Review of the system for funding, reimbursing and pricing of medicines

In November 2016, the Swedish Government decided to appoint a commission of inquiry to conduct a thorough review of the present system of funding, subsidising and pricing of medicines. It is the first since the rules came into force 15 years ago. the inquiry chair is toivo Heinsoo, former director of Stockholm County Council.

A two-part remit

The overall aim of the review is to bring about a long-term sustainable system that enables economically efficient use of medicines. This, in turn, is to contribute to modern and equal care.

In the Terms of Reference for the Inquiry (Dir 2016:95), the Government notes that the present system of funding, reimbursement and pricing is both complex and difficult to comprehend. There is a need, among other things, for a clearer distribution of responsibilities between central government and county councils, predictable processes  and favourable conditions for research and innovation. Most people active in the area would probably agree that this is the case.

There are two parts to the remit. The issue to be investi- gated first is the distribution of responsibilities between central government and county councils with regard to the funding of medicines. An analysis is thereafter to be made and proposals are to be presented for the reimbursement and pricing of medicines, adapted to the proposed funding model.

Background

At present, a single medicinal product can be used in outpatient care where it is prescribed, but also be requested by hospitals. Medicines dispensed on prescription are priced by the Dental and Pharmaceutical Benefits Agency (TLV), while medicines used in hospitals are subject to a procurement process. The price for the same medicine differs in these cases. The present reimbursement and pricing system is based on a central government responsibility for funding medicines in the benefits scheme and the county councils being responsible for funding medicines used in inpatient care. As patients can now often administer advanced medicines themselves at home, the boundary between medicinal products used in outpatient and inpatient care has become blurred.

In addition, the pharmacy market has been re-regulated, medicinal products are being developed for small groups of patients and medicines are being omitted from the benefits scheme. The pricing system has been adjusted on several occasions to cope with the challenges and changes the system has faced over the past 15 years. TLV has initiated three party negotiations between the county councils, the pharmaceutical companies and the agency. These negotiations have led to a number of ‘risk-sharing agreements’ between the companies and the county councils. The process is, however, resource-intensive for both the county councils and the companies. It is has also been accused of inadequate transparency, predictability and legal certainty.

The remit

In relation to the funding model, the inquiry is to analyse, among other things:

• Whether the current system with a special government grant for medicines in the benefits scheme is appropriate,  or whether it should be changed.
• Whether there is a continued need to divide medicines into outpatient medicines and inpatient medicines or some other form of division.
• Whether there may be a need for a change in distribution of responsibilities between central government and county councils in relation to the funding of new effective medicines.
• The need for equalisation of costs between the county councils with regard to medicines.

The remit also covers consumables. The proposals in this part of the remit are also to take account of the need for  an adequate range of products to be ensured and for there to be scope for new and effective products.

In addition, proposals are to be made for a reimbursement and pricing system. The chair of the inquiry is to:

• Evaluate access to and actual prices of medicines in Sweden in relation to other comparable countries.
• Analyse what consequences the pharmacies’ right to negotiate has on the reimbursement and pricing system  and, if necessary, propose measures to deal with any  adverse consequences.
• Analyse and, if appropriate, present proposals for some form of price control for all publicly funded medicines.
• Propose a reimbursement and pricing system that creates good and equal access to and use of effective medicines in Sweden, without resulting in increased costs in comparison with the present system.

Final report in December 2018?

Under the Terms of Reference, the chair of the inquiry is due to present an interim report containing an overall problem description and a description of the orientation of continued work by 1 November 2017. The final report is to be delivered by 1 December 2018.

The inquiry has been given a difficult remit. There are  several stakeholders, and various aspects need to be considered. It is crucial that the inquiry proposals ensure  that Swedish patients have early access to new medicines. The system must also provide an incentive for pharma- ceutical companies to develop new treatments, i.e. for innovation. In addition, everyone stands to benefit from  a stable and transparent system.

The remit is very important and extensive, and it is questionable whether the timetable can be met.

We will monitor this carefully.