|Implemented in this survey?|
The Minister of Health and The Danish Association of the Pharmaceutical Industry (In Danish: Lægemiddelindustriforeningen, Lif) have agreed on establishing a price cap on pharmaceuticals that are sold to the publicly owned hospitals. The price cap applies from July 2009 until December 31, 2012. During this period the Minister of Health is required not to make any changes that may affect the market conditions for pharmaceuticals in a significant way.
To introduce a price cap on pharmaceuticals that are bought by the publicly owned hospitals.
The Minister of Health and The Danish Association of the Pharmaceutical Industry (In Danish: Lægemiddelindustriforeningen, Lif) have agreed on establishing a price ceiling on pharmaceuticals that are sold to the publicly owned hospitals. The price cap applies from July 2009 until December 31, 2012. Furthermore it is agreed that members of Lif reduce the prices of their products to the prices of these products as of May 18, 2009. This defines the price ceiling for 2009. As of January 1, 2010 the price ceiling is reduced by an additional five percent. This price cap applies for the remaining period that is covered by the agreement. For pharmaceuticals which will be introduced during the agreement period it is agreed that the price cap is defined as the average price in the following nine countries at the time of launch in Denmark, Sweden, Norway, Finland, Great Britain, Ireland, Germany, The Netherlands, Belgium and Austria. The average price will be estimated regardless of how many countries in which the product is marketed. However, the price ceiling is not established before the product is marketed in at least three of the countries mentioned above.
Only products that are dispensed at hospitals are covered by the agreement. Thus, products that are sold at community pharmacies (i.e. in the primary health care sector) with a general subsidy are not covered by the agreement. Lif is one of three branch organisations represented in the Danish pharmaceutical market. Lif currently has 39 members. Members include for example Pfizer and Novo Nordisk. The two other branch organisations that organise generic producers and parallel importers are not part of the agreement.
The agreement between the Minister of Health and Lif follows on a year long tradition between these two parties to agree on price ceilings for prescription drugs sold in the primary sector with a general subsidy. According to these agreements prices on these drugs are not allowed to exceed the price as of August 30, 2006. However, it has recently been agreed that the price ceiling on these drugs are to be increased by two percent as of January 1, 2010 and 2011.
Thus, whereas it is agreed that prices on pharmaceuticals sold to public hospitals shall be reduced until the end of 2011, prices on pharmaceuticals sold in the primary market are allowed to increase.
In both agreements when regulating the price ceilings in the hospital sector and the primary sector, the minister of health is required not to make any changes that may affect the market conditions for pharmaceuticals in a significant way. This include introduction of price control, and, furthermore, in the primary sector, generic prescription and principal changes in the reimbursement and substitution of pharmaceuticals.
Pharmaceutical companies, Minister of Health, Hospitals
|Degree of Innovation||traditional||innovative|
|Degree of Controversy||consensual||highly controversial|
|Structural or Systemic Impact||marginal||fundamental|
|Public Visibility||very low||very high|
It is new that the minister of health and part of the industry now make an agreement regarding the prices of hospital medicine. As stated above there is a year-long tradition for doing it in for pharmaceuticals that are sold in the primary sector. Thus, making such voluntary agreements is not as controversial as the alternative of the governement introducing price regulation by law. The agreements preclude structural changes of the Danish pharmaceutical market. The agreements are publicly available.
|Implemented in this survey?|
In 2008 the total turnover of pharmaceuticals in Denmark amounted to 20 billion DKK. The publicly owned hospitals share of this amount was one third. Since 2000 the turnover of pharmaceuticals has increased, and in particular in the hospital sector. Where the turnover in the primary sector has increased by 50 % from 2000 to 2008, the turnover of pharmaceuticals in the hospital sector has trippled during the same period. Based on the increase in the turnover of pharmaceuticals the minister of health and prevention set up a commision to investigate how the hospitals' expenditures for pharmaceuticals could be reduced. A part of the commission prices on pharmaceuticals that are used at Danish hospitals were compared to prices in five countries. Based on this it was concluded that the Danish regions who own the hospitals may reduce their expenditures by 100-200 million DKK per year if a price cap on pharmaceuticals similar to the system in Norway was introduced.
Based on this the commission recommended that a reference price system was introduced in Denmark.
The approach of the idea is described as:
|Minister of Health||very supportive||strongly opposed|
|Danish Regions||very supportive||strongly opposed|
|Private Sector or Industry|
|Danish Association of the Pharmaceutical Industry||very supportive||strongly opposed|
|Minister of Health||very strong||none|
|Danish Regions||very strong||none|
|Private Sector or Industry|
|Danish Association of the Pharmaceutical Industry||very strong||none|
It is expected that the publicly owned hospitals will save up till 200 million DKK in 2010 because of the introduction of the price cap. Over the entire period 2010-2013 it is expected that the hospitals will save 700 million DKK.
|Quality of Health Care Services||marginal||fundamental|
|Level of Equity||system less equitable||system more equitable|
|Cost Efficiency||very low||very high|
The turnover of hospital medicine was about four billion Danish Kroner in 2007. The expected savings from the price cap make up about five percent of the annual turnover.
The Ministry of Health and Prevention, http://www.sum.dk/IMEVEREST/Publications/imdk%20x2D%20dansk/Prisaft_laegemiddelomr/20090604135557/CurrentVersion/Aftale%20om%20prisloft%20og%20prisreduktioner%20for%20lægemidler%20til%20sygehuse_04-06%202009.pdf.
Ministeriet for Sundhed og Forebyggelse. Analyse af sygehusmedicin. Rapport fra arbejdsgruppen om sygehusmedicin. May 2009. Available at http://www.sum.dk/IMEVEREST/Publications/imdk%20x2D%20dansk/Sygehusmedicin/20090525125320/CurrentVersion/Rapport.pdf
COWI.Analyse af sygehusmedicin i udvalgte lande
Erfaringer fra Sverige, Norge, England, Tyskland, Holland og Danmark
samt kort gennemgang af Frankrig og Canada. February 2009. Available at http://www.sum.dk/IMEVEREST/Publications/imdk%20x2D%20dansk/Sygehusmedicin/20090525125403/CurrentVersion/COWI_Analyse_sygehusmedicin.pdf
University of Southern Denmark, Institute of Public Health, The Health Economics Research Unit