[26/02/2010]
Price of innovative medicines pressed down by price competition
The reference price system introduced last spring was expected to boost price competition and direct the patients towards more inexpensive generic medicines. According to the pharmaceutical wholesale index, the price drop was significant. However, the innovative medicines continue to account for an unchanged share of the whole pharmaceutical sales but their prices have decreased dramatically. The wholesale index shows that the prices of reimbursable medicines were 5.6% down.
The price competition did not just affect the generics but also the prices of innovative medicines have gone down. For many years, generics have accounted for about 42% of all sold medicine packages. Irrespective of the new reference price system, this share did not change in 2009. Innovative medicines have thus been able to retain their market share. They have kept up with the price competition, thereby ensuring that the patients continue to have the choice of buying the familiar medicinal products they trust.
Compiled by Statistics Finland, the pharmaceutical wholesale index shows a 3.6% price decrease for all medicines in 2009. The prices of reimbursable prescription medicines were down by 3.8%.
The other side of the coin
It was anticipated that the reference price system would generate 85 million savings annually, objective already attained. The new system has had significant impact on the entire pharmaceutical branch. The tougher price competition has hit hard both the pharmacies and the pharmaceutical industry. The losses brought about by the reference price system, combined with the coinciding economic crisis, have resulted in large-scale redundancies within the pharmaceutical industry. The dramatically lower price level may also postpone the introduction of new pharmacotherapies in Finland.
The rationale behind the generic substitution system introduced in 2003 and the reference price system that entered into force in 2009 is that the patient would always choose the cheapest medicine, whenever possible. The savings for the society are, however, a result of the prices being pushed down by price competition and the generic substitution at the pharmacies.
Using the wholesale index of Statistics Finland, Pharma Industry Finland has been following the outpatient medicine price trend throughout this decade. The index is calculated based on the prices and sales of the package that have been available on the market for at least two years. The long time series shows that medicine prices have declined while the consumer price index points to a general increase in the price level.
APPENDIX Pharmaceutical wholesale index 2000-2009, graph in pdf
Further information:
Sirpa Rinta, Director, Pharmaceutical Policy, tel. +358 9 6150 4909
Nadia Tamminen, Specialist, Statistics, tel. +358 9 6150 4917
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Attachment(s):
1. Pharmaceutical wholesale index (.pdf, 21.4 kB)
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