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Hospital medicines and their procurement

Hospitals and their outpatient clinics use medicines designed for hospital use, as well as general medicines for outpatient healthcare.
Hospital sales account for about one fourth of the Finnish pharmaceutical market. The 2011 sales at wholesale prices were about 0.5 billion euro. Hospitalised patients get medicines free of charge.

Hospital medicine procurements are based on competitive bidding

The hospital districts and municipalities who are owners of hospitals are covered by the competitive procurement obligation. The Public Procurement Act defines strict procedural criteria to be followed by the public sector. The buyer decides on the medicine procurements and the conditions to be applied. However, the terms and conditions should be reasonable for the companies involved.
Normally, the hospital districts organise large procurement rings, which put out tenders for all medicine procurements. Most of the procurements cover the medicine purchases during the next two years. There is a risk that the companies that were unsuccessful in the competitive bidding procedure, especially the smallest operators, will withdraw certain products from the market during this period.
Well-functioning competition calls for a sufficient number of participants and an even rhythm of the procurement rounds so that the unsuccessful companies would not face insurmountable problems. If the unsuccessful company also has statutory stocks required by the security of supply system, its products will no longer have any users after the competition, and the useless products will have to be destroyed at the Riihimäki hazardous waste management plant.

Problems of two-tier funding

The payment of the home care of a patient depends on whether the care is in the form of “home hospital care” organised by specialised healthcare or “home care” included in primary healthcare.
  • The home municipality will pay for the home hospital care medicines, such as post-operative care at home.
  • Patients in home health care buy their own medicines from the pharmacy, receiving the usual reimbursement. This is one way of helping the elderly to cope longer at home.
It has sometimes been suggested that the municipalities might favour outpatient and home care to pass the pharmacotherapy costs on to the health insurance and the patients.
The two-tier financing system of healthcare does not promote the best use of the resources if each party paying for the care tries to minimise their own costs – without looking at the whole. The choice of the patient’s medicines should be based on medical criteria only.