In the autumn of 2007, the competition authorities in Iceland, Denmark, Finland, Norway and Sweden decided that their next joint project would be an investigation into competitive barriers in the pharmacy and medicines markets. To carry out this task, a working group was established, which has now published the results of its work in the form of a report on the websites of the competition authorities. The report is written in Norwegian, Danish and Swedish, and a summary in English is also published at the beginning of the report.
Pharmaceutical markets are part of the healthcare system of every country throughout the West and are therefore subject to significant public oversight and regulation. They are governed by a variety of laws and regulations that influence market prices and structure. This is particularly true in the Nordic countries. The laws and regulations governing the pharmacy and pharmaceutical markets are intended to ensure that citizens have access to a sufficient selection of safe medicines at a reasonable price. An effort is made to keep patients' out-of-pocket expenses for medicines low by having the state contribute a significant share of the cost of their medication. To this end, the government fixes the price of most medicines. This high level of public control inevitably affects the competitive environment in the pharmacy and medicines markets. Competition is severely restricted. Price competition is therefore very limited, as is market access, and all marketing is prohibited. The main competitive incentives are the service provided by pharmaceutical companies and the location of pharmacies, as well as discounts from the reference or maximum price of medicines where such discounts are permitted.
Although the objective of public intervention in the pharmacy and medicines markets is similar in the Nordic countries, and the markets are in many ways similar, the regulatory frameworks of individual countries differ in some respects. Different approaches have been taken towards these objectives. Furthermore, the rules in the pharmaceutical markets change rapidly and have undergone significant changes in recent years. The aim of various changes has, among other things, been to stimulate competition and thereby reduce the cost of medicines. In light of this, the Nordic competition authorities considered there to be a strong justification for producing a report that would seek to highlight and compare the competitive conditions and environment in the Nordic pharmacy and medicine markets. It is the view of the authorities that the report can be used as a basis for the governments of the countries when preparing and making decisions on regulatory changes that would affect the competitive environment and competitive practices in the pharmacy and medicine markets in the countries. The report is also intended to facilitate the assessment of the competitive effects or consequences of changes to legislation and regulations concerning the pharmacy and medicines markets, and to better equip competition authorities to address individual cases, including merger cases, which may arise in the markets in question.
Report (PDF document – Opens in a new window) Nordic competition authorities, Competition-related issues in the pharmacy and medicines sector.
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