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The pharmacy sector takes a high mark-up on generic pharmaceuticals - Document no. 3:7 (2008-2009)

Prices of pharmaceutical products in Norway are among the lowest in Western Europe, although the proportion of generic pharmaceuticals is low. However, the pharmacy sector (pharmacies and wholesalers) has a high mark-up on generics. The average mark-up on generics is considerably higher than on original pharmaceuticals in corresponding packaging.
Published 3/12/2009 1:00 PM

Document No 3:7 (2008-2009) The Office of the Auditor General’s investigation of the authorities’ regulation of the market for generic pharmaceuticals was submitted to the Storting on 12 March.

The investigation of prices shows that the price of pharmaceuticals is low in Norway compared with a sample of Western European countries. This applies both to patented and generic pharmaceuticals.

According to the Office of the Auditor General’s calculations, the pharmacy sector’s average mark-up on generics was well over 500 per cent in 2006 and over 400 per cent in 2007. The average mark-up per pack is considerably higher for generics than for the corresponding original pharmaceuticals. Unlike the mark-up on original pharmaceuticals, the mark-up on generic pharmaceuticals with stepped prices is unregulated. The stepped price is the set maximum price that may be charged by a pharmacy for selected generic pharmaceuticals that are deemed to be equivalent to the corresponding original pharmaceuticals.

The investigation shows that Norway has the lowest proportion of generic pharmaceuticals in Scandinavia and that the proportion here is considerably lower than in Denmark. It would therefore appear to be possible to increase the proportion of generic pharmaceuticals sold on ‘blue’ (fully or partially reimbursed) prescriptions within a medically justifiable framework.

The Ministry of Health and Care Services has for several years required the Norwegian Medicines Agency to rationalise its procedures for applying for marketing authorisations for generic pharmaceuticals. Despite this, case processing times are still long. The investigation shows that hardly any of the applications in 2007 and 2008 were processed within the prescribed case-processing time of 30 days. As a result, the generics arrive on the market with a corresponding delay and prices are higher than necessary.

Moreover, the Norwegian Medicines Agency’s control of pharmaceutical manufacturers’ reported price information is weak. This information forms the basis for stipulating the maximum price for original pharmaceuticals and is part of the basis for calculating the stepped price.

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