Mönkäre denounces price agreements between pharmacies and drug companies

National Agency for Medicines to investigate possible illegalities

Sinikka Mönkäre

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Pharmaceutical companies and Finnish pharmacists have been ordered to explain recent reports of an agreement to promote brand-name medicines in exchange for wholesale discounts.
      Helsingin Sanomat reported on Sunday that in exchange for manufacturers’ discounts, pharmacies have agreed to recommend that customers choose the name brands, even when a cheaper generic alternative is available for a prescription medicine.
      Legislation that came into effect in 2003 requires pharmacies offer patients the option to choose the cheapest available version of a prescription drug.
      Sinikka Mönkäre (SDP), the Minister of Social Affairs and Health, has denounced the agreements as immoral, and at the very least, as contrary to the intentions of the new law on medicines. Officials at the ministry suspect that the arrangement might actually violate the law.
     
Under present legislation pharmacies are not allowed to pass on manufacturers’ discounts to the consumer, and are required instead to keep the extra profit.
      The purpose is to prevent price competition, which would favour large chains at the expense of smaller independent pharmacies, especially those in rural areas.
      The Ministry of Social Affairs and Health is pondering whether or not to allow manufacturers’ discounts to be reflected in retail prices. Mönkäre says that one alternative would be to force pharmaceutical companies to offer any discounts on an equal basis to all pharmacies, and to require the pharmacies to pass the savings on to the consumer.
      Both pharmaceutical companies and pharmacies have been ordered to give an accounting of all discount agreements made from July 1st last year, including details of their terms and conditions - especially the amount and scope of the discounts.
      To back up its requirement, the National Agency of Medicines notes that disclosure of the information is mandatory under Finland’s criminal code.
     
Last year generic substitution of prescription medicines led to savings of about EUR 30 million in medical costs. The greatest beneficiary was the Social Insurance Institution (KELA), which helps subsidise prescription medicines.


Previously in HS International Edition:
  Planned legislation would reduce available generic drugs (6.8.2004)
  AstraZeneca board member says generic drug manufacturers take advantage of Finland (11.3.2004)
  Generic drugs bring savings of EUR 55.1 million (5.1.2004)
  Generic medicines spark considerable price competition at pharmacies (15.4.2003)
  Finnish pharmaceuticals industry could lose about 200 jobs (11.3.2003)

Helsingin Sanomat