Hospital medicines

Hospital medicines and their procurement

Hospitals and their outpatient clinics use medicines intended for hospital use or those also indicated for outpatient use. Hospitals procure their medicines through competitive bidding.

Hospital sales account for about one fourth of the Finnish pharmaceutical market. In 2013, these sales at wholesale prices totalled about 500 million 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 Act on Public Contracts sets strict terms for the procedures 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.

For the competition to work there must be a sufficient number of competitors and an even distribution of the procurement rounds  so that the unsuccessful companies would not face unsurmountable problems. If such a company is also covered by the obligatory storage liability resulting from the emergency supply legislation, its products will be disposed of after the competition since there will no longer be any use for them. 

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 those for 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 medicines for the patient should be made on medical grounds only.

Read more: Finnish Pharmaceutical Market

Local Finland
Ministry of Employment and the Economy

Confederation of Finnish Industries EK
The Market Court