Sweden - How will the deregulation of the pharmacy monopoly affect the market environment?

The deregulation will increase the number of pharmacies and ensure longer opening hours, as well as creating downward pressure on prices as more providers enter the market.

The pharmacy monopoly was deregulated in July 2009 in order to create greater competition in the Swedish market, and lead to more pharmacies with longer opening hours. As a result, Apoteket is no longer the exclusive pharmaceutical retailer, but remains a key competitor in the market. A total of 465 pharmacies were sold in November 2009, and a further 150 pharmacies will be sold to small companies to create more choice for consumers. The largest cluster of 208 stores was bought by Altor Equity Partners, while Kronans Droghandel Retail purchased 171 shops, Segulah bought 62 and Vaardapoteket i Norden purchased 24. Celesio has also announced that it is planning to open a chain of around 100 pharmacies in Sweden, although it did not join the bidding for premises previously occupied by the state-run Apoteket pharmacies.

The deregulation of the pharmacy monopoly is expected to drive down prices of pharmaceuticals due to increased competition. The number of pharmacies is likely to rise rapidly in 2010 and 2011, and slow down and stabilise from 2012 onwards. In addition, wholesalers have been negotiating an increase in distribution margins with pharmaceutical manufacturers, as a result of a rise in costs due to an increasing number of distribution locations.

As part of the liberalising of the Swedish pharmacy market, OTC products have also been available to buy from shops as well as pharmacies since November 2009. This provides an opportunity for OTC medicines to reach a wider market. Freedom of pricing for OTC medicines will be maintained, and it is likely that prices will continue to increase in the short term.

Further reading - A detailed analysis of the Swedish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Sweden (published April 2010)

Sweden - Anti-Counterfeiting System Trials Underway

The European Federation of Pharmaceutical Industries and Associations (EFPIA) announced in October 2009 that trials of an anti-counterfeiting system are underway in Sweden, to try to combat the problem of counterfeit drugs entering the market.

A medicines verification system utilising a small data matrix is being trialled, which alerts the pharmacist immediately if a pack could be counterfeit. The data matrix allows each pack to be individually coded, providing information such as the product code, expiry date, batch number and a serial number which is unique to each pack.

The trial is taking place in conjunction with the retailer Apoteket AB and local wholesalers Tamro and Oriola, in 25 pharmacies in the Stockholm area. A total of 100,000 products will be verified.

The initiative is the response of EFPIA to the European Commission’s proposal for a mass serialisation of medicines as part of measures to better protect EU citizens from the serious threats posed by counterfeit drugs.

The trial will run until the end of November 2009.

Further reading - An in-depth analysis of the Swedish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Sweden (published September 2009)

Sweden - Pharmacy Market Reform Bill Will Come into Force in July 2009

From July 1st 2009, there will be both state-owned and private outpatient pharmacies in Sweden. The pharmacy market reform is expected to result in more pharmacies with longer opening hours, increasing access for patients. Sweden is one of few countries in the world to have a state monopoly in the pharmacy market, with the Apoteket chain, which has been in place for 35 years.

One important issue is that pharmacies will be allowed to negotiate with branded and generic drugmakers on purchase prices for medicinal products. The new model will maintain price pressure while providing the conditions for a greater number of pharmacies to establish themselves on the market. The model approved by the government means that:

• Freedom of pricing will be maintained for over-the-counter (OTC) medicines
• Price competition via a national marketplace will be maintained for generic medicines
• Pharmacies will be given the chance to negotiate on the price of original pharmaceutical products

Apoteket will remain a key competitor in the market, with 330 of the 946 pharmacies currently owned by Apoteket remaining under state ownership. The remainder will be sold to other competitors, and a proportion of those remaining will be transferred to a newly formed company that will have individual entrepreneurs as partners. This will allow small-scale enterprise within the framework of a functioning support structure, with the intention that the partners will eventually be able to buy out their pharmacies. The only restriction is that neither physicians nor drugmakers will be allowed to own a pharmacy.

There are several potential bidders for the pharmacies, including Celesio, Tamro, Oriola and Alliance Boots. The pharmacies will be sold in two nationwide clusters, of 200 pharmacies and 170 pharmacies, alongside a number of regional clusters with 20 pharmacies in each.

The government has also proposed selling OTC medicines in shops, in addition to pharmacies. The Medical Products Agency will be instructed to decide which products are allowed to be sold in this way, and there will be an age limit of 18 for purchasing OTC products in shops. This will come into force in November 2009.

Further reading - An in-depth review of the Swedish pharmaceutical market, including information on the deregulation of the pharmacy state monopoly, is available from Espicom: The Pharmaceutical Market: Sweden (published April 2009)