data used in the price comparison was collected in October 2023, and it looked at all non-prescription and prescription drugs, as well as the pharmaceuticals covered by the reference price system of both countries.
