This paper examines aspects of the policy environment and market characteristics of the Swedish
pharmaceutical sector, assesses the degree to which Sweden has achieved certain policy goals, and puts
forth some key findings and conclusions.
Thanks to low mark-ups in the distribution chain and no VAT for prescribed medicines, Sweden's
public prices for pharmaceuticals are relatively low, in contrast to average prices received by
manufacturers, which are among the highest in Europe.
Recent reforms have helped to restrain pharmaceutical expenditure growth, following a period of
double digit growth in the 1990s. Pharmaceutical expenditure per capita in Sweden is lower than the
OECD average. Only five OECD countries devote less of their national income to pharmaceuticals. What
limited evidence exists tends to suggest that relatively low pharmaceutical expenditures in Sweden are due
to its low public prices, rather than to low levels of consumption.
Sweden introduced a new pricing and reimbursement scheme in 2002. Its main features are the use of
cost-effectiveness analysis for determining the reimbursement status of new pharmaceuticals and
mandatory substitution of the lowest-cost generic alternative. The use of cost-effectiveness analysis in
reimbursement decisions helps to relate the reimbursement price paid to the social value of the product, but
does not necessarily result in the lowest possible price.The generic substitution policy has enabled Sweden to achieve fairly high penetration of generic
drugs into the market in terms of volume, with a considerably low share of the total value of the market.
However, the requirement to substitute only the lowest-priced listed drug risks undermining the
competitiveness of the generic drug industry...
